Exhibit 99.7
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[FORM OF EXCHANGE AGENT AGREEMENT]
_________, 200_
Bank One Trust Company, N.A.
Xxx Xxxxx Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Exchanges
Ladies and Gentlemen:
Allegheny Energy Supply Company, LLC (the "Company"), proposes to make an
offer (the "Exchange Offer") to exchange up to $400,000,000 of its 7.80% notes
due 2011, which have been registered under the Securities Act of 1933 (the "New
Notes"), for up to $400,000,000 of its unregistered 7.80% notes due 2011 (the
"Old Notes"). The terms and conditions of the Exchange Offer as currently
contemplated are set forth in a prospectus, dated _____________ (the
"Prospectus"), proposed to be distributed to all record holders of the Old
Notes. The Old Notes and the New Notes are collectively referred to herein as
the "Notes".
The Company hereby appoints Bank One Trust Company, N.A. to act as exchange
agent (the "Exchange Agent") in connection with the Exchange Offer. References
hereinafter to "you" shall refer to Bank One Trust Company, N.A. The Exchange
Offer is expected to be commenced by the Company on or about ________________.
The Letter of Transmittal accompanying the Prospectus (or in the case of
book-entry securities, the Automated Tender Offer Program ("ATOP") of the
Book-Entry Transfer Facility (as defined below) is to be used by the holders of
the Old Notes to accept the Exchange Offer and contains instructions with
respect to the delivery of certificates for Old Notes tendered in connection
therewith.
The Exchange Offer shall expire at 5:00 p.m., New York City time, on
______________,200_ or on such subsequent date or time to which the Company may
extend the Exchange Offer (the "Expiration Date"). Subject to the terms and
conditions set forth in the Prospectus, the Company expressly reserves the right
to extend the Exchange Offer from time to time and may extend the Exchange Offer
by giving oral (promptly confirmed in writing) or written notice to you before
5:00 p.m., New York City time, on the previously scheduled Expiration Date.
The Company expressly reserves the right to amend or terminate the Exchange
Offer, and not to accept for exchange any Old Notes not therefore accepted for
exchange, upon the occurrence of any of the conditions of the Exchange Offer
specified in Prospectus under the caption ("The Exchange Offer -- Conditions to
the Exchange Offer"). The Company will give oral (promptly confirmed in writing)
or written notice of any amendment, termination or nonacceptance to you as
promptly as practicable. In carrying out your duties as Exchange Agent, you are
to act in accordance with the following instructions:
1. You will perform such duties and only such duties as are
specifically set forth in the section of the Prospectus captioned "The
Exchange Offer" or as specifically set forth herein; provided, however,
that in no way will your general duty to act in good faith be discharged by
the foregoing.
2. You will establish a book-entry account with respect to the Old
Notes at The Depository Trust Company (the "Book-Entry Transfer Facility")
for purposes of the Exchange Offer within two business days after the date
of the Prospectus, and any financial institution that is a participant in
the Book-Entry Transfer Facility's systems may make book-entry delivery of
the Old Notes by causing the Book-Entry Transfer Facility to transfer such
Old Notes into your account in accordance with the Book-Entry Transfer
Facility's procedure for such transfer.
3. You are to examine each of the Letters of Transmittal and
certificates for Old Notes (or confirmation of book-entry transfer into
your account at the Book-Entry Transfer Facility) and any other documents
delivered or mailed to you by or for holders of the Old Notes to ascertain
whether: (i) the Letters of Transmittal and any such other documents are
duly executed and properly completed in accordance with instructions set
forth therein; and (ii) the Old Notes have otherwise been properly
tendered. In each case where the Letter of Transmittal or any other
document has been improperly completed or executed or any of the
certificates for Old Notes are not in proper form for transfer or some
other irregularity in connection with the acceptance of the Exchange Offer
exists, you will endeavor to inform the presenters of the need for
fulfillment of all requirements and to take any other action as may be
reasonably necessary or advisable to cause such irregularity to be
corrected.
4. With the approval of the Chief Executive Officer, President,
Executive Vice President, any Senior Vice President or Vice President of
the Company (such approval, if given orally, to be promptly confirmed in
writing) or any other party designated in writing, by such an officer, you
are authorized to waive any irregularities in connection with any tender of
Old Notes pursuant to the Exchange Offer.
5. Tenders of Old Notes may be made only as set forth in the Letter of
Transmittal and in the section of the Prospectus captioned "The Exchange
Offer -- Procedures for Tendering", and Old Notes shall be considered
properly tendered to you only when tendered in accordance with the
procedures set forth therein.
Notwithstanding the provisions of this Section 5, Old Notes which the
Chief Executive Officer, President, Executive Vice President, any Senior Vice
President or Vice President of the Company shall approve as having been properly
tendered shall be considered to be properly tendered (such approval, if given
orally, shall be promptly confirmed in writing).
6. You shall advise the Company with respect to any Old Notes received
subsequent to the Expiration Date and accept its instructions with respect
to disposition of such Old Notes.
7. You shall accept tenders:
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(a) in cases where the Old Notes are registered in two or more
names, only if signed by all named holders;
(b) in cases where the signing person (as indicated on the Letter
of Transmittal) is acting in a fiduciary or a representative capacity,
only when proper evidence of his or her authority so to act is
submitted; and
(c) from persons other than the registered holder of Old Notes,
provided that customary transfer requirements, including payment of
any applicable transfer taxes, are fulfilled.
You shall accept partial tenders of Old Notes where so indicated and as
permitted in the Letter of Transmittal and deliver certificates for Old Notes to
the registrar for split-up and return any untendered Old Notes to the holder (or
such other person as may be designated in the Letter of Transmittal) as promptly
as practicable after expiration or termination of the Exchange Offer.
8. Upon satisfaction or waiver of all of the conditions to the
Exchange Offer, the Company will notify you (such notice, if given orally,
to be promptly confirmed in writing) of its acceptance, promptly after the
Expiration Date, of all Old Notes properly tendered and you, on behalf of
the Company, will exchange such Old Notes for New Notes and cause such Old
Notes to be cancelled and delivered to the Company. Delivery of New Notes
will be made on behalf of the Company by you at the rate of $1,000
principal amount of New Notes for each $1,000 principal amount of the
corresponding series of Old Notes tendered promptly after notice (such
notice if given orally, to be promptly confirmed in writing) of acceptance
of said Old Notes by the Company; provided, however, that in all cases, Old
Notes tendered pursuant to the Exchange Offer will be exchanged only after
timely receipt by you of certificates for such Old Notes (or confirmation
of book-entry transfer into your account at the Book-Entry Transfer
Facility), a properly completed and duly executed Letter of Transmittal (or
manually signed facsimile thereof) with any required signature guarantees
and any other required documents. You shall issue New Notes only in
denominations of $1,000 or any integral multiple thereof.
9. Tenders pursuant to the Exchange Offer are irrevocable, except
that, subject to the terms and upon the conditions set forth in the
Prospectus and the Letter of Transmittal, Old Notes tendered pursuant to
the Exchange Offer may be withdrawn at any time prior to the Expiration
Date.
10. The Company shall not be required to exchange any Old Notes
tendered if any of the conditions set forth in the Exchange Offer are not
met. Notice of any decision by the Company not to exchange any Old Notes
tendered shall be given (if given orally, to be promptly confirmed in
writing) by the Company to you.
11. If, pursuant to the Exchange Offer, the Company does not accept
for exchange all or part of the Old Notes tendered because of an invalid
tender, the occurrence of certain other events set forth in the Prospectus
under the captions "The Exchange Offer -- Terms of
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the Exchange Offer" or "The Exchange Offer -- Conditions to the Exchange
Offer" or otherwise, you shall as soon as practicable after the expiration
or termination of the Exchange Offer return those certificates for
unaccepted Old Notes (or effect appropriate book-entry transfer), together
with any related required documents and the Letters of Transmittal relating
thereto that are in your possession, to the persons who deposited them.
12. All certificates for reissued Old Notes, unaccepted Old Notes or
for New Notes shall be forwarded by first-class mail.
13. You are not authorized to pay or offer to pay any concessions,
commissions or solicitation fees to any broker, dealer, bank or other
persons or to engage or utilize any person to solicit tenders.
14. As Exchange Agent hereunder you:
(a) shall not be liable for any action or omission to act unless
the same constitutes your own gross negligence, willful misconduct or
bad faith, and in no event shall you or the Company be liable to a
securityholder, the Company or you, as the case may be, or any third
party for special, indirect or consequential damages, or lost profits,
arising in connection with this Agreement;
(b) shall have no duties or obligations with respect to the
subject matter of this Agreement other than those specifically set
forth herein or as may be subsequently agreed to in writing between
you and the Company;
(c) will be regarded as making no representations and having no
responsibilities as to the validity, sufficiency, value or genuineness
of any of the certificates or the Old Notes represented thereby
deposited with you pursuant to the Exchange Offer, and will not be
required to and will make no representation as to the validity, value
or genuineness of the Exchange Offer;
(d) shall not be obligated to take any legal action hereunder
which might in your judgment involve any expense or liability, unless
you shall have been furnished with indemnity satisfactory to you;
(e) may conclusively rely on and shall be protected in acting in
reliance upon any certificate, instrument, opinion, notice, letter,
telegram or other document or security delivered to you and believed
by you to be genuine and to have been signed or presented by the
proper person or persons;
(f) may act upon any tender, statement, request, document,
agreement, certificate or other instrument whatsoever not only as to
its due execution and validity and effectiveness of its provisions,
but also as to the truth and accuracy of any information contained
therein, which you shall in good faith believe to be genuine or to
have been signed or presented by the proper person or persons;
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(g) may conclusively rely on and shall be protected in acting
upon written or oral instructions from any authorized officer of the
Company or from Company's counsel;
(h) may consult with counsel of your selection with respect to
any questions relating to your duties and responsibilities and the
advice or opinion of such counsel shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted to be taken by you hereunder in good faith and in
accordance with the advice or opinion of such counsel; and
(i) shall not advise any person tendering Old Notes pursuant to
the Exchange Offer as to the wisdom of making such tender or as to the
market value or decline or appreciation in market value of any Old
Notes.
15. You shall take such action as may from time to time be requested
by the Company (and such other action as you may deem appropriate) to
furnish copies of the Prospectus, Letter of Transmittal and the Notice of
Guaranteed Delivery (as defined in the Prospectus) or such other forms as
may be approved from time to time by the Company, to all persons requesting
such documents and to accept and comply with telephone requests for
information relating to the Exchange Offer, provided that such information
shall relate only to the procedures for accepting (or withdrawing from) the
Exchange Offer. The Company will furnish you with copies of such documents
on your request. All other requests for information relating to the
Exchange Offer shall be directed to the Company, Attention: Xx. Xxxxxxx X.
Xxxxx.
16. You shall advise by facsimile transmission Xx. Xxxxxxx X. Xxxxx.
(at facsimile number 301-655-2746), and such other person or persons as the
Company may reasonably request, weekly (and more frequently during the week
immediately preceding the Expiration Date if requested) up to and including
the Expiration Date, as to the number of Old Notes which have been tendered
pursuant to the Exchange Offer and the items received by you pursuant to
this Agreement, separately reporting and giving cumulative totals as to
items properly received and items improperly received in the form attached
hereto as Exhibit A. In addition, you will also inform, and cooperate in
making available to, the Company or any such other person or persons as the
Company may request upon oral request made from time to time prior to the
Expiration Date of such other information as they may reasonably request.
Such cooperation shall include, without limitation, the granting by you to
the Company and such person as the Company may request of access to those
persons on your staff who are responsible for receiving tenders, in order
to ensure that immediately prior to the Expiration Date the Company shall
have received information in sufficient detail to enable it to decide
whether to extend the Exchange Offer. You shall prepare a final list of all
persons whose tenders were accepted, the aggregate principal amount of Old
Notes tendered, the aggregate principal amount of Old Notes accepted and
deliver said list to the Company.
17. Each Letter of Transmittal, Old Note and any other documents
received by you in connection with the Exchange Offer shall be stamped by
you to show the date of receipt (or if Old Notes are
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tendered by book-entry delivery, such form of record keeping of receipt as
is customary for tenders through ATOP) and, if defective, the date and time
the last defect was cured or waived by the Issuer. You shall cancel
certificated Old Notes. You shall retain all Old Notes and Letters of
Transmittal and other related documents or correspondence received by
Exchange Agent until the Expiration Date. You shall return all such
material to Issuer as soon as practicable after the Expiration Date.
You are authorized and directed to cancel all Old Notes received by you
upon delivering the New Notes to tendering holders of the Old Notes as
provided herein. You shall maintain a record as to which Old Notes have
been exchanged pursuant to Section 8 hereof.
18. For services rendered as Exchange Agent hereunder, you shall be
entitled to such compensation as set forth on Schedule I attached hereto.
The provisions of this section shall survive the termination of this
Agreement.
19. You hereby acknowledge receipt of the Prospectus and the Letter of
Transmittal, attached hereto as Exhibit B, and the Notice of Guaranteed
Delivery, attached hereto as Exhibit C. Any inconsistency between this
Agreement, on the one hand, and the Prospectus and the Letter of
Transmittal (as they may be amended from time to time), on the other hand,
shall be resolved in favor of the latter two documents, except with respect
to your duties, liabilities and indemnification as Exchange Agent.
20. The Company covenants and agrees to fully indemnify and hold you
harmless against any and all loss, liability, cost or expense, including
attorneys' fees and expenses, incurred without gross negligence or willful
misconduct on your part, arising out of or in connection with any act,
omission, delay or refusal made by you in reliance upon any signature,
endorsement, assignment, certificate, order, request, notice, instruction
or other instrument or document believed by you to be valid, genuine and
sufficient and in accepting any tender or effecting any transfer of Old
Notes believed by you in good faith to be authorized, and in delaying or
refusing in good faith to accept any tenders or effect any transfer of Old
Notes. In each case, the Company shall be notified by you, by letter or
facsimile transmission, of the written assertion of a claim against you or
of any other action commenced against you, promptly after you shall have
received any such written assertion or shall have been served with a
summons in connection therewith. The Company shall be entitled to
participate at its own expense in the defense of any such claim or other
action and, if the Company so elects, the Company shall assume the defense
of any suit brought to enforce any such claim. In the event that the
Company shall assume the defense of any such suit, the Company shall not be
liable for the fees and expenses of any additional counsel thereafter
retained by you, so long as the Company shall retain counsel reasonably
satisfactory to you to defend such suit, and so long as you have not
determined, in your reasonable judgment after consultation with independent
counsel, that a conflict of interest exists between you and the Company.
The provisions of this section shall survive the termination of this
Agreement.
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21. You shall comply with all requirements under the tax laws of the
United States imposed with respect to the activities performed by you
pursuant to this Agreement, including requirements to report certain
information to the IRS and the holders, to backup withhold, to turn
withheld amounts over to the IRS and to retain records.
22. You shall notify the Company in a timely manner regarding any
transfer taxes that are payable in respect of the exchange of Old Notes of
which you became aware.
23. This Agreement and your appointment as Exchange Agent hereunder
shall be construed and enforced in accordance with the laws of the State of
New York applicable to agreements made and to be performed entirely within
such state, and without regard to conflicts of law principles, and shall
inure to the benefit of, and the obligations created hereby shall be
binding upon, the successors and assigns of each of the parties hereto.
24. This Agreement may be executed in two or more counterparts, each
of which shall be deemed to be an original and all of which together shall
constitute one and the same agreement.
25. In case any provision of this Agreement shall be invalid, illegal
or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
26. This Agreement shall not be deemed or construed to be modified,
amended, rescinded, cancelled or waived, in whole or in part, except by a
written instrument signed by a duly authorized representative of the party
to be charged. This Agreement may not be modified orally.
27. Unless otherwise provided herein, all notices, requests and
other communications to any party hereunder shall be in writing (including
facsimile or similar writing) and shall be given to such party, addressed
to it, at its address or telecopy number set forth below:
If to the Company:
Allegheny Energy Supply Company, LLC
00000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xx. Xxxxxxx X. Xxxxx
If to the Exchange Agent:
Bank One Trust Company, N.A.
Xxx Xxxxx Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Exchanges
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28. Unless terminated earlier by the parties hereto, this Agreement
shall terminate 90 days following the Expiration Date. Notwithstanding the
foregoing, Sections 18 and 20 shall survive the termination of this
Agreement until the expiration of the applicable statute of limitations.
Upon any termination of this Agreement, you shall promptly deliver to the
Company any certificates for Notes, funds or property then held by you as
Exchange Agent under this Agreement.
29. This Agreement shall be binding and effective as of the date
hereof.
Please acknowledge receipt of this Agreement and confirm the arrangements
herein provided by signing and returning the enclosed copy.
Allegheny Energy Supply Company, LLC
By:---------------------------------
Name:
Title:
Accepted as of the date first above written:
Bank One Trust Company, N.A.,
as Exchange Agent
By:
--------------------------------------------
Name:
Title:
EXHIBIT A
Date:
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ALLEGHENY ENERGY SUPPLY COMPANY, LLC
BY FAX: 000-000-0000
Re: Notice of Tenders
With respect to Section 16 of the Exchange Agent Agreement, dated as of
_______________, 2001, we confirm the following information as of the date
hereof:
1. Principal amount of Old Notes tendered during the past week:
$____________________
2. Principal amount of Old Notes referred to in paragraph 1. above
regarding which Exchange Agent questions validity of the tender:
$____________________
3. Aggregate principal amount of Old Notes tendered since the Exchange
Offer began as to which Exchange Agent questions the validity of the
tender: $___________________.
4. Principal amount of Old Notes remaining unpresented (based on
$______________ total Old Notes): $__________________
5. Total aggregate principal amount of Old Notes validly tendered since
the Exchange Offer began: $_____________________
Bank One Trust Company, N.A.,
as Exchange Agent
By: ------------------------------------------------
Name
Title:
EXHIBIT B
Prospectus and Letter of Transmittal
EXHIBIT C
Notice of Guaranteed Delivery
SCHEDULE I
COMPENSATION OF EXCHANGE AGENT:
THE GREATER OF $5,000 OR $150 PER LETTER OF TRANSMITTAL
PLUS $500 PER EXTENSION OF OFFER
PLUS OUT-OF POCKET EXPENSES, INCLUDING, WITHOUT
LIMITATION, LEGAL FEES AND EXPENSES.
Schedule 1.1
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ALLEGHENY ENERGY SUPPLY COMPANY, LLC
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDING DECEMBER 31, 2000 AND 1999
Allowance for uncollectible
accounts:
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
Balance at Charged to
Beginning of Charged to Costs Other Balance at
Description Period and Expenses Accounts(A) Deductions(B) End of Period
----------- ------------ ---------------- ---------- ------------ -------------
Allowance for
uncollectible accounts:
Year ended $1,137,010 $4,780,341 $0 $141,029 $5,776,322
12/31/00
Year ended $ 807,205 $ 329,805 $0 $ 0 $1,137,010
12/31/99
(A) Recoveries
(B) Uncollectible accounts charged off.
Schedule 1.2
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To Allegheny Energy, Inc., the Sole Member of
Allegheny Energy Supply Company, LLC
Our audits of the consolidated financial statements referred to in our report
dated February 12, 2001 appearing in this Registration Statement also included
an audit of the financial statement schedule listed as Schedule 1.1 to this
Registration Statement. In our opinion, this financial statement schedule
presents fairly, in all material respects, the information set forth therein
when read in conjunction with the related consolidated financial statements.
PricewaterhouseCoopers LLP
Pittsburgh, Pennsylvania
February 12, 2001
