Document:

MP Amended and Restated Limited Liability Agreement of MP Environmental Funding,
      LLC

    Exhibit
      10.5

     

    EXECUTION
      COPY

     

    

    
      

      

    

    

     

    AMENDED
      AND RESTATED

     

    LIMITED
      LIABILITY COMPANY AGREEMENT

     

    OF
      MP ENVIRONMENTAL FUNDING LLC

    

     

    Dated
      as
      of April 11, 2007

     

     

     

    
      

    

    
      

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    TABLE
      OF CONTENTS

     

    
      
        	 	 	 	 	 	 	Page	 
	 	 	 	 	 	 	 	 
	
                ARTICLE
                  I 

              	 	 	
                DEFINITIONS

              	 	 	
                1

              	 
	 	 	 	 	 	 	 	 
	
                SECTION
                  1.01

              	 	 	
                Capitalized
                  Terms

              	 	 	
                1

              	 
	
                SECTION
                  1.02

              	 	 	
                Other
                  Definitional Provisions

              	 	 	
                6

              	 
	 	 	 	 	 	 	 	 
	
                ARTICLE
                  II 

              	 	 	
                CONTINUATION
                  OF THE LIMITED LIABILITY COMPANY

              	 	 	
                7

              	 
	 	 	 	 	 	 	 	 
	
                SECTION
                  2.01

              	 	 	
                Continuation;
                  Filings

              	 	 	
                7

              	 
	
                SECTION
                  2.02

              	 	 	
                Name
                  and Office

              	 	 	
                8

              	 
	
                SECTION
                  2.03

              	 	 	
                Business
                  Purpose

              	 	 	
                8

              	 
	
                SECTION
                  2.04

              	 	 	
                Term

              	 	 	
                7

              	 
	
                SECTION
                  2.05

              	 	 	
                No
                  State Law Partnership

              	 	 	
                7

              	 
	
                SECTION
                  2.06

              	 	 	
                Authority
                  of Member

              	 	 	
                9

              	 
	
                SECTION
                  2.07

              	 	 	
                Liability
                  to Third Parties

              	 	 	
                9

              	 
	
                SECTION
                  2.08

              	 	 	
                No
                  Personal Liability of Any Member, Special Member, Manager,
                  Etc.

              	 	 	
                9

              	 
	
                SECTION
                  2.09

              	 	 	
                Separateness

              	 	 	
                10

              	 
	
                SECTION
                  2.10

              	 	 	
                Limited
                  Liability and Bankruptcy Remoteness

              	 	 	
                12

              	 
	
                SECTION
                  2.11

              	 	 	
                Additional
                  Issuance

              	 	 	
                11

              	 
	 	 	 	
                 

              	 	 	 	 
	
                ARTICLE
                  III 

              	 	 	
                MANAGEMENT

              	 	 	
                14

              	 
	 	 	 	 	 	 	 	 
	
                SECTION
                  3.01

              	 	 	
                Management
                  by Managers

              	 	 	
                10

              	 
	
                SECTION
                  3.02

              	 	 	
                Acts
                  by Managers

              	 	 	
                14

              	 
	
                SECTION
                  3.03

              	 	 	
                Number
                  and Qualifications

              	 	 	
                14

              	 
	
                SECTION
                  3.04

              	 	 	
                Independent
                  Managers

              	 	 	
                15

              	 
	
                SECTION
                  3.05

              	 	 	
                Appointment
                  and Vacancy

              	 	 	
                16

              	 
	
                SECTION
                  3.06

              	 	 	
                Term

              	 	 	
                16

              	 
	
                SECTION
                  3.07

              	 	 	
                Removal

              	 	 	
                16

              	 
	
                SECTION
                  3.08

              	 	 	
                Resignation

              	 	 	
                12

              	 
	
                SECTION
                  3.09

              	 	 	
                Place
                  of Meetings of Managers

              	 	 	
                12

              	 
	
                SECTION
                  3.10

              	 	 	
                Meetings
                  of Managers

              	 	 	
                12

              	 
	
                SECTION
                  3.11

              	 	 	
                Quorum;
                  Majority Vote

              	 	 	
                12

              	 
	
                SECTION
                  3.12

              	 	 	
                Methods
                  of Voting; Proxies

              	 	 	
                17

              	 
	
                SECTION
                  3.13

              	 	 	
                Actions
                  Without a Meeting

              	 	 	
                13

              	 
	
                SECTION
                  3.14

              	 	 	
                Telephone
                  and Similar Meetings

              	 	 	
                13

              	 
	
                SECTION
                  3.15

              	 	 	
                Managers

              	 	 	
                13

              	 

      

       

      
        
          
          

        

        
          i

          
            

          

        

        
          
          

        

      

       

      
        	
                ARTICLE
                  IV 

              	 	 	
                OFFICERS

              	 	 	
                13

              	 
	 	 	 	 	 	 	 	 
	
                SECTION
                  4.01

              	 	 	
                Designation;
                  Term; Qualifications

              	 	 	
                13

              	 
	
                SECTION
                  4.02

              	 	 	
                Removal
                  and Resignation

              	 	 	
                18

              	 
	
                SECTION
                  4.03

              	 	 	
                Vacancies

              	 	 	
                14

              	 
	
                SECTION
                  4.04

              	 	 	
                Compensation

              	 	 	
                14

              	 
	 	 	 	 	 	 	 	 
	
                ARTICLE
                  V 

              	 	 	
                MEMBER

              	 	 	
                14

              	 
	 	 	 	 	 	 	 	 
	
                SECTION
                  5.01

              	 	 	
                Powers

              	 	 	
                14

              	 
	
                SECTION
                  5.02

              	 	 	
                Compensation
                  of Member

              	 	 	
                14

              	 
	
                SECTION
                  5.03

              	 	 	
                Actions
                  of Member

              	 	 	
                15

              	 
	
                SECTION
                  5.04

              	 	 	
                Control
                  by Member

              	 	 	
                15

              	 
	
                SECTION
                  5.05

              	 	 	
                Special
                  Members

              	 	 	
                15

              	 
	 	 	 	 	 	 	 	 
	
                ARTICLE
                  VI 

              	 	 	
                COMMON
                  INTEREST

              	 	 	
                16

              	 
	 	 	 	 	 	 	 	 
	
                SECTION
                  6.01

              	 	 	
                General

              	 	 	
                16

              	 
	
                SECTION
                  6.02

              	 	 	
                Distributions

              	 	 	
                16

              	 
	
                SECTION
                  6.03

              	 	 	
                Rights
                  on Dissolution and Winding Up

              	 	 	
                16

              	 
	
                SECTION
                  6.04

              	 	 	
                Redemption

              	 	 	
                17

              	 
	
                SECTION
                  6.05

              	 	 	
                VotingRights

              	 	 	
                17

              	 
	
                SECTION
                  6.06

              	 	 	
                Class

              	 	 	
                17

              	 
	
                SECTION
                  6.07

              	 	 	
                CapitalContributions

              	 	 	
                17

              	 
	 	 	 	 	 	 	 	 
	
                ARTICLE
                  VII 

              	 	 	
                ALLOCATIONS;
                  DISTRIBUTIONS; EXPENSES; TAXES; BOOKS; REPORTS; AND BANK
                  ACCOUNTS

              	 	 	
                17

              	 
	 	 	 	 	 	 	 	 
	
                SECTION
                  7.01

              	 	 	
                Allocations

              	 	 	
                17

              	 
	
                SECTION
                  7.02

              	 	 	
                Distributions

              	 	 	
                17

              	 
	
                SECTION
                  7.03

              	 	 	
                Limitation
                  Upon Distributions

              	 	 	
                17

              	 
	
                SECTION
                  7.04

              	 	 	
                Expenses

              	 	 	
                17

              	 
	
                SECTION
                  7.05

              	 	 	
                Annual
                  Tax Information

              	 	 	
                18

              	 
	
                SECTION
                  7.06

              	 	 	
                Tax
                  Matters

              	 	 	
                18

              	 
	
                SECTION
                  7.07

              	 	 	
                Maintenance
                  of Books

              	 	 	
                18

              	 
	
                SECTION
                  7.08

              	 	 	
                Reports

              	 	 	
                18

              	 
	
                SECTION
                  7.09

              	 	 	
                Bank
                  and Investment Accounts

              	 	 	
                19

              	 
	 	 	 	 	 	 	 	 
	
                ARTICLE
                  VIII 

              	 	 	
                INDEMNIFICATION

              	 	 	
                19

              	 
	 	 	 	 	 	 	 	 
	
                SECTION
                  8.01

              	 	 	
                Mandatory
                  Indemnification of the Member, the Special Members and the
                  Managers

              	 	 	
                19

              	 
	
                SECTION
                  8.02

              	 	 	
                Mandatory
                  Advancement of Expenses

              	 	 	
                19

              	 
	
                SECTION
                  8.03

              	 	 	
                Indemnification
                  of Officers, Employees and Agents

              	 	 	
                20

              	 

      

       

      
        
          
          

        

        
          ii

          
            

          

        

        
          
          

        

      

       

      
        	
                SECTION
                  8.04

              	 	 	
                Nonexclusivity
                  of Rights

              	 	 	
                20

              	 
	
                SECTION
                  8.05

              	 	 	
                Contract
                  Rights

              	 	 	
                20

              	 
	
                SECTION
                  8.06

              	 	 	
                Insurance

              	 	 	
                21

              	 
	
                SECTION
                  8.07

              	 	 	
                Savings
                  Clause

              	 	 	
                21

              	 
	
                SECTION
                  8.08

              	 	 	
                Other
                  Ventures

              	 	 	
                21

              	 
	
                SECTION
                  8.09

              	 	 	
                Survival

              	 	 	
                21

              	 
	 	 	 	 	 	 	 	 
	
                ARTICLE
                  IX 

              	 	 	
                MISCELLANEOUS
                  PROVISIONS

              	 	 	
                21

              	 
	 	 	 	 	 	 	 	 
	
                SECTION
                  9.01

              	 	 	
                Offset

              	 	 	
                21

              	 
	
                SECTION
                  9.02

              	 	 	
                Notices

              	 	 	
                21

              	 
	
                SECTION
                  9.03

              	 	 	
                Effect
                  of Waiver or Consent

              	 	 	
                22

              	 
	
                SECTION
                  9.04

              	 	 	
                Governing
                  Law; Severability

              	 	 	
                22

              	 
	
                SECTION
                  9.05

              	 	 	
                No
                  Bankruptcy Petition; No Dissolution

              	 	 	
                22

              	 
	
                SECTION
                  9.06

              	 	 	
                Amendment

              	 	 	
                23

              	 
	
                SECTION
                  9.07

              	 	 	
                Headings
                  and Sections

              	 	 	
                23

              	 
	
                SECTION
                  9.08

              	 	 	
                Binding
                  Agreement

              	 	 	
                23

              	 
	
                SECTION
                  9.09

              	 	 	
                Dissolution

              	 	 	
                23

              	 
	 	 	 	
                 

              	 	 	 	 
	 	 	 	
                 

              	 	 	 	 
	
                SCHEDULE
                  A: 

              	 	 	
                SCHEDULE
                  OF INITIAL CAPITAL CONTRIBUTION OF MEMBER 

              	 	 	
                A-1

              	 
	
                SCHEDULE
                  B: 

              	 	 	
                MANAGERS

              	 	 	
                B-1

              	 
	
                SCHEDULE
                  C: 

              	 	 	
                OFFICERS

              	 	 	
                C-1

              	 
	
                SCHEDULE
                  D: 

              	 	 	
                MANAGEMENT
                  AGREEMENT

              	 	 	
                D-1

              	 

      

    

     

    
      
        
        

      

      
        iii

        
          

        

      

      
        
        

      

    

     

    AMENDED
      AND RESTATED

    LIMITED
      LIABILITY COMPANY AGREEMENT

    OF

    MP
      ENVIRONMENTAL FUNDING LLC,

    a
      Delaware limited liability company

     

    AMENDED
      AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT, dated as of April 11, 2007
      (as
      it may be further amended, supplemented or otherwise modified and in effect
      from
      time to time, this “Agreement”), of MP ENVIRONMENTAL FUNDING LLC, a Delaware
      limited liability company (the “Company”), having its principal office at 2215-B
      Renaissance Drive, Suite #5, Las Vegas, Nevada 89119.

     

    WHEREAS,
      the Company was formed as a Delaware limited liability company (i) by the
      filing of the Certificate of Formation of the Company with the Secretary of
      State of the State of Delaware on November 17, 2006, as amended by the
      Certificate of Amendment thereto filed with the Secretary of State of the State
      of Delaware on December 27, 2006 and (ii) the execution of the Limited
      Liability Company Agreement, dated as of December 5, 2006, as amended as of
      March 12, 2007 (the “Original LLC Agreement”); and

     

    WHEREAS,
      this Agreement amends and restates the Original LLC Agreement in all respects
      and from and after the date hereof constitutes the governing instrument of
      the
      Company;

     

    NOW
      THEREFORE, the Member (as defined below) hereby agrees as follows:

     

    ARTICLE
      I

    DEFINITIONS

     

    SECTION
      1.01   Capitalized
      Terms.
      For all
      purposes of this Agreement, the following terms shall have the meanings set
      forth below:

     

    “Additional
      Issuance” has the meaning assigned to such term in the Indenture.

     

    “Additional
      Securities” has the meaning assigned to such term in the Indenture

     

    “Administration
      Agreement” shall mean the Administration Agreement, to be dated on or about
      April 11, 2007, between the Company and Allegheny Energy Service Corporation,
      as
      administrator, as the same may be amended or supplemented from time to
      time.

     

    “Administrator”
      means Allegheny Energy Service Corporation, as administrator under the
      Administration Agreement, and its permitted successors and assigns
      thereunder.

     

    “Affiliate”
      means, with respect to any specified Person, any other Person controlling or
      controlled by or under common control with such specified Person. For the
      purposes of this definition, “control” when used with respect to any specified
      Person means the power to direct or cause the direction of the management or
      policies of such Person, directly or indirectly, whether through the ownership
      of voting securities or general partnership or 

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    managing
      member interests, by contract or otherwise;
      and the terms “controlling” and “controlled” have meanings correlative to the
      foregoing. Without limiting the generality of the foregoing, a Person shall
      be
      deemed to control any other Person in which it owns, directly or indirectly,
      a
      majority of the ownership interests.

     

    “Agreement”
      shall have the meaning set forth in the first paragraph of this
      Agreement.

     

    “Bankruptcy”
      shall mean, with respect to any Person, if (A) such Person (i) makes an
      assignment for the benefit of creditors, (ii) files a voluntary petition in
      bankruptcy, (iii) is adjudged a bankrupt or insolvent, or has entered against
      it
      an order for relief, in any bankruptcy or insolvency proceedings, (iv) files
      a
      petition or answer seeking for itself any reorganization, arrangement,
      composition, readjustment, liquidation or similar relief under any statute,
      law
      or regulation, (v) files an answer or other pleading admitting or failing to
      contest the material allegations of a petition filed against it in any
      proceeding of this nature or (vi) seeks, consents to or acquiesces in the
      appointment of a trustee, receiver or liquidator of the Person or of all or
      any
      substantial part of its properties, or (B)(i) if 120 days after the commencement
      of any proceeding against the Person seeking reorganization, arrangement,
      composition, readjustment, liquidation or similar relief under any statute,
      law
      or regulation, the proceeding has not been dismissed, or (ii) within ninety
      days after the appointment without such Person’s consent or acquiescence of a
      trustee, receiver or liquidator of such Person or of all or any substantial
      part
      of its properties, the appointment is not vacated or stayed, or within ninety
      days after the expiration of any such stay, the appointment is not vacated.
      The
      foregoing definition of “Bankruptcy” is intended to replace and shall supersede
      and replace the definition of “Bankruptcy” set forth in Sections 18-101(1) and
      18-304 of the LLC Act.

     

    “Basic
      Documents” shall mean the Transfer Agreement, the Sale Agreement, the Bill of
      Sale, the Servicing Agreement, the Administration Agreement, each Swap
      Agreement, the Indenture (including any Series Supplement), the Underwriting
      Agreement and the Independent Manager Agreements, each as may be amended or
      supplemented from time to time.

     

    “Bill
      of
      Sale” means any bill of sale delivered by the Seller to the Company pursuant to
      the Sale Agreement.

     

    “Business
      Day” means any day other than a Saturday, Sunday or a day on which banking
      institutions in the City of New York, New York or the City of Charleston, West
      Virginia, is authorized or obligated by law, regulation or executive order
      to
      remain closed.

     

    “Certificate
      of Formation” means the certificate of formation of the Company, that was filed
      with the Secretary of State of the State of Delaware on November 17, 2006,
      as
      amended on December 27, 2006 and as further amended or restated from time to
      time.

     

    “Code”
      shall mean the Internal Revenue Code of 1986, as amended from time to time,
      and
      all Treasury Regulations promulgated thereunder.

     

    “Collateral”
      shall have the meaning assigned to it in the Indenture.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    “Common
      Interest” shall mean the limited liability company interest of the Member in the
      Company as described in Article VI. 

     

    “Company”
      shall have the meaning set forth in the first paragraph of this
      Agreement.

     

    “Covered
      Persons” shall have the meaning set forth in Section 2.08(b).

     

    “Environmental
      Control Bonds” or “Bonds” means the “environmental control bonds” (as defined in
      the Statute and the Financing Order) issued and authenticated under the
      Indenture.

     

    “Environmental
      Control Property” shall have the meaning assigned to such term in the Statute
      and the Financing Order.

     

    “Financing
      Order” means the order, Case Nos. 05-0402-E-CN and 05-0750-E-PC, issued by the
      PSCWV on April 7, 2006, as amended on June 13, 2006 and January 17, 2007,
      pursuant to the Statute, as the same may be further amended or supplemented
      in
      accordance with the Statute and the terms of such order.

     

    “Fiscal
      Year” shall mean, unless the Managers shall at any time determine otherwise
      pursuant to the requirements of the Code, the fiscal year of the
      Member.

     

    “Fitch”
      means Fitch, Inc., or its successor.

     

    “GAAP”
      shall mean the generally accepted accounting principles of the United States
      promulgated or adopted by the Financial Accounting Standards Board and its
      successors from time to time.

     

    “Governmental
      Authority” shall mean any federal, state, local or foreign court or governmental
      department, commission, board, bureau, agency, authority, instrumentality or
      regulatory body.

     

    “Indenture”
      shall mean the Indenture, to be dated on or about April 11, 2007, between the
      Company and the Trustee, as the same may be amended or supplemented from time
      to
      time, and shall include each Series Supplement and the forms and terms of the
      Environmental Control Bonds established thereunder.

     

    “Independent
      Manager” shall mean, with respect to the Company, a Manager who is not, and
      within the previous five years was not (except solely by virtue of such Person’s
      serving as, or being an Affiliate of any other Person serving as, an independent
      director or manager, as applicable, of any bankruptcy-remote special purpose
      entity that is an Affiliate of Mon Power or the Company), (i) a stockholder,
      member (other than a Special Member), partner, director, officer, employee,
      Affiliate, customer, supplier, creditor or independent contractor of, or any
      Person, except for Corporation Service Company, its agents and employees,
      and any successor entity thereof, that has received any benefit in any form
      whatever from (other than in such Manager’s capacity as a ratepayer or customer
      of Mon Power or any of its Affiliates in the ordinary course of business),
      or
      any Person that has provided any service in any form whatsoever

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    to,
      or any major creditor (or any Affiliate of any
      major creditor) of, the Company, Mon Power, or any of their Affiliates, (ii)
      any
      Person owning beneficially, directly or indirectly, any outstanding shares
      of
      common stock, any limited liability company interests or any partnership
      interests, as applicable, of the Company, Mon Power or any of their Affiliates,
      or of any major creditor (or any Affiliate of any major creditor) of any of
      the
      foregoing, or a stockholder, member, partner, director, officer, employee,
      Affiliate, customer, supplier, creditor or independent contractor of, or any
      Person that has received any benefit in any form whatever from (other than
      in
      such Person’s capacity as a ratepayer or customer of Mon Power or any of its
      Affiliates in the ordinary course of business), or any Person that has provided
      any service in any form whatever to, such beneficial owner or any of such
      beneficial owner’s Affiliates, or (iii) a member of the immediate family of any
      Person described above; provided,
      that the
      indirect or beneficial ownership of stock through a mutual fund or similar
      diversified investment vehicle with respect to which the owner does not have
      discretion or control over the investments held by such diversified investment
      vehicle shall not preclude such owner from being an Independent Manager. For
      purposes of this definition, “major creditor” shall mean a Person to which the
      Company, Mon Power or any of their Affiliates has outstanding indebtedness
      for
      borrowed money or credit on open account in a sum sufficiently large as would
      reasonably be expected to influence the judgment of the proposed Independent
      Manager adversely to the interests of the Company when the interests of that
      Person are adverse to those of the Company.

     

    “Independent
      Manager Agreement” shall mean the agreement by and between Corporation
      Service Company and the Company, dated as of March 30, 2007.

     

    “LLC
      Act”
shall mean the Delaware Limited Liability Company Act, as amended, as in effect
      on the date hereof (currently Chapter 18 of Title 6, Sections 18-101 through
      18-1109 of the Delaware Code) and as it may be amended hereafter, from time
      to
      time.

     

    “Management
      Agreement” means the agreement of the Managers in the form attached as Schedule
      D to this Agreement. The Management Agreement shall be deemed incorporated
      into,
      and a part of, this Agreement.

     

    “Manager”
      shall mean any manager of the Company within the meaning of the LLC Act,
      including the Independent Managers.

     

    “Member”
      shall mean MP Funding, in its capacity as sole member of the Company under
      this
      Agreement, or any successor thereto as a member pursuant to Article VI;
provided, however,
      the
      term “Member” shall not include any Special Member.

     

    “Mon
      Power” means Monongahela Power Company doing business as Allegheny Power, or its
      successor.

     

    “Moody’s”
      shall mean Moody’s Investors Service, Inc.

     

    “MP
      Funding” means MP Renaissance Funding, LLC, a Delaware limited liability
      company, or its successor.

     

    
      “Original
        LLC Agreement” shall have the meaning set forth in the second paragraph of this
        Agreement.

    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

     

    “Outstanding”
      shall have the meaning assigned to such term in the Indenture.

     

    “Person”
      shall mean any individual, corporation, estate, partnership, joint venture,
      association, joint stock company, trust (including any beneficiary thereof),
      business trust, limited liability company, unincorporated organization or
      Governmental Authority.

     

    “Proceeding”
      shall have the meaning set forth in Section 8.01.

     

    “PSCWV”
      means the Public Service Commission of West Virginia or any
      successor.

     

    “Rating
      Agency” means any rating agency rating the Environmental Control Bonds of any
      Tranche or Series or any Additional Securities, as the case may be, at the
      request of the Company or the Trustee, as the case may be. If no such
      organization or successor is any longer in existence, “Rating Agency” shall be a
      nationally recognized statistical rating organization or other comparable Person
      designated by the Company, notice of which designation shall be given to the
      Trustee.

     

    “Registration
      Statement” shall mean the registration statement on Form S-1 filed by the
      Company with the Securities and Exchange Commission on January 5, 2007, as
      such
      Registration Statement may be amended and supplemented from time to time or
      any
      registration statement subsequently filed by the Company with the Securities
      and
      Exchange Commission with respect to any Additional Securities.

     

    “S&P”
      means Standard & Poor’s Ratings Group, a division of The McGraw-Hill
      Companies.

     

    “Sale
      Agreement” shall mean the Transferred Environmental Control Property Sale
      Agreement, dated on or about, April 11, 2007, between MP Funding, as Seller,
      and
      the Company, as the same may be amended or supplemented from time to
      time.

     

    “Seller”
      means MP Renaissance Funding, LLC and its successors in interest to the extent
      permitted under the Sale Agreement.

     

    “Series”
      shall mean each series of Environmental Control Bonds issued and authenticated
      pursuant to the Indenture as specified in the Series Supplement
      therefor.

     

    “Series
      Supplement” shall mean a supplemental indenture to the Indenture that authorizes
      a particular Series of Environmental Control Bonds, as the same may be amended
      or supplemented from time to time.

     

    
      “Servicing
        Agreement” shall mean the Transferred Environmental Control Property Servicing
        Agreement, to be dated on or about April 11, 2007, between the Company and
        Mon Power, as servicer, as the same may be amended or supplemented from time
        to
        time.

       

      “Special
        Member” shall have the meaning set forth in Section 5.04. A Special Member shall
        have the rights and duties expressly set forth in this
        Agreement.

    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    “State”
      shall mean any one of the fifty states of the United States of America or the
      District of Columbia.

     

    “Statute”
      means the West Virginia Code, Chapter 24, Article 2,
§§ 24-2-4e(a) through and including 24-2-4e(v).

     

    “Swap
      Agreement” means each Swap Agreement, as defined in and permitted by the
      Indenture and any Series Supplement thereto.

     

    “Swap
      Counterparty” means, with respect to any Swap Agreement, the Company
      counterparty under the Swap Agreement.

     

    “Tranche”
      means, with respect to any Series of Environmental Control Bonds, any one of
      the
      tranches of Environmental Control Bonds of that Series.

     

    “Transfer
      Agreement” shall mean the Environmental Control Property Transfer Agreement
      dated as of April 11, 2007 between Monongahela Power Company and MP Funding,
      as
      the same may be amended and supplemented from time to time.

     

    “Transferor”
      means Monongahela Power Company under the Transfer Agreement and its successors
      in interest.

     

    “Trustee”
      shall mean the party named as such in the Indenture until a successor replaces
      it in accordance with the applicable provisions of the Indenture and thereafter
      means the successor serving thereunder.

     

    “Underwriting
      Agreement” means the Underwriting Agreement dated April 3, 2007, among the
      Company, Mon Power, the Seller, and the underwriters named therein, as the
      same
      may be amended and supplemented from time to time.

     

    SECTION
      1.02   Other
      Definitional Provisions.

     

    (a)  Unless
      otherwise defined herein, all capitalized terms herein shall have the meanings
      ascribed thereto in the Indenture.

     

    (b)  All
      terms
      in this Agreement shall have the defined meanings when used in any certificate
      or other document made or delivered pursuant hereto unless otherwise defined
      therein.

     

    
      (c)  As
        used
        in this Agreement and in any certificate or other documents made or delivered
        pursuant hereto or thereto, accounting terms not defined in this Agreement
        or in
        any such certificate or other document, and accounting terms partly defined
        in
        this Agreement or in any such certificate or other document to the extent
        not
        defined, shall have the respective meanings given to them under GAAP. To
        the
        extent that the definitions of accounting terms in this Agreement or in any
        such
        certificate or other document are inconsistent with the meanings of such
        terms
        under GAAP, the definitions contained in this Agreement or in any such
        certificate or other document shall control.

    

     

    
      
        
        

      

      
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    (d)  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; Article and Section references contained in this
      Agreement are references to Articles and Sections in this Agreement unless
      otherwise specified; and the term “including” shall mean “including without
      limitation.”

     

    (e)  The
      definitions contained in this Agreement are applicable to the singular as well
      as the plural forms of such terms.

     

    (f)  Any
      agreement, instrument or statute defined or referred to herein or in any
      instrument or certificate delivered in connection herewith means such agreement,
      instrument or statute as from time to time amended, modified or supplemented
      and
      includes (in the case of agreements or instruments) references to all
      attachments thereto and instruments incorporated therein; references to a Person
      are also to its permitted successors and assigns.

     

    ARTICLE
      II

    CONTINUATION
      OF THE LIMITED LIABILITY COMPANY

     

    SECTION
      2.01   Continuation;
      Filings.
      Pursuant to the LLC Act and in accordance with the further terms and provisions
      hereof, the Member hereby continues the Company as a limited liability company.
      The Certificate of Formation has been duly executed and filed with the Secretary
      of State of the State of Delaware by Daniel M. Dunlap as an authorized person
      within the meaning of the LLC Act. Upon such filing, his powers as an
“authorized person” ceased. Kristine W. Eppes, as an authorized person, has
      executed, delivered and filed the Certificate of Amendment to the Certificate
      of
      Formation with the Secretary of State of the State of Delaware. Upon such
      filing, her powers as an authorized person ceased. The Managers, as authorized
      persons, shall execute or cause to be executed from time to time all other
      instruments, certificates, notices and documents, and shall do or cause to
      be
      done all such filing, recording, publishing and other acts, in each case, as
      may
      be necessary or appropriate from time to time to comply with all applicable
      requirements for the formation, operation and, when appropriate, termination
      of
      a limited liability company in the State of Delaware and all other jurisdictions
      where the Company shall desire to conduct its business.

     

    
      SECTION
        2.02   Name
        and Office The
        name
        of the Company shall be “MP Environmental Funding LLC”. All business of the
        Company shall be conducted in such name and all contracts, property and other
        assets of the Company shall be held in that name and the Member shall not
        have
        any ownership interest in such contracts, property or other assets in its
        individual name.

       

      (b)  The
        address of the registered office of the Company in the State of Delaware
        is c/o
        The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street,
        Wilmington, Delaware 19801. The name of the Company’s registered agent at that
        address is The Corporation Trust Company.

       

      (c)  The
        Company may also have offices at such other places both within and without
        the
        State of Delaware as the Member may from time to time determine.

       

    

    
      
        
        

      

      
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    SECTION
      2.03   Business
      Purpose.

     

    (a)  The
      nature of the business or purpose to be conducted or promoted by the Company
      is
      to engage exclusively in the following business and financial
      activities:

     

    (i)  to
      authorize, issue, sell and deliver (A) one or more Series or Tranches of
      Environmental Control Bonds under the Indenture and, in connection therewith,
      to
      execute and deliver Series Supplements, including Series Supplements providing
      for the issuance of additional Series of Environmental Control Bonds, each
      as
      permitted by and in accordance with the terms of the Indenture and
      (B) securities of one or more Additional Issuances;

     

    (ii)  (A) to
      purchase and hold Environmental Control Property and pledge the same and other
      Collateral to the Trustee pursuant to the terms and conditions of the Basic
      Documents and (B) to purchase and hold other collateral and pledge the same
      as permitted by the PSCWV and the terms herein in connection with any Additional
      Issuance;

     

    (iii)  to
      negotiate, authorize, execute, deliver, assume the obligations under, and
      perform, any agreement or instrument or document relating to the activities
      set
      forth in subclauses (i) and (ii) above, including but not limited to agreements
      with third-party credit enhancers and additional swap or hedge agreement
      counterparties relating to any Series of Environmental Control Bonds and any
      Additional Issuance; provided,
      that
      each
      party to any such agreement with the Company shall covenant that it shall not,
      prior to the date which is one year and one day after the termination of the
      Indenture, or the termination of any other indenture pursuant to which any
      Additional Securities are issued, and the payment in full of any Series of
      the
      Environmental Control Bonds and Additional Securities and any other amounts
      owed
      under the Indenture or other indenture pursuant to which Additional Securities
      are issued, including, without limitation, any amounts owed to third-party
      credit enhancers and of all securities of any Additional Issuance, acquiesce,
      petition or otherwise invoke or cause the Company to invoke the process of
      any
      court or Governmental Authority for the purpose of commencing or sustaining
      an
      involuntary case against the Company 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 Company or
      any
      substantial part of the property of the Company, or ordering the winding up
      or
      liquidation of the affairs of the Company; and
      provided, further,
      that
the Company shall be permitted to incur additional indebtedness
      or
      other liabilities payable to service providers in the ordinary course of
      business in connection with the foregoing activities; and
       

      (iv)  to
        engage
        in any activity and to exercise any powers permitted to limited liability
        companies under the laws of the State of Delaware that are related or incidental
        to the foregoing and necessary, convenient or advisable to accomplish the
        foregoing.

       

      (b)  Notwithstanding
        anything in this Agreement to the contrary, the Company, the Member, and
        each
        officer and Manager of the Company on behalf of the Company, acting alone,
        has
        authority and is hereby authorized to enter into and perform the Basic Documents
        and all documents, agreements, certificates or financing statements contemplated
        thereby or related thereto, and to execute and file with the Commission,
        and
        cause 

    

     

    
      
        
        

      

      
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    to
      go
      effective, one or more registration statements, including the Registration
      Statement, all without any further act, vote or approval of any other
      Person.

     

    SECTION
      2.04   Term.
      The
      term of the Company shall continue until the Company is dissolved and wound-up
      in accordance with the LLC Act and this Agreement. The existence of the Company
      as a separate legal entity shall continue until the cancellation of the
      Certificate of Formation in accordance with the LLC Act.

     

    SECTION
      2.05   No
      State Law Partnership.
      The
      Member and the Special Members intend that the Company shall not be a
      partnership (including, without limitation, a general partnership or a limited
      partnership) or joint venture, and that neither the Member, any Special Member
      nor any Manager shall be a partner or joint venturer of the Member, any Special
      Member or any Manager with respect to the business of the Company for any
      purposes, and this Agreement shall not be construed to suggest
      otherwise.

     

    SECTION
      2.06   Authority
      of Member.
      Subject
      to Section 3.04, the Member, acting in such capacity, shall have the authority
      and power to act for and on behalf of the Company, to do any act that would
      be
      binding on the Company, and to incur any expenditures, debts, liabilities and
      obligations on behalf of the Company.

     

    SECTION
      2.07   Liability
      to Third Parties.
      Except
      as otherwise expressly provided by the LLC Act, neither the Member nor any
      Special Member nor any Manager shall be liable personally for the debts,
      obligations or liabilities of the Company (whether arising in contract, tort
      or
      otherwise), including, without limitation, any debts, obligations or liabilities
      of the Company arising under a judgment, decree or order of a court, solely
      by
      reason of such Person being the Member, or a Special Member or Manager of the
      Company.

     

    SECTION
      2.08   No
      Personal Liability of Any Member, Special Member, Manager,
      Etc.

     

    (a)  Except
      as
      otherwise expressly provided by the LLC Act, the debts, obligations and
      liabilities of the Company, whether arising in contract, tort or otherwise,
      shall be the debts, obligations and liabilities solely of the Company, and
      neither the Member nor any Special Member nor any Manager shall be obligated
      personally for any such debt, obligation or liability of the
      Company solely by reason of such Person being a Member, Special Member or
      Manager.
       

      (b)  To
        the
        fullest extent permitted by law, neither the Member nor any Special Member
        nor
        any officer, Manager, employee or agent of the Company, nor any employee,
        agent
        or Affiliate of the Member, a Manager or a Special Member (collectively,
        the
“Covered Persons”) shall be liable to the Company or the Member, any Special
        Member or any Manager for any loss, damage or claim incurred by reason of
        any
        act or omission performed or omitted by such Covered Person in good faith
        on
        behalf of the Company and in a manner reasonably believed to be within the
        scope
        of the authority conferred on such Covered Person by this Agreement, except
        that
        a Covered Person shall be liable for any loss, damage or claim incurred by
        reason of such Covered Person’s gross negligence or willful misconduct, and
        except that a Manager shall be liable for (i) liabilities arising from the
        failure by such Manager to perform 

    

     

    
      
        
        

      

      
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    obligations
      expressly undertaken by it in this Agreement and (ii) taxes, fees or other
      charges, based on or measured by any fees, commissions or compensation received
      by such Manager in connection with the transactions described in this Agreement
      and the Basic Documents.

     

    SECTION
      2.09   Separateness.
      Except
      for financial reporting purposes (to the extent required by GAAP) and for
      federal income tax purposes and, to the extent consistent with applicable state
      tax law, state income and corporation business tax purposes, the Member and
      the
      Managers shall take all steps necessary to continue the identity of the Company
      as a separate legal entity and to make it apparent to third Persons that the
      Company is an entity with assets and liabilities distinct from those of the
      Member, Affiliates of the Member or any other Person, and that the Company
      is
      not a division of any of the Affiliates of the Company or any other Person.
      In
      that regard, and without limiting the foregoing in any manner:

     

    (a)  Except
      as
      provided in the Basic Documents, the funds and other assets of the Company
      shall
      not be commingled with those of any other Person, and the Company shall maintain
      its accounts separate from the Member and any other Person.

     

    (b)  The
      Company shall not hold itself out as being liable for the debts of any other
      Person, and shall conduct its own business in its own name.

     

    (c)  The
      Company shall not form, or cause to be formed, any subsidiaries.

     

    (d)  The
      Company shall act solely in its limited liability company name and through
      its
      duly authorized Member, Special Members, Managers, officers or agents in the
      conduct of its business, and shall conduct its business so as not to mislead
      others as to the identity of the entity or assets with which they are concerned
      and (except as provided in the Basic Documents) shall at all times maintain
      its
      assets in a manner that facilitates their identification and segregation from
      those of the Member or any of its Affiliates or any other Person.

     

    (e)  The
      Company shall practice and adhere to organizational formalities, such as
      maintaining separate records, books of account and financial statements, and
      shall not commingle its records and books of account with the records and books
      of account of the Member or any of its Affiliates or any other
      Person.

     

    
      (f)  The
        Managers shall act by written consent or hold appropriate meetings to authorize
        all of the Company’s limited liability company actions, which meetings may be
        held by telephone conference call or by electronic transmission. The Company
        shall observe all formalities required by this Agreement.

       

      (g)  The
        Company shall at all times remain solvent and ensure that its capitalization
        is
        adequate in light of its business and purpose, provided, however, the foregoing
        shall not require the Member to make any additional capital contributions
        to the
        Company.

       

      (h)  Neither
        the Member nor any Special Member nor any Manager shall guarantee, become
        liable
        on or hold itself out as being liable for the debts of the Company. The Company
        shall not guarantee or become obligated for the debts of the Member, any
        Special
        Member, any Manager, any Affiliate of the foregoing or any other Person,
        or
        otherwise hold out 

       

    

    
      
        
        

      

      
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    its
      credit as being available to satisfy the obligations of the Member, any Special
      Member, any Manager or any other Person, shall not pledge its assets for the
      benefit of any Person other than the Trustee for the benefit of the Holders
      of
      the Environmental Control Bonds, shall not make loans or advances to any Person,
      and shall not acquire obligations or securities of the Member, any Special
      Member, any Manager or any Affiliate of the foregoing.

     

    (i)  The
      Company shall pay its own liabilities out of its own funds, including fees
      and
      expenses earned by Allegheny Energy Service Corporation, as administrator,
      pursuant to the Administration Agreement, Mon Power, as servicer, pursuant
      to
      the Servicing Agreement and MP Funding, as Seller, pursuant to the Sale
      Agreement, provided, however, the foregoing shall not require the Member to
      make
      any additional capital contributions to the Company.

     

    (j)  The
      Company shall maintain an arm’s-length relationship with its
      Affiliates.

     

    (k)     
      The
      Company shall allocate fairly and reasonably, on market-based terms, any
      overhead for office space shared with the Member, any Special Member or any
      Manager.

     

    (l)      
      The
      Company shall use its own separate stationery, invoices, checks and other
      business forms distinct from those of the Member or any of its Affiliates or
      any
      other Person.

     

    (m)     The
      Company shall hold itself out as a separate entity and correct any known
      misunderstanding regarding its separate identity.

     

    (n)     The
      Company shall not engage in any activity other than (i) those activities
      expressly permitted under this Agreement and the Basic Documents to which it
      is
      a party, nor will the Company enter into any agreement other than those
      necessary to fulfill the purposes of the Company as described in Section 2.03
      hereof and such other agreements that are permitted by the Basic Documents
      and
      are necessary or desirable for the Company to exercise its rights and perform
      its obligations under such Basic Documents and this Agreement and
      (ii) those activities reasonable and necessary to undertake an offering of
      Additional Securities, as authorized by the PSCWV.

     

    
      (o)    
        To
        the
        fullest extent permitted by law, the Company shall make all decisions with
        respect to its business and daily operations independently and in the Company’s
        best interest without obligation or reference to how such decision might
        affect
        any other Person, including the Member or any of its Affiliates; provided,
        that
        the officer making any particular decision may also be an employee, officer
        or
        director of the Member, any other member, or any of their respective
        Affiliates.

       

      (p)    
        The
        Company shall maintain office space separate from the office space of the
        Member, any other member and any of their respective Affiliates (but which
        may
        be located at the same address).

       

      (q)    
        The
        Company shall allocate, on an arm’s-length basis, all shared corporate operating
        services, leases and expenses and otherwise maintain an arm’s-length
        relationship with the Member, any other members and any of their respective
        Affiliates.

    

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (r)     
      The
      Company, without the consent of the Independent Managers, shall not file or
      otherwise initiate or support the filing of a motion in any Bankruptcy or other
      insolvency proceeding involving the Member, any other member or any of their
      respective Affiliates to substantively consolidate the Member or any Affiliate
      of the Member with the Company.

     

    (s)    
      The
      Company shall not acquire obligations or securities of the Member, any other
      member or any of their respective Affiliates.

     

    Failure
      of the Company, the Member, any Special Member or any Manager on behalf of
      the
      Company to comply with any of the foregoing covenants or any of the covenants
      contained in this Agreement shall not affect the status of the Company as a
      separate legal entity or the limited liability of the Member, any Special Member
      or any Manager.

     

    SECTION
      2.10   Limited
      Liability and Bankruptcy Remoteness.
      Without
      limiting the generality of Section 2.09, the Company shall be operated in such
      a
      manner as the Managers deem reasonable and necessary or appropriate to
      preserve:

     

    (a)  the
      limited liability of MP Funding (or its successor) as the Member in the Company
      and the limited liability of the Special Members,

     

    (b)  the
      separateness of the Company from the business of MP Funding (or its successor),
      as the Member of the Company, or any other Affiliate thereof, and 

     

    (c)  until
      the
      expiration of the one year and one day period of time as specified in Section
      9.05(a), the bankruptcy-remote status of the Company.

     

    SECTION
      2.11   Additional
      Issuance. If
      the Company receives a financing order or other authorization or approval from
      the PSCWV, the Company may, in its sole discretion, acquire additional and
      separate property (including property other than Environmental Control Property)
      and issue one or more Additional Issuances that are backed by such separate
      additional property. Any new Additional Issuance may include terms and
      provisions unique to that Additional Issuance.

     

    
      (a)  The
        Company shall not issue additional Environmental Control Bonds or other
        Additional Securities if the Additional Issuance would result in the
        then-current ratings on any Outstanding Series of Environmental Control Bonds
        or
        other Outstanding Additional Securities being reduced or withdrawn.

       

      (b)  The
        following conditions must be satisfied in connection with any Additional
        Issuance:

       

      (i)  if
        the
        Additional Issuance is a new series of Environmental Control Bonds, such
        Bonds
        shall be rated “Aaa” by Moody’s and “AAA” by S&P and Fitch;

       

      (ii)  each
        Additional Issuance shall have recourse only to the assets pledged in connection
        with such Additional Issuance, shall be nonrecourse to any of the Company’s
        other assets and shall not constitute a claim against the Company if cash
        flow
        from the pledged assets is insufficient to pay such Additional Issuance in
        full;

       

    

    
      
        
        

      

      
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    (iii)  the
      Company has delivered to the Trustee an Opinion of Counsel of a nationally
      recognized firm experienced in such matters to the effect that after such
      issuance, in the opinion of such counsel, if either or both of Mon Power or
      the
      Seller were to become a debtor in a case under the United States Bankruptcy
      Code
      (Title 11, U.S.C.), a federal court exercising bankruptcy jurisdiction and
      exercising reasonable judgment after full consideration of all relevant factors
      would not order substantive consolidation of the assets and liabilities of
      the
      Company with those of the bankruptcy estate of Mon Power or the Seller, subject
      to the customary exceptions, qualifications and assumptions contained
      therein;

     

    (iv)  the
      Company has delivered to the Trustee a certificate meeting the criteria of
      Section 3.19(c)(iv) of the Indenture stating that the securities issued pursuant
      to such Additional Issuance shall have the benefit of a true-up
      mechanism;

     

    (v)  the
      transaction documentation for such Additional Issuance provides that holders
      of
      the securities of such Additional Issuance will not file or join in the filing
      of any bankruptcy petition against the Company;

     

    (vi)  if
      the
      holders of the securities of any Additional Issuance are deemed to have any
      interest in any of the Collateral pledged under the Indenture (other than
      Collateral pledged with respect to such Additional Issuance), the holders of
      such securities must agree that any such interest is subordinate to the claims
      and rights of the Holders of such other related sereies of Environmental Control
      Bonds;

     

    (vii)  the
      Additional Issuance shall have its own bank accounts or trust accounts;
      and

     

    (viii)  the
      Additional Issuance shall bear its own trustees fees and servicer fees, except
      that the allocation of such fees with respect to any Additional Issuance of
      Environmental Control Bonds shall be governed by the terms of the Indenture
      and
      the Servicing Agreement.

     

    
       

      ARTICLE
        III

      MANAGEMENT

       

      SECTION
        3.01   Management
        by Managers.
        Except
        as otherwise expressly set forth in this Agreement, the powers of the Company
        shall be exercised by or under the authority of, and the business and affairs
        of
        the Company shall be managed under the direction of, the Managers.

       

      SECTION
        3.02   Acts
        by Managers.

       

      (a)  The
        Managers shall be obliged to devote only as much of their time to the Company’s
        business as shall be reasonably required in light of the Company’s business and
        objectives. A Manager shall perform his or her duties as a Manager in good
        faith, in a manner he or she reasonably believes to be in the best interests
        of
        the Company, and with such care as an ordinarily prudent person in a like
        position would use under similar circumstances.

       

    

    
      
        
        

      

      
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    (b)  Every
      Manager is an agent of the Company for the purpose of its business, and the
      act
      of every Manager, including the execution in the name of the Company of any
      instrument for carrying on the business of the Company, binds the Company,
      unless such act is in contravention of this Agreement or unless the Manager
      so
      acting otherwise lacks the authority to act for the Company and the Person
      with
      whom he or she is dealing has knowledge of the fact that he or she has no such
      authority.

     

    (c)  The
      Managers shall have the right and authority to take all actions which the
      Managers deem necessary, useful or appropriate for the day-to-day management
      and
      conduct of the Company’s business.

     

    (d)  The
      Managers may exercise all powers of the Company and do all such lawful acts
      and
      things as are not required or directed by the LLC Act, other applicable law
      or
      this Agreement to be exercised or done by the Member. Except as provided in
      Section 2.03(b), all instruments, contracts, agreements and documents providing
      for the acquisition or disposition of property of the Company shall be valid
      and
      binding on the Company if executed by one or more of the Managers. Except as
      provided in Section 2.03(b), all instruments, contracts, agreements and
      documents of whatsoever type executed on behalf of the Company shall be executed
      in the name of the Company by one or more Managers.

     

    SECTION
      3.03   Number
      and Qualifications.
      The
      number of Managers of the Company shall be as determined by the Member from
      time
      to time but shall not be less than five, and no decrease in the number of
      Managers shall have the effect of shortening the term of any incumbent Manager.
      The Member hereby determines the initial number of Managers to be
      five.

     

    SECTION
      3.04   Independent
      Managers.

     

    (a)  The
      Company shall have at all times at least two individuals who are Independent
      Managers. One Independent Manager shall be appointed by the Member and the
      other
      Independent Manager shall be appointed by PSCWV in accordance with Section
      3.04(e). The Independent Managers may not delegate their duties, authorities
      or
      responsibilities hereunder. If any Independent Manager resigns, dies or becomes
      incapacitated, or such position is otherwise vacant, no action
      requiring the unanimous affirmative vote of the Managers shall be taken until
      a
      successor Independent Manager is appointed by the Member or the PSCWV as
      applicable and such successor Independent Manager qualifies and approves such
      action.
       

      (b)  Notwithstanding
        any other provision of this Agreement and any provision of law that otherwise
        so
        empowers the Company, the Member, any Special Member, any Manager or any
        other
        Person, the Company shall not, and neither the Member nor any Special Member
        nor
        any Manager nor any other Person on behalf of the Company shall, without
        the
        prior unanimous consent of the Managers, including each of the Independent
        Managers, do any of the following: (i) engage in any business or activity
        other
        than those set forth in Article II; (ii) except as provided in the Basic
        Documents, incur any indebtedness, other than the Environmental Control Bonds,
        obligations under agreements with third party credit enhancers and swap or
        hedge
        agreement counterparties relating to any Series of Environmental Control
        Bonds
        and ordinary course expenses incurred in accordance with Article II, or assume
        or guarantee any indebtedness of any other entity; (iii) make a general
        assignment for the benefit of 

    

     

    
      
        
        

      

      
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    creditors;
      (iv) file a petition commencing a voluntary bankruptcy case; (v) file a petition
      or answer seeking reorganization, arrangement, composition, readjustment,
      liquidation, dissolution or similar relief under any statute, law or regulation;
      (vi) file an answer or other pleading admitting or failing to contest the
      material allegations of a petition filed against the Company in any proceeding
      seeking reorganization, arrangement, composition, readjustment, liquidation,
      dissolution or similar relief under any statute, law or regulation, or the
      entry
      of any order appointing a trustee, liquidator or receiver of the Company or
      of
      the Company’s assets or any substantial portion thereof; (vii) seek, consent to
      or acquiesce in the appointment of a trustee, receiver or liquidator of the
      Company or of all or any substantial part of the Company’s assets; (viii)
      consolidate, convert or merge with or into any other entity or convey or
      transfer substantially all of the Company’s properties and assets substantially
      as an entirety to any entity; or (ix) amend this Agreement or take any action
      in
      furtherance of any such action. With regard to any action contemplated by the
      preceding sentence, or with regard to any action taken or determination made
      at
      any time when the Company is insolvent, each Independent Manager will, to the
      fullest extent permitted by law, owe its primary fiduciary duty to the Company
      (including the creditors of the Company).

     

    (c)  At
      all
      times, one of the Managers shall have been selected by and shall be subject
      to
      removal by the PSCWV and shall be an Independent Manager. Such Independent
      Manager shall be compensated in accordance with the terms of the Financing
      Order
      The Company shall submit the name of a proposed Independent Manager to the
      PSCWV, and the PSCWV shall either affirmatively approve or disapprove the
      appointment of such Person as an Independent Manger within fifteen days. If
      the
      PSCWV does not approve or disapprove such proposal within fifteen days, such
      PSCWV approval shall have been deemed to have been made. If the PSCWV
      disapproves such proposal, the PSCWV may select any individual the PSCWV deems
      appropriate, so long as such individual qualifies as an “Independent Manager”
pursuant to the definition herein.

     

    SECTION
      3.05   Appointment
      and Vacancy.
      The
      Member will appoint each Manager other than the Manager approved by the PSCWV
      in
      accordance with the terms of Section 3.04(e), including any Manager to be
      appointed by reason of an increase in the number of Managers. The
      initial Managers hereby appointed by the Member and the PSCWV are listed on
      Schedule B attached hereto.
       

      SECTION
        3.06   Term.
        Each
        Manager shall hold office until his or her successor shall be selected by
        the
        Member and qualified, or until his or her earlier death, resignation or removal
        as provided in this Agreement.

       

      SECTION
        3.07   Removal.
        Subject
        to Section 3.04(a) and Section 3.15, the Member may remove, with or without
        cause, any Manager. However, the Member may not remove the Independent Manager
        selected or deemed selected by the PSCWV pursuant to Section
        3.04(c).

       

      SECTION
        3.08   Resignation.
        Any
        Manager may resign at any time. Such resignation shall be made in writing
        and
        shall take effect at the time specified therein or, if no time is specified
        therein, at the time of its receipt by the remaining Managers; provided, that
        the
        resignation of an Independent Manager shall not be effective until a replacement
        Independent 

    

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    Manager
      has been appointed. The acceptance of a resignation shall not be necessary
      to
      make it effective, unless so expressly provided in the resignation.

     

    SECTION
      3.09   Place
      of Meetings of Managers.
      Any
      meetings of the Managers may be held either within or without the State of
      Delaware at such place or places as shall be determined from time to time by
      resolution of the Managers.

     

    SECTION
      3.10   Meetings
      of Managers.
      Meetings of the Managers may be held when called by any Manager or Managers.
      The
      Manager or Managers calling any meeting shall cause notice to be given of such
      meeting, including therein the time, date and place of such meeting, to each
      Manager at least two Business Days before such meeting. The business to be
      transacted at, or the purpose of, any meeting of the Managers shall be specified
      in the notice or waiver of notice of any such meeting. If fewer than all of
      the
      Managers are present in person, by telephone or by proxy, business transacted
      at
      any such meeting shall be confined to the business or purposes specifically
      stated in the notice or waiver of notice of such meeting.

     

    SECTION
      3.11   Quorum;
      Majority Vote.
      At all
      meetings of the Managers, the presence in person, by telephone or by proxy
      of a
      majority of the Managers shall be necessary and sufficient to constitute a
      quorum for the transaction of business unless a greater number is required
      by
      this Agreement or by law. The act of a majority of the Managers present in
      person, by telephone or by proxy at a meeting at which a quorum is present
      in
      person, by telephone or by proxy shall be the act of the Managers, except as
      otherwise provided by law or this Agreement. If a quorum shall not be present
      in
      person, by telephone or by proxy at any meeting of the Managers, the Managers
      present in person, by telephone or by proxy at the meeting may adjourn the
      meeting from time to time, without notice other than announcement at the
      meeting, until a quorum shall be present in person, by telephone or by
      proxy.

     

    SECTION
      3.12   Methods
      of Voting; Proxies.
      A
      Manager may vote either in person, by telephone, electronic transmission or
      by
      proxy executed in writing by the Manager; provided,
      that
      the
      Person designated to act as proxy for an Independent Manager must be an
      Independent Manager.

     

    
      SECTION
        3.13   Actions
        Without a Meeting.
        Any
        action required or permitted to be taken at a meeting of the Managers may
        be
        taken without a meeting, without prior notice, and without a vote, if a consent
        in writing, setting forth the action so taken, is signed by the Managers
        having
        not fewer than the minimum number of votes that would be necessary to take
        the
        action at a meeting at which all Managers entitled to vote on the action
        were
        present and voted. Copies of any such consents shall be filed with the minutes
        and permanent records of the Company.

       

      SECTION
        3.14   Telephone
        and Similar Meetings.
        The
        Managers, or members of any committee thereof, may participate in and hold
        meetings by means of conference telephone or similar communications equipment
        by
        means of which all persons participating in the meeting can hear each other.
        Such participation in any such meeting shall constitute presence in person
        at
        such meeting, except where a Person participates in such meeting for the
        express
        purpose of objecting to the transaction of any business on the ground that
        such
        meeting is not lawfully called or convened.

    

     

    
      
        
        

      

      
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    SECTION
      3.15   Managers.
      The
      Member and each Manager shall take all actions necessary from time to time
      to
      ensure that at all times the number of Managers shall not be less than five;
      provided,
      however,
      that
      pursuant to Section 3.04, the Company shall at all times have at least two
      Independent Managers.

     

    ARTICLE
      IV

    OFFICERS

     

    SECTION
      4.01   Designation;
      Term; Qualifications.
      The
      Managers may, from time to time, designate one or more Persons to be officers
      of
      the Company. Any officer so designated shall have such title and authority
      and
      perform such duties as the Managers may, from time to time, delegate to them.
      Each officer shall hold office for the term for which such officer is designated
      and until his or her successor shall be duly designated and shall qualify or
      until his or her death, resignation or removal as provided in this Agreement.
      Any Person may hold any number of offices. No officer need be a Manager, the
      Member, a Delaware resident, or a United States citizen. To the extent the
      Managers do not enumerate the powers and duties of an officer of the Company,
      such officers shall have the powers and duties of an officer with a comparable
      title of a corporation organized under the General Corporation Law of the State
      of Delaware. The persons identified on Schedule C are hereby designated the
      initial officers of the Company.

     

    SECTION
      4.02   Removal
      and Resignation.
      Any
      officer of the Company may be removed as such, with or without cause, by the
      Managers at any time. Any officer of the Company may resign as such at any
      time
      upon written notice to the Company. Such resignation shall be made in writing
      and shall take effect at the time specified therein or, if no time is specified
      therein, at the time of its receipt by the Managers.

     

    SECTION
      4.03   Vacancies.
      Any
      vacancy occurring in any office of an officer of the Company shall be filled
      by
      the Managers.

     

    
      SECTION
        4.04   Compensation.
        The
        compensation, if any, of the officers of the Company shall be fixed from
        time to
        time by the Managers.

       

      ARTICLE
        V

      MEMBER

       

      SECTION
        5.01   Compensation
        of Member.
        The
        Company shall have authority to pay to the Member reasonable compensation
        for
        the Member’s services to the Company. It is understood that the compensation
        paid to the Member under the provisions of this Section 5.01 shall be determined
        without regard to the income of the Company, shall not be deemed to constitute
        distributions to the recipient of any profit, loss or capital of the Company
        and
        shall be considered as an operating expense of the Company.

       

    

    
      
        
        

      

      
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    SECTION
      5.02   Actions
      of Member.
      All
      actions of the Member may be taken by written resolution of the Member which
      shall be signed on behalf of the Member by an authorized officer of the Member
      and filed with the minutes and permanent records of the Company.

     

    SECTION
      5.03   Control
      by Member.
      To the
      extent the Member takes any action with respect to the Company (including by
      means of its appointment of any individual Manager or its control or employment
      of any individual Manager in any other capacity), the Member, or any such
      Manager, as applicable, will act in good faith in accordance with the terms
      of
      this Agreement, and make decisions with respect to the business and daily
      operations of the Company independent of, and not dictated by, in the case
      of
      any such Manager, the Member, or in either case any Affiliate of the foregoing,
      and, to the fullest extent permitted by law, each Independent Manager shall
      bear
      a fiduciary duty to the Company (including its creditors) under the
      circumstances set forth in Section 3.04.

     

    SECTION
      5.04   Special
      Members.
      Upon
      the occurrence of any event that causes the Member to cease to be a member
      of
      the Company other than by a transfer by the Member of its limited liability
      company interest in the Company pursuant to Section 6.01 and the admission
      of a
      substitute Member pursuant to Section 6.01, each person acting as an Independent
      Manager pursuant to Section 3.04 shall, without any action of any Person and
      simultaneously with the Member ceasing to be a member of the Company,
      automatically be admitted to the Company as a special member (a “Special
      Member”) and shall continue the Company without dissolution. No Special Member
      may resign from the Company or transfer its rights as a Special Member unless
      (a) a successor Special Member has been admitted to the Company as a Special
      Member by executing a counterpart to this Agreement and (b) such successor
      has
      also accepted its appointment as Independent Manager; provided,
      however,
      the
      Special Members shall automatically cease to be members of the Company upon
      the
      admission to the Company of a substitute Member appointed by the personal
      representative of the last Member that ceased to be a member of the Company.
      Each Special Member shall be a member of the Company that has no interest in
      the
      profits, losses and capital of the Company and has no right to receive any
      distributions of Company assets. Pursuant to Section 18-301 of the LLC Act,
      a
      Special Member shall not be required to make any capital contributions to the
      Company and shall not receive a limited liability company interest in the
      Company. A Special Member, in its capacity as Special Member, may not bind
      the
      Company. Except as required by any mandatory provision of the LLC
      Act, each Special Member, in its capacity as Special Member, shall have no
      right
      to vote on, approve or otherwise consent to any action by, or matter relating
      to, the Company, including, without limitation, the merger, consolidation or
      conversion of the Company. In order to implement the admission to the Company
      of
      each Special Member pursuant to this Section 5.04, each person acting as an
      Independent Manager pursuant to Section 3.04 shall execute a counterpart to
      this
      Agreement. Prior to its admission to the Company as Special Member, each person
      acting as an Independent Manager pursuant to Section 3.04 shall not be a member
      of the Company.

     

    
      
        
        

      

      
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    ARTICLE
      VI

    COMMON
      INTEREST

     

    SECTION
      6.01   General.
      The
      Common Interest constitutes personal property and shall be freely transferable
      and assignable in whole but not in part upon registration of such transfer
      and
      assignment on the books of the Company in accordance with the procedures
      established for such purpose by the Managers of the Company. Immediately upon
      registration of the transfer and assignment of the Common Interest on the books
      of the Company and execution by the transferee/assignee of an instrument
      evidencing its agreement to be bound by this Agreement and without the need
      for
      any other action by any Person, the transferee/assignee shall be and become
      the
      sole Member of the Company and shall have the rights and powers, and be subject
      to the restrictions and liabilities, of the Member under this Agreement and
      the
      LLC Act, and the transferor/assignor shall cease to be the Member, each as
      of
      the date of such registration. Notwithstanding the foregoing, the Common
      Interest may not be transferred unless S&P shall have confirmed in writing
      to the Trustee and the Company that such transfer will not result in a reduction
      or withdrawal of the then current rating by any such Rating Agency of any
      outstanding Series or Tranche of Environmental Control Bonds and any outstanding
      securities of all Additional Issuances and ten days prior written notice of
      such
      transfer shall be provided to Moody’s and Fitch. 

     

    SECTION
      6.02   Distributions.
      The
      Member shall be entitled to receive, out of the assets of the Company legally
      available therefor, when, as and if declared by the Managers, distributions
      payable in cash in such amounts, if any, as the Managers shall declare.
      Notwithstanding any provision to the contrary contained in this Agreement,
      the
      Company shall not be required to make a distribution to the Member on account
      of
      its interest in the Company if such distribution would violate the LLC Act
      or
      any other applicable law or any Basic Document.

     

    SECTION
      6.03   Rights
      on Dissolution and Winding Up.

     

    (a)  In
      the
      event of any dissolution and winding up of the Company, the Member shall be
      entitled to all remaining assets of the Company available for distribution
      to
      the Member after satisfaction (whether by payment or reasonable provision for
      payment) of all liabilities, debts and obligations of the Company to creditors,
      as set forth in Section 18-804 of the LLC Act.

     

    (b)  Neither
      the sale of all or substantially all of the property or business of the Company,
      nor the merger, conversion or consolidation of the Company into or with another
      company or other entity, shall be deemed to be a dissolution,
      liquidation or winding up, voluntary or involuntary, for the purpose of this
      Section 6.03.
       

      (c)  The
        commencement of a Bankruptcy, insolvency, receivership or other similar
        proceeding by or against the Company, any Special Member or the Member shall
        not, by itself, result in the dissolution of the Company or in the cessation
        of
        the interest of the Member in the Company. The resignation of the Member
        or any
        Special Member or the dissolution of the Member or any Special Member shall
        not,
        by itself, constitute a dissolution of the Company.

    

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    (d)  Upon
      the
      occurrence of any event that causes the last remaining member of the Company
      to
      cease to be a member of the Company, to the fullest extent permitted by law,
      the
      personal representative of such member is hereby authorized to, and shall,
      within ninety days after the occurrence of the event that terminated the
      continued membership of such member in the Company, agree in writing (i) to
      continue the Company and (ii) to the admission of the personal representative
      or
      its nominee or designee, as the case may be, as a substitute member of the
      Company, effective as of the occurrence of the event that terminated the
      continued membership of the last remaining member of the Company in the
      Company.

     

    (e)  Notwithstanding
      any other provision of this Agreement, the Bankruptcy of the Member or any
      Special Member shall not cause the Member or Special Member, respectively,
      to
      cease to be a member of the Company, and, upon the occurrence of such an event,
      the business of the Company shall continue without dissolution.

     

    SECTION
      6.04   Redemption.
      The
      Common Interest shall not be redeemable.

     

    SECTION
      6.05   Voting
      Rights.
      The
      Member shall have the sole right to vote on all matters as to which members
      of a
      limited liability company shall be entitled to vote pursuant to the LLC Act
      and
      other applicable law.

     

    SECTION
      6.06   Class.
      The
      Company shall have one class of Common Interest.

     

    SECTION
      6.07   Capital
      Contributions.
      The
      Member shall contribute the amount of cash to the Company listed on Schedule
      A
      attached hereto. The Member is not required to make any additional capital
      contribution to the Company. To the extent that the Member makes an additional
      capital contribution to the Company, the Member shall revise Schedule A
      accordingly.

     

    ARTICLE
      VII

    ALLOCATIONS;
      DISTRIBUTIONS; EXPENSES;

    TAXES;
      BOOKS; REPORTS; AND BANK ACCOUNTS

     

    SECTION
      7.01   Allocations.
      All
      items of income, gain, loss, deduction and credit of the Company for each Fiscal
      Year shall be allocated to the Member. Any credit available for federal income
      tax purposes shall be allocated to the Member in the same manner.

    
       

      SECTION
        7.02   Expenses.
        Except
        as otherwise provided in this Agreement, and subject to the provisions of
        the
        Basic Documents and the documents governing the terms of any Additional
        Issuance, the Company shall be responsible for all of its own expenses and
        the
        allocation thereof including without limitation:

       

      (a)  all
        expenses incurred by the Member or its Affiliates in organizing the
        Company;

       

    

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    (b)  all
      expenses related to the payment of the principal of and interest on the
      Environmental Control Bonds and the securities of any Additional Issuance issued
      by the Company;

     

    (c)  all
      expenses related to the business of the Company and all routine administrative
      expenses of the Company, including any amounts payable under the Administration
      Agreement and the Servicing Agreement, the maintenance of books and records
      of
      the Company, and the preparation and dispatch to the Member of checks, financial
      reports, tax returns and notices required pursuant to this
      Agreement;

     

    (d)  all
      expenses incurred in connection with any litigation or arbitration involving
      the
      Company (including the cost of any investigation and preparation) and the amount
      of any judgment or settlement paid in connection therewith;

     

    (e)  all
      expenses for indemnity or contribution payable by the Company to any
      Person;

     

    (f)  all
      expenses incurred in connection with the collection of amounts due to the
      Company from any Person;

     

    (g)  all
      expenses incurred in connection with the preparation of amendments to this
      Agreement;

     

    (h)  all
      expenses incurred in connection with the liquidation, dissolution and winding
      up
      of the Company; and

     

    (i)  all
      expenses otherwise allocated in good faith to the Company by the
      Managers.

     

    SECTION
      7.03   Annual
      Tax Information.
      The
      Managers shall cause the Company to deliver to the Member all information
      necessary for the preparation of the Member’s federal or state income tax
      return.

     

    SECTION
      7.04   Tax
      Matters.
      (a) The
      Member shall communicate and negotiate with the Internal Revenue Service on
      any
      tax matter on behalf of the Member and the Company.

     

    (b) The
      Member acknowledges that at all times that two or more persons or entities
      hold
      equity interests in the Company for federal income tax purposes (i) it is the
      intention of the Company to be treated as a “partnership” for federal and all
      relevant state tax purposes, and (ii) the Company will be treated
      as a “partnership” for federal and all relevant state tax purposes and shall
      make all available elections to be so treated. Until such time, however, it
      is
      the intention of the Member that the Company be disregarded for federal and
      all
      relevant state tax purposes and that the activities of the Company be deemed
      to
      be activities of the Member for such purposes. All provisions of the Company’s
      certificate of formation and this Agreement are to be construed so as to
      preserve that tax status under those circumstances.
       

    

     

    
      
        
        

      

      
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    (c) In
      accordance with the provisions of Treasury Regulations section 301.7701-3,
      the
      Company will not elect to be treated as a corporation for Federal income tax
      purposes, and therefore will be treated as either a disregarded entity or a
      division of the Member. Any other election under any provision of any tax law
      shall be made only by the Managers or by a person authorized to do so by the
      Managers.

     

    SECTION
      7.05   Maintenance
      of Books.
      The
      Company shall keep books and records of accounts and shall keep minutes of
      the
      proceedings of the Member and the Managers. The Fiscal Year shall be the
      accounting year of the Company.

     

    SECTION
      7.06   Reports.
      Within
      sixty days following the end of each Fiscal Year during the term of the Company,
      the Managers shall cause to be furnished to the Member a balance sheet, an
      income statement and a statement of changes in the Member’s capital account for,
      or as of the end of, that Fiscal Year. Such financial statements shall be
      prepared in accordance with the accounting method selected by the Managers
      consistently applied (except as therein noted), and shall be accompanied by
      an
      audit report from a nationally recognized accounting firm. The Managers also
      may
      cause to be prepared or delivered such other reports as they may deem
      appropriate. The Company shall bear the costs of all such financial statements
      and reports.

     

    SECTION
      7.07   Bank
      and Investment Accounts.
      The
      Managers shall establish and maintain one or more separate bank and investment
      accounts and arrangements for Company funds in the Company name with such
      financial institutions and firms as the Managers determine.

     

    ARTICLE
      VIII

    INDEMNIFICATION

     

    SECTION
      8.01   Mandatory
      Indemnification of the Member, the Special Members and the
      Managers.
      Any
      Person who was or is a party or is threatened to be made a party to, or is
      involved in, any threatened, pending or completed suit in equity, action at
      law
      or other judicial or administrative proceeding (hereafter a “Proceeding”), or
      any appeal in such a Proceeding or any inquiry or investigation that could
      lead
      to such a Proceeding, by reason of the fact that such Person is or was the
      Member, a Special Member or a Manager, or by reason of the fact that the Member,
      such Special Member or such Manager is or was serving at the request of the
      Company as a member, director, manager, officer, partner, venturer, proprietor,
      trustee, employee, agent or similar functionary of another foreign or domestic
      corporation, limited liability company, partnership, joint venture, trust,
      sole
      proprietorship, employee benefit plan or other enterprise, shall be indemnified
      by the Company to the fullest extent permitted by applicable law, as the same
      exists or may hereafter be amended (but, in the case of any such amendment,
      only
      to the extent that such amendment permits the Company to provide greater or
      broader indemnification rights than such law permitted the Company to provide
      prior to such amendment) against judgments, penalties (including, without
      limitation, excise and similar taxes and punitive damages), fines, settlements
      and reasonable expenses (including, without limitation, reasonable attorneys’
fees) actually incurred by such Person in connection with such Proceeding;
provided,
      that such
      judgments, penalties, settlements, fines or other expenses are not directly
      caused by the negligence or willful misconduct of such Person except that such
      Person shall be 

     

    
      
        
        

      

      
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    liable
      for (i) liabilities arising from the failure by such Person to perform
      obligations expressly undertaken by it in this Agreement; and (ii) taxes,
      fees or other charges, based on or measured by any fees, commissions or
      compensation received by such Person in connection with the transactions
      described in this Agreement and the Basic Documents. It is expressly
      acknowledged that the indemnification provided in this Article VIII could
      involve indemnification under theories of strict liability. Notwithstanding
      anything herein to the contrary, including the provisions of Section 8.02,
      for
      so long as any Environmental Control Bonds are outstanding, no payment from
      funds of the Company (as distinct from funds from other sources, such as
      insurance) of any indemnity of the Member, any Special Member or any Manager
      under this Article VIII shall be payable except out of funds available for
      payment of Company expenses as provided in the Indenture.

     

    SECTION
      8.02   Mandatory
      Advancement of Expenses.
      Expenses incurred by a Person of the type entitled to be indemnified under
      Section 8.01 in defending any Proceeding shall be paid or reimbursed by the
      Company in advance of the final disposition of the Proceeding, without any
      determination as to such Person’s ultimate entitlement to indemnification under
      Section 8.01, upon receipt of a written affirmation by such Person of such
      Person’s good faith belief that such Person has met the standard of conduct
      necessary for indemnification under this Agreement and a written undertaking
      by
      or on behalf of such Person to repay all amounts so advanced if it shall
      ultimately be determined that such Person is not entitled to be indemnified
      by
      the Company as authorized in Section 8.01 or otherwise. The written undertaking
      shall be an unlimited general obligation of the Person but need not be secured
      and shall be accepted without reference to financial ability to make
      repayment.

     

    SECTION
      8.03   Indemnification
      of Officers, Employees and Agents.
      To the
      fullest extent permitted by law, the Company shall indemnify and pay and advance
      expenses to an officer, employee or agent of the Company to the same extent
      and
      subject to the same conditions under which it may indemnify and pay and advance
      expenses to the Member, any Special Member or any Manager under this Article
      VIII; and, to the fullest extent permitted by law, the Company shall indemnify
      and pay and advance expenses to any Person who is or was an officer, employee
      or
      agent of the Company and who is or was serving at the request of the Company
      as
      a member, manager, director, officer, partner, venturer, proprietor, trustee,
      employee, agent or similar functionary of another foreign or domestic limited
      liability company, corporation, partnership, joint venture, sole proprietorship,
      trust, employee benefit plan or other enterprise against any liability asserted
      against such Person and incurred by such Person in such a capacity or arising
      out of such Person’s status as such to the same extent and subject to the same
      conditions that the Company may indemnify and pay and advance expenses to the
      Member, any Special Member or any Manager under this Article VIII.

     

    
      SECTION
        8.04   Nonexclusivity
        of Rights.
        Subject
        to Section 8.01, the indemnification and advancement and payment of expenses
        provided by this Article VIII:

       

      (a)  shall
        not
        be deemed exclusive of any other rights to which the Member, a Special Member,
        a
        Manager or other Person seeking indemnification may be entitled under any
        statute, agreement, decision of the Member or disinterested Managers, or
        otherwise both as to action in such Person’s official capacity and as to action
        in another capacity while holding such office;

    

     

    
      
        
        

      

      
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    (b)  shall
      continue as to any Person who has ceased to serve in the capacity which
      initially entitled such Person to indemnity and advancement and payment of
      expenses;

     

    (c)  shall
      inure to the benefit of the heirs, executors, administrators, successors and
      assigns of the Member, such Special Member, such Manager or such other
      Person;

     

    (d)  shall
      not
      exclude any other rights to which a Person seeking indemnification or
      advancement of expenses may be entitled under any agreement, decision of the
      Member, disinterested Managers or otherwise, for either an action of the Member,
      any Special Member or any Manager, officer, employee or agent in the official
      capacity of such Person or an action in another capacity while holding such
      position, except that indemnification, unless ordered by a court, may not be
      made to or on behalf of the Member, any Special Member or any Manager if a
      final
      adjudication established that such Person’s acts or omissions involved gross
      negligence or willful misconduct; and

     

    (e)  shall
      continue for a Person who has ceased to be the Member, a Special Member or
      a
      Manager, officer, employee or agent and inures to the benefit of the heirs,
      executors, administrators, successors and assigns of such a Person.

     

    SECTION
      8.05   Contract
      Rights.
      The
      rights granted pursuant to this Article VIII shall be deemed to be contract
      rights, and no amendment, modification or repeal of this Article VIII shall
      have
      the effect of limiting or denying any such rights with respect to actions taken
      or Proceedings arising prior to any such amendment, modification or
      repeal.

     

    SECTION
      8.06   Insurance.
      The
      Company may purchase and maintain insurance or other arrangement or both, at
      its
      expense, on behalf of itself or any Person who is or was serving as the Member,
      a Special Member or a Manager, officer, employee or agent of the Company or
      as
      an officer, employee or agent of the Member, or is or was serving at the request
      of the Company as a member, manager, director, officer, partner, venturer,
      proprietor, trustee, employee, agent or similar functionary of another foreign
      or domestic limited liability company, partnership, corporation, joint venture,
      sole proprietorship, trust, employee benefit plan or other enterprise, against
      any liability, expense or loss, whether or not the Company would have the power
      to indemnify such Person against such liability under the provisions of this
      Article VIII.

     

    SECTION
      8.07   Savings
      Clause.
      If this
      Article VIII or any portion of this Agreement shall be invalidated on any ground
      by any court of competent jurisdiction, then the Company shall nevertheless
      indemnify and hold harmless the Member, each Special Member, each Manager or
      any
      other Person indemnified pursuant to this Article VIII as to costs, charges
      and
      expenses (including, without limitation, attorneys’ fees), judgments, fines and
      amounts paid in settlement with respect to any action, suit or
      proceeding, whether civil, criminal, administrative or investigative, to the
      fullest extent permitted by any applicable portion of this Article VIII that
      shall not have been invalidated and to the fullest extent permitted by
      applicable law.
       

      SECTION
        8.08   Other
        Ventures.
        Notwithstanding any other provision at law or in equity, it is expressly
        agreed
        that the Member, any Special Member, any Manager and any Affiliates, officers,
        directors, managers, stockholders, partners or employees of the Member, any
        

    

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    Special
      Member or any Manager, may engage in other business ventures of every nature
      and
      description, whether or not in competition with the Company, independently
      or
      with others, and the Company shall not have any rights in and to any independent
      venture or activity or the income or profits derived therefrom.

     

    SECTION
      8.09   Survival.
      The
      foregoing provisions of this Article VIII shall survive any termination of
      the
      Company or this Agreement. 

     

    ARTICLE
      IX

    MISCELLANEOUS
      PROVISIONS

     

    SECTION
      9.01   Offset.
      Whenever the Company is to pay any sum to the Member, any amounts the Member
      owes the Company may be deducted from such sum before payment.

     

    SECTION
      9.02   Notices.
      Except
      as expressly set forth to the contrary in this Agreement, all notices, requests
      or consents provided for or permitted to be given under this Agreement shall
      be
      in writing and shall be given either by depositing such writing in the United
      States mail, addressed to the recipient, postage paid, and registered or
      certified with return receipt requested or by delivering such writing to the
      recipient in person, by reputable overnight courier, or by facsimile or
      electronic transmission; and a notice, request or consent given under this
      Agreement shall be effective on receipt by the Person to whom sent. All notices,
      requests and consents to be sent to the Member shall be sent to or made to
      MP
      Renaissance Funding, LLC, 2215-B Renaissance Drive, Suite #5, Las Vegas, Nevada
      89119 or such other address as the Member may specify by notice to the
      Company and the Managers. Any notice, request or consent to the Company or
      the
      Managers must be given to the Managers at the following address: MP
      Environmental Funding LLC, 2215-B Renaissance Drive, Suite #5, Las Vegas, Nevada
      89119. Whenever any notice is required to be given by law or this Agreement,
      a
      written waiver thereof, signed by the Person entitled to notice, whether before
      or after the time stated therein, shall be deemed equivalent to the giving
      of
      such notice.

     

    SECTION
      9.03   Effect
      of Waiver or Consent.
      A
      waiver or consent, express or implied, to or of any breach or default by any
      Person in the performance by such Person of its obligations with respect to
      the
      Company shall not be a consent or waiver to or of any other breach or default
      in
      the performance by such Person of the same or any other obligations of such
      Person with respect to the Company.

     

    SECTION
      9.04   Governing
      Law; Severability.
      This
      Agreement shall be governed by and shall be construed in accordance with the
      law
      of the State of Delaware, 
      excluding
        any conflict-of-laws rule or principle that
        might refer the governance or the construction of this Agreement to the law
        of
        another jurisdiction. If there is a direct conflict between the provisions
        of
        this Agreement and any mandatory and non-modifiable provision of the LLC
        Act,
        then the applicable provision of the LLC Act shall control. If any provision
        of
        this Agreement or the application thereof to any Person or circumstance is
        held
        invalid or unenforceable to any extent, the remainder of this Agreement and
        the
        application of that provision to other Persons or circumstances shall not
        be
        affected thereby and such provision shall be enforced to the fullest extent
        permitted by law.

    

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    SECTION
      9.05   No
      Bankruptcy Petition; No Dissolution.

     

    (a)  Each
      Member, each Special Member and each Manager hereby covenants and agrees (or
      shall be deemed to have hereby covenanted and agreed) that it shall not, prior
      to the date which is one year and one day after the termination of the
      Indenture, or the termination of any other indenture pursuant to which any
      Additional Securities are issued, and the payment in full of all Series of
      the
      Environmental Control Bonds or Additional Securities and any other amounts
      owed
      under the Indenture or other indenture pursuant to which any Additional
      Securities are issued, including, without limitation, any amounts owed to
      third-party credit enhancers, consent to, or make application for, or institute
      or maintain any action for, the Company to invoke the process of any court
      or
      government authority for the purpose of commencing or sustaining an involuntary
      case against the Company 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 Company or of all or any
      substantial part of the property of the Company, or to the fullest extent
      permitted by law ordering the winding up or liquidation of the affairs of the
      Company; provided,
      however,
      that
      nothing in this Section 9.05 shall constitute a waiver of any right to
      indemnification, reimbursement or other payment from the Company pursuant to
      this Agreement.

     

    (b)
        To
      the
      fullest extent permitted by law, each Member, each Special Member and each
      Manager hereby covenants and agrees (or shall be deemed to have hereby
      covenanted and agreed) that, until the termination of the Indenture, or other
      termination of any other indenture pursuant to which any Additional Securities
      are issued, and the payment in full of all Series of the Environmental Control
      Bonds and Additional Securities and any other amounts owed under the Indenture
      or other indenture pursuant to which any Additional Securities are issued,
      including, without limitation, any amounts owed to third-party credit enhancers,
      the Member, such Special Member and such Manager will not consent to, or make
      application for, or institute or maintain any action for, the dissolution of
      the
      Company under Section 18-801 or 18-802 of the LLC Act or otherwise.

     

    (c)
        In
      the
      event that the Member, any Special Member or any Manager takes action in
      violation of this Section 9.05, the Company agrees that it will file an answer
      with the court or otherwise properly contest the taking of such action and
      raise
      the defense that the Member, the Special Member or the Manager, as the case
      may
      be, has agreed in writing not to take such action and should be estopped and
      precluded therefrom and such other defenses, if any, as its counsel advises
      that
      it may assert.

    
       

      (d)
          The
        provisions of this Section 9.05 shall survive the termination of this Agreement
        and the resignation, withdrawal or removal of the Member, any Special Member
        or
        any Manager. Nothing herein contained shall preclude participation by the
        Member, any Special Member or a Manager in assertion or defense of its claims
        in
        any such proceeding involving the Company.

       

      SECTION
        9.06   Amendment.
        This
        Agreement may not be amended, except in writing by the Member, upon prior
        approval of the Trustee and with prior notice to the Rating Agencies and
        notification from each of Moody’s, Fitch and S&P, or their respective
        successors, to the Company, that such amendment will not result in a reduction
        or withdrawal of the then 

    

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    current
      rating by any such Rating Agency of any outstanding Series or Tranche of
      Environmental Control Bonds (except that with regard to Moody’s and Fitch, it
      will be sufficient to provide ten days’ written notice of the
      amendment).

     

    SECTION
      9.07   Headings
      and Sections.
      The
      headings in this Agreement are inserted for convenience only and are in no
      way
      intended to describe, interpret, define or limit the scope, extent or intent
      of
      this Agreement or any provision hereof.

     

    SECTION
      9.08   Binding
      Agreement.
      Notwithstanding any other provision of this Agreement, the Member agrees that
      this Agreement constitutes a legal, valid and binding agreement of the Member,
      and is enforceable against the Member by the Independent Managers, in accordance
      with its terms. In addition, the Independent Managers shall be intended
      beneficiaries of this Agreement.

     

    SECTION
      9.09   Dissolution.
      The
      Company shall be dissolved, and its affairs shall be wound up, upon the first
      to
      occur of the following: (i) the termination of the legal existence of the last
      remaining member of the Company or the occurrence of any other event which
      terminates the continued membership of the last remaining member of the Company
      in the Company unless the Company is continued without dissolution in a manner
      permitted by this Agreement or by the LLC Act; or (ii) the entry of a decree
      of
      judicial dissolution under Section 18-802 of the LLC Act.

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF,
      this
      Agreement is hereby executed by the undersigned as of April 11,
      2007.

     

     

    MEMBER:

    

    MP
      RENAISSANCE FUNDING, LLC

    

    By:          /s/
      Kristine W. Eppes                          

Name:
      Kristine W. Eppes
Title:  
      Vice President, Treasurer and Secretary

    

    

    Agreed
      and Consented to by the Independent Managers:

    

                 
      /s/ Kari L. Johnson                               
Name: 
      Kari L. Johnson

    

                
      /s/ Darryl E. Smith                          
      
Name: 
      Darryl E. Smith

    

    
      
        
        

      

      
        Signature
          Page to Amended and Restated LLC Agreement

        
          

        

      

      
        
        

      

    

    SCHEDULE
      A

     

    SCHEDULE
      OF INITIAL CAPITAL CONTRIBUTION OF MEMBER

     

    COMMON
      INTEREST

     

    
      	
              MEMBER’S
                NAME

            	 	
              INITIAL
                CAPITAL

              CONTRIBUTION*

            	 	
              COMMON
                INTEREST PERCENTAGE

            	 
	
              MP
                Renaissance Funding, LLC

            	 	 	
              $1,722,375 

            	 	 	
              100%

            	
               

            	 

    

    

    

    _________

    *
      0.50%
      of original principal amount of the Environmental Control Bonds.

    

    
      
        
        

      

      
        A-1

        
          

        

      

      
        
        

      

    

    SCHEDULE
      B

     

    MANAGERS

     

    Names

    

    
      	
              1.

            	
              Paul
                J. Evanson

            

    

     

    
      	
              2.

            	
              David
                E. Flitman

            

    

     

    
      	
              3.

            	
              Philip
                L. Goulding

            

    

     

    
      	
              4.

            	Kari L. Johnson

    

     

    
      	
              5.

            	Darryl E. Smith

    

     

    
      
        
        

      

      
        B-1

        
          

        

      

      
        
        

      

    

    SCHEDULE
      C

     

    OFFICERS

     

    
      	
              Names

            	 	
              Office

            
	 	 	 
	
              Paul
                J. Evanson

            	 	
              Chief
                Executive Officer

            
	 	 	 
	
              Philip
                L. Goulding

            	 	
              Vice
                President

            
	 	 	 
	
              Thomas
                R. Gardner

            	 	
              Controller

            

    

    

     

     

    
      
        
        

      

      
        C-1

        
          

        

      

      
        
        

      

       

    

    SCHEDULE
      D

     

    Management
      Agreement

     

    ________
      __, 200_

     

    MP
      Environmental Funding LLC 

     

    [                                   
      ]

     

     

    
      	 	Re:	Management Agreement 
	 	 	 
	 	 	MP Environmental Funding
              LLC

    

     

    Ladies
      and Gentlemen:

     

    For
      good
      and valuable consideration, each of the undersigned persons, who have been
      designated as managers of MP Environmental Funding LLC, a Delaware limited
      liability company (the “Company”), in accordance with the Amended and Restated
      Limited Liability Company Agreement of the Company, dated as of April 11, 2007,
      as it may be amended or restated from time to time (the “LLC Agreement”), hereby
      agree as follows:

     

    1. Each
      of
      the undersigned accepts such person’s rights and authority as a Manager (as
      defined in the LLC Agreement) under the LLC Agreement and agrees to perform
      and
      discharge such person’s duties and obligations as a Manager under the LLC
      Agreement, and further agrees that such rights, authorities, duties and
      obligations under the LLC Agreement shall continue until such person’s successor
      as a Manager is designated or until such person’s resignation or removal as a
      Manager in accordance with the LLC Agreement. Each of the undersigned agrees
      and
      acknowledges that he has been designated as a “manager” of the Company within
      the meaning of the Delaware Limited Liability Company Act.

     

    2. THIS
      MANAGEMENT AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
      THE
      LAWS OF THE STATE OF DELAWARE, AND ALL RIGHTS AND REMEDIES SHALL BE GOVERNED
      BY
      SUCH LAWS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.

     

    
      
        
        

      

      
        D-1

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the undersigned have executed this Management Agreement as
      of
      the day and year first above written.

     

    _________________________________________

    Name:
      

     

    _________________________________________

    Name:
      

     

    _________________________________________

    Name:
      

     

    _________________________________________

    Name:
      

     

    _________________________________________

    Name:
      

     

    
      
        
        

      

      
        D-2PE Environmental Control Property Transfer Agreement

     

    Exhibit
      10.6

     

    EXECUTION
      COPY

     

     

    
      

    

     

     

    
      ENVIRONMENTAL
        CONTROL PROPERTY 

      TRANSFER
        AGREEMENT

       

      between

       

      PE
        RENAISSANCE FUNDING, LLC 

      Seller

       

      and

       

      THE
        POTOMAC EDISON 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

              	
                5

              
	
                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 PE RENAISSANCE FUNDING, LLC, a Delaware limited liability company
          (the
“Seller”),
          and
          THE POTOMAC EDISON COMPANY, a Virginia and Maryland 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).
        

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      (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;

       

      
        
          
          

        

        
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      (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 States of Maryland and Virginia, 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

       

      
        
          
          

        

        
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      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 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

       

      
        
          
          

        

        
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      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. 

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

      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

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

      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

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

       

       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.

       

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

       

      (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 The Potomac Edison Company, 800 Cabin Hill Drive, Greensburg,
          Pennsylvania 15601, Attention of Amanda J. Skov, Esq., (b) in the case of
          the Seller, to PE 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 PE 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.

       

      
        	 	
                PE
                  RENAISSANCE FUNDING, LLC,

                Seller,

                 

                 

              
	 	
                by:

              	/s/
                Kristine W. Eppes 
	 	 	
                Title: 
                  Vice President, Treasuer and Secretary

              
	 	 	
                 

                 

              
	 	
                THE
                  POTOMAC EDISON COMPANY,

                Transferor,

                 

                 

              
	 	
                by:

              	/s/
                Philip L. Goulding
	 	 	
                Title: 
                  Vice President

              
	 	 	
                 

                 

              
	 	
                Acknowledged
                  and Accepted:

                 

                PE
                  ENVIRONMENTAL FUNDING LLC,

                as
                  Issuer of the Environmental Control Bonds,

                 

                 

              
	 	
                by:

              	/s/
                Philip L. 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

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