MP Environmental Control Property Transfer Agreement


    Exhibit
      10.1

     

    EXECUTION
      COPY

     

    
 

    
      

      

    

     

    ENVIRONMENTAL
      CONTROL PROPERTY 

    TRANSFER
      AGREEMENT

     

    between

     

    MP
      RENAISSANCE FUNDING, LLC 

    Seller

     

    and

     

    MONONGAHELA
      POWER COMPANY 

    Transferor

     

    Dated
      as
      of April 11, 2007

     

     

    
      

      

    

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    TABLE
      OF CONTENTS

    

      
        	 	 	 	 	 	 	
                Page

              	 
	 	 	 	 	 	 	 	 
	 	 	 	
                ARTICLE
                  I

              	 	 	 	 
	 	 	 	
                Definitions

              	 	 	 	 
	 	 	 	 	 	 	 	 
	
                Section
                  1.01.

              	 	 	
                Definitions

              	 	 	
                1

              	 
	
                Section
                  1.02.

              	 	 	
                Other
                  Definitional Provisions

              	 	 	
                2

              	 
	 	 	 	 	 	 	 	 
	
                ARTICLE
                  II

              	 
	
                Conveyance
                  of Environmental Control Property

              	 
	 	 	 	 	 	 	 	 
	
                Section
                  2.01.

              	 	 	
                Conveyance
                  of Initial Environmental Control Property

              	 	 	
                2

              	 
	
                Section
                  2.02.

              	 	 	
                Conveyance
                  of Subsequent Environmental Control Property

              	 	 	
                3

              	 
	
                Section
                  2.03.

              	 	 	
                Conditions
                  to Conveyance of Environmental Control Property

              	 	 	
                3

              	 
	 	 	 	 	 	 	 	 
	
                ARTICLE
                  III

              	 
	
                Representations
                  and Warranties of Transferor

              	 
	 	 	 	 	 	 	 	 
	
                Section
                  3.01.

              	 	 	
                Organization
                  and Good Standing

              	 	 	
                4

              	 
	
                Section
                  3.02.

              	 	 	
                Due
                  Qualification

              	 	 	
                4

              	 
	
                Section
                  3.03.

              	 	 	
                Power
                  and Authority

              	 	 	
                4

              	 
	
                Section
                  3.04.

              	 	 	
                Binding
                  Obligation

              	 	 	
                5

              	 
	
                Section
                  3.05.

              	 	 	
                No
                  Violation

              	 	 	
                4

              	 
	
                Section
                  3.06.

              	 	 	
                No
                  Proceedings

              	 	 	
                5

              	 
	
                Section
                  3.07.

              	 	 	
                Approvals

              	 	 	
                5

              	 
	
                Section
                  3.08.

              	 	 	
                The
                  Environmental Control Property

              	 	 	
                5

              	 
	
                Section
                  3.09.

              	 	 	
                Representations
                  and Warranties of Seller

              	 	 	
                8

              	 
	 	 	 	 	 	 	 	 
	
                ARTICLE
                  IV

              	 
	
                Covenants
                  of the Transferor

              	 
	 	 	 	 	 	 	 	 
	
                Section
                  4.01.

              	 	 	
                Corporate
                  Existence

              	 	 	
                8

              	 
	
                Section
                  4.02.

              	 	 	
                No
                  Liens or Conveyances

              	 	 	
                9

              	 
	
                Section
                  4.03.

              	 	 	
                Delivery
                  of Collections

              	 	 	
                9

              	 
	
                Section
                  4.04.

              	 	 	
                Notice
                  of Liens

              	 	 	
                9

              	 
	
                Section
                  4.05.

              	 	 	
                Compliance
                  with Law

              	 	 	
                9

              	 
	
                Section
                  4.06.

              	 	 	
                Covenants
                  Related to Environmental Control Property

              	 	 	
                9

              	 
	
                Section
                  4.07.

              	 	 	
                Notice
                  of Indemnification Events

              	 	 	
                10

              	 
	
                Section
                  4.08.

              	 	 	
                Protection
                  of Title

              	 	 	
                10

              	 
	
                Section
                  4.09.

              	 	 	
                Taxes

              	 	 	
                11

              	 
	
                Section
                  4.10.

              	 	 	
                Third
                  Parties

              	 	 	
                11

              	 


      

       

      
        
          
          

        

        
          i

          
            

          

        

        
          
          

        

      

       

      
        	
                ARTICLE
                  V

              	 
	
                The
                  Transferor

              	 
	 	 	 	 	 	 	 	 
	
                Section
                  5.01.

              	 	 	
                Liability
                  of Transferor; Indemnities

              	 	 	
                11

              	 
	
                Section
                  5.02.

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

              	 	 	
                13

              	 
	
                Section
                  5.03.

              	 	 	
                Limitation
                  on Liability of Transferor and Others

              	 	 	
                13

              	 
	
                Section
                  5.04.

              	 	 	
                Opinions
                  of Counsel

              	 	 	
                13

              	 
	 	 	 	 	 	 	 	 
	
                ARTICLE
                  VI

              	 
	
                Miscellaneous
                  Provisions

              	 
	 	 	 	 	 	 	 	 
	
                Section
                  6.01.

              	 	 	
                Amendment

              	 	 	
                14

              	 
	
                Section
                  6.02.

              	 	 	
                Notices

              	 	 	
                14

              	 
	
                Section
                  6.03.

              	 	 	
                Assignment

              	 	 	
                16

              	 
	
                Section
                  6.04.

              	 	 	
                Limitations
                  on Rights of Others

              	 	 	
                16

              	 
	
                Section
                  6.05.

              	 	 	
                Severability

              	 	 	
                16

              	 
	
                Section
                  6.06.

              	 	 	
                Separate
                  Counterparts

              	 	 	
                16

              	 
	
                Section
                  6.07.

              	 	 	
                Headings

              	 	 	
                17

              	 
	
                Section
                  6.08.

              	 	 	
                Governing
                  Law

              	 	 	
                17

              	 
	
                Section
                  6.09.

              	 	 	
                Assignment
                  to Issuer and to Indenture Trustee

              	 	 	
                17

              	 
	
                Section
                  6.10.

              	 	 	
                Nonpetition
                  Covenant

              	 	 	
                17

              	 
	
                Section
                  6.11.

              	 	 	
                Perfection

              	 	 	
                17

              	 
	
                Section
                  6.12.

              	 	 	
                Limitation
                  of Liability

              	 	 	
                18

              	 
	 	 	 	
                 

              	 	 	 	 
	
                Exhibit
                  A

              	 	 	
                Pending
                  Litigation

              	 	 	 	 
	
                Appendix
                  A

              	 	 	
                Master
                  Definitions

              	 	 	 	 


      

    

     

    
      
        
        

      

      
        ii

        
          

        

      

      
        
        

      

    


    ENVIRONMENTAL
      CONTROL PROPERTY TRANSFER AGREEMENT dated as of April 11, 2007 (as amended,
      restated, supplemented or otherwise modified from time to time, “this
      Agreement”),
      between MP RENAISSANCE FUNDING, LLC, a Delaware limited liability company (the
      “Seller”),
      and
      MONONGAHELA POWER COMPANY, an Ohio corporation, and its successors in interest
      to the extent permitted hereunder, as Transferor (the “Transferor”).

     

    WHEREAS
      the Transferor desires to contribute from time to time Environmental Control
      Property created pursuant to the Statute and the Financing Order; and


     

    WHEREAS
      the Seller is willing to acquire the Environmental Control Property;
      and

     

    WHEREAS
      the Seller intends to sell the Transferred Environmental Control Property to
      the
      Issuer and the Issuer intends to purchase the Transferred Environmental Control
      Property from the Seller pursuant to the Sale Agreement; 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 the 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 Seller has determined that the transactions contemplated by the Basic
      Documents are in the best interest of the Seller and its creditors and represent
      a prudent and advisable course of action that does not impair the rights and
      interests of the Seller’s creditors; and

     

    WHEREAS
      the PSCWV or its attorney will enforce this Agreement pursuant to the Financing
      Order for the benefit of the 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 to 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 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 Environmental Control Property

     

    

      Section
        2.01.  Conveyance
        of Initial Environmental Control Property.
        (a)
        Subject
        to the conditions specified in Section 2.03,
        the
        Transferor hereby irrevocably contributes, sells, transfers, assigns, sets
        over
        and otherwise conveys to the Seller, without recourse (subject to the
        obligations herein), all right, title and interest of the Transferor in and
        to
        the Initial Environmental Control Property created pursuant to the Statute
        and
        in accordance with the Financing Order (such contribution, sale, transfer,
        assignment, set over and conveyance of the Initial 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 Environmental Control Property, as the same may be adjusted from
        time to
        time). Such contribution, sale, transfer, assignment, set over and conveyance
        is
        expressly an absolute transfer of all of the Transferor’s right, title and
        interest (as in a true sale), and not as a pledge or other secured transaction,
        of the Initial Environmental Control Property. The Transferor agrees and
        confirms that after giving effect to the contribution it has no rights in
        the
        Initial Environmental Control Property to which a security interest of creditors
        of the Transferor could attach because it has sold all rights in the Initial
        Environmental Control Property to the Seller 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
        Environmental Control Property and as the creation of a security interest
        (within the meaning of the Statute and the UCC) in the Initial Environmental
        Control Property and, without prejudice to its position that it has absolutely
        transferred all of its rights in the Initial Environmental Control Property
        to
        the Seller, the Transferor hereby grants a security interest in the Initial
        Environmental Control Property to the Seller (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 Seller under the Basic Documents to receive the
        Environmental Control Charges and all other the Environmental Control Property).
        

       

      
        
          
          

        

        
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    (b)  In
      exchange for the contribution of the Initial Environmental Control Property
      from
      the Transferor, the Seller will distribute the net proceeds of the issuance
      and
      sale of the Environmental Control Bonds to the Transferor as a
      dividend.

     

    Section
      2.02.  Conveyance
      of Subsequent Environmental Control Property.
      The
      Transferor may from time to time offer to contribute or convey additional
      Environmental Control Property to the Seller, subject to the conditions
      specified in Section 2.03.
      Such
      Subsequent Environmental Control Property, if any, shall be contributed or
      conveyed to the Seller effective on the Subsequent Contribution 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 Environmental Control Property.
      The
      Transferor shall be permitted to contribute and transfer Environmental Control
      

    Property
      to the Seller only upon the satisfaction or
      waiver of each of the following conditions:

     

    (i)  as
      of the
      Initial Contribution Date or the Subsequent Contribution Date, as applicable,
      the Transferor was not insolvent and will not have been made insolvent by such
      contribution and the Transferor is not aware of any pending insolvency with
      respect to itself;

     

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

     

    (iii)  as
      of the
      Initial Contribution Date or the Subsequent Contribution 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 pursuant to the Sale Agreement 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;

     

    (iv)  on
      or
      prior to the Initial Contribution Date or the Subsequent Contribution Date,
      as
      applicable, the Transferor shall have taken all action required to transfer
      to
      the Seller ownership of the Environmental Control Property to be conveyed on
      such date, free and clear of all Liens, other than Liens created by the Issuer
      under the Indenture, the Seller shall have taken any action required for the
      Seller 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 by the Issuer under the Indenture, 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;

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

    ARTICLE
      III

    Representations
      and Warranties of Transferor

     

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

     

    Section
      3.01.  Organization
      and Good Standing.
      The
      Transferor is a corporation duly organized, validly existing and in good
      standing under the laws of the State of Ohio, with corporate power and authority
      to own its properties and conduct its business as currently owned or
      conducted.

     

    Section
      3.02.  Due
      Qualification.
      The
      Transferor is duly qualified to do business as a foreign corporation in good
      standing, and has obtained all necessary licenses and approvals, in all
      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 Transferor’s
      business, operations, assets, revenues or properties).

     

    Section
      3.03.  Power
      and Authority.
      The
      Transferor has the corporate power and authority to execute and deliver this
      Agreement and to carry out its terms; the Transferor has full corporate power
      and authority to own the Environmental Control Property and contribute, convey
      and assign the Initial Environmental Control Property, in the case of the
      Initial Contribution Date, and the Subsequent Environmental Control Property,
      in
      the case of each Subsequent Contribution Date, as applicable, and the Transferor
      has duly authorized such contribution, conveyance and assignment to the Seller
      by all necessary corporate action; and the execution, delivery and performance
      of this Agreement have been duly 

     

    
      
        
        

      

      
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    authorized
      by the Transferor by all necessary corporate action.

     

    Section
      3.04.  Binding
      Obligation.
      This
      Agreement constitutes a legal, valid and binding obligation of the Transferor
      enforceable against the Transferor in accordance with its terms subject to
      bankruptcy, receivership, insolvency, fraudulent transfer, reorganization,
      moratorium or other laws 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 and the
      fulfillment of the terms hereof do not conflict with, result in any breach
      of
      any of the terms and provisions of, nor constitute (with or without notice
      or
lapse of time) a default under, the articles of
      incorporation or by-laws of the Transferor, or any indenture, agreement or
      other
      instrument to which the Transferor is a party or by which it shall be bound;
      nor
      result in the creation or imposition of any Lien upon any of its properties
      (other than under this Agreement) pursuant to the terms of any such indenture,
      agreement or other instrument; nor, to the Transferor’s knowledge, violate any
      Requirements of Law applicable to the Transferor of any Governmental Authority
      having jurisdiction over the Transferor or its properties.

     

    Section
      3.06.  No
      Proceedings.
      Except
      as described in Exhibit A, there are no proceedings or investigations pending
      or, to the Transferor’s best knowledge, threatened, before any Governmental
      Authority having jurisdiction over the Transferor 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 or the Environmental
      Control Bonds or (iii)  seeking any determination or ruling that could
      reasonably be expected to materially and adversely affect the performance by
      the
      Transferor 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 Governmental Authority
      is
      required in connection with the execution and delivery by the Transferor of
      this
      Agreement, the performance by the Transferor of the transactions contemplated
      hereby or the fulfillment by the Transferor of the terms hereof, except those
      that have been obtained or made.

     

    Section
      3.08.  The
      Environmental Control Property.
      (a) Information.
      All
      information provided by the Transferor to the Seller in writing with respect
      to
      the Environmental Control Property is correct in all material
      respects.

     

    (b)  Effect
      of Transfer.
      The
      transfers and assignments herein contemplated constitute absolute transfers
      of
      the Initial Environmental Control Property

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    or
      the
      Subsequent Environmental Control Property, as the case may be, from the
      Transferor to the Seller, and the beneficial interest in and title to the
      Environmental Control Property would not be part of the debtor’s estate in the
      event of the filing of a bankruptcy petition by or against the Transferor under
      any bankruptcy law.

     

    (c)  Transfer
      Filings.
      

     

    (i)  The
      Transferor is the sole owner of the Environmental Control Property being
      contributed to the Seller on the Initial Contribution Date or Subsequent
      Contribution Date, as applicable.

     

    (ii)  The
      Environmental Control Property has been validly transferred to the Seller free
      and clear of all Liens other than Liens created by the Issuer under the
      Indenture.

     

    
      (iii)  All
        filings, including filings with the Secretary of State of West Virginia under
        the Statute, necessary in any jurisdiction to give the Seller a valid ownership
        interest in the Environmental Control Property, free and clear of all Liens
        of
        the Transferor or anyone claiming through the Transferor, and to give the
        Seller
        a first priority perfected security interest in the Environmental Control
        Property have been made, other than any such filings (except for filings
        with
        the Secretary of State of the State of West Virginia, Delaware and Nevada,
        under
        the Statute and UCC, as applicable) the absence of which would not have a
        material adverse impact on (A) the ability of the Servicer to collect
        Environmental Control Charges with respect to the Environmental Control Property
        or (B) the rights of the Seller with respect to the Environmental Control
        Property.

    

     

    (d)  Irrevocable;
      Process Valid; No Litigation; Etc.
      

     

    (i)  The
      Financing Order has been issued by the PSCWV in accordance with the Statute;
      the
      Financing Order and the process by which it was issued comply with all
      applicable Requirements of Law; and the Financing Order is in full force
      and effect, final, and not subject to appeal by any Person.

     

    (ii)  As
      of the
      date of issuance of any Series of Environmental Control Bonds, such
      Environmental Control Bonds are entitled to the protections provided by the
      Statute and, accordingly, the provisions of the Financing Order relating to
      Environmental Control Property and Environmental Control Charges are not
      revocable by the PSCWV.

     

    (iii)  (A) Under
      the Statute, the State of West Virginia has pledged (the “State
      Pledge”)
      that
      it will not take or permit any action that impairs the value of Environmental
      Control Property or, except as allowed in connection with the True-Up
      Adjustments, reduce, alter or impair Environmental Control Charges that are
      imposed, collected and remitted for the benefit of the Environmental Control
      Bondholders, until any principal, interest and redemption premium in respect
      of
      the Environmental Control Bonds, all financing costs and all amounts to be
      paid
      under any ancillary agreement are paid or performed in 

     

    
      
        
        

      

      
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    full.
      (B) Under the Contract Clauses of the
      Constitutions of the State of West Virginia and the United States, the State
      of
      West Virginia could not, absent a demonstration that such action was necessary
      to serve a significant and legitimate public purpose, repeal or amend the
      Statute, nor could the State of West Virginia (or the PSCWV in exercising its
      legislative powers) take any action or fail to take any action required by
      the
      State Pledge if the repeal or amendment, or the action or inaction, would
      substantially limit, alter, impair or reduce the value of the Environmental
      Control Property or the Environmental Control Charges. (C) Under applicable
      West Virginia constitutional principles relating to the impairment of liens,
      the
      State of West Virginia could not enact legislation (other than a law passed
      by
      the State of West Virginia in the valid exercise of the state’s police power)
      that repeals the State Pledge or limits, alters, impairs or reduces the value
      of
      the Environmental Control Property or the Environmental Control Charges so
      as to
      impair (x) the terms of the Indenture or the Environmental  Control
      Bonds or (y) the rights and remedies of the Environmental Control Bondholders
      (or the Indenture Trustee acting on their behalf) prior to the time that the
      Environmental Control Bonds are fully paid and discharged if such action would
      prevent the payment of the Environmental Control Bonds or would significantly
      affect the security for the Environmental Control Bonds.

     

    (iv)  There
      is
      no order by any court providing for the revocation, alteration, limitation
      or
      other impairment of the Statute, Financing Order, Environmental Control Property
      or the Environmental Control Charges or any rights arising under any of them
      or
      which seeks to enjoin the performance of any obligations under the Financing
      Order.

     

    (v)  No
      other
      approval, authorization, consent, order or other action of, or filing with,
      any
      Governmental Authority is required in connection with the creation of the
      Environmental Control Property, except those that have been obtained or
      made.

     

    (vi)  Except
      as
      described in Exhibit A, there are no proceedings or investigations challenging
      the Financing Order or the Statute pending, or to the best of the Transferor’s
      knowledge, threatened before any Governmental Authority having jurisdiction
      over
      the Transferor or its properties.

     

    (vii)  No
      failure on the Initial Contribution Date or any Subsequent Contribution Date
      or
      any time thereafter to satisfy any condition imposed by the Statute with respect
      to the recovery of Environmental Control Costs will have a material adverse
      affect on the creation or contribution hereunder of Environmental Control
      Property or the right to collect Environmental Control Charges.

     

    (viii)  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.

     

    
      
        
        

      

      
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    (e)  Assumptions.
      The
      assumptions used in calculating Environmental Control Charges are reasonable
      and
      made in good faith.

     

    (f)  Creation
      of Environmental Control Property.
      

     

    (i)  The
      Environmental Control Property constitutes an existing present property right
      that will continue to exist until the Environmental Control Bonds issued
      pursuant to the Financing Order and all Financing Costs of the Environmental
      Control Bonds have been paid in full.

     

    (ii)  The
      Environmental Control Property consists of (A) the rights and interests of
      the Transferor, the Seller, as assignee of the Transferor, and the Issuer,
      as
      assignee of the Seller, including the right to impose, charge, collect and
      receive Environmental Control Charges in the amount necessary to provide for
      full payment and recovery of all Environmental Control Costs and Financing
      Costs determined to be recoverable in the Financing
      Order,
      and any interest in such rights and interests; (B) the right under the
      Financing Order, to obtain True-Up Adjustments; and (C) all revenues,
      receipts, collections, rights to payment, payments, moneys, claims or other
      proceeds arising from the rights and interests described in clauses (A) and
      (B)
      above.

     

    (iii)  The
      Financing Order, including the right to collect Environmental Control Charges,
      has been declared to be irrevocable by the PSCWV.

     

    (g)  Solvency.
      After
      giving effect to the contribution of any Environmental Control Property
      hereunder, the Transferor (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 unreasonably small 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
      3.09.  Representations
      and Warranties of Seller.
      The
      representations and warranties made by the Seller under the Sale Agreement
      are
      true and correct in all material respects.

     

    ARTICLE
      IV

    Covenants
      of the Transferor

     

    Section
      4.01.  Corporate
      Existence.
      Subject
      to Section 5.02,
      so long
      as Environmental Control Bonds of any Series remain Outstanding, except in
      the
      case of a merger, consolidation, division, asset disposition or other similar
      transaction permitted under the terms of this Agreement, the Transferor will
      keep in full force and effect its corporate existence and remain in good
      standing, in each case under the laws of the jurisdiction of its incorporation,
      and will obtain and preserve its qualification to do

     

    
      
        
        

      

      
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    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 Transferor 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 Transferor 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 Environmental Control Property, whether now existing
      or
      hereafter created, or any interest therein. The Transferor shall not at any
      time
      assert any Lien against or with respect to any Environmental Control Property,
      and shall defend the right, title and interest of the Seller, the Issuer, as
      assignee of the Seller, and the Indenture Trustee, as collateral assignee of
      the
      Issuer, in, to and under the Environmental Control Property and the Transferred
      Environmental Control Property,
      as the case may be, whether now existing or hereafter created, against all
      claims of third parties claiming through or under the Transferor.

     

    Section
      4.03.  Delivery
      of Collections.
      Subject
      to the terms of the Servicing Agreement, if the Transferor receives collections
      in respect of the Environmental Control Charges, the Transferor agrees to pay
      the Servicer all estimated payments received by the Transferor in respect
      thereof as soon as practicable after receipt is known by the Transferor, but
      in
      no event later than two Business Days after such receipt is known by the
      Transferor, and the Transferor shall reconcile estimated payment amounts with
      the Servicer within 25 Business Days after the estimated payments are paid
      to
      the Servicer.

     

    Section
      4.04.  Notice
      of Liens.
      The
      Transferor 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 Sale Agreement, the Indenture or the other
      Basic Documents.

     

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

     

    Section
      4.06.  Covenants
      Related to Environmental Control Property.
      (a)
      So long
      as Environmental Control Bonds of any Series remain Outstanding, the Transferor
      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 Transferor
      shall (i) clearly disclose in its financial statements that it is not the
      owner of the Environmental Control Property and that the assets of the Issuer
      are not available to pay creditors of the Transferor or any of its Affiliates
      and (ii) clearly

     

    
      
        
        

      

      
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    disclose
      the effects of all transactions among the Transferor, the Seller and the Issuer
      in accordance with GAAP.

     

    (c)  The
      Transferor agrees that upon the conveyance by the Transferor of the
      Environmental Control Property to the Seller, (i) to the fullest extent
      permitted by applicable Requirements of Law, the Seller shall have all of the
      rights originally held by the Transferor with respect to the Environmental
      Control Property, including the right to collect any amounts payable by any
      Customer or Third Party in respect of such Environmental Control Property,
      notwithstanding any objection or direction to the contrary by the Transferor
      and
      (ii) any payment by any Customer or Third Party to the Seller shall
      discharge such Customer’s or such Third Party’s obligations in respect of such
      Environmental Control Property to the extent of such payment, notwithstanding
      any objection or direction to the contrary by the Transferor.

     

    (d)  So
      long
      as Environmental Control Bonds of any Series remain Outstanding, (i) the
      Transferor shall not make any statement or reference in respect of the
      Environmental Control Property that is inconsistent with the ownership thereof
      by the Seller or, after the sale of the Transferred Environmental Control
      Property by the Seller to the Issuer, the Issuer and (ii) the Transferor
      shall not take any action in respect of the Environmental Control Property
      except solely in its capacity as the Servicer thereof pursuant to the Servicing
      Agreement or as otherwise contemplated by the Basic Documents.

     

    Section
      4.07.  Notice
      of Indemnification Events.
      The
      Transferor shall deliver to the Seller, 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
      4.08.  Protection
      of Title.
      The
      Transferor 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
      law fully to preserve, maintain, and protect the interests of the Seller in
      the
      Environmental Control Property, including all filings required under the Statute
      relating to the transfer of the ownership or security interest in the
      Environmental Control Property by the Transferor to the Seller. The Transferor
      shall deliver (or cause to be delivered) to the Seller file-stamped copies
      of,
      or filing receipts for, any document filed as provided above, as soon as
      available following such filing. The Transferor 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 Seller, 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 Environmental Control Property by
      legislative

     

    
      
        
        

      

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

     

    Section
      4.09.  Taxes.
      So long
      as Environmental Control Bonds of any Series remain Outstanding, the Transferor
      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
      Environmental Control Property; provided that no such tax need be paid if the
      Transferor or one of its subsidiaries is contesting the same in good faith
      by
      appropriate proceedings promptly instituted and diligently conducted and if
      the
      Transferor or such subsidiary has established appropriate reserves as shall
      be
      required in conformity with generally accepted accounting
      principles.

     

    Section
      4.10.  Third
      Parties.
      So long
      as Environmental Control Bonds of any Series remain Outstanding, the Transferor
      shall not permit any Third Party to bill or collect Environmental Control
      Charges on behalf of the Issuer except (a) as a subcontractor under the active
      supervision of the Servicer or (b) as required by applicable law or regulation
      and to the extent permitted by applicable law or regulation, after written
      notice of such arrangement is furnished to the Rating Agencies.

     

    ARTICLE
      V

    The
      Transferor

     

    Section
      5.01.  Liability
      of Transferor; Indemnities.
      (a)
      The
      Transferor shall be liable in accordance herewith only to the extent of the
      obligations specifically undertaken by the Transferor under this
      Agreement.

     

    (b)  The
      Transferor shall indemnify the Seller, the Issuer, the Indenture Trustee, for
      itself and on behalf of the Environmental Control Bondholders, and each of
      their
      respective members, managers, officers, directors and agents for, 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 as a result of the acquisition or holding
      of the Environmental Control Property by the Seller or the Transferred
      Environmental Control Property by the Issuer or the issuance and sale by the
      Issuer of the Environmental Control Bonds, or any other transactions
      contemplated herein, including any sales, gross receipts, general corporation,
      tangible personal property, privilege or license taxes.

     

    (c)  The
      Transferor shall indemnify the Seller, the Issuer, the Indenture Trustee, on
      behalf of the Environmental Control Bondholders, and each of their respective
      members, managers, officers, directors, and agents for, and defend and hold
      harmless each such Person from and against, 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 and the amount of any
      deposits to the Issuer required

     

    
      
        
        

      

      
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     to
      have been made in accordance with the terms of the Basic Documents which are
      not
      made when so required, in either case as a result of the Transferor’s breach of
      any of its representations, warranties or covenants contained in this
      Agreement.

     

    (d)  The
      Transferor shall indemnify the Seller, the Issuer, the Indenture Trustee, on
      behalf of the Environmental Control Bondholders, and each of their respective
      members, managers, officers, directors, 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 (i) the
      Transferor’s willful misconduct, bad faith or negligence in the performance of
      its duties or observance of its covenants under this Agreement, (ii) the
      Transferor’s reckless disregard of its obligations and duties under this
      Agreement or (iii) the Transferor’s breach of any of its representations or
      warranties contained in this Agreement (any event described in any of the
      foregoing clauses (i), (ii) or (iii), 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
      Transferor 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 Transferor’s representations or warranties in this
      Agreement, (ii) any breach of the Transferor’s covenants in this Agreement,
      (iii) any failure of the Seller’s representations in the Sale Agreement or
      (iv) by breach of the Seller’s covenants in the Sale Agreement. The
      Transferor 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.

     

    (f)  The
      Transferor shall indemnify the Indenture Trustee and 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 misconduct, bad faith or gross negligence of the Indenture Trustee.
      Such
      amounts shall be deposited into the Collection Account and distributed in
      accordance with the Indenture.

     

    (g)  The
      Transferor’s indemnification obligations under Section 5.01(b),
      (c), (d), (e) 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 reasonable attorney’s fees and expenses of the Indenture Trustee). Any
      amounts indemnified by the Transferor pursuant to its obligations under
Sections
      5.01(b), (c), (d) or (e)
      shall be
      deposited into the Collection Account and distributed in accordance with the
      Indenture. 

     

    
      
        
        

      

      
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    Section
      5.02.  Merger
      or Consolidation of, or Assumption of the Obligations of,
      Transferor.
      Any
      Person (a) into which the Transferor may be merged or consolidated and
      which succeeds to all or any material part of the electric distribution business
      of the Transferor, (b) which results from the division of the Transferor
      into two or more Persons and which succeeds to all or any material part of
      the
      electric distribution business of the Transferor, (c) which may result from
      any merger or consolidation to which the Transferor shall be a party and which
      succeeds to all or any material part of the electric distribution business
      of
      the Transferor, (d) which may succeed to the properties and assets of the
      Transferor substantially as a whole and which succeeds to all or any material
      part of the electric distribution business of the Transferor or (e) which
      may otherwise succeed to all or any material part of the electric distribution
      business of the Transferor, which Person in any of the foregoing cases executes
      an agreement of assumption to perform every obligation of the Transferor under
      this Agreement, shall be the successor to the Transferor
      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,
      would become a Servicer Default, shall have occurred and be continuing,
      (ii) the Transferor shall have delivered to the Seller, 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 and (iv) the Transferor shall have delivered to the
      Seller, 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 Transferor 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 Seller in the 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. 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 clause (a), (b), (c), (d) or (e)
      above.

     

    Section
      5.03.  Limitation
      on Liability of Transferor and Others.
      The
      Transferor and any director or officer or agent of the Transferor, or any
      employee of Allegheny Energy Service Corporation, 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
      Transferor 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.

     

    Section
      5.04.  Opinions
      of Counsel.
      The
      Transferor shall deliver to the Seller, 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

     

    
      
        
        

      

      
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     Subsequent
      Contribution 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 Seller in the 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 Contribution 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 pursuant
      to the Statute, have been executed and filed that are necessary to preserve
      fully and protect fully the interest of the Seller in the Environmental Control
      Property, 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. 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 Transferor and the Seller, 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 Transferor 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

     

    
      
        
        

      

      
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     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
      Officers’ 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:

     

    (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.

     

    
      
        
        

      

      
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    (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 Transferor, 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
        Transferor, to Monongahela Power Company, 800 Cabin Hill Drive, Greensburg,
        Pennsylvania 15601, Attention of Amanda J. Skov, Esq., (b) in the case of
        the Seller, to MP Renaissance Funding, LLC, 2215-B Renaissance Drive, Suite
        #5,
        Las Vegas, Nevada 89119, Attention of Kristine Eppes, (c) in the case of
        the Issuer, to MP Environmental Funding LLC, 2215-B Renaissance Drive, Suite
        #5,
        Las Vegas, Nevada 89119, Attention of Kristine Eppes, (d) in the case of
        the Indenture Trustee, at the Corporate Trust Office, (e) in the case of
        Moody’s, to Moody’s Investors Service, Inc., Asset Finance Group, 99 Church
        Street, New York, New York 10007, (f) in the case of Standard & Poor’s,
        to Standard & Poor’s Ratings Services, a division of The McGraw-Hill
        Companies, Inc., 55 Water Street, 42nd
        Floor,
        New York, New York 10041-0003, Attention of ABS Surveillance Group - New
        Assets,
        (g) in the case of Fitch, to Fitch, Inc., One State Street Plaza, New York,
        New York 10004, Attention of ABS Surveillance, and (h) in the case of the
        PSCWV,
        to 201 Brooks Street, P.O. Box 812, Charleston, West Virginia 25325, Attention
        of Executive Secretary; 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 Transferor.

     

    Section
      6.04.  Limitations
      on Rights of Others.
      The
      provisions of this Agreement are solely for the benefit of the Transferor,
      the
      Seller, PSCWV, the Issuer 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.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    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
      Transferor hereby acknowledges and consents to the sale, transfer, assignment
      and conveyance of all right, title and interest of the Seller in, to and under
      the Transferred Environmental Control Property and the proceeds thereof and
      the
      assignment of any or all of the Seller’s rights hereunder to the Issuer pursuant
      to the Sale Agreement.

     

    (b)  The
      Transferor hereby acknowledges and consents to the mortgage, pledge, assignment
      and grant of a security interest by the Issuer (as assignee of the Seller)
      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 under the Sale
      Agreement 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
      Environmental Control Property upon application by the Issuer or the Indenture
      Trustee notwithstanding any bankruptcy, reorganization or other insolvency
      proceedings with respect to the debtor, pledgor or transferor of the
      Environmental Control Property pursuant to Section 24-2-4e(k)(4) of the
      Statute, the Transferor 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 Seller or the Issuer to invoke the process of any court or government
      authority for the purpose of commencing or sustaining a case against the Seller
      or 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 Seller or the Issuer or any substantial part
      of
      the property of the Seller or the Issuer, or ordering the winding up or
      liquidation of the affairs of the Seller or 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 (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

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    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 U.S. Bank National Association, 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 U.S. Bank National Association, 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 U.S. Bank National
      Association against any liability that would otherwise be imposed by reason
      of
      willful misconduct, bad faith or gross negligence in the performance of duties
      or by reason of reckless disregard of obligations or duties under this
      Agreement.

     

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    


    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.

     

     

    MP
      RENAISSANCE FUNDING, LLC,

    Seller,

     

    by:           /s/
      Kristine W.
      Eppes                  
Title:
      Vice Pesident, Treasury and Secretary

     

     

    MONONGAHELA
      POWER COMPANY,

    Transferor,

     

    by:
                /s/
      Philip J.
      Goulding               
Title: 
      Vice President

     

    Acknowledged
      and Accepted:

     

    MP
      ENVIRONMENTAL FUNDING LLC,

    as
      Issuer
      of the Environmental Control Bonds,

     

    by:          /s/
      Philip J. Goulding               

             
      Title:  Vice President

     

     

    U.S.
      Bank
      National Association, not in

    its
      individual capacity but solely as

    Indenture
      Trustee on behalf of the

    Environmental
      Control Bondholders,

     

    by:          /s/
      Melissa
      A. Rosal            

             
      Title:  Vice President

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    


    EXHIBIT
      A

    


    PENDING
      LITIGATION

     

    


    None.

     

    
      
        
        

      

      
        A-1