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EXHIBIT 1.1
WEST PENN FUNDING LLC
TRANSITION BONDS SERIES 1999-A
WEST PENN POWER COMPANY
WEST PENN FUNDING CORPORATION
UNDERWRITING AGREEMENT
New York, New York
_________ ___, 1999
To the Representative named in Schedule I
hereto of the Underwriters named in Schedule
II hereto
Ladies and Gentlemen:
1. Introduction. West Penn Funding LLC, a Delaware limited liability
company (the "Issuer"), proposes to sell to the underwriters named in Schedule
II hereto (the "Underwriters"), for whom you (the "Representative") are acting
as representative, the principal amount of the securities identified in Schedule
I hereto (the "Transition Bonds"). If the firm or firms listed in Schedule II
hereto include only the firm or firms listed in Schedule I hereto, then the
terms "Underwriters" and 'Representative', as used herein, shall each be deemed
to refer to such firm or firms.
The Issuer was formed on May 26, 1999, for the purpose of purchasing
and owning the Initial Intangible Transition Property, issuing the Transition
Bonds, and pledging its interest in the Collateral to ___________ (the "Bond
Trustee") under an indenture, dated as of ________ __, 1999 (as amended and
supplemented from time to time, including any Series Supplement, the
"Indenture"), between the Issuer and the Bond Trustee, to secure the Transition
Bonds. The Transition Bonds will be secured primarily by the Initial Intangible
Transition Property. The Initial Intangible Transition Property will be
transferred by West Penn Power Company (the "Company") to West Penn Funding
Corporation, a Delaware corporation (the "Seller"), pursuant to an intangible
transition property transfer agreement, dated as of ____ ___, 1999 (the
"Transfer Agreement"), between the Company and the Seller. Such Initial
Intangible Transition Property will then be sold to the Issuer by the Seller
pursuant to an intangible transition property sale agreement, dated as of
________ __, 1999 (the "Sale Agreement"), between the Seller and the Issuer.
Subsequent Intangible Transition Property may be sold to the Issuer by the
Seller pursuant to an agreement substantially similar to the Sale Agreement. The
Initial Intangible Transition Property will be serviced pursuant to a servicing
agreement, dated as of ________ __, 1999 (as amended and supplemented from time
to time, the "Servicing Agreement"), between the Company, as servicer, and the
Issuer.
Capitalized terms used and not otherwise defined herein shall have the
meanings given to them in the Indenture.
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2. Representations and Warranties. Each of the Company, the Issuer and
the Seller represents and warrants to, and agrees with, each Underwriter as set
forth below in this Section 2. Certain terms used in this Section 2 are defined
in paragraph (c) hereof.
(a) If the offering of the Transition Bonds is a Delayed
Offering (as specified in Schedule I hereto), paragraph (i) below is
applicable and, if the offering of the Transition Bonds is a
Non-Delayed Offering (as so specified), paragraph (ii) below is
applicable.
(i) The Issuer and the Transition Bonds meet the
requirements for the use of Form S-3 under the Securities Act
of 1933 (the "Act"), and the Issuer has filed with the
Securities and Exchange Commission (the "SEC") a registration
statement (the file number of which is set forth in Schedule I
hereto) on such Form, including a basic prospectus, for
registration under the Act of the offering and sale of the
Transition Bonds. The Issuer may have filed one or more
amendments thereto, and may have used a Preliminary Final
Prospectus, each of which has previously been furnished to
you. Such registration statement, as so amended, has become
effective. The offering of the Transition Bonds is a Delayed
Offering and, although the Basic Prospectus may not include
all the information with respect to the Transition Bonds and
the offering thereof required by the Act and the rules
thereunder to be included in the Final Prospectus, the Basic
Prospectus includes all such information required by the Act
and the rules thereunder to be included therein as of the
Effective Date. The Issuer will next file with the SEC
pursuant to Rules 415 and 424(b) (2) or (5) a final supplement
to the form of prospectus included in such registration
statement relating to the Transition Bonds and the offering
thereof. As filed, such final prospectus supplement shall
include all required information with respect to the
Transition Bonds and the offering thereof and, except to the
extent the Representative shall agree in writing to a
modification, shall be in all substantive respects in the form
furnished to you prior to the Execution Time or, to the extent
not completed at the Execution Time, shall contain only such
specific additional information and other changes (beyond that
contained in the Basic Prospectus and any Preliminary Final
Prospectus) as the Issuer has advised you, prior to the
Execution Time, will be included or made therein.
(ii) The Issuer and the Transition Bonds meet the
requirements for the use of Form S-3 under the Act and the
Issuer has filed with the SEC a registration statement (the
file number of which is set forth in Schedule I hereto) on
such Form, including a basic prospectus, for registration
under the Act of the offering and sale of the Transition
Bonds. The Issuer may have filed one or more amendments
thereto, including a Preliminary Final Prospectus, each of
which has previously been furnished to you. The Issuer will
next file with the SEC either (x) a final prospectus
supplement relating to the Transition Bonds in accordance with
Rules 430A and 424(b)(l) or (4), or (y) prior to the
effectiveness of such registration statement, an amendment to
such registration statement, including the form of final
prospectus supplement. In the case of clause (x), the Issuer
has included in such registration statement, as amended at
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the Effective Date, all information (other than Rule 430A
Information) required by the Act and the rules thereunder to
be included in the Final Prospectus with respect to the
Transition Bonds and the offering thereof. As filed, such
final prospectus supplement or such amendment and form of
final prospectus supplement shall contain all Rule 430A
Information, together with all other such required
information, with respect to the Transition Bonds and the
offering thereof and, except to the extent the Representative,
shall agree in writing to a modification, shall be in all
substantive respects in the form furnished to you prior to the
Execution Time or, to the extent not completed at the
Execution Time, shall contain only such specific additional
information and other changes (beyond that contained in the
Basic Prospectus and any Preliminary Final Prospectus) as the
Issuer has advised you, prior to the Execution Time, will be
included or made therein.
(b) On the Effective Date, the Registration Statement did or
will, and when the Final Prospectus is first filed (if required) in
accordance with Rule 424(b) and on the Closing Date, the Final
Prospectus (and any supplement thereto) will, comply in all material
respects with the applicable requirements of the Act, the Securities
Exchange Act of 1934 (the "Exchange Act") and the Trust Indenture Act
of 1939 (the "Trust Indenture Act") and the respective rules
thereunder; on the Effective Date, the Registration Statement did not
or will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading; on the Effective
Date and on the Closing Date the Indenture did or will comply in all
material respects with the requirements of the Trust Indenture Act and
the rules thereunder, and, on the Effective Date, the Final Prospectus,
if not filed pursuant to Rule 424(b), did not or will not, and on the
date of any filing pursuant to Rule 424(b) and on the Closing Date, the
Final Prospectus (together with any supplement thereto) will not,
include any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that neither the Issuer, the Seller nor the Company
makes any representations or warranties as to (i) that part of the
Registration Statement which shall constitute the Statements of
Eligibility and Qualification (Forms T-l) under the Trust Indenture Act
of the Bond Trustee or (ii) the information contained in or omitted
from the Registration Statement or the Final Prospectus (or any
supplement thereto) in reliance upon and in conformity with information
furnished in writing to the Issuer by or on behalf of any Underwriter
through the Representative specifically for inclusion in the
Registration Statement or the Final Prospectus (or any supplement
thereto).
(c) The terms which follow, when used in this Agreement, shall
have the meanings indicated. The term "Effective Date" shall mean each
date that the Registration Statement and any post-effective amendment
or amendments thereto became or become effective and each date after
the date hereof on which a document incorporated by reference in the
Registration Statement is filed. "Execution Time" shall mean the date
and time that this Agreement is executed and delivered by the parties
hereto. "Basic Prospectus" shall mean the prospectus referred to in
paragraph (a) above contained in the Registration Statement at the
Effective Date including, in the case of a Non-Delayed Offering, any
Preliminary
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Final Prospectus. "Preliminary Final Prospectus" shall mean any
preliminary prospectus supplement to the Basic Prospectus which
describes the Transition Bonds and the offering thereof and is used
prior to filing of the Final Prospectus. "Final Prospectus" shall mean
the prospectus supplement relating to the Transition Bonds that is
first filed pursuant to Rule 424(b) after the Execution Time, together
with the Basic Prospectus or, if, in the case of a Non-Delayed
Offering, no filing pursuant to Rule 424(b) is required, shall mean the
form of final prospectus relating to the Transition Bonds, including
the Basic Prospectus, included in the Registration Statement at the
Effective Date. "Registration Statement" shall mean the registration
statement referred to in paragraph (a) above, including incorporated
documents, exhibits and financial statements, as amended at the
Execution Time (or, if not effective at the Execution Time, in the form
in which it shall become effective) and, in the event any
post-effective amendment thereto becomes effective prior to the Closing
Date (as hereinafter defined), shall also mean such registration
statement as so amended. Such term shall include any Rule 430A
Information deemed to be included therein at the Effective Date as
provided by Rule 430A. "Rule 415", "Rule 424", "Rule 430A" and
"Regulation S-K" refer to such rules or regulation under the Act. "Rule
430A Information" means information with respect to the Transition
Bonds and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
Any reference herein to the Registration Statement, the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus
shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 which were filed
under the Exchange Act on or before the Effective Date of the
Registration Statement or the issue date of the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus, as the case may
be; and any reference herein to the terms "amend", "amendment" or
"supplement" with respect to the Registration Statement, the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus
shall be deemed to refer to and include the filing of any document
under the Exchange Act after the Effective Date of the Registration
Statement or the issue date of the Basic Prospectus, any Preliminary
Final Prospectus or the Final Prospectus, as the case may be, deemed to
be incorporated therein by reference. A "Non-Delayed Offering" shall
mean an offering of securities which is intended to commence promptly
after the effective date of a registration statement, with the result
that, pursuant to Rules 415 and 430A, all information (other than Rule
430A Information) with respect to the securities so offered must be
included in such registration statement at the effective date thereof.
A "Delayed Offering" shall mean an offering of securities pursuant to
Rule 415 which does not commence promptly after the effective date of a
registration statement, with the result that only information required
pursuant to Rule 415 need be included in such registration statement at
the effective date thereof with respect to the securities so offered.
Whether the offering of the Transition Bonds is a Non-Delayed Offering
or a Delayed Offering shall be set forth in Schedule I hereto.
3. Purchase and Sale. Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Issuer
agrees to sell to each Underwriter, and each Underwriter agrees, severally and
not jointly, to purchase from the Issuer, at the purchase price set forth in
Schedule I hereto the principal amount
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of the Transition Bonds set forth opposite such Underwriter's name in Schedule
II hereto.
4. Delivery and Payment. Delivery of and payment for the Transition
Bonds shall be made on the date and at the time specified in Schedule I hereto
(or such later date not later than five business days after such specified date
as the Representative shall designate), which date and time may be postponed by
agreement between the Representative and the Issuer or as provided in Section 9
hereof (such date and time of delivery and payment for the Transition Bonds
being herein called the "Closing Date"). Delivery of the Transition Bonds shall
be made to the Representative for the respective accounts of the several
Underwriters against payment by the several Underwriters through the
Representative of the purchase price thereof to the Issuer by wire transfer of
immediately available funds. Delivery of the Transition Bonds shall be made at
such location as the Representative shall reasonably designate at least one
business day in advance of the Closing Date. The Transition Bonds to be so
delivered shall be initially represented by Bonds registered in the name of Cede
& Co., as nominee of The Depository Trust Company ("DTC"). The interests of
beneficial owners of the Transition Bonds will be represented by book entries on
the records of DTC and participating members thereof. Definitive Transition
Bonds will be available only under limited circumstances.
The Issuer agrees to have the Transition Bonds available for
inspection, checking and packaging by the Representative in New York, New York,
not later than 1:00 PM on the business day prior to the Closing Date.
5. Covenants.
(a) Covenants of the Issuer. The Issuer covenants and agrees
with the several Underwriters that:
(i) The Issuer will use its best efforts to cause the
Registration Statement, if not effective at the Execution
Time, and any amendment thereto, to become effective. Prior to
the termination of the offering of the Transition Bonds, the
Issuer will not file any amendment of the Registration
Statement or supplement (including the Final Prospectus or any
Preliminary Final Prospectus) to the Basic Prospectus unless
the Issuer has furnished you a copy for your review prior to
filing and will not file any such proposed amendment or
supplement to which you reasonably object. Subject to the
foregoing sentence, the Issuer will cause the Final
Prospectus, properly completed, and any supplement thereto to
be filed with the SEC pursuant to the applicable paragraph of
Rule 424 (b) within the time period prescribed and will
provide evidence satisfactory to the Representative of such
timely filing. The Issuer will promptly advise the
Representative (i) when the Registration Statement, if not
effective at the Execution Time, and any amendment thereto,
shall have become effective, (ii) when the Final Prospectus,
and any supplement thereto, shall have been filed with the SEC
pursuant to Rule 424(b), (iii) when, prior to termination of
the offering of the Transition Bonds, any amendment to the
Registration Statement shall have been filed or become
effective, (iv) of any request by the SEC for any amendment of
the Registration Statement or supplement to the Final
Prospectus or for any additional information,
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(v) of the issuance by the SEC of any stop order suspending
the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose
and (vi) of the receipt by the Issuer of any notification with
respect to the suspension of the qualification of the
Transition Bonds for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose.
The Issuer will use its best efforts to prevent the issuance
of any such stop order and, if issued, to obtain as soon as
possible the withdrawal thereof.
(ii) If, at any time when a prospectus relating to
the Transition Bonds is required to be delivered under the
Act, any event occurs as a result of which the Final
Prospectus as then supplemented would include any untrue
statement of a material fact or omit to state any material
fact necessary to make the statements therein in the light of
the circumstances under which they were made not misleading,
or if it shall be necessary to amend the Registration
Statement or supplement the Final Prospectus to comply with
the Act or the Exchange Act or the respective rules
thereunder, the Issuer promptly will (i) prepare and file with
the SEC, subject to the second sentence of paragraph (a)(i) of
this Section 5, an amendment or supplement which will correct
such statement or omission or effect such compliance and (ii)
supply any supplemented Prospectus to you in such quantities
as you may reasonably request.
(iii) As soon as practicable, the Issuer will make
generally available to the Bondholders and to the
Representative an earnings statement or statements of the
Issuer which will satisfy the provisions of Section 11(a) of
the Act and Rule 158 under the Act.
(iv) The Issuer will furnish to the Representative
and counsel for the Underwriters, without charge, copies of
the Registration Statement (including exhibits thereto) and,
so long as delivery of a prospectus by an Underwriter or
dealer may be required by the Act, as many copies of any
Preliminary Final Prospectus and the Final Prospectus and any
supplement thereto as the Representative may reasonably
request. The Issuer shall furnish or cause to be furnished to
the Representative copies of all reports on Form SR required
by Rule 463 under the Act. The Issuer will pay the expenses of
printing or other production of all documents relating to the
offering.
(v) The Issuer will arrange for the qualification of
the Transition Bonds for sale under the laws of such
jurisdictions as the Representative may designate, will
maintain such qualifications in effect so long as required for
the distribution of the Transition Bonds and will arrange for
the determination of the legality of the Transition Bonds for
purchase by institutional investors; provided that in no event
shall the Issuer be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any
action that would subject it to service of process in suits,
other than those arising out of the offering or sale of the
Transition Bonds, in any jurisdiction where it is not now so
subject.
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(vi) Until the business date set forth on Schedule I
hereto, the Issuer will not, without the consent of the
Representative, offer, sell or contract to sell, or otherwise
dispose of, directly or indirectly, or announce the offering
of, any asset-backed securities of a special purpose vehicle
(other than the Transition Bonds).
(vii) For a period from the date of this Agreement
until the retirement of the Transition Bonds, or until such
time as the Underwriters shall cease to maintain a secondary
market in the Transition Bonds, whichever occurs first, the
Issuer will deliver to the Representative the annual
statements of compliance and the annual independent auditor's
servicing reports furnished to the Issuer or the Trustee
pursuant to the Servicing Agreement or the Indenture, as
applicable, as soon as such statements and reports are
furnished to the Issuer or the Trustee.
(viii) So long as any of the Transition Bonds are
outstanding, the Issuer will furnish to the Representative (i)
as soon as available, a copy of each report filed with the SEC
under the Exchange Act, or mailed to Bondholders, (ii) a copy
of any filings with the Pennsylvania Public Utility Commission
(the "PUC") or any other governmental agency or
instrumentality relating to the Transition Bonds, and (iii)
from time to time, any information concerning the Company, the
Seller or the Issuer, as the Representative may reasonably
request.
(ix) To the extent, if any, that any rating necessary
to satisfy the condition set forth in Section 6(o) of this
Agreement is conditioned upon the furnishing of documents or
the taking of other actions by the Issuer on or after the
Closing Date, the Issuer shall furnish such documents and take
such other actions.
(b) Covenants of the Company and the Seller . The Company and
the Seller each covenants and agrees with the several Underwriters
that, to the extent that the Issuer has not already performed such act
pursuant to Section 5 (a):
(i) Each of the Company and the Seller will use its
best efforts to cause the Registration Statement, if not
effective at the Execution Time, and any amendment thereto, to
become effective. Each of the Company and the Seller will use
its best efforts to prevent the issuance by the SEC of any
stop order suspending the effectiveness of the Registration
Statement and, if issued, to obtain as soon as possible the
withdrawal thereof.
(ii) Until the business date set forth on Schedule I
hereto, each of the Company and the Seller will not, without
the consent of the Representative, offer, sell or contract to
sell, or otherwise dispose of, directly or indirectly, or
announce the offering of, any asset-backed securities of a
special purpose vehicle (other than the Transition Bonds).
(iii) So long as any of the Transition Bonds are
outstanding and the Company is the Servicer, the Company will
furnish to the Representative (i) as soon as available, a copy
of each report filed with the
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SEC under the Exchange Act, or mailed to Bondholders, (ii) a
copy of any filings with the PUC or any other governmental
agency or instrumentality relating to the Transition Bonds,
and (iii) from time to time, any information concerning the
Company and, to the extent readily available, the Issuer and
the Seller, as the Representative may reasonably request.
(iv) To the extent, if any, that any rating necessary
to satisfy the condition set forth in Section 6(o) of this
Agreement is conditioned upon the furnishing of documents or
the taking of other actions by the Company or the Seller on or
after the Closing Date, the Company and the Seller shall
furnish such documents and take such other actions.
6. Conditions to the Obligations of the Underwriters. The obligations
of the Underwriters to purchase the Transition Bonds shall be subject to the
accuracy of the representations and warranties on the part of the Issuer, the
Seller and the Company contained herein as of the Execution Time and the Closing
Date, on the part of the Company contained in Article III of the Transfer
Agreement, on the part of the Seller contained in Article III of the Sale
Agreement and on the part of the Company contained in Section 5.01 of the
Servicing Agreement as of the Closing Date, to the performance by the Issuer,
the Seller and the Company of their obligations hereunder and to the following
additional conditions:
(a) If the Registration Statement has not become effective
prior to the Execution Time, unless the Representative agree in writing
to a later time, the Registration Statement will become effective not
later than (i) 6:00 PM New York City time, on the date of determination
of the public offering price, if such determination occurred at or
prior to 3:00 PM New York City time on such date, or (ii) 12:00 Noon on
the business day following the day on which the public offering price
was determined, if such determination occurred after 3:00 PM New York
City time on such date; if filing of the Final Prospectus, or any
supplement thereto, is required pursuant to Rule 424(b), the Final
Prospectus, and any such supplement, shall have been filed in the
manner and within the time period required by Rule 424 (b); and no stop
order suspending the effectiveness of the Registration Statement shall
have been issued and no proceedings for that purpose shall have been
instituted or threatened.
(b) The Representative shall have received opinions of counsel
for the Company and the Seller, portions of which may be delivered by
Cravath, Swaine & Xxxxx, outside counsel for the Company and the
Seller, portions of which may be delivered by ____________________,
Esq., in-house counsel for the Company and the Seller, portions of
which may be delivered by ___________________________, special
regulatory counsel for the Company and the Seller, and portions of
which may be delivered by Xxxxxxxx, Xxxxxx & Finger, P. A., special
Delaware counsel for the Company and the Seller, each dated the Closing
Date, in form and substance reasonably satisfactory to the
Representative, to the effect that:
(i) each of the Company and the Seller (a) has been
duly incorporated and is validly existing as a corporation in
good standing under the laws of the jurisdiction in which it
is organized, (b) has all requisite corporate power and
authority to own its properties, conduct its
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business as presently conducted and execute, deliver and
perform its obligations under this Agreement, the Sale
Agreement, the Transfer Agreement and the Servicing Agreement,
as applicable, and (c) is duly qualified to do business, in
all jurisdictions (and is in good standing under the laws of
all such jurisdictions) to the extent that such qualification
and good standing is or shall be necessary to protect the
validity and enforceability of this Agreement, the Basic
Documents to which the Company and/or the Seller is party and
each other instrument or agreement necessary or appropriate to
the proper administration of this Agreement and the
transactions contemplated hereby;
(ii) (a) the Transfer Agreement and the Servicing
Agreement have been duly authorized, executed and delivered by
the Company and constitute legal, valid and binding
instruments enforceable against the Company in accordance with
their terms (subject, as to enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium
or other similar laws or equitable principles affecting
creditors' rights generally from time to time in effect);
(b) the Transfer Agreement and the Sale Agreement
have been duly authorized, executed and delivered by the
Seller and constitute legal, valid and binding instruments
enforceable against the Seller in accordance with their terms
(subject, as to enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency moratorium or other
similar laws or equitable principles affecting creditors'
rights generally from time to time in effect);
(iii) to the best knowledge of such counsel, there is
no pending or threatened action, suit or proceeding before any
court or governmental agency, authority or body or any
arbitrator involving the Company, the Seller or any of their
subsidiaries of a character required to be disclosed in the
Registration Statement which is not adequately disclosed in
the Final Prospectus, and there is no franchise, contract or
other document of a character required to be described in the
Registration Statement or Final Prospectus, or to be filed as
an exhibit, which is not described or filed as required;
(iv) this Agreement has been duly authorized,
executed and delivered by the Company and the Seller;
(v) no consent, approval, authorization or order of
any court or governmental agency or body is required for the
consummation of the transactions contemplated herein, except
such as have been obtained under the Pennsylvania Electricity
Generation Customer Choice and Competition Act (the
"Competition Act") and such as may be required under the blue
sky laws of any jurisdiction in connection with the purchase
and distribution of the Transition Bonds by the Underwriters
and such other approvals (specified in such opinion) as have
been obtained;
(vi) neither the execution and delivery of this
Agreement, the Transfer Agreement, the Sale Agreement, the
Servicing Agreement, nor
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the consummation of the transactions contemplated by this
Agreement, the Transfer Agreement, the Sale Agreement or the
Servicing Agreement, nor the fulfillment of the terms of this
Agreement, the Transfer Agreement, the Sale Agreement or the
Servicing Agreement by the Company and the Seller as
applicable, will (A) conflict with, result in any breach of
any of the terms or provisions of, or constitute (with or
without notice or lapse of time) a default under the articles
of incorporation, bylaws or other organizational documents of
the Company or the Seller, or conflict with or breach any of
the terms or provisions of, or constitute (with or without
notice or lapse of time) a default under, any indenture,
material agreement or other material instrument to which the
Company or the Seller is a party or by which the Company or
the Seller is bound, (B) result in the creation or imposition
of any lien upon any properties of the Company or the Seller
pursuant to the terms of any such indenture, agreement or
other instrument (other than as contemplated by the Basic
Documents and the Competition Act), or (C) violate any law or
any order, rule or regulation applicable to the Company or the
Seller of any court or of any federal or state regulatory
body, administrative agency or other governmental
instrumentality having jurisdiction over the Company, the
Seller or any of their properties;
(vii) upon the delivery of the fully executed
Transfer Agreement and related Bill of Sale to the Seller, the
fully executed Sale Agreement and related Bill of Sale to the
Issuer and the payment of the purchase price of the Initial
Intangible Transition Property by the Issuer to the Seller
pursuant to the Sale Agreement, then (A) the transfer of the
Initial Intangible Transition Property by the Company to the
Seller pursuant to the Transfer Agreement and related Bill of
Sale conveys the Company's right, title and interest in the
Initial Intangible Transition Property to the Seller and will
be treated as an absolute transfer of all the Company's right,
title and interest in the Initial Intangible Transition
Property, other than for federal and state income and
franchise tax purpose, (B) the transfer of the Initial
Intangible Transition Property by the Seller to the Issuer
pursuant to the Sale Agreement and related Bill of Sale
conveys the Seller's right, title and interest in the Initial
Intangible Transition Property to the Issuer and will be
treated as an absolute transfer of all of the Seller's right,
title, and interest in the Initial Intangible Transition
Property, other than for federal and state income and
franchise tax purposes, (C) such transfers of the Initial
Intangible Transition Property are perfected, (D) such
transfers have priority over any other assignment of the
Initial Intangible Transition Property (except that the
transfer of Initial Intangible Transition Property from the
Company to the Seller pursuant to the Transfer Agreement and
related Bill of Sale shall not have priority over the sale of
the Initial Intangible Transition Property to the Issuer from
the Seller pursuant to the Sale Agreement and related Bill of
Sale), and (E) the Initial Intangible Transition Property is
free and clear of all liens created prior to the respective
transfers to the Seller and the Issuer pursuant to the
applicable Bills of Sale; and
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(viii) the Initial Intangible Transition Property is
not subject to the Lien of the Mortgage Bond Indenture, dated
as of _____, between the Company and ________, as trustee.
In rendering such opinion, Xxxxxxx, Xxxxxx & Xxxxx may rely as to matters
involving the application of laws of the State of Pennsylvania, to the extent
deemed proper and specified in such opinion, upon the opinion of other counsel
of good standing believed to be reliable and who are satisfactory to counsel for
the Underwriters, and such counsel may rely as to matters of fact, to the extent
deemed proper, on certificates of responsible officers of the Company and the
Seller. References to the Final Prospectus in this paragraph (b) include any
supplements thereto at the Closing Date.
(c) The Representative shall have received opinions of counsel
for the Issuer, portions of which may be delivered by Xxxxxxx, Swaine &
Xxxxx, outside counsel for the Issuer, portions of which may be
delivered by __________________, Esq., in-house counsel for the Issuer,
portions of which may be delivered by _________________, special
regulatory counsel for the Issuer, and portions of which may be
delivered by Xxxxxxxx, Xxxxxx & Xxxxxx, P.A., special Delaware counsel
for the Issuer, each dated the Closing Date, in form and substance
reasonably satisfactory to the Representative, to the effect that:
(i) the Issuer has been duly formed and is validly
existing as a limited liability company and is in good
standing under the laws of the State of Delaware, with full
power and authority to execute, deliver and perform its
obligations under this Agreement, the Sale Agreement, the
Servicing Agreement and the Indenture;
(ii) the Sale Agreement, the Servicing Agreement and
the Indenture have been duly authorized, executed and
delivered by the Issuer and constitute legal, valid and
binding instruments enforceable against the Issuer in
accordance with their terms (subject, as to enforcement of
remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium or other similar laws or equitable
principles affecting creditors' rights generally from time to
time in effect); and the Transition Bonds have been duly
authorized and executed by the Issuer, and when authenticated
in accordance with the provisions of the Indenture and
delivered to and paid for by the Underwriters in accordance
with the terms of this Agreement, will constitute legal, valid
and binding obligations of the Issuer entitled to the benefits
of the Indenture and enforceable against the Issuer in
accordance with their terms (subject, as to enforcement of
remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium or other similar laws or equitable
principles affecting creditors' rights generally from time to
time in effect);
(iii) this Agreement has been duly authorized,
executed and delivered by the Issuer;
(iv) the Indenture has been duly qualified under the
Trust Indenture Act;
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(v) to the best knowledge of such counsel, there is
no pending or threatened action, suit or proceeding before any
court or governmental agency, authority or body or any
arbitrator involving the Issuer, or relating to the Transition
Bonds, the Competition Act, the qualified rate order issued by
the PUC to the Company on November 19, 1998, as supplemented
by a supplemental qualified rate order issued by the PUC to
the Company on August 12, 1999 (collectively, the "Qualified
Rate Order") or the use and enjoyment of Initial Intangible
Transition Property of a character required to be disclosed in
the Registration Statement which is not adequately disclosed
in the Final Prospectus, and there is no franchise, contract
or other document of a character required to be described in
the Registration Statement or Final Prospectus, or to be filed
as an exhibit, which is not described or filed as required;
(vi) the Registration Statement has become effective
under the Act; any required filing of the Basic Prospectus,
any Preliminary Final Prospectus and the Final Prospectus, and
any supplements thereto, pursuant to Rule 424(b) has been made
in the manner and within the time period required by Rule 424
(b); to the best knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has
been issued, no proceedings for that purpose have been
instituted or threatened, and the Registration Statement and
the Final Prospectus (other than the financial statements and
other financial and statistical information contained therein
as to which such counsel need express no opinion) comply as to
form in all material respects with the applicable requirements
of the Act, the Exchange Act and the Trust Indenture Act and
the respective rules thereunder; and such counsel has no
reason to believe that at the Effective Date the Registration
Statement contained any untrue statement of a material fact or
omitted to state any material fact required to be stated
therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading or that the Final Prospectus as of its date and the
Closing Date includes any untrue statement of a material fact
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 (other than the financial
statements and other financial and statistical information
contained therein as to which such counsel need express no
opinion);
(vii) no consent, approval, authorization or order of
any court or governmental agency or body is required for the
consummation of the transactions contemplated herein, except
such as have been obtained under the Competition Act and such
as may be required under the blue sky laws of any jurisdiction
in connection with the purchase and distribution of the
Transition Bonds by the Underwriters and such other approvals
(specified in such opinion) as have been obtained;
(viii) neither the execution and delivery of this
Agreement, the Sale Agreement, the Servicing Agreement or the
Indenture, nor the issue and sale of the Transition Bonds, nor
the consummation of the transactions contemplated by this
Agreement, the Sale Agreement, the Servicing Agreement, or the
Indenture, nor the fulfillment of the terms of
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this Agreement, the Sale Agreement, the Servicing Agreement or
the Indenture by the Issuer, will (A) conflict with, result in
any breach of any of the terms or provisions of, or constitute
(with or without notice or lapse of time) a default under the
Limited Liability Company Agreement of the Issuer, or conflict
with or breach any of the terms or provisions of, or
constitute (with or without notice or lapse of time) a default
under, any indenture, agreement or other instrument known to
such counsel and to which the Issuer is a party or by which
the Issuer is bound, (B) result in the creation or imposition
of any lien upon any properties of the Issuer pursuant to the
terms of any such indenture, agreement or other instrument
(other than as contemplated by the Basic Documents and the
Competition Act), or (C) violate any law or any order, rule or
regulation applicable to the Issuer of any court or of any
federal or state regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over
the Issuer, or any of its properties;
(ix) (A) to the extent that the provisions of the
Competition Act apply to the grant of a security interest by
the Issuer in the Collateral pursuant to the Indenture, then
upon the giving of value by the Bond Trustee to the Issuer
with respect to the Collateral, (I) the Indenture creates in
favor of the Bond Trustee a security interest in the rights of
the Issuer in the Collateral, (II) such security interest is
valid and enforceable against the Issuer and third parties
(subject to the rights of any third parties holding security
interests in such Collateral perfected in the manner described
in the Competition Act) and has attached, (III) such security
interest is perfected, and (IV) such perfected security
interest is of first priority, (B) to the extent that the
provisions of the Competition Act do not apply to the grant of
a security interest by the Issuer in the Collateral pursuant
to the Indenture, then upon the giving of value by the Bond
Trustee to the Issuer with respect to the Collateral, (I) the
Indenture creates in favor of the Bond Trustee a security
interest in the rights of the Issuer in the Collateral, and
such security interest is enforceable against the Issuer with
respect to such Collateral, (II) such security interest is
perfected, and (III) such perfected security interest is of
first priority;
(x) the Issuer is not an "investment company" or
under the "control" of an "investment company" as such terms
are defined under the Investment Company Act of 1940, as
amended.
(xi) the statements included in the Final Prospectus
under the captions "The Competition Act", "West Penn's
Restructuring Plan", "The QRO and The Intangible Transition
Charges", "The Transition Bonds", "The Transfer Agreement",
"The Sale Agreement", "The Servicing Agreement", and "The
Indenture" fairly summarize the matters described therein; and
(xii) the statements included in the Final Prospectus
under the captions "United States Taxation" and "Erisa
Considerations", to the extent that they constitute matters of
law on legal conclusions with respect thereto, provide a fair
and accurate summary of such law and conclusions.
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In rendering such opinion, Xxxxxxx, Xxxxxx & Xxxxx may rely as to matters
involving the application of laws of the Commonwealth of Pennsylvania, to the
extent deemed proper and specified in such opinion, upon the opinion of other
counsel of good standing believed to be reliable and who are satisfactory to
counsel for the Underwriters, and such counsel may rely as to matters of fact,
to the extent deemed proper, on certificates of responsible officers of the
Issuer and public officials. References to the Final Prospectus in this
paragraph (c) include any supplements thereto at the Closing Date.
(d) The Representative and the Issuer have received an opinion
of ___________, counsel to the Bond Trustee, dated the Closing Date, in
form and substance reasonably satisfactory to the Representative, to
the effect that:
(i) [the Bond Trustee is validly existing as a
national banking association in good standing under the
federal laws of the United States of America;]
(ii) the Indenture has been duly authorized, executed
and delivered by the Bond Trustee, and constitutes a legal,
valid and binding instrument enforceable against the Bond
Trustee in accordance with its terms (subject, as to
enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other similar laws
or equitable principles affecting creditors' rights generally
from time to time in effect); and
(iii) the Transition Bonds have been duly
authenticated by the Trustee.
(e) The Representative shall have received from Xxxxxx &
Xxxxxxx, counsel for the Underwriters, such opinion or opinions, dated
the Closing Date, with respect to the issuance and sale of the
Transition Bonds, the Indenture, the Registration Statement, the Final
Prospectus (together with any supplement thereto) and other related
matters as the Representative may reasonably require, and the Company,
the Seller and the Issuer shall have furnished to such counsel such
documents as they request for the purpose of enabling them to pass upon
such matters.
(f) The Representative and the Bond Trustee shall have
received a certificate of the Issuer, signed by the [President] and the
principal financial or accounting officer of the Issuer, dated the
Closing Date, to the effect that the signers of such certificate have
carefully examined the Registration Statement, the Final Prospectus,
any supplement to the Final Prospectus and this Agreement and that:
(i) the representations and warranties of the Issuer
in this Agreement and in the Indenture are true and correct in
all material respects on and as of the Closing Date with the
same effect as if made on the Closing Date, and the Issuer has
complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or
prior to the Closing Date;
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(ii) no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings
for that purpose have been instituted or, to the Issuer's best
knowledge, threatened; and
(iii) since the dates as of which information is
given in the Final Prospectus (exclusive of any supplement
thereto), there has been no material adverse change in (x) the
condition (financial or other), prospects, earnings, business
or properties of the Issuer, whether or not arising from
transactions in the ordinary course of business, or (y) the
Initial Intangible Transition Property, except as set forth in
or contemplated in the Final Prospectus (exclusive of any
supplement thereto).
(g) The Representative and the Bond Trustee shall have
received a certificate of the Company, signed by the [Vice President
and Treasurer] and the principal financial officer of the Company,
dated the Closing Date, to the effect that the signers of such
certificate have carefully examined the Registration Statement, the
Final Prospectus, any supplement to the Final Prospectus and this
Agreement and that:
(i) the representations and warranties of the Company
in this Agreement, the Transfer Agreement and the Servicing
Agreement are true and correct in all material respects on and
as of the Closing Date with the same effect as if made on the
Closing Date, and the Company has complied with all the
agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings
for that purpose have been instituted or, to the Company's
best knowledge, threatened; and
(iii) since the dates as of which information is
given in the Final Prospectus (exclusive of any supplement
thereto), there has been no material adverse change in (x) the
condition (financial or other), prospects, earnings, business
or properties of the Company and its subsidiaries taken as a
whole, whether or not arising from transactions in the
ordinary course of business, or (y) the Initial Intangible
Transition Property, except as set forth in or contemplated in
the Final. Prospectus (exclusive of any supplement thereto)
(h) The Representative and the Bond Trustee shall have
received a certificate of the Seller, signed by the Vice President and
Treasurer and the principal financial officer of the Seller, dated the
Closing Date, to the effect that the signers of such certificate have
carefully examined the Registration Statement, the Final Prospectus,
any supplement to the Final Prospectus and this Agreement and that:
(i) The representations and warranties of the Seller
in this Agreement and the Sale Agreement are true and correct
in all material
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respects on and as of the Closing Date with the same effect as
if made on the Closing Date, and the Seller has complied with
all the agreements and satisfied all the conditions on its
part to be performed or satisfied at or prior to the Closing
Date;
(ii) no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings
for that purpose have been instituted or, to the Seller's best
knowledge, threatened; and
(iii) since the dates as of which information is
given in the Final Prospectus (exclusive of any supplement
thereto), there has been no material adverse change in (x) the
condition (financial or other), prospects, earnings, business
or properties of the Seller and its subsidiaries taken as a
whole, whether or not arising from transactions in the
ordinary course of business, or (y) the Initial Intangible
Transition Property, except as set forth in or contemplated in
the Final Prospectus (exclusive of any supplement thereto)
(i) At the Closing Date, ________________ shall have furnished
to the Representative (i) a letter or letters (which may refer to
letters previously delivered to one or more of the Representative),
dated the Closing Date, in form and substance satisfactory to the
Representative, confirming that they are independent accountants within
the meaning of the Act and the Exchange Act and the respective
applicable published rules and regulations thereunder and stating in
effect that they have performed certain specified procedures as a
result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company and its subsidiaries) set
forth in the Registration Statement and the Final Prospectus, agrees
with the accounting records of the Company and its subsidiaries,
excluding any questions of legal interpretation, and (ii) the opinion
or certificate, dated the Closing Date, in form and substance
satisfactory to the Representative, satisfying the requirements of
Section 2.10(i) of the Indenture.
References to the Final Prospectus in this paragraph (i) include any
supplement thereto at the date of the letter.
In addition, except as provided in Schedule I hereto, at the Execution
Time, _______________ shall have furnished to the Representative a letter or
letters, dated the Execution Time, in form and substance satisfactory to the
Representative, to the effect set forth above.
(j) Subsequent to the Execution Time or, if earlier, the dates
as of which information is given in the Registration Statement
(exclusive of any amendment thereof) and the Final Prospectus
(exclusive of any supplement thereto), there shall not have been any
change, or any development involving a prospective change, in or
affecting either (i) the business, properties or financial condition of
the Company, the Seller or the Issuer or (ii) the Initial Intangible
Transition Property, the Transition Bonds, the Qualified Rate Order or
the Competition Act, the effect of which is, in the judgment of the
Representative, so
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material and adverse as to make it impractical or inadvisable to
proceed with the offering or delivery of the Transition Bonds as
contemplated by the Registration Statement (exclusive of any amendment
thereof) and the Final Prospectus (exclusive of any supplement
thereto).
(k) The Representative and the Issuer, shall have received on
the Closing Date an opinion letter or letters of Xxxxxxx, Swaine &
Xxxxx, counsel to the Company, the Seller and the Issuer, dated the
Closing Date, in form and substance reasonably satisfactory to the
Representative, (i) with respect to the characterization of the
transfer of the Initial Intangible Transition Property by the Company
to the Seller as a "true sale" for bankruptcy purposes, [(ii) to the
effect that a court would not order the substantive consolidation of
the assets and liabilities of the Seller with those of the Company in
the event of a bankruptcy, reorganization or other insolvency
proceeding involving the Company], (iii) with respect to the
characterization of the transfer of the Initial Intangible Transition
Property by the Seller to the Issuer as a "true sale" for bankruptcy
purposes, and (iv) to the effect that a court would not order the
substantive consolidation of the assets and liabilities of the Issuer
with those of the Seller or the Company, in the event of a bankruptcy,
reorganization or other insolvency proceeding involving the Seller or
the Company, respectively.
(l) The Representative and the Issuer shall have received on
the Closing Date an opinion letter or letters of counsel for the
Company, portions of which may be delivered by Cravath, Swaine & Xxxxx,
outside counsel for the Company, portions of which may be delivered by
_____________, special regulatory counsel for the Company, and portions
of which may be delivered by _________________, in-house counsel for
the Company, each dated the Closing Date, in form and substance
reasonably satisfactory to the Representative, to the effect that: (i)
the Qualified Rate Order has been duly authorized and adopted by the
PUC and is irrevocable to the extent provided therein; (ii) the
decisions of the PUC adopting the Qualified Rate Order are
non-appealable; and (iii) any state action (whether by legislative
action, PUC action, or otherwise ) to revoke or limit the Qualified
Rate Order, the Intangible Transition Property, or the Intangible
Transition Charges would be subject to a successful constitutional
contracts clause challenge under the United States and Pennsylvania
Constitutions.
(m) On or prior to the Closing Date, the Company shall have
furnished to the Representative (i) copies of the private letter
ruling, dated _____, 1999, issued by the Internal Revenue Service to
the Company, and (ii) copies of the Declaration on Form U-1 issued by
the SEC to the Company on _____, 1999 under the Public Utility Holding
Company Act of 1935.
(n) The Representative and the Bond Trustee shall have
received on the Closing Date an opinion letter or letters of Xxxxxxxx,
Xxxxxx & Finger, P.A., special Delaware counsel to the Issuer, dated
the Closing Date, in form and substance reasonably satisfactory to the
Representative, to the effect that: (i) if properly presented to a
Delaware court, a Delaware court applying Delaware law, would conclude
that (x) in order for a person to file a voluntary bankruptcy petition
on behalf of the Issuer, the prior unanimous written consent of the
Member and the Board of Directors (including the Independent Director),
as
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provided in Section __________ of the Limited Liability Company
Agreement of the Issuer (the "LLC Agreement"), is required, and (y)
such provision, contained in Section ___________ of the LLC Agreement,
that requires the unanimous written consent of the Member and the Board
of Directors (including the Independent Director) in order for a person
to file a voluntary bankruptcy petition on behalf of the Issuer,
constitutes a legal, valid and binding agreement of the Member and is
enforceable against the Member, in accordance with its terms; and (ii)
the LLC Agreement constitutes a legal, valid and binding agreement of
the Member, and is enforceable against the Member in accordance with
its terms.
(o) The Transition Bonds shall have been rated in the highest
long-term rating category by each of the Rating Agencies.
(p) On or prior to the Closing Date, the Issuer shall have
delivered to the Representative evidence, in form and substance
reasonably satisfactory to the Representative, that appropriate filings
have been or are being made in accordance with the Competition Act and
other applicable law reflecting the grant of a security interest by the
Issuer in the Collateral to the Bond Trustee, including filings with
the PUC and the filing of the UCC financing statements in the office of
the [Secretary] of the Commonwealth of Pennsylvania.
(q) On or prior to the Closing Date, the Issuer shall have
delivered to the Representative evidence, in form and substance
satisfactory to the Representative, of the PUC's issuance of the
Qualified Rate Order relating to the Transition Property.
(r) On or prior to the Closing Date, the Issuer shall have
furnished to the Representative the documents required pursuant to
Section 2.10 of the Indenture.
(s) Prior to the Closing Date, the Issuer, the Company and the
Seller shall have furnished to the Representative such further
information, certificates, opinions and documents as the Representative
may reasonably request, including any documents provided to the Rating
Agencies.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Representative and counsel for the Underwriters, this
Agreement and all obligations of the Underwriters hereunder may be canceled at,
or at any time prior to, the Closing Date by the Representative. Notice of such
cancellation shall be given to the Issuer in writing or by telephone or
telegraph confirmed in writing.
The documents required to be delivered by this Section 6 shall be
delivered at the offices of Cravath, Swaine & Xxxxx, Worldwide Plaza, 000 Xxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 on the Closing Date.
7. Reimbursement of Underwriters' Expenses. If the sale of the
Transition Bonds provided for herein is not consummated because any condition to
the obligations of the Underwriters set forth in Section 6 hereof is not
satisfied, because of
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any termination pursuant to Section 10 hereof or because of any refusal,
inability or failure on the part of the Company, the Seller or the Issuer to
perform any agreement herein or comply with any provision hereof other than by
reason of a default (including under Section 9) by any of the Underwriters, the
Company, the Seller and the Issuer will, jointly and severally, reimburse the
Underwriters upon demand for all out-of-pocket expenses (including reasonable
fees and disbursements of counsel) that shall have been incurred by them in
connection with the proposed purchase and sale of the Transition Bonds.
8. Indemnification and Contribution. (a) The Company, the Seller and
the Issuer will, jointly and severally, indemnify and hold harmless each
Underwriter, the directors, officers, members, employees and agents of each
Underwriter, and each person who controls any Underwriter, within the meaning of
either the Act or the Exchange Act against any and all losses, claims, damages
or liabilities, joint or several, to which they or any of them may become
subject under the Act, the Exchange Act or other Federal or state statutory law
or regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in the registration statement for the registration of the Transition
Bonds as originally filed or in any amendment thereof, or in the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, or in any
amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and will reimburse
each such indemnified party, as incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, xxxxxxxxx or action; provided, however, that neither
the Company, the Seller nor the Issuer will be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with written
information furnished to the Issuer, the Seller or the Company by or on behalf
of any Underwriter through the Representative specifically for inclusion
therein; provided further, that with respect to any untrue statement or omission
of material fact made in any Preliminary Final Prospectus, the indemnity
agreement contained in this Section 8(a) shall not inure to the benefit of any
Underwriter or any person controlling such Underwriter from whom the person
asserting any such loss, claim, damage or liability purchased the Transition
Bonds that are the subject thereof, to the extent that any such loss, claim,
damage or liability of such Underwriter occurs under the circumstance where it
shall have been determined by a court of competent jurisdiction by final and
nonappealable judgment that (w) the Company, the Seller or the Issuer had
previously furnished copies of the Final Prospectus to the Representative, (x)
delivery of the Final Prospectus was required by the Act to be made to such
person, (y) the untrue statement or omission of a material fact contained in the
Preliminary Final Prospectus was corrected in the Final Prospectus and (z) there
was not sent or given to such person, at or prior to the written confirmation of
the sale of such Transition Bonds to such person, a copy of the Final
Prospectus. This indemnity agreement will be in addition to any liability which
the Company, the Seller and the Issuer may otherwise have.
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, the Seller and the Issuer, each of their directors, each of their
officers who
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signs the Registration Statement, and each person who controls the Company, the
Seller or the Issuer within the meaning of either the Act or the Exchange Act,
to the same extent as the foregoing indemnity from the Company, the Seller and
the Issuer to each Underwriter, but only with reference to written information
relating to such Underwriter furnished to the Issuer, the Seller or the Company
by or on behalf of such Underwriter through the Representative specifically for
inclusion in the documents referred to in the foregoing indemnity. This
indemnity agreement will be in addition to any liability which any Underwriter
may otherwise have. The Issuer, the Seller and the Company acknowledge that the
statements set forth in the third, fourth, fifth, and sixth paragraphs under the
heading "Underwriting The Series 1999-A Bonds" and in the fourth paragraph under
the heading "Plan of Distribution" in any Preliminary Final Prospectus or the
Final Prospectus constitute the only information furnished in writing by or on
behalf of the several Underwriters for inclusion in the documents referred to in
the foregoing indemnity, and you, as the Representative, confirm that such
statements are correct.
(c) Promptly after receipt by an indemnified party under this Section 8
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); provided, however, that such counsel shall be
reasonably satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the indemnified
party in an action, the indemnified party shall have the right to employ
separate counsel (including local counsel), and the indemnifying party shall
bear the reasonable fees, costs and expenses of such separate counsel if (i) the
use of counsel chosen by the indemnifying party to represent the indemnified
party would present such counsel with a conflict of interest, (ii) the actual or
potential defendants in, or targets of, any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those
available to the indemnifying party, (iii) the indemnifying party shall not have
employed counsel reasonably satisfactory to the indemnified party to represent
the indemnified party within a reasonable time after notice of the institution
of such action or (iv) the indemnifying party shall authorize the indemnified
party to employ separate counsel at the expense of the indemnifying party. An
indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.
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(d) In the event that the indemnity provided in paragraph (a) or (b) of
this Section 8 is unavailable to or insufficient to hold harmless an indemnified
party for any reason, the Company, the Seller, the Issuer and the Underwriters
agree to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively "Losses") to which the Issuer and
one or more of the Underwriters may be subject in such proportion as is
appropriate to reflect the relative benefits received by the Issuer and by the
Underwriters from the offering of the Transition Bonds; provided, however, that
in no case shall any Underwriter (except as may be provided in any agreement
among underwriters relating to the offering of the Transition Bonds) be
responsible for any amount in excess of the underwriting discount or commission
applicable to the Transition Bonds purchased by such Underwriter hereunder. If
the allocation provided by the immediately preceding sentence is unavailable for
any reason, the Company, the Seller, the Issuer and the Underwriters shall
contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Issuer and of the
Underwriters in connection with the statements or omissions which resulted in
such Losses as well as any other relevant equitable considerations. Benefits
received by the Issuer shall be deemed to be equal to the total net proceeds
from the offering (before deducting expenses) of the Transition Bonds and
benefits received by the Underwriters shall be deemed to be equal to the total
underwriting discounts and commissions, in each case as set forth on the cover
page of the Final Prospectus. Relative fault shall be determined by reference to
whether any alleged untrue statement or omission relates to information provided
by the Issuer or the Underwriters. The Company, the Seller, the Issuer and the
Underwriters agree that it would not be just and equitable if contribution were
determined by pro rata allocation or any other method of allocation which does
not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 8, each person who
controls an Underwriter within the meaning of either the Act or the Exchange Act
and each director, officer, employee and agent of an Underwriter shall have the
same rights to contribution as such Underwriter, and each person who controls
the Issuer, the Seller or the Company within the meaning of either the Act or
the Exchange Act, each officer of the Issuer, the Seller or the Company who
shall have signed the Registration Statement and each director of the Issuer,
the Seller or the Company shall have the same rights to contribution as the
Issuer, the Seller or the Company, subject in each case to the applicable terms
and conditions of this paragraph (d).
9. Default by an Underwriter. If any one or more Underwriters shall
fail to purchase and pay for any of the Transition Bonds agreed to be purchased
by such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the nondefaulting Underwriters shall be obligated severally to take
up and pay for (in the respective proportions which the amount of Transition
Bonds set forth opposite their names in Schedule II hereto bears to the
aggregate amount of Transition Bonds set forth opposite the names of all the
remaining Underwriters) the Transition Bonds which the defaulting Underwriter or
Underwriters agreed but failed to purchase; provided, however, that in the event
that the aggregate amount of Transition Bonds which the defaulting Underwriter
or Underwriters agreed but failed to purchase shall exceed 10% of the aggregate
amount of Transition Bonds set forth in Schedule II hereto, the
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nondefaulting Underwriters shall have the right to purchase all, but shall not
be under any obligation to purchase any, of the Transition Bonds, and if such
nondefaulting Underwriters do not purchase all the Transition Bonds, this
Agreement will terminate without liability to any nondefaulting Underwriter, the
Issuer, the Seller or the Company. In the event of a default by any Underwriter
as set forth in this Section 9, the Closing Date shall be postponed for such
period, not exceeding seven days, as the Representative shall determine in order
that the required changes in the Registration Statement and the Final Prospectus
or in any other documents or arrangements may be effected. Nothing contained in
this Agreement shall relieve any defaulting Underwriter of its liability, if
any, to the Issuer, the Seller and the Company and any nondefaulting Underwriter
for damages occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to termination in the
absolute discretion of the Representative, by notice given to the Issuer prior
to delivery of and payment for the Transition Bonds, if prior to such time (i)
there shall have occurred any change, or any development involving a prospective
change, in or affecting either (A) the business, properties or financial
condition of the Issuer, the Seller or the Company or (B) the Initial Intangible
Transition Property, the Transition Bonds, the Qualified Rate Order or the
Competition Act, the effect of which, in the judgment of the Representative,
materially impairs the investment quality of the Transition Bonds or makes it
impractical or inadvisable to market the Transition Bonds, (ii) trading in the
Company's Common Stock shall have been suspended by the SEC or the New York
Stock Exchange or trading in securities generally on the New York Stock Exchange
shall have been suspended or limited or minimum prices shall have been
established on such Exchange, (iii) a banking moratorium shall have been
declared either by Federal, New York State or Pennsylvania State authorities or
(iv) there shall have occurred any outbreak or escalation of hostilities,
declaration by the United States of a national emergency or war or other
calamity or crisis the effect of which on financial markets is such as to make
it, in the judgment of the Representative, impracticable or inadvisable to
proceed with the offering or delivery of the Transition Bonds as contemplated by
the Final Prospectus (exclusive of any supplement thereto).
11. Computational Materials and ABS Term Sheets.
(a) Each Underwriter severally represents and warrants to the
Issuer, the Company and the Seller that it has not and will not use any
information that constitutes "Computational Materials," as defined in
the SEC's No-Action Letter, dated May 20, 1994, addressed to Xxxxxx,
Peabody Acceptance Corporation I, Xxxxxx Xxxxxxx & Co. Incorporated and
Xxxxxx Structured Asset Corporation (as made generally applicable to
registrants, issuers and underwriters by the SEC's response to the
request of the Public Securities Association dated May 27, 1994), with
respect to the offering of the Transition Bonds.
(b) Each Underwriter severally represents and warrants to the
Issuer, the Company and the Seller that it has not and will not use any
information that constitutes "ABS Term Sheets," as defined in the SEC's
No-Action Letter, dated February 17, 1995, addressed to the Public
Securities Association, with respect to the offering of the Transition
Bonds.
12. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
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Company or its officers, the Issuer or its officers, the Seller or its officers
and of the Underwriters set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation made by or on
behalf of any Underwriter or of the Company, the Issuer, the Seller or any of
the officers, directors or controlling persons referred to in Section 9 hereof,
and will survive delivery of and payment for the Transition Bonds. The
provisions of Sections 7 and 6 hereof shall survive the termination or
cancelation of this Agreement.
13. Notices. All communications hereunder will be in writing and may be
given by United States mail, courier service, telegram, telex, telemessage,
telecopy, telefax, cable or facsimile (confirmed by telephone or in writing in
the case of notice by telegram, telex, telemessage, telecopy, telefax, cable or
facsimile) or any other customary means of communication, and any such
communication shall be effective when delivered, or if mailed, three days after
deposit in the United States mail with proper postage for ordinary mail prepaid,
and if sent to the Representative, to them at the address specified in Schedule
I hereto; and if sent to the Company, to it at ______________________________,
Attention: ; and if sent to the Issuer, to it at
________________________________________, Attention: Treasurer; and if sent to
the Seller, to it at ____________________________, Attention: . The parties
hereto, by notice to the others, may designate additional or different addresses
for subsequent communications.
14. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 8 hereof, and no
other person will have any right or obligation hereunder.
15. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York.
16. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be deemed an original, which taken together
shall constitute one and the same instrument.
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company, the Issuer, the Seller and the several Underwriters.
Very truly yours,
WEST PENN POWER COMPANY,
by
------------------------------
Name:
Title:
WEST PENN FUNDING LLC,
by
------------------------------
Name:
Title:
WEST PENN FUNDING CORPORATION
by
------------------------------
Name:
Title:
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The foregoing Agreement is
hereby confirmed and accepted as
of the date specified in Schedule I
hereto.
XXXXXX XXXXXXX & CO.
INCORPORATED
by
------------------------------
Name:
Title:
for themselves and the other several
Underwriters, if any, named in
Schedule II to the foregoing Agreement.
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SCHEDULE I
Underwriting Agreement dated , 1999
------------- --
Registration Statement No. 333-
-----
Representative(s);
Xxxxxx Xxxxxxx & Co.
Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Title, Purchase Price and Description of Bonds:
Title: West Penn Funding LLC $ Transition
Bonds, Series 1999 - A --------------
Principal Xxxxxx, Price to Public, Underwriting Discounts
and Commissions, Proceeds to the Issuer, and Required
Ratings:
Underwriting
Total Principal Price to Discounts and Proceeds to Required
Amount of Class Public Commissions the Issuer Ratings
--------------- ------ ----------- ---------- -------
Per Class A-1
Bond
Per Class A-2
Bond
Per Class A-3
Bond
Per Class A-4
Bond
Total
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Plus the Underwriters will be reimbursed by the Issuer for:
$___________ of expenses,
consisting of $____________
of out-of-pocket expenses and
$______________for Underwriters' Counsel
Original Issue Discount (if any): $______________
Redemption provisions:
Other provisions:
Closing Date, Time and Location: ____________ __, 1999, _____a.m., Eastern
Standard Time, New York, NY
Type of Offering: Delayed Offering
Date referred to in Section 5(a) (vi) after which the Issuer may offer or sell
asset-backed securities in a special purpose vehicle without the consent of the
Representative(s): ___________ __, 1999
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SCHEDULE II
PRINCIPAL AMOUNT OF BONDS TO BE PURCHASED
------------------------------------------------------------------------------------------
CLASS A-1 CLASS A-2 CLASS A-3 CLASS A-4
UNDERWRITERS BONDS BONDS BONDS BONDS TOTAL
------------ ----- ----- ----- ----- -----
Xxxxxx Xxxxxxx & Co.
Incorporated
Xxxxxxx, Xxxxx & Co.
Banc of America Securities
LLC
PNC Capital Markets, Inc.
Xxxxx, XxXxxxxxx, Counts &
Co., Inc.
Total.....................
