Form of Sale Agreement


     

    Exhibit
      10.1

    


     

    
      

    

     

     

     

     

     

     

     

     

    TRANSFERRED
      ENVIRONMENTAL CONTROL PROPERTY

    SALE
      AGREEMENT

    


    


    


    between

    


    PE
      ENVIRONMENTAL FUNDING LLC

    


    


    Issuer

     

    


     

    


     

    


     

    and

     

    


     

    PE
      RENAISSANCE FUNDING, LLC

     

    


     

    


     

    Seller

     

    


     

    Dated
      as
      of [_______________]

     

     

     

     

     

      
        

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
                TABLE
                OF CONTENTS

            	 
	 	 	 
	 	 	 
	 	 	
               Page

            
	
               

              ARTICLE
                I

               

              Definitions

               

            	 
	
              Section
                1.01.

            	
              Definitions

            	
              3

            
	
              Section
                1.02.

            	
              Other
                Definitional Provisions

            	
              3

            
	
               

              ARTICLE
                II

               

              Conveyance
                of Transferred Environmental Control
                Property

               

            	 
	
              Section
                2.01.

            	
              Conveyance
                of Initial Transferred Environmental Control Property

            	
              4

            
	
              Section
                2.02.

            	
              Conveyance
                of Subsequent Transferred Environmental Control Property

            	
              5

            
	
              Section
                2.03.

            	
              Conditions
                to Conveyance of Transferred Environmental Control
                Property

            	
              5

            
	
               

              ARTICLE
                III

               

              Representations
                and Warranties of
                Seller

               

            	 
	
              Section
                3.01.

            	
              Organization
                and Good Standing

            	
              6

            
	
              Section
                3.02.

            	
              Due
                Qualification

            	
              6

            
	
              Section
                3.03.

            	
              Power
                and Authority

            	
              6

            
	
              Section
                3.04.

            	
              Binding
                Obligation

            	
              6

            
	
              Section
                3.05.

            	
              No
                Violation

            	
              7

            
	
              Section
                3.06.

            	
              No
                Proceedings

            	
              7

            
	
              Section
                3.07.

            	
              Approvals

            	
              7

            
	
              Section
                3.08.

            	
              The
                Transferred Environmental Control Property

            	
              7

            
	
              Section
                3.09.

            	
              The
                Statute and the Financing Order

            	
              8

            
	
              Section
                3.10.

            	
              State
                Pledge

            	
              8

            
	
              Section
                3.11.

            	
              The
                Environmental Control Property Rights

            	
              9

            
	
               

              ARTICLE
                IV

               

              Covenants
                of the Seller

               

            	 
	
              Section
                4.01.

            	
              Existence
                as a Limited Liability Company

            	
              9

            
	
              Section
                4.02.

            	
              No
                Liens or Conveyances

            	
              9

            
	
              Section
                4.03.

            	
              Delivery
                of Collections

            	
              10

            
	
              Section
                4.04.

            	
              Notice
                of Liens

            	
              10

            
	
              Section
                4.05.

            	
              Compliance
                with Law

            	
              10

            
	
              Section
                4.06.

            	
              Use
                of Proceeds

            	
              10

            
	
              Section
                4.07.

            	
              Covenants
                Related to Transferred Environmental Control Property

            	
              10

            
	
              Section
                4.08.

            	
              Notice
                of Indemnification Events

            	
              11

            


    

     

    
      
        
        

      

      
        i

        
          

        

      

      
        
        

      

    

     

    
      	
              Section
                4.09.

            	
              Protection
                of Title

            	
              11

            
	
              Section
                4.10.

            	
              Taxes

            	
              12

            
	
              Section
                4.11.

            	
              Notice
                of Breach

            	
              12

            
	
              Section
                4.12.

            	
              Termination

            	
              12

            
	
              Section
                4.13.

            	
              Further
                Covenants

            	
              12

            
	
               

              ARTICLE
                V

               

              The
                Seller

            	 
	
              Section
                5.01.

            	
              Liability
                of Seller; Indemnities

            	
              13

            
	
              Section
                5.02.

            	
              Merger
                or Consolidation of, or Assumption of the Obligations of,
                Seller

            	
              14

            
	
              Section
                5.03.

            	
              Limitation
                on Liability of Seller and Others

            	
              15

            
	
              Section
                5.04.

            	
              Opinions
                of Counsel

            	
              15

            
	
               

              ARTICLE
                VI

               

              Miscellaneous
                Provisions

               

            	 
	
              Section
                6.01.

            	
              Amendment

            	
              16

            
	
              Section
                6.02.

            	
              Notices

            	
              17

            
	
              Section
                6.03.

            	
              Assignment

            	
              18

            
	
              Section
                6.04.

            	
              Limitations
                on Rights of Others

            	
              18

            
	
              Section
                6.05.

            	
              Severability

            	
              18

            
	
              Section
                6.06.

            	
              Separate
                Counterparts

            	
              18

            
	
              Section
                6.07.

            	
              Headings

            	
              18

            
	
              Section
                6.08.

            	
              GOVERNING
                LAW

            	
              18

            
	
              Section
                6.09.

            	
              Assignment
                to Indenture Trustee

            	
              18

            
	
              Section
                6.10.

            	
              Nonpetition
                Covenant

            	
              18

            
	
              Section
                6.11.

            	
              Perfection

            	
              19

            
	
              Section
                6.12.

            	
              Limitation
                of Liability

            	
              19

            
	 	 	 


    

    Exhibit
      A    Form
      of
      Bill of Sale

    
      Exhibit
        B      Pending
        Litigation

      Appendix
        A   
Master
        Definitions

       

      
        
          
          

        

        
          ii

          
            

          

        

        
          
          

        

      


      TRANSFERRED
        ENVIRONMENTAL CONTROL PROPERTY SALE AGREEMENT dated as of [__________] (as
        amended, restated, supplemented or otherwise modified from time to time,
        “this
        Agreement”),
        between PE ENVIRONMENTAL FUNDING LLC, a Delaware limited liability company
        (the
“Issuer”),
        and
        PE RENAISSANCE FUNDING, LLC, a Delaware limited liability company, and its
        successors in interest to the extent permitted hereunder, as Seller (the
        “Seller”).

       

      WHEREAS
        the Seller received a contribution from the Transferor of Environmental Control
        Property created pursuant to the Statute and the Financing Order;
        and

       

      WHEREAS
        the Issuer desires to purchase from time to time Transferred Environmental
        Control Property; and

       

      WHEREAS
        the Seller is willing to sell Transferred Environmental Control Property
        to the
        Issuer; and

       

      WHEREAS
        the Issuer, in order to finance the purchase of the Transferred Environmental
        Control Property, will from time to time issue Environmental Control Bonds
        under
        the Indenture; and

       

      WHEREAS
        the Issuer, to secure its obligations under all Environmental Control Bonds
        and
        the Indenture, will pledge its right, title and interest in the Transferred
        Environmental Control Property to the Indenture Trustee for the benefit of
        the
        Environmental Control Bondholders; and

       

      WHEREAS
        the Issuer has determined that the transactions contemplated by the Basic
        Documents are in the best interest of the Issuer and its creditors and represent
        a prudent and advisable course of action that does not impair the rights
        and
        interests of the Issuer’s creditors; and 

       

      WHEREAS
        the PSCWV or its attorney will enforce this Agreement pursuant to the Financing
        Order for the benefit of Customers to the extent permitted by applicable
        Requirements of Law.

       

      NOW,
        THEREFORE, in consideration of the premises and the mutual covenants herein
        contained and intending to be legally bound hereby, the parties hereto agree
        as
        follows:

      ARTICLE
        I

       

      Definitions

       

      Section
        1.01.  Definitions. 
        Capitalized terms used but not otherwise defined herein have the meanings
        assigned to them in Appendix A of this Agreement.

       

      Section
        1.02.  Other
        Definitional Provisions.
         (a)
        The
        words “hereof”, “herein”, “hereunder” and words of similar import when used in
        this Agreement shall refer to this Agreement as a whole and not to any
        particular provision of this Agreement; Section, Schedule and Exhibit references
        contained in this Agreement are references to Sections, Schedules
        and

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      Exhibits
        in or to this Agreement unless otherwise specified; and the term “including”
shall mean “including without limitation”.

       

      (b)  The
        definitions contained in this Agreement are applicable to the singular as
        well
        as the plural forms of such terms and to the masculine as well as to the
        feminine and neuter genders of such terms.

       

      ARTICLE
        II

        

      Conveyance
        of Transferred Environmental Control Property

       

      Section
        2.01.  Conveyance
        of Initial Transferred Environmental Control Property.
         (a)
        In
        consideration of the Issuer’s delivery to or upon the order of the Seller of
        $[___________], subject to the conditions specified in Section
        2.03,
        the
        Seller, pursuant to a Bill of Sale, will irrevocably sell, transfer, assign,
        set
        over and otherwise convey to the Issuer, without recourse (subject to the
        obligations herein), all right, title and interest of the Seller in and to
        the
        Initial Transferred Environmental Control Property created pursuant to the
        Statute and in accordance with the Financing Order (such sale, transfer,
        assignment, set over and conveyance of the Initial Transferred Environmental
        Control Property will include, to the fullest extent permitted by the Statute,
        the assignment of all revenues, collections, claims, rights, payments, money
        or
        proceeds of or arising from the Environmental Control Charges related to
        the
        Initial Transferred Environmental Control Property, as the same may be adjusted
        from time to time). Such sale, transfer, assignment, set over and conveyance
        will be expressly stated to be a sale and, pursuant to
        Section 24-2-4e(m)(1) of the Statute, shall be treated as an absolute
        transfer of all of the Seller’s right, title and interest (as in a true sale),
        and not as a pledge or other secured transaction, of the Initial Transferred
        Environmental Control Property. The Seller and the Issuer agree and confirm
        that
        after giving effect to the sale contemplated by such Bill of Sale, the Seller
        has no rights in the Initial Transferred Environmental Control Property to
        which
        a security interest of creditors of the Seller could attach because it has
        sold
        all rights in the Initial Transferred Environmental Control Property to the
        Issuer pursuant to Section 24-2-4e(m)(1) of the Statute. If such sale, transfer,
        assignment, setting over and conveyance is held by any court of competent
        jurisdiction not to be a true sale as provided in Section 24-2-4e(m)(1) of
        the Statute, then such sale, transfer, assignment, setting over and conveyance
        shall be treated as a pledge of the Initial Transferred Environmental Control
        Property and as the creation of a security interest (within the meaning of
        the
        Statute and the UCC) in the Initial Transferred Environmental Control Property
        and, without prejudice to its position that it has absolutely transferred
        all of
        its rights in the Initial Transferred Environmental Control Property to the
        Issuer, the Seller hereby grants a security interest in the Initial Transferred
        Environmental Control Property to the Issuer (and, to the extent necessary
        to
        qualify the grant as a security interest under the Statute and the UCC, to
        the
        Indenture Trustee for the benefit of the Environmental Control Bondholders
        to
        secure the right of the Issuer under the Basic Documents to receive the
        Environmental Control Charges and all other Transferred Environmental Control
        Property).

       

      (b)  Subject
        to the conditions specified in Section
        2.03,
        the
        Issuer, pursuant to a Bill of Sale, will purchase the Initial Transferred
        Environmental Control Property from the Seller for the consideration set
        forth
        in paragraph (a) above.

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      (c)  The
        Seller and the Issuer each acknowledge and agree that the purchase price
        for the
        Initial Transferred Environmental Control Property sold pursuant to the Bill
        of
        Sale is equal to its fair market value at the time of sale.

       

      Section
        2.02.  Conveyance
        of Subsequent Transferred Environmental Control Property.
         The Seller may from time to time offer to sell additional Transferred
        Environmental Control Property to the Issuer, subject to the conditions
        specified in Section
        2.03.
        If any
        such offer is accepted by the Issuer, such Subsequent Transferred Environmental
        Control Property shall be sold to the Issuer effective on the Subsequent
        Sale
        Date specified in the related Addition Notice, subject to the satisfaction
        or
        waiver of the conditions specified in Section
        2.03.

       

      Section
        2.03.  Conditions
        to Conveyance of Transferred Environmental Control Property. 
        The Seller shall be permitted to sell Transferred Environmental Control Property
        to the Issuer only upon the satisfaction or waiver of each of the following
        conditions:

       

      (i)  on
        or
        prior to the Initial Sale Date or Subsequent Sale Date, as applicable, the
        Seller shall have delivered to the Issuer a duly executed Bill of Sale
        identifying the Transferred Environmental Control Property to be conveyed
        on
        that date;

       

      (ii)  as
        of the
        Initial Sale Date or the Subsequent Sale Date, as applicable, the Seller
        was not
        insolvent and will not have been made insolvent by such sale and the Seller
        is
        not aware of any pending insolvency with respect to itself;

       

      (iii)  as
        of the
        Initial Sale Date or the Subsequent Sale Date, as applicable, no breach by
        the
        Seller of its representations, warranties or covenants in this Agreement
        shall
        exist; no Servicer Default shall have occurred and be continuing; and no
        breach
        by the Transferor of its representations and warranties in the Transfer
        Agreement shall exist;

       

      (iv)  as
        of the
        Initial Sale Date or the Subsequent Sale Date, as applicable, (A) the Issuer
        shall have sufficient funds available to pay the purchase price for the
        Transferred Environmental Control Property to be conveyed on such date and
        (B)
        all conditions to the issuance of one or more Series of Environmental Control
        Bonds intended to provide such funds set forth in the Indenture shall have
        been
        satisfied or waived;

       

      (v)  on
        or
        prior to the Initial Sale Date or the Subsequent Sale Date, as applicable,
        the
        Seller shall have taken all action required to transfer to the Issuer ownership
        of the Transferred Environmental Control Property to be conveyed on such
        date,
        free and clear of all Liens other than Liens created pursuant to the Basic
        Documents; and the Issuer or the Servicer, on behalf of the Issuer, shall
        have
        taken any action required for the Issuer to grant the Indenture Trustee a
        first
        priority perfected security interest in the Collateral and maintain such
        security interest as of such date;

       

      (vi)  in
        the
        case of a sale of Subsequent Transferred Environmental Control Property only,
        on
        or prior to such Subsequent Sale Date, the Seller shall have provided the
        Issuer
        and the Rating Agencies with a timely Addition Notice;

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      (vii)  the
        Seller shall have delivered to the Rating Agencies and the Issuer (A) an
        Opinion
        of Counsel with respect to the transfer of the Transferred Environmental
        Control
        Property then being conveyed to the Issuer and (B) the Opinion of Counsel
        required by Section
        5.04(a);

       

      (viii)  the
        Seller shall have delivered to the Indenture Trustee and the Issuer an Officers’
Certificate confirming the satisfaction of each condition precedent specified
        in
        this Section
        2.03;
        and

       

      (ix)  the
        Seller shall have received the purchase price set forth in Section
        2.01(a).

       

      ARTICLE
        III  

       

      Representations
        and Warranties of Seller

       

      As
        of the
        Initial Sale Date and as of any Subsequent Sale Date, as applicable, the
        Seller
        makes the following representations and warranties on which the Issuer has
        relied and will rely in acquiring Transferred Environmental Control Property.
        The Seller agrees and acknowledges that the following representations and
        warranties are also for the benefit of the Indenture Trustee, as collateral
        assignee of the Issuer pursuant to the Indenture. The representations and
        warranties shall survive the sale of Transferred Environmental Control Property
        to the Issuer and the pledges and assignments thereof permitted
        hereby.

       

      Section
        3.01.  Organization
        and Good Standing.
         The Seller is a limited liability company duly organized, validly existing
        and in good standing under the laws of the State of Delaware, with limited
        liability company power and authority to own its properties and conduct its
        business.

       

      Section
        3.02.  Due
        Qualification. 
        The Seller is duly qualified to do business as a foreign limited liability
        company in good standing, and has obtained all necessary licenses and approvals,
        in all foreign jurisdictions in which the ownership or lease of property
        or the
        conduct of its business shall require such qualifications, licenses or approvals
        (except where the failure to so qualify or obtain such licenses and approvals
        would not be reasonably likely to have a material adverse effect on the Seller’s
        business, operations, assets, revenues or properties).

       

      Section
        3.03.  Power
        and Authority.
         The Seller has the requisite limited liability company power and authority
        to execute and deliver this Agreement and to carry out its terms; the Seller
        has
        full limited liability company power and authority to own the Environmental
        Control Property and sell and assign the Initial Transferred Environmental
        Control Property, in the case of the Initial Sale Date, and the Subsequent
        Transferred Environmental Control Property, in the case of each Subsequent
        Sale
        Date, as applicable, and the Seller has duly authorized such sale and assignment
        to the Issuer by all necessary limited liability company action; and the
        execution, delivery and performance of this Agreement has been duly authorized
        by the Seller by all necessary limited liability company action.

       

      Section
        3.04.  Binding
        Obligation.
         This Agreement constitutes a legal, valid and binding obligation of the
        Seller enforceable against the Seller in accordance with its terms, subject
        to

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      bankruptcy,
        receivership, insolvency, fraudulent transfer, reorganization, moratorium
        or
        other laws relating to or affecting creditors’ rights generally from time to
        time in effect and to general principles of equity (regardless of whether
        considered in a proceeding in equity or at law).

       

      Section
        3.05.  No
        Violation.
         The consummation of the transactions contemplated by this Agreement does
        not conflict with the organizational documents of the Seller, or any indenture,
        or other agreement or instrument to which the Seller is a party or by which
        it
        is bound; result in the creation or imposition of any Lien upon any of its
        properties pursuant to the terms of any such indenture, agreement or other
        instrument (other than may be granted under the Basic Documents or any Liens
        created by the Issuer pursuant to the Financing Order) or violate any
        Requirements of Law applicable to the Seller or its properties.

       

      Section
        3.06.  No
        Proceedings.
         There are no proceedings or investigations pending or, to the Seller’s
        knowledge, threatened, before any court, federal or state regulatory body,
        administrative agency or other governmental instrumentality having jurisdiction
        over the Seller or its properties (i) asserting the invalidity of the Basic
        Documents, the Environmental Control Bonds, the Statute or the Financing
        Order,
        (ii) seeking to prevent the issuance of the Environmental Control Bonds or
        the
        consummation of any of the transactions contemplated by the Basic Documents
        (iii) challenging the Seller’s treatment of the Environmental Control Bonds as
        debt of the Seller for federal and state tax purposes, or (iv) except as
        described in Exhibit B, seeking any determination or ruling that could
        reasonably be expected to materially and adversely affect the performance
        by the
        Seller of its obligations under, or the validity or enforceability of, the
        Basic
        Documents, the Environmental Control Bonds or the Financing Order. 

       

      Section
        3.07.  Approvals.
         Except for UCC filings or filings under the Statute, no approval,
        authorization, consent, order or other action of, or filing with, any court,
        federal or state regulatory body, administrative agency or other governmental
        instrumentality is required in connection with the execution and delivery
        by the
        Seller of this Agreement, the performance by the Seller of the transactions
        contemplated hereby or the fulfillment by the Seller of the terms hereof,
        except
        those that have been obtained or made.

       

      Section
        3.08.  The
        Transferred Environmental Control Property.

       

      (a)  All
        information provided by the Seller to the Issuer in writing with respect
        to the
        Transferred Environmental Control Property is correct in all material
        respects.

       

      (b)  The
        transfer, sale, assignment and conveyance of the Transferred Environmental
        Control Property constitutes a sale or other absolute transfer of all of
        the
        Seller’s right, title and interest in the Initial Transferred Environmental
        Control Property or the Subsequent Transferred Environmental Control Property,
        as the case may be, to the Issuer, and, upon the execution of this Agreement,
        Seller will have no right, title or interest in the Initial Transferred
        Environmental Control Property or the Subsequent Transferred Environmental
        Control Property, as the case may be, and the Initial Transferred Environmental
        Control Property or the Subsequent Transferred Environmental Control Property,
        as the case may be, would not be part of the estate of the Seller as debtor
        in
        the event of a filing of a bankruptcy petition.

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      (c)  The
        Seller is the sole owner of the Transferred Environmental Control Property
        sold
        to the Issuer on the Initial Sale Date or Subsequent Sale Date, as applicable,
        and such sale has been made free and clear of all Liens other than Liens
        created
        by the Issuer pursuant to the Indenture. All actions or filings, including
        filings with the Secretary of State of West Virginia under the Statute and
        UCC
        and with the Delaware Secretary of State under the Delaware UCC, necessary
        to
        give the Issuer a valid first priority perfected ownership interest in the
        Transferred Environmental Control Property and to grant the Indenture Trustee
        a
        first priority perfected ownership interest in the Transferred Environmental
        Control property, free and clear of all Liens of the Seller or anyone claiming
        through the Seller have been made.

       

      Section
        3.09.  Solvency
        of Seller.
        After
        giving effect to the sale of any Transferred Environmental Control Property
        hereunder, the Seller (i) is solvent and expects to remain solvent, (ii)
        is
        adequately capitalized to conduct its business and affairs considering its
        size
        and the nature of its business and intended purposes, (iii) is not engaged
        in
        nor does it expect to engage in a business for which its remaining property
        represents an unreasonably small amount of capital, (iv) reasonably believes
        that it will be able to pay its debts as they come due and (v) is able to
        pay
        its debts as they mature and does not intend to incur, or believe that it
        will
        incur, indebtedness that it will not be able to repay at its
        maturity.

       

      Section
        3.10.  The
        Statute and the Financing Order.

       

      (a)  The
        Financing Order has been issued by the PSCWV in accordance with the Statute
        and
        in compliance with all applicable Requirements of Law. The Financing Order
        became effective pursuant to the Statute, is in full force and effect and
        is
        final and nonappealable

       

      (b)  The
        Environmental Control Bonds are entitled to the protections provided by the
        Statute, the Financing Order is not subject to impairment, and the rights
        to
        impose, collect and adjust the Environmental Control Charges are irrevocable
        and
        not subject to impairment or adjustment, except for the periodic True-Up
        Adjustments to the Environmental Control Charges provided for in the Financing
        Order.

       

      Section
        3.11.  State
        Pledge.

       

      (a)  The
        State
        of West Virginia may not take or permit any action which would impair the
        value
        of the Environmental Control Property or reduce or alter, except for periodic
        True-Up Adjustments allowed under the Financing Order, or impair the
        Environmental Control Charges to be imposed, collected or remitted for the
        benefit of Environmental Control Bondholders, until all principal, interest
        or
        other charges incurred or contracts to be performed in connection with the
        Environmental Control Bonds are paid or performed in full.

       

      (b)  The
        State
        of West Virginia, including the PSCWV, cannot take any action that substantially
        impairs the rights of the Environmental Control Bondholders unless such action
        is reasonable exercise of the State of West Virginia’s sovereign powers and of a
        character to further a legitimate public purpose. Under the takings clauses
        of
        the West Virginia Constitution and the United States Constitution, the state
        cannot repeal or amend the Statute in contravention of the State Pledge,
        as
        described in Section
        3.10(a),
        unless
        just compensation, as determined by a court of competition jurisdiction,
        is
        provided to the Environmental Control Bondholders; but

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      nothing
        in this paragraph precludes any limitation or alteration of the rights of
        the
        Environmental Control Bondholders if full compensation is made by law for
        the
        full protection of the Environmental Control Charges and of the Environmental
        Control Bondholders or any assignee or party entering into a contract with
        the
        Seller.

       

      (c)  There
        is
        no order by a court providing for the limitation or other impairment of the
        Statute, Financing Order, Environmental Control Property or Environmental
        Control Charges, or any rights arising under them, or that seeks to enjoin
        the
        performance of any obligations under the Financing Order which is materially
        adverse to the position of the Environmental Control Bondholders.

       

      (d)  The
        voters of the State of West Virginia have no right of referendum or initiative
        to amend, repeal or revoke the Statute in a manner that would impair the
        security of the Environmental Control Bondholders.

       

      Section
        3.12.  The
        Environmental Control Property Rights.

       

      (a)  The
        Environmental Control Property constitutes a present property right that
        will
        continue to exist until the Environmental Control Bonds are paid in full
        and the
        financing costs associated with the Environmental Control Bonds have been
        recovered in full.

       

      (b)  The
        Environmental Control Property consists of (a) the irrevocable right of the
        Seller under the Financing Order to impose, collect and receive Environmental
        Control Charges in the amount necessary to provide for full recovery of
        principal and interest on the Environmental Control Bonds, together with
        the
        Financing Costs; (b) the right under the Financing Order to obtain periodic
        True-Up Adjustments of the Environmental Control Charges and (c) all proceeds
        arising out of the rights and interests described in (a) and (b). The
        Environmental Control Property does not include any right to any revenues,
        collections, claims, rights, payments, money or proceeds of or arising from
        certain tax charges.

       

      ARTICLE
        IV  

       

      Covenants
        of the Seller

       

      Section
        4.01.  Existence
        as a Limited Liability Company. 
        Subject to Section
        5.02,
        so long
        as Environmental Control Bonds of any Series remain Outstanding, the Seller
        will
        keep in full force and effect its existence as a limited liability company
        and
        remain in good standing, in each case under the laws of the jurisdiction
        of its
        formation, and will obtain and preserve its qualification to do business
        in each
        jurisdiction in which such qualification is or shall be necessary to protect
        the
        validity and enforceability of this Agreement and each other instrument or
        agreement to which the Seller is a party necessary to the proper administration
        of this Agreement and the transactions contemplated hereby.

       

      Section
        4.02.  No
        Liens or Conveyances.
         Except for the conveyances hereunder, the Seller will not sell, pledge,
        assign or transfer to any other Person, or grant, create, incur, assume or
        suffer to exist any Lien on, any of the Transferred Environmental Control
        Property, whether now existing or hereafter created, or any interest therein.
        The Seller shall not at any time assert any Lien against or with respect
        to any
        Transferred Environmental Control Property, and shall

       

      
        
          
          

        

        
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      defend
        the right, title and interest of the Issuer and the Indenture Trustee, as
        collateral assignee of the Issuer, in, to and under the Transferred
        Environmental Control Property, whether now existing or hereafter created,
        against all claims of third parties claiming through or under the
        Seller.

       

      Section
        4.03.  Delivery
        of Collections.
         If the Seller receives collections in respect of the Environmental Control
        Charges, or in respect of the Environmental Control Property or the
        proceeds thereof, the Seller agrees to pay the Servicer all estimated
        collections received by the Seller in respect thereof as soon as practicable
        after receipt is known by the Seller, but in no event later than two Business
        Days after such receipt is known by the Seller, and
        the
        Seller shall reconcile such estimated amounts with the Servicer within 25
        Business Days after the estimated collections are paid to the
        Servicer.

       

      Section
        4.04.  Notice
        of Liens.
         The Seller shall notify the Issuer and the Indenture Trustee promptly
        after becoming aware of any Lien on any Environmental Control Property other
        than the conveyances hereunder or under the Transfer Agreement, the Indenture
        or
        the other Basic Documents.

       

      Section
        4.05.  Compliance
        with Law.
         The Seller hereby agrees to materially comply with its organizational or
        governing documents and all Requirements of Law applicable to the Seller,
        except
        to the extent that failure to so comply would not have a material adverse
        affect
        on the Issuer’s or the Indenture Trustee’s interests in the Transferred
        Environmental Control Property or under any of the Basic Documents, the timing
        or amount of Environmental Control Charges payable by customers or the Seller’s
        performance of its material obligations hereunder or under any of the other
        Basic Documents to which it is a party.

       

      Section
        4.06.  Use
        of
        Proceeds.
         The Seller will use the proceeds of the sale of the Transferred
        Environmental Control Property in accordance with the Financing
        Order.

       

      Section
        4.07.  Covenants
        Related to Transferred Environmental Control Property.
        

       

      (a)  So
        long
        as Environmental Control Bonds of any Series remain Outstanding, the Seller
        shall treat the Environmental Control Bonds as debt of the Seller for federal
        income tax purposes to the extent permitted by applicable Requirements of
        Law.

       

      (b)  So
        long
        as Environmental Control Bonds of any Series remain Outstanding, the Seller
        shall (i) treat the Environmental Control Bonds as the debt of the Issuer,
        except for financial accounting or tax purposes, (ii) clearly disclose in
        its
        financial statements that it is not the owner of the Transferred Environmental
        Control Property and that the assets of the Issuer are not available to pay
        creditors of the Seller or any of its Affiliates, (iii) not own or purchase
        any
        Environmental Control Bonds, and (iv) clearly disclose the effects of all
        transactions between the Seller and the Issuer in accordance with
        GAAP.

       

      (c)  The
        Seller agrees that upon the sale by the Seller of the Transferred Environmental
        Control Property to the Issuer pursuant to a Bill of Sale, (i) to the fullest
        extent permitted by applicable Requirements of Law, the Issuer shall have
        all of
        the rights originally held by the Seller with respect to the Transferred
        Environmental Control Property, including the

       

      
        
          
          

        

        
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      right
        to
        collect any amounts payable by any Customer or Third Party in respect of
        such
        Transferred Environmental Control Property, notwithstanding any objection
        or
        direction to the contrary by the Seller and (ii) any payment by any Customer
        or
        Third Party to the Issuer shall discharge such Customer’s or such Third Party’s
        obligations in respect of such Transferred Environmental Control Property
        to the
        extent of such payment, notwithstanding any objection or direction to the
        contrary by the Seller.

       

      (d)  So
        long
        as Environmental Control Bonds of any Series remain Outstanding, the Seller
        (i)
        in all proceedings relating directly or indirectly to the Transferred
        Environmental Control Property, will affirmatively certify and confirm that
        it
        has sold all of its rights and interests in and to the Transferred Environmental
        Control Property (other than for financial accounting or tax purposes), (ii)
        shall not make any statement or reference in respect of the Transferred
        Environmental Control Property that is inconsistent with the ownership thereof
        by the Issuer (other than for financial accounting or tax purposes), (iii)
        will
        not take any action in respect of the Transferred Environmental Control Property
        except as contemplated by the Basic Documents and (iv) will not sell
        Environmental Control Property under a Subsequent Financing Order in connection
        with the issuance of additional series of Environmental Control Bonds unless
        the
        Rating Agency Condition has been satisfied.

       

      Section
        4.08.  Notice
        of Indemnification Events. 
         The Seller shall deliver to the Issuer and the Indenture Trustee promptly
        after having obtained knowledge thereof, written notice in an Officers’
Certificate of any Indemnification Event or any event which, with the giving
        of
        notice or the passage of time, would become an Indemnification
        Event.

       

      Section
        4.09.  Protection
        of Title.
        

       

      (a)  The
        Seller shall execute and file such filings, including filings with the PSCWV
        pursuant to the Statute and the Financing Order, and cause to be executed
        and
        filed such filings, all in such manner and in such places as may be required
        by
        applicable Requirements of Law fully to preserve, maintain, and protect the
        interests of the Issuer, the Indenture Trustee and the Environmental Control
        Bondholders in the Transferred Environmental Control Property, including
        all
        filings required under the Statute relating to the transfer of the ownership
        or
        security interest in the Transferred Environmental Control Property by the
        Seller to the Issuer.

       

      (b)  The
        Seller shall deliver (or cause to be delivered) to the Issuer file-stamped
        copies of, or filing receipts for, any document filed as provided above,
        as soon
        as available following such filing. 

       

      (c)  The
        Seller agrees to take such legal or administrative actions, including defending
        against or instituting and pursuing legal actions and appearing or testifying
        at
        hearings or similar proceedings, as may be reasonably necessary (i) to protect
        the Issuer, the Indenture Trustee and the Environmental Control Bondholders
        from
        claims, state actions or other actions or proceedings of third parties which,
        if
        successfully pursued, would result in a breach of any representation or warranty
        set forth in Article III or (ii) to block or overturn any attempts to cause
        a
        repeal of, modification of or supplement to the Statute or the Financing
        Order
        or the rights of holders of Transferred Environmental Control Property by
        legislative enactment or

       

      
        
          
          

        

        
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      constitutional
        amendment that would be materially adverse to the holders of Transferred
        Environmental Control Property. 

       

      (d)  The
        Seller will institute any action or proceeding necessary to compel performance
        by the PSCWV, the State of West Virginia or any of their respective agents
        of
        any of their obligations or duties under the Statute, any Financing Order
        or any
        Issuance Advice Letter. The Seller will comply with all filing requirements,
        including any post closing filings, in accordance with the Financing
        Order.

       

      The
        costs
        of any action described in this Section
        4.09
        shall be
        payable from the Collection Account as an Operating Expense in accordance
        with
        Section 8.02(e) of the Indenture. The Seller’s obligations pursuant to this
Section
        4.09
        shall
        survive and continue notwithstanding that payment of such Operating Expense
        may
        be delayed pursuant to the terms of the Indenture it being understood that
        the
        Seller may be required initially to advance its own fund to satisfy its
        obligations hereunder).

       

      Section
        4.10.  Taxes.
         So long as any of the Environmental Control Bonds are Outstanding, the
        Seller shall, and shall cause each of its subsidiaries to, pay all material
        taxes, including assessments and governmental charges imposed upon it or
        any of
        its properties or assets or with respect to any of its franchises, business,
        income or property before any penalty accrues thereon if the failure to pay
        any
        such taxes, assessments and governmental charges would, after any applicable
        grace periods, notices or other similar requirements, result in a lien on
        the
        Transferred Environmental Control Property; provided that no such tax need
        be
        paid if the Seller or one of its affiliates is contesting the same in good
        faith
        by appropriate proceedings promptly instituted and diligently conducted and
        if
        the Seller or such affiliate has established appropriate reserves as shall
        be
        required in conformity with generally accepted accounting
        principles.

       

      Section
        4.11.  Notice
        of Breach.
         Promptly after obtaining knowledge of any breach in any material respect
        of its representations and warranties in this Agreement, the Seller will
        notify
        the Issuer and the Rating Agencies of the breach.

       

      Section
        4.12.  Termination.
         Even if this Agreement or the Indenture is terminated, the Seller will
        not, prior to the date which is one year and one day after the termination
        of
        the Indenture, petition or otherwise invoke or cause the Issuer to invoke
        the
        process of any court or Governmental Authority for the purpose of commencing
        or
        sustaining an involuntary case against the Issuer or any substantial part
        of the
        Issuer’s property under any federal or state bankruptcy, insolvency or similar
        law, appointing a receiver, liquidator, assignee, trustee, custodian,
        sequestrator or other similar official, or ordering the winding up or
        liquidation of the Issuer’s affairs.

       

      Section
        4.13.  Further
        Covenants.
         Upon the Issuer’s request, the Seller will execute and deliver such
        further instruments and do such further acts as may be necessary to carry
        out
        more effectively the provisions and purposes of this Agreement.

       

      
        
          
          

        

        
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      ARTICLE
        V

        

      The
        Seller

       

      Section
        5.01.  Liability
        of Seller; Indemnities.
        

       

      (a)  The
        Seller shall be liable in accordance herewith only to the extent of the
        obligations specifically undertaken by the Seller under this
        Agreement.

       

      (b)  The
        Seller shall indemnify the Issuer and the Indenture Trustee, for itself and
        on
        behalf of the Environmental Control Bondholders and each of their respective
        members, managers, officers, directors, employees and agents for, and any
        Swap
        Counterparty, and defend and hold harmless each such Person from and against,
        any and all taxes (other than any taxes imposed on Environmental Control
        Bondholders solely as a result of their ownership of Environmental Control
        Bonds) that may at any time be imposed on or asserted against any such Person
        under existing law as of the Initial Sale Date or Subsequent Sale Date as
        a
        result of (i) the sale and assignment of the Environmental Control Property
        to
        the Issuer, (ii) the acquisition or holding of the Environmental Control
        Property by the Issuer or (iii) the issuance and sale of the Environmental
        Control Bonds by the Issuer, including any sales, gross receipts, general
        corporation, single business, personal property, privilege, franchise or
        license
        taxes, but excluding any taxes imposed as a result of a failure of such person
        to withhold or remit taxes with respect to payments on any Environmental
        Control
        Bonds, it being understood that the Environmental Control Bondholders shall
        be
        entitled to enforce their rights against the Seller under this Section
        5.01(b)
        solely
        through a cause of action brought for their benefit by the Indenture
        Trustee.

       

      (c)  The
        Seller shall indemnify the Issuer, the Indenture Trustee, for itself and
        on
        behalf of the Environmental Control Bondholders, and each of their respective
        affiliates, members, managers, officers, directors, employees and agents
        and any
        swap counterparty, and defend and hold harmless each such Person from and
        against, (i) any and all amounts of principal of and interest on the
        Environmental Control Bonds not paid when due or when scheduled to be paid
        in
        accordance with their terms, (ii) the amount of any deposits to the Issuer
        required to have been made in accordance with the terms of the Basic Documents
        or any Financing Order which are not made when so required, and (iii) any
        and
        all other liabilities, obligations, losses, claims, damages, payment, costs
        or
        expenses incurred by any of these persons, in each case as a result of the
        Seller’s breach of any of its representations, warranties or covenants contained
        in this Agreement; each of which the Seller will have a 30-day opportunity
        to
        cure upon notice from us of a material breach of a covenant.

       

      (d)  The
        Seller shall indemnify the Issuer, the Indenture Trustee, for itself and
        on
        behalf of the Environmental Control Bondholders, and each of their respective
        affiliates, members, managers, officers, directors, employees and agents,
        and
        defend and hold harmless each such Person from and against, any and all Losses
        that may be imposed on, incurred by or asserted against any such Person as
        a
        result of (x) the Seller’s willful misconduct, bad faith or negligence in the
        performance of its duties or observance of its covenants under this Agreement,
        (y) the Seller’s reckless disregard of its obligations and duties under this
        Agreement or the Transferor’s reckless disregard of its obligations and duties
        under the Transfer Agreement or (z)

       

      
        
          
          

        

        
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      the
        Seller’s breach of any of its representations or warranties contained in this
        Agreement or the Transferor’s breach of any of its representations or warranties
        contained in the Transfer Agreement (any event described in any of the foregoing
        clauses (x), (y) or (z), an “Indemnification
        Event”).
        Amounts on deposit in the Excess Funds Subaccount and the Capital Subaccount
        shall not be available to satisfy any Losses for which indemnification is
        provided in this Agreement.

       

      (e)  The
        Seller also will indemnify the PSCWV, for the benefit of Customers, for any
        and
        all Losses, including but not limited to Losses in the form of higher
        Environmental Control Charges, that Customers may incur by reason of
        (i) any failure of the Seller’s representations or warranties in this
        Agreement, (ii) any breach of the Seller’s covenants in this Agreement,
        (iii) any failure of the Transferor’s representations in the Transfer
        Agreement or (iv)  breach of the Transferor’s covenants in the Transfer
        Agreement. 

       

      (f)  The
        Seller shall indemnify the Indenture Trustee its officers, directors and
        agents
        for, and defend and hold harmless each such Person from and against, any
        and all
        Losses that may be imposed upon, incurred by or asserted against any such
        Person
        as a result of the acceptance or performance of the trusts and duties contained
        herein and in the Basic Documents to which the Indenture Trustee is a party,
        except to the extent that any such Loss shall be due to the willful misfeasance,
        bad faith or negligence of the Indenture Trustee. Such amounts shall be
        deposited into the Collection Account and distributed in accordance with
        the
        Indenture.

       

      (g)  The
        Seller’s indemnification obligations under Sections
        5.01(b), (c), (d) and (f)
        for
        events occurring prior to the removal or resignation of the Indenture Trustee
        or
        the termination of this Agreement shall survive the resignation or removal
        of
        the Indenture Trustee or the termination of this Agreement and shall include
        reasonable fees and expenses of investigation and litigation (including the
        Indenture Trustee’s reasonable attorney’s fees and expenses) and will rank in
        priority with other general, unsecured obligations of the Seller. Any amounts
        indemnified by the Seller pursuant to its obligations under Sections
        5.01(b), (c), (d) or (f)
        shall be
        deposited into the Collection Account and distributed in accordance with
        the
        Indenture. The Seller shall not indemnify any party under this Section
        5.01
        for any
        changes in law after the Initial Sale Date or the Subsequent Sale Date, as
        applicable. 

       

      Section
        5.02.  Merger
        or Consolidation of, or Assumption of the Obligations of, Seller.
         Any Person (a) into which the Seller may be merged or consolidated or
        which succeeds to all or the majority of the Seller’s electric distribution
        business, (b) which results from the division of the Seller into two or more
        Persons and which succeeds to all or the majority of the Seller’s electric
        distribution business, (c) which may result from any merger or consolidation
        to
        which the Seller shall be a party and which succeeds to all or the majority
        of
        the Seller’s electric distribution business, or (d) which may succeed to the
        properties and assets of the Seller substantially as a whole and which succeeds
        to all or the majority of the Seller’s electric distribution business, which
        Person in any of the foregoing cases executes an agreement of assumption
        to
        perform every obligation of the Seller under this Agreement, shall be the
        successor to the Seller hereunder without the execution or filing of any
        document or any further act by any of the parties to this Agreement; provided,
        however, that (i) immediately after giving effect to such transaction, no
        representation or warranty made pursuant to Article III shall have been breached
        and no Servicer Default, and no event that, after notice or lapse of time,
        or
        both,

       

      
        
          
          

        

        
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      would
        become a Servicer Default, shall have occurred and be continuing, (ii) the
        Seller shall have delivered to the Issuer and the Indenture Trustee an Officers’
Certificate and an Opinion of Counsel each stating that such consolidation,
        merger or succession and such agreement of assumption comply with this Section
        and that all conditions precedent, if any, provided for in this Agreement
        relating to such transaction have been complied with, (iii) the Rating Agencies
        shall have received prior written notice of such transaction, (iv) the Seller
        shall have delivered to the Issuer and the Indenture Trustee an Opinion of
        Counsel either (A) stating that, in the opinion of such counsel, all filings,
        including filings by the Seller with the PSCWV pursuant to the Statute and
        UCC
        filings, have been executed and filed that are necessary fully to preserve
        and
        protect the interest of the Issuer in the Transferred Environmental Control
        Property and reciting the details of such filings or (B) stating that, in
        the
        opinion of such counsel, no such action shall be necessary to preserve and
        protect such interests and (v) the Seller shall have delivered to the Issuer
        and
        the Indenture Trustee an Opinion of Counsel from independent tax counsel
        stating
        to the effect that, for the federal income tax purposes, such consolidation,
        merger or succession to, and assumption of, the obligations of the Seller
        will
        not result in a material adverse federal income tax consequence to the Issuer,
        the Seller, the Indenture Trustee or the Environmental Control Bondholders.
        Notwithstanding anything herein to the contrary, the execution of the above
        described agreement of assumption and compliance with clauses (i), (ii),
        (iii)
        and (iv) above shall be conditions precedent to the consummation of any
        transaction referred to in clauses (a), (b), (c) or (d) above.

       

      Section
        5.03.  Limitation
        on Liability of Seller and Others.
         The Seller and any director or officer or employee or agent of the Seller
        may rely in good faith on the advice of counsel or on any document of any
        kind,
        prima facie properly executed and submitted by any Person, respecting any
        matters arising hereunder. Subject to Section
        4.08,
        the
        Seller shall not be under any obligation to appear in, prosecute or defend
        any
        legal action that is not incidental to its obligations under this Agreement,
        and
        that in its opinion may involve it in any expense or liability. The Seller
        will
        not be liable for any Losses resulting solely from a downgrade in the ratings
        on
        the Environmental Control Bonds or any consequential, incidental or indirect
        damages, including any loss of market value of the Environmental Control
        Bonds,
        resulting from any downgrade of the ratings of the Environmental Control
        Bonds.


       

      Section
        5.04.  Opinions
        of Counsel.
         The Seller shall deliver to the Issuer and the Indenture Trustee: (a)
        promptly after the execution and delivery of this Agreement and of each
        amendment hereto or to the Servicing Agreement and on each Subsequent Sale
        Date,
        an Opinion of Counsel either (i) to the effect that, in the opinion of such
        counsel, all filings, including filings with the PSCWV pursuant to the Statute,
        that are necessary to fully preserve and protect the interests of the Issuer
        in
        the Transferred Environmental Control Property have been executed and filed,
        and
        reciting the details of such filings or referring to prior Opinions of Counsel
        in which such details are given, or (ii) to the effect that, in the opinion
        of
        such counsel, no such action shall be necessary to preserve and protect such
        interest; and (b) within 90 days after the beginning of each calendar year
        beginning with the first calendar year beginning more than three months after
        the Initial Sale Date, an Opinion of Counsel, dated as of a date during such
        90-day period, either (i) to the effect that, in the opinion of such counsel,
        all filings with the PSCWV or otherwise pursuant to the Statute, have been
        executed and filed that are necessary to preserve fully and protect fully
        the
        interest of the Issuer in the Transferred Environmental Control Property,
        and
        reciting the details of such filings or referring to prior Opinions of Counsel
        in

       

      
        
          
          

        

        
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      which
        such details are given, or (ii) to the effect that, in the opinion of such
        counsel, no such action shall be necessary to preserve and protect such
        interest. Each Opinion of Counsel referred to in clause (a) or (b) above
        shall
        specify any action necessary (as of the date of such opinion) to be taken
        in the
        following year to preserve and protect such interest.

       

      ARTICLE
        VI  

       

      Miscellaneous
        Provisions

       

      Section
        6.01.  Amendment..
        

       

      (a)  Subject
        to Section
        6.01(b)
        below,
        this Agreement may be amended by the Seller and the Issuer, with the prior
        written consent of the Indenture Trustee and the satisfaction of the Rating
        Agency Condition. Promptly after the execution of any such amendment and
        consent, the Issuer shall furnish written notification of the substance of
        such
        amendment or consent to each of the Rating Agencies. Prior to the execution
        of
        any amendment to this Agreement, the Issuer and the Indenture Trustee shall
        be
        entitled to receive and rely upon an Opinion of Counsel stating that the
        execution of such amendment is authorized or permitted by this Agreement
        and the
        Opinion of Counsel referred to in Section 3.10 of the Servicing Agreement.
        Subject to paragraph (b) below, the Issuer and the Indenture Trustee may,
        but
        shall not be obligated to, enter into any such amendment which affects their
        own
        rights, duties or immunities under this Agreement or otherwise.

       

      (b)  Notwithstanding
        anything to the contrary in Section
        6.01(a),
        no
        amendment or modification of this Agreement shall be effective except upon
        satisfaction of the conditions precedent in this Section
        6.01(b).

       

      (i)  PSCWV
        Condition.
        At
        least 16 days prior to the effectiveness of any such amendment or
        modification, and after obtaining the other necessary approvals set forth
        in
Section 6.01(a),
        except
        for the consent of the Indenture Trustee and the Environmental Control
        Bondholders if the consent of the Environmental Control Bondholders is required
        or sought by the Indenture Trustee in connection with such amendment or
        modification, the Issuer shall have delivered to the PSCWV’s executive director
        and general counsel written notification of any proposed amendment or
        modification, which notification shall contain:

       

      (A)  a
        reference to Case Nos. 05-0402-E-CN and 05-0750-E-PC and any other case
        number under which a Financing Order has been issued;

       

      (B)  an
        Officer’s Certificate stating that the proposed amendment or modification has
        been approved by all parties to this Agreement; and

       

      (C)  a
        statement identifying the person to whom the PSCWV is to address any response
        to
        the proposed amendment or to request additional time.

       

      (ii)  The
        PSCWV
        or its authorized representative shall, within 15 days of receiving the
        notification complying with Section
        6.01(b)(i)
        above,
        either:

       

      
        
          
          

        

        
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      (A)  provide
        notice of its determination that the proposed amendment or modification will
        not
        under any circumstances have the effect of increasing the ongoing qualified
        costs related to the Environmental Control Bonds,

       

      (B)  provide
        notice of its consent or lack of consent to the person specified in Section
        6.01(b)(i)(C)
        above,
        or

       

      (C)  be
        conclusively deemed to have consented to the proposed amendment or
        modification,

       

      unless,
        within 15 days of receiving the notification complying with Section
        6.01(b)(i)
        above,
        the PSCWV or its authorized representative delivers to the office of the
        person
        specified in Section
        6.01(b)(i)(C)
        above
        with a written statement requesting an additional amount of time not to exceed
        15 days in which to consider whether to consent to the proposed amendment
        or
        modification. If the PSCWV or its authorized representative requests an
        extension of time in the manner set forth in the preceding sentence, then
        the
        PSCWV shall either provide notice of its consent or lack of consent or notice
        of
        its determination that the proposed amendment or modification will not under
        any
        circumstances increase ongoing qualified costs to the person specified in
        Section
        6.01(b)(i)(C)
        above
        not later than the last day of such extension of time or be conclusively
        deemed
        to have consented to the proposed amendment or modification on the last day
        of
        such extension of time. Any amendment or modification requiring the consent
        of
        the PSCWV shall become effective on the later of (i) the date proposed by
        the
        parties to such amendment or modification or (ii) the first day after the
        expiration of the 15-day period provided for in this Section
        6.01(b)(ii),
        or, if
        such period has been extended pursuant hereto, the first day after the
        expiration of such period as so extended.

       

      (c)  For
        the
        purpose of this Section
        6.01,
        an
“authorized representative” of the PSCWV means any person authorized to act on
        behalf of the PSCWV, as evidenced by an Opinion of Counsel (which may be
        the
        general counsel) to the PSCWV.

       

      Section
        6.02.  Notices.
         All demands, notices and communications upon or to the Seller, the Issuer,
        the Indenture Trustee, the Rating Agencies or the PSCWV under this Agreement
        shall be in writing, delivered personally, via facsimile, reputable overnight
        courier or by certified mail, return-receipt requested, and shall be deemed
        to
        have been duly given upon receipt (a) in the case of the Seller, to PE
        Renaissance Funding, LLC, 2215-B Renaissance Drive, Suite #5, Las Vegas,
        Nevada 89119, Attention of [_______________], (b) in the case of the Issuer,
        to
        PE Environmental Funding LLC, 2215-B Renaissance Drive, Suite #5, Las
        Vegas, Nevada 89119, Attention of [_______________], (c) in the case of the
        Indenture Trustee, at the Corporate Trust Office, (d) in the case of Moody’s, to
        Moody’s Investors Service, Inc., [ABS Monitoring Department], 99 Church Street,
        New York, New York 10007, (e) in the case of Standard & Poor’s, to in the
        case of Standard & Poor’s, to Standard & Poor’s Ratings Services, a
        division of The McGraw-Hill Companies, Inc., 55 Water Street, New York, New
        York
        10004, Attention of [Asset Backed Surveillance Department], (f) in the case
        of
        Fitch, to Fitch, Inc., One State Street Plaza, New York, New York 10004,
        Attention of ABS Surveillance, and (g) in the case of the PSCWV, to Public
        Service Commission of West Virginia, 201 Brooks Street, P.O. Box
        812,

       

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

       

      Charleston,
        West Virginia 25325 Attention of [_____________]; or, as to each of the
        foregoing, at such other address as shall be designated by written notice
        to the
        other parties.

       

      Section
        6.03.  Assignment.
         Notwithstanding anything to the contrary contained herein, except as
        provided in Section 5.02, this Agreement may not be assigned by the
        Seller.

       

      Section
        6.04.   Limitations
        on Rights of Others.
         The provisions of this Agreement are solely for the benefit of the Seller,
        the Issuer, the PSCWV and the Indenture Trustee, on behalf of itself and
        the
        Environmental Control Bondholders, and nothing in this Agreement, whether
        express or implied, shall be construed to give to any other Person any legal
        or
        equitable right, remedy or claim in the Collateral or under or in respect
        of
        this Agreement or any covenants, conditions or provisions contained
        herein.

       

      Section
        6.05.  Severability.
         Any provision of this Agreement that is prohibited or unenforceable in any
        jurisdiction shall, as to such jurisdiction, be ineffective to the extent
        of
        such prohibition or unenforceability without invalidating the remaining
        provisions hereof, and any such prohibition or unenforceability in any
        jurisdiction shall not invalidate or render unenforceable such provision
        in any
        other jurisdiction.

       

      Section
        6.06.  Separate
        Counterparts.
         This Agreement may be executed by the parties hereto in separate
        counterparts, each of which when so executed and delivered shall be an original,
        but all such counterparts shall together constitute but one and the same
        instrument.

       

      Section
        6.07.  Headings.
         The headings of the various Articles and Sections herein are for
        convenience of reference only and shall not define or limit any of the terms
        or
        provisions hereof.

       

      Section
        6.08.  GOVERNING
        LAW.
         THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
        OF WEST VIRGINIA, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND
        THE
        OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED
        IN
        ACCORDANCE WITH SUCH LAWS.

       

      Section
        6.09.  Assignment
        to Issuer and to Indenture Trustee.
        

       

      (a)  The
        Seller hereby assigns to the Issuer all of the Seller’s rights in, to and under
        the Transfer Agreement. 

       

      (b)  The
        Seller hereby acknowledges and consents to the mortgage, pledge, assignment
        and
        grant of a security interest by the Issuer to the Indenture Trustee pursuant
        to
        the Indenture for the benefit of the Environmental Control Bondholders of
        all
        right, title and interest of the Issuer in, to and under the Transferred
        Environmental Control Property and the proceeds thereof and the assignment
        of
        any or all of the Issuer’s rights hereunder to the Indenture Trustee.


       

      Section
        6.10.  Nonpetition
        Covenant.
         Notwithstanding any prior termination of this Agreement or the Indenture,
        but subject to a court of competent jurisdiction’s rights to order the
        sequestration and payment of Environmental Control Revenues arising with
        respect
        to the Transferred Environmental Control Property upon application by the
        Issuer
        or the Indenture

       

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

       

      Trustee
        notwithstanding any bankruptcy, reorganization or other insolvency proceedings
        with respect to the debtor, pledgor or transferor of the Transferred
        Environmental Control Property pursuant to Section 24-2-4e(k)(4) of the Statute,
        the Seller shall not, prior to the date which is one year and one day after
        the
        termination of the Indenture, petition or otherwise invoke or cause the Issuer
        to invoke the process of any court or Governmental Authority for the purpose
        of
        commencing or sustaining an involuntary case against the Issuer under any
        federal or state bankruptcy, insolvency or similar law or appointing a receiver,
        liquidator, assignee, trustee, custodian, sequestrator or other similar official
        of the Issuer or any substantial part of the property of the Issuer, or ordering
        the winding up or liquidation of the affairs of the Issuer.

       

      Section
        6.11.  Perfection.
         In accordance with Section 24-2-4e(m) of the Statute, (i) upon the
        Financing Order creating the Environmental Control Property becoming effective,
        (ii) the execution and delivery of this Agreement and the related Bill of
        Sale,
        (iii) the receipt of value and (iv) the filing of a financing statement with
        the
        office of the Secretary of State of West Virginia, a transfer of an interest
        in
        the Environmental Control Property will be perfected as against all third
        persons, including any judicial lien creditors, other than creditors holding
        a
        prior security interest, ownership interest or assignment in the Environmental
        Control Property previously perfected in accordance with the relevant provisions
        of the Statute. 

       

      Section
        6.12.  Limitation
        of Liability.
         It is expressly understood and agreed by the parties hereto that this
        Agreement is executed and delivered by The Bank of New York, not individually
        or
        personally but solely as Indenture Trustee for the benefit of the Environmental
        Control Bondholders, in the exercise of the powers and authority conferred
        and
        vested in it, and nothing herein contained shall be construed as creating
        any
        liability on The Bank of New York, individually or personally, to perform
        any
        covenant either expressed or implied contained herein, all such liability,
        if
        any, being expressly waived by the parties who are signatories to this Agreement
        and by any Person claiming by, through or under such parties; provided, however,
        that this provision shall not protect The Bank of New York against any liability
        that would otherwise be imposed by reason of willful misconduct, bad faith
        or
        negligence in the performance of duties or by reason of reckless disregard
        of
        obligations or duties under this Agreement.

       

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

       

      IN
        WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
        executed by their respective officers as of the day and year first above
        written.

       

      

        
          	 	 	
                  PE
                    ENVIRONMENTAL FUNDING LLC, Issuer

                
	 	 	 
	 	 	 
	 	 	
                  by

                	
                   

                
	 	 	
                   Title:

                


        

      

       

      
        

          
            	 	 	
                    PE
                      RENAISSANCE FUNDING, LLC,  Seller

                  
	 	 	 
	 	 	 
	 	 	
                    by

                  	
                     

                  
	 	 	
                     Title:

                  


          

        

         

      

       

      Acknowledged
        and Accepted:

       

      [_____________________],
        not in its

      individual
        capacity but solely as Indenture

      Trustee
        on behalf of the Environmental Control

      Bondholders.

      


      


      by___________________________________      

      Title:

       

      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      


      EXHIBIT
        A

       

      FORM
        OF
        BILL OF SALE

       

      1.  This
        Bill
        of Sale is being delivered pursuant to the Transferred Environmental Control
        Property Sale Agreement, dated as of
        [                    ]
        (as amended, restated, supplemented or otherwise modified from time to time,
        the
“Sale Agreement”), between PE Renaissance Funding, LLC (the “Seller”) and PE
        Environmental Funding LLC (the “Issuer”) and is subject to all of the terms,
        conditions and limitations contained in the Sale Agreement. All capitalized
        terms used but not defined herein have the respective meanings ascribed thereto
        in the Sale Agreement.

       

      2.  In
        consideration of the Issuer’s delivery to or upon the order of the Seller of
        $[                ],
        the Seller does hereby irrevocably sell, transfer, assign, set over and
        otherwise convey to the Issuer, without recourse (subject to the obligations
        in
        the Sale Agreement), all right, title and interest of the Seller in and to
        the
        Transferred Environmental Control Property created by the Statute and in
        accordance with the Financing Order related to the Series 200[7]-[A]
        Environmental Control Bonds and identified on Schedule 1 hereto (the “Initial
        Transferred Environmental Control Property”) (such sale, transfer, assignment,
        set over and conveyance of the Initial Transferred Environmental Control
        Property includes, to the fullest extent permitted by the Statute, the
        assignment of all revenues, collections, claims, rights, payments, money
        or
        proceeds of or arising from the Environmental Control Charges related to
        the
        Initial Transferred Environmental Control Property, as the same may be adjusted
        from time to time). Such sale, transfer, assignment, set over and conveyance
        is
        hereby expressly stated to be a sale and, pursuant to Section 24-2-4e(m)(1)
        of
        the Statute, shall be treated as an absolute transfer of all of the Seller’s
        right, title and interest (as in a true sale), and not as a pledge or other
        secured transaction, of the Initial Transferred Environmental Control Property.
        The Seller agrees and confirms that after giving effect to the sale contemplated
        hereby, it has no rights in the Initial Transferred Environmental Control
        Property to which a security interest of creditors of the Seller could attach
        because it has sold all rights in the Initial Transferred Environmental Control
        Property to the Issuer pursuant to Section 24-2-4e(m)(1) of the
        Statute.

       

      3.  The
        Issuer does hereby purchase the Initial Transferred Environmental Control
        Property from the Seller for the consideration set forth in paragraph 2
        above.

       

      4.  The
        Seller and the Issuer each acknowledge and agree that the purchase price
        for the
        Initial Transferred Environmental Control Property sold pursuant to this
        Bill of
        Sale and the Sale Agreement is equal to its fair market value at the time
        of
        sale.

       

      5.  The
        Seller confirms that each of the representations and warranties on the part
        of
        the Seller contained in the Sale Agreement are true and correct in all respects
        on the date hereof as if made on the date hereof.

       

      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

       

      6.  This
        Bill
        of Sale may be executed by the parties hereto in separate counterparts, each
        of
        which when so executed and delivered shall be an original, but all such
        counterparts shall together constitute but one and the same
        instrument.

       

      7.  This
        Bill
        of Sale shall be construed in accordance with the laws of the State of West
        Virginia, without reference to its conflict of law provisions, and the
        obligations, rights and remedies of the parties hereunder shall be determined
        in
        accordance with such laws.

       

      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      


      IN
        WITNESS WHEREOF, the Seller and the Issuer have duly executed this Bill of
        Sale
        as of this [     ] day of
        [                ].

      

        
          

            
              	 	 	
                      PE
                        RENAISSANCE FUNDING, LLC  

                    
	 	 	 
	 	 	 
	 	 	
                      by

                    	
                       

                    
	 	 	
                       Title:

                    
	 	 	
                       Name:

                    


            

          

           

        

      

       

      
        
          
            	 	 	
                    PE
                      ENVIRONMENTAL FUNDING LLC

                  
	 	 	 
	 	 	 
	 	 	
                    by

                  	
                     

                  
	 	 	
                     Title:

                  
	 	 	
                     Name:

                  


          

        

         

        
          
            
            

          

          
            23

            
              

            

          

          
            
            

          

        

      

       

      SCHEDULE
        1

       

      Transferred
        Environmental Control Property and the related Environmental Control Charges
        with respect to the Series 200[7]-[A] Environmental Control Bonds identified
        in
        the Pricing Advice Letter filed with the PSCWV on
        [                ].

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      EXHIBIT
        B

       

      PENDING
        LITIGATION

       

      None.