THE POLLUTION CONTROL FINANCING AUTHORITY OF SALEM COUNTY REOFFERING AGREEMENT Pollution Control Revenue Refunding Bonds, 1997 Series B (Atlantic City Electric Company Project) Due April 15, 2014
THE
POLLUTION CONTROL FINANCING AUTHORITY OF SALEM COUNTY
$4,400,000
Pollution
Control Revenue Refunding Bonds,
1997
Series B
(Atlantic
City Electric Company Project)
Due
April 15, 2014
This is a
Reoffering Agreement dated June 23, 2009 between Atlantic City Electric Company
(the “Company”) and
Xxxxxx Xxxxxxx & Co. Incorporated (“Xxxxxx Xxxxxxx”), in its
capacity as Remarketing Agent under the Remarketing Agreement hereinafter
referred to.
SECTION
1.
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(a) The
Pollution Control Financing Authority of Salem County (the “Authority”) issued $4,400,000
of its Pollution Control Revenue Refunding Bonds, 1997 Series B (Atlantic City
Electric Company) (the “Bonds”) on July 30,
1997. The proceeds of the Bonds were used to refund $4,400,000
aggregate principal amount of the Authority’s Pollution Control Revenue Bonds of
1987, Series A (Atlantic City Electric Company Project), the proceeds of which
were used to finance the Company’s respective 5% and 7.41% undivided ownership
interests in certain air or water pollution control facilities and/or sewage or
solid waste disposal facilities at the Hope Creek Generating Station, and the
Salem Generating Station, both of which are electric power plants located in
Salem County, New Jersey.
(b) The Bonds
were issued pursuant to a Trust Indenture, dated as of July 1, 1997 (the “Original Indenture”), between
the Authority and The Bank of New York Mellon, as successor trustee (the “Trustee”). The
Authority and the Trustee have entered into an Amended and Restated Trust
Indenture, dated as of June 22, 2009, to amend and restate in its entirety the
Original Indenture (the “Indenture”). The
Bonds are limited obligations of the Authority payable, except to the extent
payable from Bond proceeds or investment earnings thereon, solely from and are
secured solely by a pledge of, revenues received by the Authority under a
Pollution Control Facilities Loan Agreement, dated as of July 1, 1997 (the
“Original Loan Agreement”), between the
Authority and the Company. The Authority and the Company have entered
into Amendment No. 1 to Pollution Control Facilities Loan Agreement, dated as of
June 22, 2009, to amend the Original Loan Agreement (the Original Loan
Agreement, as so amended, the “Loan Agreement”), such
obligations being evidenced by a promissory note (the “Note”) of the Company
previously delivered to the Trustee.
(c) The Bank
of New York Mellon (“BNY”) proposes to issue and
deliver to the Trustee an irrevocable, direct-pay Letter of Credit relating to
the Bonds (the “Letter of
Credit”), which will permit the Trustee to draw upon such Letter of
Credit for the payment of the principal or redemption price of, and interest on,
the Bonds pursuant to the terms and subject to the conditions set forth in the
Indenture and in a Letter of Credit and Reimbursement Agreement, to be dated on
or about June 24, 2009, by and between BNY and the Company (the “Reimbursement
Agreement”).
(d) The
Company and Xxxxxx Xxxxxxx have heretofore entered into the Remarketing
Agreement, dated as of July 30, 1997 (the “Original Remarketing
Agreement”), pursuant to which Xxxxxx Xxxxxxx undertook the duties and
responsibilities of remarketing agent under the Indenture and the Remarketing
Agreement (Xxxxxx Xxxxxxx, in its capacity of such remarketing agent, the “Remarketing
Agent”). The Original Remarketing Agreement has been amended
by Amendment No. 1 to Remarketing Agreement, dated as of June 22, 2009 (the
Original Remarketing Agreement, as so amended, the “Remarketing
Agreement”).
(e) The
Company acknowledges that the Remarketing Agent will remarket the Bonds in an
offering in reliance on the representations, warranties, covenants and
indemnities herein set forth. A reoffering circular, dated June 16,
2009, including the Appendices thereto and all documents incorporated therein by
reference, will be distributed in connection with the remarketing of the
Bonds. The reoffering circular, as it may be amended or supplemented,
including the Appendices thereto (collectively, the “Appendix”), and all documents
incorporated therein by reference is collectively referred to as the “Reoffering
Circular.”
(f) The
Remarketing Agent shall not incur any liability to the Company for its actions
as Remarketing Agent pursuant to the terms hereof or of the Indenture except for
(i) its gross negligence or willful misconduct and (ii) the liabilities for
which the Remarketing Agent has agreed to indemnify the Company and others
pursuant to Section 5(a)(ii) hereof.
(a) The
financial statements of the Company and its subsidiary contained or incorporated
by reference in the Appendix to the Reoffering Circular present fairly the
financial position of the Company as of the dates indicated and the results of
its operations for the periods specified; such financial statements have been
prepared in conformity with United States generally accepted accounting
principles consistently applied (except as stated therein) with respect to the
periods involved; the financial statement schedule incorporated by reference in
Appendix A presents fairly the information required to be stated therein; and
the other financial data incorporated by reference in Appendix A, if it includes
any non-GAAP financial measure, comply as of the date hereof, and as of the
Closing Time (as hereinafter defined) will comply, in all material respects with
the requirements of paragraph (e) of Item 10 of Regulation S-K.
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(b) PricewaterhouseCoopers
LLP, which audited certain of the financial statements incorporated by reference
into the Appendix are independent public accountants as required by the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the
regulations promulgated thereunder.
(c) The
Reoffering Circular does not, and, at the Closing Time, the Reoffering Circular
will not, contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that (i) none of the representations and warranties in this paragraph (c) shall
apply to any statements in or omissions from the Reoffering Circular made in
reliance upon and in conformity with information furnished in writing to the
Company by the Remarketing Agent, the Authority or BNY expressly for use
therein, to the information contained under the headings “THE AUTHORITY” and
“TAX MATTERS,” or to the information in Appendices B and C.
(d) The
documents specified in Appendix A as being incorporated by reference therein,
when they were filed with the Securities and Exchange Commission (the “Commission”), complied in all
material respects with the applicable provisions of the Exchange Act and the
regulations promulgated thereunder and any documents that are deemed
incorporated by reference after the date hereof and prior to the termination of
the remarketing of the Bonds, when they are filed with the Commission, will
comply in all material respects with the applicable provisions of the Exchange
Act and the regulations promulgated thereunder.
(e) The
Company hereby confirms the representations, warranties, covenants and
agreements on the part of the Company in the Loan Agreement. All
information supplied in writing by the Company to Xxxxxx XxXxx P.A. and/or
Xxxxxxx Xxxxx Xxxxxxx & Ingersoll, LLP and designated as being for use by
either or both of such firms to render any of its opinions with respect to the
Bonds (or any predecessor bonds of the Authority refunded directly or indirectly
by the Bonds), was when supplied, and, considered collectively, is at the date
hereof, true, accurate, correct and complete in all material
respects.
(f) There is
no action, suit, proceeding, inquiry or investigation at law or in equity or
before or by any public board or body pending to which the Company is a party
or, to the knowledge of the Company, threatened against or affecting the
Company, wherein the decision, ruling or finding would (i) have a material
adverse effect on the transactions contemplated by this Reoffering Agreement or
the Reoffering Circular or have a material adverse effect on the validity or
enforceability of the Bonds or this Reoffering Agreement or (ii) except as set
forth in the Reoffering Circular, have a material adverse effect on the
business, condition (financial or otherwise) or results of operations of the
Company and its subsidiary, considered as one enterprise, whether or not arising
in the ordinary course of business (a “Material Adverse
Effect”).
(g) Since
April 1, 2008, the Company has filed timely all reports and all definitive proxy
and information statements required to be filed by the Company
3
with the
Commission pursuant to the Exchange Act and the regulations thereunder; the
Company is an indirect, wholly-owned subsidiary of Pepco Holdings, Inc., a
Delaware corporation (“PHI”).
(h) The
Company has been duly organized and is validly existing as a corporation in good
standing under the laws of the State of New Jersey with all corporate power and
other authority, including franchises, necessary to own or lease its properties
and conduct its business and enter into this Reoffering Agreement and the
transactions contemplated by the Reoffering Circular. The Company is
qualified to do business as a foreign corporation in all other states and
jurisdictions wherein the nature of the business transacted by the Company or
its ownership or leasing of properties requires such qualification, except to
the extent where a failure to so qualify would not constitute a Material Adverse
Effect.
(i) The
Company has no “significant subsidiaries” as defined in Rule 1-02 of Regulation
S-X.
(j) The
authorized, issued and outstanding capital stock of the Company is as set forth
in the Reoffering Circular. The shares of issued and
outstanding capital stock of the Company have been duly authorized and validly
issued and are fully paid and non-assessable and are owned by Conectiv, a
Delaware corporation wholly-owned by PHI; none of the outstanding shares of
capital stock of the Company was issued in violation of the preemptive or other
similar rights of any securityholder of the Company.
(k) Since the
respective dates as of which information contained in the Reoffering Circular is
given, and except as set forth therein or contemplated thereby, there has not
been any material adverse change in, the business, condition (financial or
otherwise) or results of operations of the Company and its subsidiary,
considered as one enterprise, whether or not arising in the ordinary course of
business (such change, a “Material Adverse
Change”).
(l) Prior to
the original issuance of the Bonds, the Company filed with the State of New
Jersey Board of Public Utilities (“BPU”) an application and any
necessary amendment or amendments thereto, and obtained from the BPU an
appropriate order authorizing the borrowing from the Authority of the proceeds
from the sale of the Bonds pursuant to the Loan Agreement and the transactions
related thereto and the Company has complied with all terms and conditions
contained in such order. The Company is not required to obtain any
other consents, approvals or authorizations in connection with the transactions
contemplated in the Reoffering Circular.
(m) This
Reoffering Agreement, the Loan Agreement, the Note and the Remarketing Agreement
and the Reimbursement Agreement have been duly authorized, executed and
delivered by the Company, and the Loan Agreement and the Note each constitutes a
valid and legally binding obligation of the Company, enforceable in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent
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transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors’ rights and to general equity principles. At the Closing
Time, the Reimbursement Agreement will have been duly authorized, executed and
delivered by the Company and will constitute a valid and legally binding
obligation of the Company, enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors’ rights
and to general equity principles.
(n) The sale
of the Bonds will not be subject to any New Jersey issuance, transfer or other
documentary stamp taxes.
(o) The
Company is in compliance with all previous undertakings made by it pursuant to
Section (b)(5)(i) of Rule 15c2-12 of the Commission (“Rule 15c2-12”) under the
Exchange Act.
(p) The
descriptions of the Bonds (except for information relating to the status of
interest on the Bonds for tax purposes), the Indenture, the Loan Agreement, the
Letter of Credit and the Reimbursement Agreement in the Reoffering Circular are
accurate in all material respects.
(q) The
Company is not in violation of its articles of incorporation or by-laws or in
default in the performance or observance of any obligation, agreement, covenant
or condition contained in any contract, indenture, mortgage, deed of trust, loan
or credit agreement, note, lease or other agreement or instrument to which the
Company is a party or by which it may be bound, or to which any of the property
or assets of the Company is subject (collectively, “Agreements and Instruments”)
except for such defaults as have not resulted, and are not reasonably expected
to result, in a Material Adverse Effect; and the execution, delivery and
performance of this Reoffering Agreement and the consummation of the
transactions contemplated herein (including the remarketing of the Bonds) and
compliance by the Company with its obligations hereunder and under the
Indenture, the Loan Agreement and the Remarketing Agreement do not and will not,
and the execution, delivery and performance of the Reimbursement Agreement and
compliance by the Company with its obligations thereunder will not, whether with
or without the giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event under, or result in the
creation or imposition of any lien upon any property or assets of the Company
pursuant to, the Agreements and Instruments (except for such conflicts,
breaches, defaults or liens as would not result in a Material Adverse Effect),
nor will such action result in any violation of the provisions of the articles
of incorporation or bylaws of the Company or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any of its assets, properties or operations. As used
herein, a “Repayment
Event” means any event or condition that gives the holder of any note,
debenture or other evidence of indebtedness (or any person acting on such
holder’s behalf) the right to require the repurchase, redemption or repayment of
all or a portion of such indebtedness by the Company.
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(r) No labor
dispute with the employees of the Company exists or, to the knowledge of the
Company, is imminent, and the Company is not aware of any existing or imminent
labor disturbance by the employees of any of its principal suppliers,
manufacturers, customers or contractors, which, in either case, could reasonably
be expected to result in a Material Adverse Effect.
(s) The
Company possesses such permits, licenses, approvals, consents and other
authorizations (collectively, “Governmental Licenses”) issued
by the appropriate federal, state, local or foreign regulatory agencies or
bodies necessary to conduct the business now operated by it and is in compliance
with the terms and conditions of all such Governmental Licenses, except (a) as
disclosed in the Reoffering Circular or (b) where the failure so to possess any
such Governmental License or to comply therewith would not, singly or in the
aggregate, have a Material Adverse Effect; all of the Governmental Licenses are
valid and in full force and effect, except where the invalidity of such
Governmental Licenses or the failure of such Governmental Licenses to be in full
force and effect would not have a Material Adverse Effect; and the Company has
not received any notice of proceedings relating to the revocation or
modification of any such Governmental Licenses, the revocation or modification
of which would, singly or in the aggregate, result in a Material Adverse
Effect.
(t) Any
leases material to the business of the Company, and under which the Company
holds properties described in the Reoffering Circular, are in full force and
effect, and the Company has no notice of any claim of any sort asserted by
anyone adverse to the rights of the Company under any such leases, or affecting
or questioning the rights of the Company to the continued possession of the
leased premises under any such lease, that, if the subject of an adverse
decision, ruling or finding, would have a Material Adverse Effect.
(u) The
Company is not, and upon the sale of the Bonds as herein contemplated and the
application of the net proceeds therefrom will not be, an “investment company”
or an entity “controlled” by an “investment company” as such terms are defined
in the Investment Company Act of 1940, as amended.
(v) Except as
described in the Reoffering Circular or except as would not, singly or in the
aggregate, result in a Material Adverse Effect, (A) the Company is not in
violation of any federal, state, local or foreign statute, law, rule,
regulation, ordinance, code, policy or rule of common law or any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent, decree or judgment, relating to pollution or protection of human
health, the environment (including, without limitation, ambient air, surface
water, groundwater, land surface or subsurface strata) or wildlife, including,
without limitation, laws and regulations relating to the release or threatened
release of chemicals, pollutants, contaminants, wastes, toxic substances,
hazardous substances, petroleum or petroleum products (collectively, “Hazardous Materials”) or to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials (collectively, “Environmental Laws”), (B) the
Company has all permits, authorizations and approvals required under any
applicable Environmental Laws and is
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in
compliance with their requirements, (C) there are no pending, or to the
knowledge of the Company, threatened administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, notices of noncompliance
or violation, investigation or proceedings relating to any Environmental Law
against the Company and (D) to the knowledge of the Company, there are no events
or circumstances that could reasonably be expected to form the basis of an order
for clean-up or remediation, or an action, suit or proceeding by any private
party or governmental body or agency, against or affecting the Company relating
to Hazardous Materials or Environmental Laws.
(w) (i) The
Company has established and maintains the following:
(A) a system
of “internal accounting controls” as contemplated in Section 13(b)(2)(B) of the
Exchange Act (the “Accounting
Controls”);
(B) “disclosure
controls and procedures” as such term is defined in Rule 13a-15(e) under the
Exchange Act (the “Disclosure
Controls”); and
(C) “internal
control over financial reporting” as such term is defined in Rule 13a-15(f)
under the Exchange Act (the “Reporting Controls” and,
together with the Accounting Controls and the Disclosure Controls, the “Internal
Controls”);
(ii) The
Internal Controls are evaluated by the Company periodically as appropriate and,
in any event, as required by law;
(iii) Based on
the most recent evaluations of the Accounting Controls, the Accounting Controls
perform the functions for which they were established in all material
respects;
(iv) As of the
most recent date as of which the effectiveness of the design and operation of
the Disclosure Controls were evaluated by the Company, the Disclosure Controls
were effective to provide reasonable assurance that material information
relating to the Company and its subsidiary that is required to be disclosed in
reports filed with, or submitted to, the Commission under the Exchange Act (I)
is recorded, processed, summarized and reported within the time periods
specified by the Commission rules and forms and (II) is accumulated and
communicated to management, including its chief executive officer and chief
financial officer, as appropriate, to allow timely decisions regarding required
disclosure;
(v) As of
December 31, 2008 (the most recent date as of which the Reporting Controls were
evaluated by the Company), the Reporting Controls were effective based on
criteria established in Internal Control–Integrated Framework issued by the
Committee of Sponsoring Organizations of the Xxxxxxxx Commission;
and
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(vi) Since the
respective dates as of which the Internal Controls were last evaluated, nothing
has come to the attention of the Company that has caused the Company to conclude
that (I) the Accounting Controls do not perform the functions for which they
were established in all material respects or (II) the Disclosure Controls or the
Reporting Controls are not effective (within the meaning of the evaluation
standards identified above).
(x) The
Company is in compliance in all material respects with the Xxxxxxxx-Xxxxx Act of
2002 and the rules and regulations of the Commission that have been adopted
thereunder, all to the extent that such Act and such rules and regulations are
applicable to the Company.
(y) All
representations, warranties and agreements of the Company shall survive delivery
of the Bonds to the Remarketing Agent regardless of any investigations made by
the Remarketing Agent or on its behalf.
SECTION
3.
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(a) On the
basis of the representations, warranties, covenants and indemnities contained
herein and in the other agreements referred to herein and subject to the terms
and conditions set forth herein, the Remarketing Agent will use its best efforts
to remarket the Bonds in accordance with the Indenture for an amount equal to
100% of the principal amount of the Bonds.
(b) The
Closing of the transactions contemplated herein shall be held in Washington,
D.C. at the offices of Xxxxxxxxx & Xxxxxxx LLP at 0000 Xxxxxxxxxxxx Xxxxxx,
XX, Xxxxxxxxxx, XX 00000, or at such other place as the Company and the
Remarketing Agent shall mutually agree upon in writing, at 10:00 A.M., New York
City time, on the first business day after the date hereof (the “Closing Date,” and the hour
and date of closing is herein called the “Closing Time.”)
SECTION
4.
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(a) The
Remarketing Agent’s obligations hereunder are subject to the accuracy, as of the
date of this Reoffering Agreement and as of the Closing Time, of the
representations and warranties of the Company contained in Section 2 hereof and
in all certificates of officers of the Company delivered pursuant to the
provisions hereof, to the performance by the Company of its covenants and other
obligations hereunder to be performed at or prior to the Closing Time, and to
the following further conditions:
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(i) The
Indenture, the Loan Agreement, the Remarketing Agreement and the Reimbursement
Agreement shall have been duly executed and delivered in the forms heretofore
approved by the Remarketing Agent and the Remarketing Agent shall have received
executed originals or copies thereof.
(ii) At the
Closing Time, the Remarketing Agent shall have received:
(A) The
opinion or opinions, dated the Closing Date, of (i) Xxxxxx XxXxx P.A., Bond
Counsel, covering the matters set forth in Exhibit A-1 and Exhibit A-2 hereto,
(ii) Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, LLP, Special Tax Counsel covering
the matters set forth in Exhibit B hereto, (iii) Xxxx X. Xxxx, Esq., General
Counsel of the Company, and Xxxxxx X. Xxxxxxxxxx, counsel for the Company,
covering the matters set forth in Exhibit C and Exhibit D hereto, respectively,
(iv) Xxxxxxxxx & Xxxxxxx LLP, special counsel to the Company, covering the
matters set forth in Exhibit E hereto, (v) Pillsbury Xxxxxxxx Xxxx Xxxxxxx LLP,
counsel to BNY, covering the matters set forth in Exhibit F hereto, and (vi)
Xxxxx & XxXxxxx LLP, counsel to the Remarketing Agent; and such counsel
shall have received such papers and information as they may reasonably request
to enable them to pass upon such matters;
(B) A
certificate, reasonably satisfactory in form and substance to the Remarketing
Agent, of the Chairman, the President, any Senior Vice President, any Vice
President, the Treasurer or any Assistant Treasurer of the Company, dated as of
the Closing Date, to the effect that, to the best of his or her knowledge: (i)
since the respective dates as of which information contained in the Reoffering
Circular is given, and except as set forth in or contemplated by the Reoffering
Circular or a document incorporated by reference therein, there has not been any
Material Adverse Change; (ii) the Company has duly performed all of its
obligations under such agreements to be performed at or prior to the Closing
Time; and (iii) each of the representations and warranties of the Company
contained in the Reoffering Agreement is true and correct as of the Closing
Time;
(C) Evidence,
reasonably satisfactory to the Remarketing Agent, to the effect that Standard
& Poor’s Ratings Group, a division of The XxXxxx-Xxxx Companies, Inc.
(“S&P”), shall have
given the Bonds a rating of “A-1+” and Xxxxx’x Investors Service, Inc. (“Moody’s”) shall have given the
Bonds a rating of “VMIG-1”;
(D) A letter
from PricewaterhouseCoopers LLP, dated as of the date of this Reoffering
Agreement, in form and substance reasonably satisfactory to the Remarketing
Agent and a bringdown with respect to such letter dated the Closing
Date;
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(E) A
certificate, reasonably satisfactory in form and substance to the Remarketing
Agent, of BNY, regarding Appendix C to the Reoffering Circular; and
(F) Such
additional certificates and other documents as the Remarketing Agent may
reasonably request to evidence performance of or compliance with the covenants,
agreements, representations and warranties of this Reoffering Agreement and the
transactions contemplated hereby or by the Reoffering Circular, all such
certificates and other documents to be reasonably satisfactory in form and
substance to the Remarketing Agent and its counsel, Xxxxx & XxXxxxx
LLP.
(b) The
Remarketing Agent shall have the right to terminate its obligation hereunder to
remarket the Bonds (and such termination shall not constitute a default for
purposes of Section 6 hereof) by notifying the Company in writing of its
election to do so between the date hereof and the Closing Time, if at any time
hereafter and prior to the Closing Time:
(i) legislation
shall be passed by the House of Representatives or the Senate of the Congress of
the United States, or favorably reported for passage to either the House of
Representatives or the Senate by any committee of either such body to which such
legislation shall have been referred for consideration, a decision by a court
established under Article III of the Constitution of the United States or the
Tax Court of the United States shall be rendered, or a ruling, regulation or
order of the Treasury Department of the United States or the Internal Revenue
Service shall be made or proposed, in any case having the purpose or effect of
imposing federal income taxation, or any other event shall have occurred which
results in the imposition of federal income taxation, upon revenues or other
income of the general character to be derived by the Authority from the Loan
Agreement, or upon interest received on obligations of the general character of
the Bonds, which, in the Remarketing Agent’s opinion, might materially and
adversely affect the market price of the Bonds, or the market price generally of
obligations of the general character of the Bonds, or would make it
impracticable to market the Bonds on the terms and in the manner contemplated in
the Reoffering Circular;
(ii) any
legislation, ordinance, rule or regulation shall be enacted or adopted, or any
order or declaration shall be issued, by any governmental body, department or
agency in the State of New Jersey or in any other state in which the Company
shall be doing business, or a decision by any court of competent jurisdiction
within such states shall be rendered which, in the Remarketing Agent’s opinion,
might materially and adversely affect the market price of the Bonds, or would
make it impracticable to market the Bonds on the terms and in the manner
contemplated in the Reoffering Circular;
(iii) a ruling,
regulation or official statement by, or on behalf of, the Commission shall be
issued or made to the effect that the issuance, offering or
10
sale of
the Bonds or obligations of the general character of the Bonds, as contemplated
hereby or by the Reoffering Circular, is or would be in violation of any
provision of the Securities Act of 1933, as amended (the “Securities Act”), the Exchange
Act or the Trust Indenture Act of 1939, as amended (the “Trust Indenture
Act”);
(iv) legislation
shall be passed by the House of Representatives or the Senate of the Congress of
the United States of America, or favorably reported for passage to either the
House of Representatives or the Senate by any committee of either such body to
which such legislation shall have been referred for consideration, a decision by
a court of the United States of America shall be rendered, or a ruling,
regulation or official statement by or on behalf of the Commission or other
governmental agency having jurisdiction of the subject matter shall be made or
proposed, in any case to the effect that the Bonds, or obligations of the
general character of the Bonds, are not exempt from registration, qualification
or other requirements of the Securities Act, the Exchange Act or the Trust
Indenture Act;
(v) the
information contained or incorporated by reference in the Reoffering Circular
shall be untrue or incorrect in any material respect, shall contain any untrue
or misleading statement of a material fact, or shall omit to state a material
fact required to be stated therein or necessary to make the statements contained
therein, in light of the circumstances under which they were made, not
misleading;
(vi) legislation
shall be enacted by any legislative body which would adversely affect the
exemption of interest on the Bonds from New Jersey income taxation;
(vii) additional
material restrictions not in force as of the date hereof shall have been imposed
upon trading in securities generally by any governmental authority or by any
national securities exchange or any suspension of or limitation on trading in
securities generally on any national securities exchange, or any suspension of
trading of any securities of the Company in any such exchange or in the
over-the-counter market or if there is a material disruption in securities
settlement, payment or clearance services in the United States;
(viii) the New
York Stock Exchange or other national securities exchange or any governmental
authority shall impose, as to the Bonds or similar obligations, any material
restrictions not now in force, or increase materially those now in force, with
respect to the extension of credit by, or the charge to the net capital
requirements of, underwriters;
(ix) a general
banking moratorium shall have been established by federal, New York or New
Jersey authorities;
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(x) the Bonds
shall not have been rated at least “A-1+” by S&P and “VMIG-1” by
Xxxxx’x;
(xi) an
outbreak of hostilities or an escalation thereof, a declaration of war by
Congress, another substantial calamity or crisis or another event or occurrence
of a similar character shall have occurred, which, in the Remarketing Agent’s
opinion, materially and adversely affects the market price of the Bonds or would
make it impracticable to market the Bonds on the terms and in the manner
contemplated in the Reoffering Circular; or
(xii) there
shall have occurred any change in or affecting the business, properties,
financial condition or results of operations of the Company from that set forth
or incorporated by reference in the Reoffering Circular which, in the
Remarketing Agent’s opinion, materially and adversely affects the investment
quality or marketability of the Bonds.
SECTION
5.
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(a) (i) The
Company will indemnify and hold harmless (A) the Remarketing Agent, any member,
director, officer, official or employee of the Remarketing Agent, and each
person, if any, who controls the Remarketing Agent within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act, and (B) the
Authority, any director, officer, official or employee of the Authority and each
person, if any, who controls the Authority within the meaning of Section 15 or
Section 20 of the Exchange Act (collectively, the “Authority Indemnified
Parties”), against any and all losses, claims, damages and liabilities
whatsoever caused by any untrue or misleading statement or alleged untrue or
misleading statement of a material fact contained in the Reoffering Circular, as
it may be amended or supplemented, distributed in connection with the
remarketing of the Bonds or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary in order to
make the statements made therein, in light of the circumstances under which they
were made, not misleading, except insofar as such losses, claims, damages and
liabilities shall have been caused by an untrue or misleading statement or
omission or an alleged untrue or misleading statement or omission which shall
have been based upon (X) with respect to the indemnification of the parties
referred to in clause (A) above, information relating to the Remarketing Agent
furnished to the Company in writing by the Remarketing Agent expressly for use
therein and (Y) with respect to the indemnification of the Authority Indemnified
Parties, information relating to the Authority furnished to the Company in
writing by the Authority expressly for use therein.
(ii) The
Remarketing Agent agrees to indemnify and hold harmless (A) the Company, any
member, director, officer or employee, and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, and (B) the Authority Indemnified Parties, against any and all
losses, claims, damages and liabilities whatsoever caused by any untrue or
misleading statement or alleged untrue or misleading statement of a material
fact
12
contained
in the Reoffering Circular, as it may be amended or supplemented, distributed in
connection with the remarketing of the Bonds or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading, in each case to the
extent and only to the extent such untrue or misleading statement or alleged
untrue or misleading statement or omission or alleged omission was made in any
such documents in reliance upon, and in conformity with, information furnished
to the Company in writing by the Remarketing Agent expressly for use in the
Reoffering Circular or any amendment or supplement thereto.
(iii) In case
any proceeding (including any governmental investigation) shall be instituted
involving any person in respect of which indemnity is
required pursuant to any of the two preceding paragraphs, such person
(hereinafter called the “indemnified party”) shall
promptly notify the person against whom such indemnity may be sought
(hereinafter called the “indemnifying party”) in
writing and the indemnifying party, upon request of the indemnified party, shall
retain counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in such
proceeding and shall pay the fees and disbursements of such counsel related to
such proceeding. In any such proceeding, any indemnified party shall
have the right to retain its own counsel, but the fees and expenses of such
indemnified party shall be at the expense of such indemnified party unless (i)
the indemnifying party and the indemnified party shall have mutually agreed to
the retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between
them. It is understood that the indemnifying party shall not, in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to local counsel) for all such indemnified parties, unless representation of
more than one indemnified party by the same counsel would be inappropriate due
to actual or potential differing interests between them, and that all such fees
and expenses shall be reimbursed as they are incurred. In the event
of such a conflict, such firm shall be designated in writing (x) by the
Remarketing Agent in the case of parties indemnified pursuant to (a)(i)(A) of
this Section 5, (y) by the Authority in the case of the Authority Indemnified
Parties and (z) by the Company in the case of parties indemnified pursuant to
(a)(ii) of this Section 5. The indemnifying party shall not be liable
for any settlement of any proceeding effected without its prior written consent,
but if settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified party from
and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses contemplated by the third sentence of
this paragraph, the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after the receipt by the
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall not have reimbursed the indemnified party for the fees and expenses to
which such indemnified party is entitled
13
hereunder
in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such proceeding.
(iv) If the
indemnification provided for in (a)(i)(A) or (a)(ii)(A) of this Section 5
is unavailable to an indemnified party under such paragraph, in respect of any
losses, claims, damages or liabilities referred to therein, then the
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Remarketing Agent, from the remarketing and sale of the Bonds or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company and the
Remarketing Agent in connection with the statements or omissions which resulted
in such losses, claims, damages and liabilities, as well as any other relevant
equitable considerations. The relative benefits received by the
Company and the Remarketing Agent shall be deemed to be in the same proportion
as the total net proceeds from the remarketing and sale of the Bonds (before
deducting expenses) received by the Company bear to the total commissions
received by the Remarketing Agent in connection therewith. The
relative fault of the Company, and the Remarketing Agent shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
required to be stated therein or necessary in order to make the statements
therein not misleading relates to information supplied by the Company or by the
Remarketing Agent and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission.
The
Company and the Remarketing Agent agree that it would not be just and equitable
if contribution were to be determined by pro rata allocation or by any other
method of allocation which does not take account of the equitable considerations
referred to above. The amount paid or payable by an indemnified party
as a result of the losses, claims, damages and liabilities referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any action
or claim. Notwithstanding the provisions of this Section, the
Remarketing Agent shall not be required to contribute any amount in excess of
the amount by which the total price at which the Bonds were remarketed and
distributed to the public exceeds the amount of any damages that the Remarketing
Agent has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
14
(v) The
indemnity and contribution agreements contained in this Section 5 and the
representations and warranties of the Company shall remain operative and in full
force and effect regardless of (i) any termination of this Reoffering Agreement,
(ii) any investigation made by or on behalf of the Company or the Remarketing
Agent, their respective officers or directors or any other person controlling
the Company or the Remarketing Agent and (iii) sale and delivery of any of the
Bonds.
(vi) The
provisions of this Section 5 shall inure to the benefit of the Authority
Indemnified Parties as third party beneficiaries.
(b) The
Company hereby authorizes the use by the Remarketing Agent of the Reoffering
Circular and the information contained therein in connection with the
remarketing and sale of the Bonds. The Company will promptly notify
the Remarketing Agent of any Material Adverse Change occurring before the
Closing Date or until distribution of the Bonds is complete which would require
a change in the Reoffering Circular (including the Appendix) in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading in connection with the sale of the Bonds. After
such notification, if, in the opinion of the Company, the Remarketing Agent or
counsel for the Remarketing Agent, a change would be required in the Reoffering
Circular in order to make the statements therein, in light of the circumstances
under which they were made, true and not misleading, then such change will be
made in the Reoffering Circular and the Company will supply copies of the
Reoffering Circular as so amended to the Remarketing Agent for
distribution. The Company may deem the distribution of the Bonds to
be complete on the Closing Date unless otherwise notified by the Remarketing
Agent on or prior to such date. The Company will provide to the
Remarketing Agent not less than two business days after the date hereof, such
number of copies of the Reoffering Circular as the Remarketing Agent shall
request for distribution to purchasers of the Bonds.
(c) The
Company will advise the Remarketing Agent promptly of the institution of any
legal or regulatory proceedings prior to the Closing Time affecting the
transactions contemplated by this Reoffering Agreement.
(d) At or
prior to the Closing Time, the Company will furnish or cause to be furnished to
the Remarketing Agent to the extent not publicly available, copies of the
Indenture and the Loan Agreement and all amendments and supplements to such
documents, in each case as soon as available and in such quantities as the
Remarketing Agent may reasonably request.
(e) At any
time prior to the Closing Time, the Company shall have the right to require, and
shall have the right of prior approval of, any amendment or supplement to the
Reoffering Circular.
SECTION
6.
|
Whether
or not the Bonds are remarketed, the Remarketing Agent shall be under no
obligation to pay expenses incident to the transactions contemplated hereby.
All
15
reasonable
expenses and costs to effect the remarketing of the Bonds (including, without
limitation, the Remarketing Agent’s commissions and out-of-pocket expenses, the
reasonable fees and disbursements of Xxxxxx XxXxx P.A., the reasonable fees and
disbursements of Puma, Telsey & Xxxx, P.A., the reasonable fees and
disbursements of Xxxxxxx Xxxxx Xxxxxxx & Ingersoll, LLP, the reasonable fees
and disbursements of Xxxxx & XxXxxxx LLP, the expenses and costs for the
preparation, printing, photocopying, execution and delivery of the Reoffering
Circular, the Indenture, the Loan Agreement, the Remarketing Agreement, the
Reimbursement Agreement, this Reoffering Agreement and all other agreements and
documents contemplated hereby, as well as all accountants’ fees, rating agency
fees and all trustee fees) shall be paid by the Company. Nothing in
this Section 6 shall limit the right of the Company to refrain from paying, or
from proceeding against the Remarketing Agent with respect to, such costs and
expenses if the Remarketing Agent shall have defaulted hereunder.
(a) This
Reoffering Agreement shall relate only to the remarketing specifically
contemplated herein to be consummated at the Closing Time and shall not relate
to ordinary remarketing activities to be conducted by the Remarketing Agent
after the Closing Time in accordance with the provisions of the Indenture and
the Remarketing Agreement.
(b) The
Remarketing Agreement shall remain in effect and shall apply to ordinary
remarketing activities to be conducted by the Remarketing Agent after the
Closing Time in accordance with the provisions of the Indenture and such
Remarketing Agreement.
SECTION
8.
|
Any
notice or other communication to be given hereunder will be in writing and
mailed or delivered to:
The
Company:
|
|
000
Xxxxx Xxxxxx, X.X.
Xxxxxxxxxx,
X.X. 00000
Attention:
Treasurer
|
|
The
Remarketing Agent:
|
|
Xxxxxx
Xxxxxxx & Co. Incorporated
1221
Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attention:
Xxxxxxx X.
Xxxxxxx
|
16
The
Authority:
|
|
The
Pollution Control Financing Authority of Salem County
00
Xxxxxx Xxxxxx
Xxxxx,
Xxx Xxxxxx 00000
Attention:
Chairman
|
|
with
a copy to:
Puma,
Telsey & Xxxx, P.A.
000
Xxxx Xxxxxxxx
Xxxxx,
Xxx Xxxxxx 00000
Attention:
Xxxxx X. Puma, Esquire
|
SECTION
9.
|
This
Reoffering Agreement shall be governed by, and interpreted under, the laws of
the State of New York.
SECTION
10.
|
EXECUTION
OF COUNTERPARTS.
|
This
Reoffering Agreement may be executed in several counterparts, each of which
shall be regarded as an original and all of which shall constitute one and the
same document.
SECTION
11.
|
If any
clause, provision or section hereof shall be ruled invalid or unenforceable by
any court of competent jurisdiction, the invalidity or unenforceability of such
clause, provision or section shall not affect any of the remaining clauses,
provisions or sections hereof.
[Signatures
appear on the following page]
17
By:
|
/s/
XXXXX X. XxXXXXX
|
|
Name: Xxxxx
X. XxXxxxx
|
||
Title: Vice
President and Treasurer
|
XXXXXX
XXXXXXX & CO. INCORPORATED
|
||
By:
|
/s/
XXXXXX XXXXXXX
|
|
Name: Xxxxxx
Xxxxxxx
|
||
Title: Vice
President
|
18
Exhibit
A-1
[LETTERHEAD
OF XXXXXX XXXXX P.A.]
June 24,
2009
The Pollution Control Financing Authority | Xxxxxx Xxxxxxx & Co. Incorporated |
of Salem County | 1221 Avenue of the Americas, 00xx Xxxxx |
00 Xxxxxx Xxxxxx | Xxx Xxxx, Xxx Xxxx 10020 |
Salem, New Jersey |
|
RE:
|
$[___________]
THE POLLUTION CONTROL FINANCING AUTHORITY OF SALEM COUNTY – POLLUTION
CONTROL REVENUE REFUNDING BONDS, 1997 SERIES [ ]
(ATLANTIC CITY
ELECTRIC COMPANY PROJECT)
|
Ladies
and Gentlemen:
We have
acted as Bond Counsel in connection with the delivery of an irrevocable,
direct-pay Letter of Credit (“Letter of Credit”) issued by The Bank of New York
Mellon (“Bank”) and the remarketing of $[___________] aggregate principal amount
of Pollution Control Revenue Refunding Bonds, 1997 Series [__] (Atlantic City
Electric Company Project), originally dated July 30, 1997 (“Series [__] Bonds”),
of The Pollution Control Financing Authority of Salem County (“Authority”),
which Series [__] Bonds were issued pursuant a Trust Indenture, dated as of July
1, 1997 (“Original Indenture”), as amended and restated in its entirety by an
Amended and Restated Trust Indenture, dated as June 22, 2009 (“Amended and
Restated Indenture” and, together with the Original Indenture, the “Indenture”),
between the Authority and The Bank of New York Mellon (as successor to Summit
Bank), as trustee (“Trustee”).
The
Series [__] Bonds are being remarketed pursuant to the Indenture and a
Reoffering Agreement, dated June 23, 2009 (“Reoffering Agreement”), between the
Company and Xxxxxx Xxxxxxx & Co. Incorporated, as remarketing
agent. This opinion is being delivered pursuant to Section
4(a)(ii)(A)(i) of the Reoffering Agreement. Capitalized terms not
otherwise defined herein shall have the meanings ascribed to such terms in the
Indenture.
In our
capacity as Bond Counsel to the Authority, we have examined such documents,
agreements and proceedings related to the Series [__] Bonds as we deemed
necessary to enable us to express the opinions set forth below, including, inter alia: original or
certified copies of: (i) the Resolution of the Authority adopted on June 9, 2009
authorizing, approving, acknowledging and consenting, as applicable to, inter alia, (a) the
termination of the Standby Agreement (as hereinafter defined), (b) the execution
and delivery of the Amended and Restated Indenture, (c) the execution and
delivery of the Loan Agreement Amendment (as hereinafter defined), (d) the
cancellation of the Policy (as hereinafter defined), (e) the execution and
delivery of the Cancellation Agreement (as hereinafter defined), (f) the
delivery of the Letter of Credit and (g) the remarketing of the Series [__]
Bonds (items (a) through (g) are collectively referred to herein as the
“Transaction”); (ii) the Indenture; (iii) the Pollution Control Facilities Loan
Agreement,
A-1-1
Pollution
Control Financing
Authority
of Salem County, et
al.
June 24,
2009
Page
2
dated as
of July 1, 1997, between the Authority and the Company (“Original Loan
Agreement”), as amended and supplemented by Amendment No. 1 to Pollution Control
Facilities Loan Agreement, dated as of June 22, 2009 (“Loan Agreement Amendment”
and together with the Original Loan Agreement, the “Loan Agreement”); (iv) the
Financial Guaranty Insurance Policy issued by MBIA Insurance Corporation
(“Insurer”) insuring the payment of the principal of and interest on the Series
[__] Bonds (“Policy”); (v) the Standby Bond Purchase Agreement, dated as of July
30, 1997 (“Standby Agreement”), among the Company, the banks party thereto and
The Bank of New York Mellon (formerly The Bank of New York), as agent (“Agent”);
(vi) the executed consents from the Company, the Agent and the Insurer attached
to the Amended and Restated Indenture agreeing and consenting to the
cancellation of the Policy; (vii) the Cancellation Agreement, dated June 22,
2009, by and among the Authority, the Insurer and the Company, pursuant to which
the Policy shall be cancelled; (viii) the New Jersey Pollution Control Financing
Law, constituting Chapter 376 of the Pamphlet Laws of 1973, approved January 9,
1974, as amended (“Act”), the Constitution of the State of New Jersey (“State”)
and such statutes and other applicable federal and State law as we deem
necessary; and (ix) such other opinions, agreements, proceedings, certificates,
records, approvals, resolutions and documents as to various matters with respect
to the Transaction as we have deemed necessary. As to certain matters
of fact, we have relied upon the representations of the Authority and the
Company, and where we have deemed appropriate, representations or other
certifications of public officials.
In
addition, in rendering the opinions set forth below, we have assumed the due
authorization, execution and delivery of the Indenture by the Trustee, the Loan
Agreement Amendment by the Company, the Cancellation Agreement by the Insurer
and the Company, and the Letter of Credit by the Company and the
Bank. With respect to the opinion provided in numbered paragraph two
(2) below, we have exclusively relied on the matters of fact and law set forth
in the legal opinion of the Company’s Special Tax Counsel, Xxxxxxx Xxxxx Xxxxxxx
& Xxxxxxxxx, LLP, Philadelphia, Pennsylvania, of even date herewith and
attached hereto.
Based
upon and subject to the foregoing, we are of the following opinion:
1. The
Amended and Restated Indenture and the Loan Agreement Amendment have each been
duly and lawfully authorized by the Authority, are in full force and effect and
constitute the valid and binding obligations of the Authority enforceable
against the Authority in accordance with their respective terms and no other
authorization for the Amended and Restated Indenture or the Loan Agreement
Amendment is required.
2. The
Transaction will not, in and of itself, adversely affect the exclusion from
gross income for purposes of federal income taxation of interest on the Series
[__] Bonds.
A-1-2
Pollution
Control Financing
Authority
of Salem County, et
al.
June 24,
2009
Page
3
It is
understood the enforceability of the Indenture and the Loan Agreement may be
subject to bankruptcy, insolvency, reorganization, moratorium and other similar
laws affecting creditor’s rights heretofore or hereinafter enacted to the extent
constitutionally applicable and that enforcement of the Indenture and the Loan
Agreement may also be subject to the exercise of judicial discretion in
appropriate cases.
Except as
expressly stated above, we express no opinion regarding any federal income tax
consequence arising with respect to the Series [__] Bonds.
The
opinions expressed in the numbered paragraphs above are being rendered on the
basis of federal law and the laws of the State, as presently enacted and
construed, and we assume no responsibility to advise any party as to any changes
in law or fact subsequent to the date hereof.
This is
only an opinion letter and not a warranty or guaranty of the matters discussed
above.
This
opinion is solely for the use of the addressees in connection with the
Transaction and, without our prior written consent, may not be quoted in whole
or in part or otherwise referred to in any legal opinion, document or other
report, and may not be furnished to any other person or entity without our prior
written consent. Without limiting the generality of the foregoing,
this opinion may not be relied upon by any person or entity to whom it is not
specifically addressed.
Very
truly yours,
X-0-0
Xxxxxxx
X-0
[LETTERHEAD
OF XXXXXX XXXXX P.A.]
June 24,
2009
Pollution
Control Financing
Authority
of Salem County
Salem,
New Jersey
Xxxxxx
Xxxxxxx & Co. Incorporated
1221
Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Ladies
and Gentlemen:
We have
acted as Bond Counsel to The Pollution Control Financing Authority of Salem
County (“Authority”) in connection with the delivery of an irrevocable,
direct-pay Letter of Credit issued by The Bank of New York Mellon and the
remarketing of $[___________] aggregate principal amount of Pollution Control
Revenue Refunding Bonds, 1997 Series [__] (Atlantic City Electric Company
Project), originally dated July 30, 1997 (“Series [__] Bonds”), of the
Authority, which Series [__] Bonds were issued pursuant a Trust Indenture, dated
as of July 1, 1997 (“Original Indenture”), as amended and restated in its
entirety by an Amended and Restated Trust Indenture, dated as June 22, 2009
(“Amended and Restated Indenture” and, together with the Original Indenture, the
“Indenture”), between the Authority and The Bank of New York Mellon (as
successor to Summit Bank), as trustee.
The
Series [__] Bonds are being remarketed pursuant to the Indenture and a
Reoffering Agreement, dated June 23, 2009 (“Reoffering Agreement”), between the
Company and Xxxxxx Xxxxxxx & Co. Incorporated, as remarketing
agent. This opinion is being delivered pursuant to Section
4(a)(ii)(A)(i) of the Reoffering Agreement. Capitalized terms not
otherwise defined herein shall have the meanings ascribed to such terms in the
Indenture.
In our
capacity as Bond Counsel to the Authority, we have examined such documents,
records of the Authority, agreements, proceedings and other instruments related
to the Series [__] Bonds as we deemed necessary to enable us to express the
opinions set forth below, including the Reoffering Agreement and the Reoffering
Circular dated June 16, 2009 (“Reoffering Circular”) distributed in connection
with the remarketing of the Series [__] Bonds. As to certain matters
of fact, we have relied upon the representations of the Authority and the
Company, and where we have deemed appropriate, representations or other
certifications of public officials. We do not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Reoffering Circular except as expressly provided
herein.
A-2-1
Pollution
Control Financing
Authority
of Salem County, et
al.
June 24,
2009
Page
2
Based
upon and subject to the foregoing, we are of the following opinion:
1. The
descriptions and statements concerning, and summaries of provisions of, the
Series [__] Bonds, the Agreement, the Note and the Indenture set forth under the
captions entitled “THE BONDS (excluding any information under the subheadings
“Special Consideration Relating to Variable Rate Demand Obligations” and
“Book-Entry-Only System”)”, “THE AGREEMENTS AND THE NOTES” and “THE INDENTURES”
fairly summarize the provisions of the documents or matters of law intended to
be summarized therein; and the statements contained in the Reoffering Circular
under the caption “TAX MATTERS” (except for the statements contained under the
caption “Special Tax Considerations”) fairly summarize the provisions of the
documents and the matters of law intended to be summarized therein.
The
opinions expressed in the numbered paragraph above are being rendered on the
basis of federal law and the laws of the State, as presently enacted and
construed, and we assume no responsibility to advise any party as to any changes
in law or fact subsequent to the date hereof.
This is
only an opinion letter and not a warranty or guaranty of the matters discussed
above.
This
opinion is solely for the use of the addressees in connection with the
consummation of the transactions contemplated by the Reoffering Circular and,
without our prior written consent, may not be quoted in whole or in part or
otherwise referred to in any legal opinion, document or other report, and may
not be furnished to any other person or entity without our prior written
consent. Without limiting the generality of the foregoing, this
opinion may not be relied upon by any person or entity to whom it is not
specifically addressed.
Very
truly yours,
A-2-2
Exhibit
B
[XXXXXXX
XXXXX XXXXXXX & INGERSOLL, LLP LETTERHEAD]
June 24,
2009
Xxxxxx
Xxxxxxx & Co. Incorporated
0000
Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx,
XX 00000
|
Re:
|
The
Pollution Control Financing Authority of Salem County, Pollution Control
Revenue Refunding Bonds, 1997 Series A and
B(Atlantic City
Electric Company Project)
|
Ladies
and Gentlemen:
We have
acted as Special Tax Counsel to Atlantic City Electric Company (the “Company”)
in connection with the reoffering of $18,200,000 aggregate principal amount of
Pollution Control Revenue Refunding Bonds, 1997 Series A (Atlantic City Electric
Company Project) and $4,400,000 aggregate principal amount of Pollution Control
Revenue Refunding Bonds, 1997 Series B (Atlantic City Electric Company Project)
(collectively, the “Bonds”) issued by The Pollution Control Financing Authority
of Salem County. At your request, we are delivering this letter to
you.
We have
reviewed the statements contained in the Reoffering Circular relating to the
Bonds dated June 16, 2009 (the “Reoffering Circular”) under the heading
captioned “TAX MATTERS–Special Tax Considerations” and believe that such
information is accurate.
Other
than as set forth above, we express no opinion with respect to the accuracy,
completeness, fairness or sufficiency of the Reoffering Circular, the
statistical or financial data contained therein, or any appendices or
attachments thereto.
The
statements in this letter are predicated upon present laws, facts and
circumstances, and we assume no affirmative obligation to update this letter if
such laws, facts or circumstances change after the date hereof.
This
letter is furnished by us solely for your benefit in connection with the
remarketing of the Bonds and may not be relied upon by any other persons without
our express permission.
Very
truly yours,
B-1
Exhibit
C
[ACE
LETTERHEAD]
June 24,
2009
Xxxxxx
Xxxxxxx & Co. Incorporated
1221
Avenue of the Americas, 00xx Xxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Ladies
and Gentlemen:
I am
General Counsel of Atlantic City Electric Company (the “Company”) and am
rendering this opinion pursuant to Section 4(a)(ii)(A)(iii) of the Reoffering
Agreement, dated June 23, 2009 (the “Reoffering Agreement”), between the Company
and Xxxxxx Xxxxxxx & Co. Incorporated, as remarketing agent under the
Indenture (as hereinafter defined), relating to the remarketing of $4,400,000
aggregate principal amount of Pollution Control Revenue Refunding Bonds, 1997
Series B (Atlantic City Electric Company Project) (the “Bonds”) of The Pollution
Control Financing Authority of Salem County (the “Authority”). Terms
used herein and not defined have the meanings provided therefor in the
Reoffering Agreement.
The Bonds
were issued pursuant to a Trust Indenture, dated as of July 1, 1997 between the
Authority and The Bank of New York Mellon, as successor trustee (the
“Trustee”). In connection with the remarketing of the Bonds, the
Authority and the Trustee have entered into an Amended and Restated Trust
Indenture, dated as of June 22, 2009 (the “Indenture”). The Authority
loaned the proceeds of the Bonds to the Company pursuant to a Pollution Control
Facilities Loan Agreement, dated as of July 1, 1997, between the Authority and
the Company (the “Original Loan Agreement”). In connection with the
remarketing of the Bonds, the Original Loan Agreement was amended by Amendment
No. 1 to Pollution Control Facilities Loan Agreement, dated as of June 22, 2009
(the Original Loan Agreement, as so amended, the “Loan Agreement”).
In
connection with the remarketing of the Bonds, The Bank of New York Mellon (the
“Bank”) issued and delivered to the Trustee an irrevocable Letter of
Credit (the “Letter of Credit”), which permits the Trustee to draw
upon such Letter of Credit for payment of the principal or purchase price of,
and interest on, the Bonds pursuant to the terms and subject to the
conditions set forth in the Indenture and in a Letter of Credit and
Reimbursement Agreement, dated as of June 24, 2009, by and between the Bank and
the Company (the “Reimbursement Agreement”).
I, or my
representatives, have reviewed:
(i) the
Reoffering Agreement;
(ii) the
Reoffering Circular dated June 16, 2009, including the Appendices thereto and
the documents incorporated therein by reference (collectively, the “Reoffering
Circular”), for the remarketing and sale of the Bonds;
C-1
June 24,
2009
Page
2
(iii) the
Loan Agreement;
(iv) a
copy of the Pollution Control Note evidencing the Company’s obligation to repay
the loan provided to the Company by the Authority under the Loan Agreement (the
Note”);
(v) the Indenture;
(vi) a facsimile copy of the
Bonds received by the Trustee;
(vii) the Letter of
Credit;
(viii) the Reimbusement
Agreement;
(ix) the
Remarketing Agreement for the Bonds, dated as of July 30, 1997, as amended by
Amendment No. 1 to Remarketing Agreement, dated as of June 22, 2009 (the
remarketing agreement, as so amended, the “Remarketing Agreement”);
and
(x) the
Restated Certificate of Incorporation of the Company and its Amended and
Restated By-Laws.
I, or my
representatives, also have examined or caused to be examined originals, or
copies that have been certified or otherwise identified to my or their
satisfaction as being true copies, of such other instruments, certificates and
other documents or records as I or they have deemed necessary or appropriate to
enable me to render the opinions set forth below. In my or my
representatives’ review and examination, I or they have assumed the genuineness
of all signatures, the authenticity of all documents submitted to me or them as
originals, and the conformity to original documents of all documents submitted
to me or them as copies. I have assumed that the Authority has duly authorized,
executed and delivered the Loan Agreement and that the Loan Agreement is the
valid and binding obligation of the Authority, enforceable against the Authority
in accordance with its terms. I also have assumed that the Company has duly
authorized, executed and delivered the Note.
Based on
the foregoing, and subject to the reservations and limitations and exceptions
set forth herein, I am of the opinion that:
1. The
Company is duly qualified as a foreign corporation to transact business and is
in good standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure so to qualify or to be in good standing would
not result in a Material Adverse Effect.
2. Each
of the Loan Agreement, the Reimbursement Agreement, the Remarketing Agreement
and the Reoffering Agreement has been duly authorized, executed and delivered by
the Company.
C-2
June 24,
2009
Page
3
3. The
Loan Agreement constitutes a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
other laws of general applicability relating to or affecting creditor’s rights
and to general equity principles. The Note constitutes a valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other laws of general applicability relating to
or affecting creditor’s rights and to general equity principles.
4. The
execution and delivery of the Loan Agreement, the Reimbursement Agreement, the
Remarketing Agreement and the Reoffering Agreement, and performance by the
Company of its obligations thereunder, do not and will not violate or constitute
a default under (i) the Restated Certificate of Incorporation or the Amended and
Restated By-Laws of the Company, (ii) any statute, governmental rule or
regulation, or court order by which the Company or its property is bound, or
(iii) any agreement, indenture, mortgage, lease, note or other obligation or
instrument to which the Company is a party, excluding, in the case of (ii) or
(iii) above, violations or defaults that would not have a Material Adverse
Effect.
5. Except
for the authorization of the State of New Jersey Board of Public Utilities duly
granted in its Docket No. EF97050362, dated June 30, 1997, which order remains
in full force and effect, no approval or other action by any governmental
authority or agency is required in connection with the execution and delivery of
the Loan Agreement, the Remarketing Agreement and the Reoffering Agreement, and
performance by the Company of its obligations thereunder.
6. The
Company holds valid and subsisting franchises, licenses and permits authorizing
it to carry on the utility businesses in which it is engaged.
7. The
statements contained in the Reoffering Circular under the captions “THE BONDS,”
“THE LETTERS OF CREDIT,” “THE AGREEMENTS AND THE NOTES” and “THE INDENTURES,”
insofar as such statements constitute summaries of the provisions of the
Indenture, the Letter of Credit, the Reimbursement Agreement and the Loan
Agreement described therein, are accurate in all material respects and fairly
summarize the matters referred to therein.
8. The
documents incorporated by reference in Appendix A to the Reoffering Circular
(other than the financial statements, including the notes thereto, and financial
schedules and other financial data included or incorporated therein, or omitted
therefrom, as to which I express no opinion), when they were filed with the
Securities and Exchange Commission (the “Commission”) complied as to form in all
material respects with the requirements of the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission
thereunder.
The
opinion set forth in paragraph 3 is subject to the following limitations and
qualifications:
C-3
June 24,
2009
Page
4
(a) I express
no opinion as to:
(i) restrictions
upon assignments of a party’s rights under the Loan Agreement; or
(ii) provisions
requiring amendments and waivers to be in writing and provisions making notices
effective even if not actually received.
(b) No
opinion is being expressed herein on any provision relating to indemnification
or contribution in connection with securities laws or relating to
indemnification, conditions of exculpation in connection with willful, reckless,
or criminal acts or negligence of the indemnified person or entity or the person
or entity receiving indemnification or contribution.
In
addition, I advise you that, I know of no action, suit, proceeding, inquiry or
investigation at law or equity by a judicial or administrative court or agency,
pending or threatened, against the Company, that is reasonably likely to have a
Material Adverse Effect on (i) the validity or enforceability of the Loan
Agreement, the Reimbursement Agreement, the Remarketing Agreement or the
Reoffering Agreement or (ii) except as disclosed in the Reoffering Circular, the
Company or its business.
Further,
I am not passing upon and do not assume responsibility for the accuracy,
completeness or fairness of the statements contained in the Reoffering Circular
and make no representations that I have independently verified the accuracy,
completeness or fairness of such statements, except insofar as such statements
refer specifically to me. However, based on my or my representatives’
examination of the Reoffering Circular, on my general familiarity with the
affairs of the Company and on my or my representatives’ participation in
conferences with officials and other representatives of, and other counsel for,
the Company, with PricewaterhouseCoopers LLP, the independent accountants of the
Company, and with your representatives and your counsel, nothing came to my
attention in the course of such review which has caused me to believe that the
Reoffering Circular as of its date contained, or as of the date hereof contains,
any untrue statement of a material fact or omitted or omits to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The foregoing
statement is subject to the qualification that I do not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Reoffering Circular (except as set forth in paragraph 7) and I
am not expressing any opinion or belief on (i) the financial statements,
including the notes thereto, the financial schedules and the other financial
data included or incorporated by reference in the Reoffering Circular and (ii)
any of the information in the following sections of the Reoffering
Circular:
·
|
The
sections of the Reoffering Circular
headed:
|
o
|
“THE
AUTHORITY,”
|
C-4
June 24,
2009
Page
5
o
|
“THE
BONDS --Book-Entry-Only System,”
and
|
o
|
“TAX
MATTERS” (or any other information in the Reoffering Circular relating to
the status of interest on the Bonds for tax
purposes).
|
·
|
The
information included in Appendix B of the Reoffering
Circular.
|
·
|
The
information included in Appendix C of the Reoffering
Circular.
|
I am a
member of the Bar of the District of Columbia and the Bar of the State of
Maryland, and I express no opinion herein as to any law other than the laws of
the State of New Jersey, the Commonwealth of Pennsylvania and the federal law of
the United States. With respect to the laws of the State of New
Jersey, I have relied on the opinion, dated the date hereof, of Xxxxxx X.
Xxxxxxxxxx, an employee of PHI Service Company, that is being delivered to your
pursuant to Section 4(a)(ii)(A)(iii) of the Reoffering
Agreement. With respect to the laws of the Commonwealth of
Pennsylvania, I have received advice, satisfactory to me, from Pennsylvania
counsel admitted in such jurisdiction whom I deem fully competent to furnish
such advice.
The
opinions contained herein are rendered solely for your benefit and may not be
relied on by any other person, except that I hereby authorize Xxxxx &
XxXxxxx LLP, in connection with rendering its opinion to you on the date hereof
relating to the remarketing of the Bonds, to rely on such opinions with respect
to matters governed by the laws of the State of New Jersey and the Commonwealth
of Pennsylvania. The opinions expressed in this letter are limited to
the matters set forth herein, and no opinion should be inferred beyond those
opinions expressly stated. I assume no obligation to advise you of
any facts that come to my attention, or any changes in law, subsequent to the
date hereof.
Very
truly yours,
|
|
Xxxx
X. Xxxx
|
C-5
Exhibit
D
[ACE
LETTERHEAD]
June 24, 2009
Xxxxxx
Xxxxxxx & Co. Incorporated
1221
Avenue of the Americas, 00xx Xxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Ladies
and Gentlemen:
I am an
employee of PHI Service Company and I am authorized to provide legal services to
its affiliate, Atlantic City Electric Company (the “Company”). I am
rendering this opinion pursuant to Section 4(a)(ii)(A)(iii) of the Reoffering
Agreement, dated June 23, 2009 (the “Reoffering Agreement”), between the Company
and Xxxxxx Xxxxxxx & Co. Incorporated, as remarketing agent under the
Indenture (as hereinafter defined), relating to the remarketing of $4,400,000
aggregate principal amount of Pollution Control Revenue Refunding Bonds, 1997
Series B (Atlantic City Electric Company Project) (the “Bonds”) of The Pollution
Control Financing Authority of Salem County (the “Authority”). Terms
used herein and not defined have the meanings provided therefor in the
Reoffering Agreement.
The Bonds
were issued pursuant to a Trust Indenture, dated as of July 1, 1997, between the
Authority and The Bank of New York Mellon, as successor trustee (the
“Trustee”). In connection with the remarketing of the Bonds, the
Authority and the Trustee have entered into an Amended and Restated Trust
Indenture, dated as of June 22, 2009 (the “Indenture”). The Authority
loaned the proceeds of the Bonds to the Company pursuant to a Pollution Control
Facilities Loan Agreement, dated as of July 1, 1997, between the Authority and
the Company (the “Original Loan Agreement”). The Original Loan
Agreement was amended by Amendment No. 1 to Pollution Control Facilities Loan
Agreement, dated as of June 22, 2009 (the Original Loan Agreement, as so
supplemented, the “Loan Agreement”).
In
connection with the remarketing of the Bonds, The Bank of New York Mellon (the
“Bank”) issued and delivered to the Trustee an irrevocable Letter of
Credit (the “Letter of Credit”), which permits the Trustee to draw
upon such Letter of Credit for payment of the principal or purchase price of,
and interest on, the Bonds pursuant to the terms and subject to the
conditions set forth in the Indenture and in a Letter of Credit and
Reimbursement Agreement, dated as of June 24, 2009, by and between the Bank and
the Company (the “Reimbursement Agreement”).
I have
reviewed:
(i) the
Reoffering Agreement;
(ii) the
Loan Agreement;
D-1
June 24,
2009
Page
2
(iii) the
Indenture;
(iv) the
Reimbursement Agreement;
(v) the
Remarketing Agreement for the Bonds, dated as of July 30, 1997, as amended by
Amendment No. 1 to Remarketing Agreement, dated as of June 22,
2009 (the remarketing agreement, as so amended, the “Remarketing
Agreement”);
(vi) a
copy of the Pollution Control Note evidencing the Company’s obligation to repay
the loan provided to the Company by the Authority under the Loan Agreement (the
“Note”); and
(vii) the
Restated Certificate of Incorporation of the Company and its Amended
and Restated By-Laws.
I also
have examined or caused to be examined originals, or copies that have been
certified or otherwise identified to my satisfaction as being true copies, of
such other instruments, certificates and other documents or records as I have
deemed necessary or appropriate to enable me to render the opinions set forth
below. In my review and examination, I have assumed the genuineness
of all signatures, the authenticity of all documents submitted to me as
originals, and the conformity to original documents of all documents submitted
to me as copies.
I have
assumed that the Loan Agreement and the Reoffering Agreement have been duly
executed and delivered by the Company (except to the extent that the execution
and delivery thereof is governed by the laws of the State of New Jersey). I have
assumed that the Authority has duly authorized, executed and delivered the Loan
Agreement and that the Loan Agreement is the valid and binding obligation of the
Authority, enforceable against the Authority in accordance with its terms. I
also have assumed that the Company has duly authorized, executed and delivered
the Note.
Based on
the foregoing, and subject to the reservations and limitations and exceptions
set forth herein, I am of the opinion that:
1. The
Company has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the State of New Jersey, with full corporate
power to conduct the business now being conducted by it, to own and operate the
properties used and useful in said business and to execute and deliver and to
carry out and perform its obligations under the Loan Agreement, the
Reimbursement Agreement, the Remarketing Agreement and the Reoffering
Agreement.
2. Each
of the Loan Agreement, the Reimbursement Agreement, the Remarketing Agreement
and the Reoffering Agreement has been duly authorized, executed and delivered by
the Company.
3. The
Loan Agreement constitutes a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, subject
to
D-2
June 24,
2009
Page
3
bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and other laws of
general applicability relating to or affecting creditor’s rights and to general
equity principles. The Note constitutes a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
other laws of general applicability relating to or affecting creditor’s rights
and to general equity principles.
4. The
execution and delivery of the Loan Agreement, the Reimbursement Agreement, the
Remarketing Agreement and the Reoffering Agreement, and performance by the
Company of its obligations thereunder, do not and will not violate or constitute
a default under (i) the Restated Certificate of Incorporation or the Amended and
Restated By-Laws of the Company or (ii) any statute, governmental rule or
regulation, or court order by which the Company or its property is bound,
excluding violations or defaults that would not have a Material Adverse
Effect.
5. Except
for the authorization of the State of New Jersey Board of Public Utilities duly
granted in its Docket No. EF97050362, dated June 30, 1997, which order remains
in full force and effect, no approval or other action by any governmental
authority or agency within the State of New Jersey is required in connection
with the execution and delivery of the Loan Agreement, the Reimbursement
Agreement, the Remarketing Agreement and the Reoffering Agreement, and
performance by the Company of its obligations thereunder.
The
opinion set forth in paragraph 3 is subject to the following limitations and
qualifications:
(a) I express
no opinion as to:
(i) restrictions
upon assignments of a party’s rights under the Agreement; or
(ii) provisions
requiring amendments and waivers to be in writing and provisions making notices
effective even if not actually received.
(b) No
opinion is being expressed herein on any provision relating to indemnification
or contribution in connection with securities laws or relating to
indemnification, conditions of exculpation in connection with willful, reckless,
or criminal acts or negligence of the indemnified person or entity or the person
or entity receiving indemnification or contribution.
This
opinion is given as of the date and time of delivery hereof solely in connection
with settlement of the sale of the Bonds on the date hereof and no opinion is
expressed as to any matter not explicitly set forth in the numbered paragraphs
herein. I assume no obligation to update or supplement this opinion
to reflect any facts or
D-3
June 24,
2009
Page
4
circumstances
that may hereafter come to my attention or any changes in laws which may
hereafter occur.
I am a
member of the Bar of the State of New Jersey, and I express no opinion herein as
to any law other than the laws of the State of New Jersey.
The
opinions contained herein are rendered solely for your benefit and may not be
relied on by any other person, except that I hereby authorize Xxxxx &
XxXxxxx LLP, in connection with rendering its opinion to you on the date hereof
relating to the remarketing of the Bonds, to rely on such opinions with respect
to matters governed by the laws of the State of New Jersey. The
opinions expressed in this letter are limited to the matters set forth herein,
and no opinion should be inferred beyond those opinions expressly
stated. I assume no obligation to advise you of any facts that come
to my attention, or any changes in law, subsequent to the date
hereof.
Very
truly yours,
|
|
Xxxxxx
X. Xxxxxxxxxx
|
D-4
Exhibit
E
[LETTERHEAD
OF XXXXXXXXX & XXXXXXX LLP]
June 24,
2009
Xxxxxx
Xxxxxxx & Co. Incorporated
1221
Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Ladies
and Gentlemen:
We are
special counsel to Atlantic City Electric Company (the “Company”) and are
rendering this opinion pursuant to Section 4(a)(ii)(A)(iv) of the Reoffering
Agreement, dated June 23, 2009 (the “Reoffering Agreement”), between the Company
and Xxxxxx Xxxxxxx & Co. Incorporated, as remarketing agent under the
Indenture (as hereinafter defined), relating to the remarketing of $4,400,000
aggregate principal amount of Pollution Control Revenue Refunding Bonds, 1997
Series B (Atlantic City Electric Company Project) (the “Bonds”) of The Pollution
Control Financing Authority of Salem County (the “Authority”). Terms
used herein and not defined have the meanings provided therefor in the
Reoffering Agreement.
The Bonds
were issued pursuant to a Trust Indenture, dated as of July 1, 1997, between the
Authority and The Bank of New York Mellon, as successor trustee (the
“Trustee”). In connection with the remarketing of the Bonds, the
Authority and the Trustee have entered into an Amended and Restated Trust
Indenture, dated as of June 22, 2009 (the “Indenture”). The Authority
loaned the proceeds of the Bonds to the Company pursuant to a Pollution Control
Facilities Loan Agreement, dated as of July 1, 1997, between the Authority and
the Company (the “Original Loan Agreement”). The Original Loan
Agreement was amended by an Amendment No. 1 to Pollution Control Facilities Loan
Agreement, dated as of June 22, 2009 (the Original Loan Agreement, as so
supplemented, the “Loan Agreement”).
In
connection with the remarketing of the Bonds, The Bank of New York Mellon (the
“Bank”) issued and delivered to the Trustee an irrevocable Letter of
Credit (the “Letter of Credit”), which permits the Trustee to draw
upon such Letter of Credit for payment of the principal or purchase price of,
and interest on, the Bonds pursuant to the terms and subject to the
conditions set forth in the Indenture and in a Letter of Credit and
Reimbursement Agreement, dated as of June 24, 2009, by and between the Bank and
the Company (the “Reimbursement Agreement”).
We have
reviewed:
(i) the
Reoffering Agreement;
(ii) the
Reoffering Circular, dated June 16, 2009, including the Appendices thereto and
the documents incorporated therein by reference (collectively, the “Reoffering
Circular”), for the remarketing and sale of the Bonds;
E-1
June 24,
2009
Page
2
(iii) the
Loan Agreement;
(iv) a
copy of the Pollution Control Note evidencing the Company’s obligation to repay
the loan provided to the Company by the Authority under the Loan
Agreement;
(v)
the Indenture;
(vi) the Remarketing
Agreement for the Bonds, dated as of July 30, 1997, as amended by Amendment No.
1 to Remarketing Agreement, dated as of June 22, 2009 (the
remarketing agreement, as so amended, the “Remarketing Agreement”);
(vii) a
facsimile copy of the Bonds provided by the Trustee;
(viii) the
Letter of Credit; and
(ix)
the Reimbursement Agreement.
We also
have reviewed such corporate records, certificates and other documents and such
questions of law, as we have deemed necessary or appropriate for the purposes of
rendering this opinion.
We have
assumed that all signatures are genuine, that all documents submitted to us as
originals are authentic and that all copies of documents submitted to us conform
to the originals. We have assumed further that (i) the Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of New Jersey, has all requisite power, authority and legal right,
to execute, deliver and perform its obligations under the Loan Agreement, the
Reimbursement Agreement, the Remarketing Agreement and the Reoffering Agreement
and has obtained all authorizations and approvals of governmental authorities
necessary therefor, and (ii) the Loan Agreement, the Reimbursement Agreement,
the Remarketing Agreement and the Reoffering Agreement have been duly
authorized, executed and delivered by the Company (except to the extent that the
execution and delivery thereof is governed by the laws of the State of New
York).
We have
made no investigation for the purpose of verifying the assumptions set forth
herein.
Based
upon the foregoing, and subject to the qualifications set forth below, we are of
the opinion that:
1. The
Loan Agreement, the Reimbursement Agreement, the Remarketing Agreement and the
Reoffering Agreement have been duly executed and delivered by the Company
(insofar as the validity of such execution and delivery is governed by the laws
of the State of New York).
E-2
June 24,
2009
Page
3
2. The
statements contained in the Reoffering Circular under the captions “THE BONDS,”
“THE LETTERS OF CREDIT,” “THE AGREEMENTS AND THE NOTES” and “THE INDENTURES,”
insofar as such statements constitute summaries of the provisions of the
Indenture, the Letter of Credit, the Reimbursement Agreement and the Loan
Agreement described therein, are accurate in all material respects and fairly
summarize the matters referred to therein.
3. The
Company is not an “investment company” under the Investment Company Act of 1940,
as amended.
4. The
offer and resale of the Bonds by the Company in accordance with the Reoffering
Agreement does not require registration under the Securities Act of 1933, as
amended. In expressing this opinion, we have assumed, with your
permission, and without having conducted any independent investigation or
analysis with respect to the matter, that the Bonds have been duly and validly
issued and that the interest thereon is not includable (with only the limited
exceptions expressly set forth in the opinions of bond counsel referred to
below) in the gross income of the owners thereof for United States federal
income tax purposes. We note that (i) in connection with the initial
issuance of the Bonds Xxxxxx XxXxx P.A. (formerly known as Xxxxxx, XxXxx &
Xxxxxxxxx, P.A.), as bond counsel, issued an opinion dated as of July 30, 1997,
regarding, among other things, (A) the United States federal income
tax treatment of the interest on the Bonds and (B) the valid issuance of the
Bonds by the Authority and (ii) you have received an opinion from Xxxxxx XxXxx
P.A., as bond counsel, of even date herewith, regarding the United States
federal income tax treatment of the interest on the Bonds after giving effect
to: (1) the execution and delivery of the Indenture, (2) the execution and
delivery of the Loan Agreement, (3) the termination on June 22, 2009 of the
financial guaranty insurance policy previously issued by MBIA Insurance
Corporation for the benefit of the holders of the Bonds, (4) the termination of
the Standby Bond Purchase Agreement, dated as of July 30, 1997, among the
Company, the banks party thereto and The Bank of New York Mellon (formerly known
as The Bank of New York), as agent, with respect to the Bonds and (5) the
execution of the Letter of Credit with respect to the Bonds.
In
accordance with our understanding with the Company as to the scope of our
services in connection with the remarketing of the Bonds, as special counsel to
the Company, we reviewed the Reoffering Circular and participated in discussions
with your representatives and those of the Company, your counsel and the
Company’s accountants. On the basis of the information which was
reviewed by us in the course of the performance of the services referred to
above, considered in the light of our understanding of the applicable law and
the experience we have gained through our practice under the federal securities
laws, we confirm to you that nothing came to our attention in the course of such
review which has caused us to believe that the Reoffering Circular as of its
date contained, or as of the date hereof contains, any untrue statement of a
material fact or omitted or omits to state a material fact necessary to make
the
E-3
June 24,
2009
Page
4
statements
therein, in the light of the circumstances under which they were made, not
misleading.
The
limitations inherent in the independent verification of factual matters and the
character of determinations involved in the preparation of the Reoffering
Circular are such, however, that we do not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the Reoffering
Circular (except as set forth in paragraph 2). Also, we do not
express any opinion or belief as to (i) the financial statements, including the
notes thereto, the financial schedules and the other financial and statistical
data included in the Reoffering Circular and (ii) any of the information in the
following sections of the Reoffering Circular:
·
|
The
sections of the Reoffering Circular
headed:
|
o
|
“THE
AUTHORITY,”
|
o
|
“THE
BONDS --Book-Entry-Only System,”
and
|
o
|
“TAX
MATTERS” (or any other information in the Reoffering Circular relating to
the status of interest on the Bonds for tax
purposes).
|
·
|
The
information included in Appendix B of the Reoffering
Circular.
|
·
|
The
information included in Appendix C of the Reoffering
Circular.
|
We do not
express any opinion on any laws other than the laws of the State of New York and
the federal securities laws of the United States.
This
opinion is given solely for your benefit in your capacity as Remarketing Agent
and may not be relied upon by any other person without our written
consent. This opinion may not be disclosed to any other person
without our written consent.
Very
truly yours,
E-4
Exhibit
F
[LETTERHEAD
OF PILLSBURY XXXXXXXX XXXX XXXXXXX LLP]
June 24, 2009
To the
parties listed on
Schedule
I hereto
Re:
|
The
Pollution Control Financing Authority of Salem County $4,400,000 Pollution
Control Revenue Refunding Bonds 1997, Series B (Atlantic City
Electric Company
Project)
|
Ladies
and Gentlemen:
We have
acted as special counsel to The Bank of New York Mellon (the “Bank”) in connection
with the Letter of Credit and Reimbursement Agreement, dated as of June 24,
2009, by and between Atlantic City Electric Company and the Bank (the “Agreement”), pursuant
to which the Bank has agreed issue a letter of credit in the form of Exhibit A
(the “Letter of
Credit”) thereto in support of the subject bonds (the “Bonds”). The
definitions of terms set forth in the Agreement apply to terms that are used
without definition herein.
On the
basis of the assumptions and subject to the qualifications and limitations set
forth below, we are of the opinion that:
1. The
Bank is a banking corporation duly incorporated and validly existing under the
laws of the State of New York.
2. The
Bank has the corporate power and authority to execute and deliver, and perform
its obligations under, each of the Agreement and the Letter of
Credit.
3. The
Bank has taken all requisite corporate action to authorize the execution and
delivery by the Bank of each of the Agreement and the Letter of Credit and the
performance by the Bank of its obligations under each of the Agreement and the
Letter of Credit.
4. The
Agreement and the Letter of Credit have been executed and delivered on behalf of
the Bank by a duly authorized officer of the Bank.
5. Each
of the Agreement and the Letter of Credit is the legal, valid and binding
obligation of the Bank, enforceable against the Bank in accordance with its
terms.
6. The
statements made in the Remarketing Circular in the section captioned “THE
LETTERS OF CREDIT”, insofar as they purport to constitute a summary of certain
of the provisions of the Agreement and the Letter of Credit described therein,
constitute an accurate summary of such provisions in all material
respects.
F-1
June 24,
2009
Page
2
7. The
issuance of the Letter of Credit by the Bank to the Trustee does not require
registration under the Securities Act of 1933.
Our
opinion is based on the procedures and assumptions, and subject to the
qualifications and limitations, set forth below:
(a) Our
opinion is limited to the law of the State of New York and the Federal law of
the United States in effect on the date hereof.
(b) We
have examined and reviewed originals, or copies of originals certified,
conformed or otherwise identified to our satisfaction, of such agreements,
documents and records as we have considered relevant and necessary as a basis
for this opinion.
(c) We
have assumed the accuracy and completeness of all, and the authenticity of all
original, certificates, agreements, documents, records and other materials
submitted to us, the conformity with the originals of any copies submitted to
us, the genuineness of all signatures (other than those of the Bank) and the
legal capacity of all natural persons.
(d) We
have assumed that (i) the execution and delivery of, and the performance of its
obligations under, the Agreement and the Letter of Credit by the Bank do not and
will not (A) require any authorization, consent, approval, license, franchise,
ruling, tariff, rate, permit, certificate, exemption of, or filing or
registration with, any governmental unit, agency, commission, department or
other authority having jurisdiction over the Bank (other than an authorization,
consent, approval, license, franchise, ruling, tariff, rate, permit,
certificate, exemption, filing or registration generally required under the law
to which our opinion is limited in paragraph (a) above with respect to New York
banking corporations entering into transactions that are similar in nature to
the execution, delivery and performance of its obligations under the Agreement
and the Letter of Credit by the Bank) or (B) violate or conflict with, result in
a breach of, or constitute a default under, (1) any agreement or instrument to
which the Bank or any of its affiliates is a party or by which the Bank or any
of its affiliates or any of their respective properties may be bound, (2) any
authorization, consent, approval, license, franchise, ruling, tariff, rate,
permit, certificate, exemption of, or filing or registration with, any
governmental unit, agency commission, department or other authority having
jurisdiction over the Bank that may be applicable to the Bank or any of its
affiliates or any of their respective properties (other than an authorization,
consent, approval, license, franchise, ruling, tariff, rate, permit,
certificate, exemption of, or filing or registration with any governmental unit,
agency commission, department or other authority having jurisdiction over the
Bank required for the execution and delivery of, and performance of its
obligations under, the Agreement and the Letter of Credit under the law to which
our opinion is limited in paragraph (a) above as such law applies to New York
state banking corporations entering into transactions that are similar in nature
to the execution, delivery and performance of its obligations under the
Agreement and the Letter of Credit by the Bank), (3) any order, decision,
judgment or decree that may be applicable to the Bank or any of its affiliates
or any of their respective properties or (4) any law, rule, regulation, order,
decree or other
F-2
June 24,
2009
Page
3
requirement
having the force of law relating to the Bank (other than the law to which our
opinion is limited in paragraph (a) above); (ii) the Agreement constitutes the
valid, legally binding and enforceable obligation of the parties thereto under
all laws, rules, regulations, orders, decrees or other requirements having the
force of law applicable to such parties (other than, in the case of the Bank,
the law to which our opinion is limited in paragraph (a) above); and (iii) there
are no agreements or understandings between the parties not set forth in the
Agreement and the Letter of Credit that would modify the terms of the Agreement
and/or the Letter of Credit, as applicable or the rights and obligations of the
parties thereunder.
(e) Our
opinion in paragraph 5 above with respect to the validity and enforceability of
the obligations of the Bank under the Agreement and the Letter of Credit is
subject to the effect of (i) applicable insolvency, reorganization, moratorium,
receivership, conservatorship, fraudulent conveyance and other similar laws
affecting creditors’ rights generally as such laws would apply in the event of
an insolvency, reorganization, moratorium, receivership, conservatorship or
similar occurrence with respect to the Bank, (ii) general equitable principles,
(iii) requirements of reasonableness, good faith and fair dealing, (iv) in the
case of waivers and exculpatory provisions, public policy, and (v) in the case
of restrictions on, or remedies in the event of, assignment or transfer of
rights or interests in the creation, attachment, perfection or enforcement of
security interests, Sections 9-406 and 9-408 of the Uniform Commercial Code as
in effect on the date hereof in the State of New York.
(f) We
express no view as to whether the statements as to which our opinion in
paragraph 6 relates summarize all of the material provisions of the Agreement
and the Letter of Credit or as to the completeness of any such
summary.
This
opinion is intended for the sole benefit of the addressees hereof and no other
Person shall be entitled to rely hereon for any purpose. In addition,
we disclaim any responsibility to update this opinion for changes in fact, law
or otherwise.
Very
truly yours,
F-3
Exhibit
F
SCHEDULE
I
to
Pillsbury
Xxxxxxxx Xxxx Xxxxxxx LLP Opinion
The
Pollution Control Financing Authority of Salem County
00 Xxxxxx
Xxxxxx
Xxxxx,
Xxx Xxxxxx 00000
Atlantic
City Electric Company
000 Xxxxx
Xxxxxx, X.X.
Xxxxxxxxxx,
X.X. 00000
Xxxxxx
Xxxxxxx & Co. Incorporated
1221
Avenue of the Xxxxxxxx, 00xx
Xxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Xxxxx’x
Investors Service, Inc.
New York,
New York
Standard
& Poor’s Ratings Services
a
division of the XxXxxx-Xxxx Companies, Inc.
New York,
NY
The Bank
of New York Mellon
New York,
NY
Sch-1