SEC FILE NO. 70-8403
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
CERTIFICATE PURSUANT TO
RULE 24
OF COMPLETION OF
TRANSACTIONS
PENNSYLVANIA ELECTRIC COMPANY
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
In the Matter of )
Pennsylvania Electric Company ) Certificate Pursuant
SEC File No. 70-8403 ) to Rule 24 of
) Completion of
(Public Utility Holding ) Transactions
Company Act of 1935) )
)
)
TO THE MEMBERS OF THE SECURITIES AND EXCHANGE COMMISSION:
The undersigned, Pennsylvania Electric Company ("Penelec"), hereby
certifies pursuant to Rule 24 of the General Rules and Regulations under the
Public Utility Holding Company Act of 1935, as amended, that the transactions
authorized by the Commission's Order, dated June 24, 1994 (HCAR No. 26071), and
Supplemental Order, dated June 27, 1994 (HCAR No. 26073), have been carried out
in accordance with the terms and conditions of, and for the purposes represented
by, the Application, as amended and post-effectively amended, in SEC File No.
70-8403, as follows:
1. On July 16, 1999 (the "Redemption Date"), Penelec Capital L.P.
("Penelec Capital") redeemed its 4,200,000 outstanding 8 3/4% Monthly Income
Preferred Securities, Series A ("Preferred Securities") at a redemption price of
$25.00 per Preferred Security, plus $.09115 of accumulated and unpaid
distributions per Preferred Security to the Redemption Date. From the Redemption
Date, such Preferred Securities are no longer deemed to be outstanding and all
rights with respect to such Preferred Securities have terminated, except only
the right to receive, from and after the Redemption Date, the redemption price
thereof, without interest.
2. On August 31, 1999, Penelec and Penelec Capital filed with the
Commission a request for withdrawal of the Registration Statement Nos. 33-53677
and 33-53677-01 registering the Preferred Securities. As a result, Penelec
Capital will not issue the remainder of the registered Preferred Securities.
1
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3. The following exhibits are filed in Item 6:
F-1(a) "Past-tense" opinion of Berlack, Israels & Liberman LLP.
F-2(a) "Past-tense" opinion of Ryan, Russell, Ogden & Seltzer
LLP.
F-3(a) "Past-tense" opinion of Richards, Layton & Finger P.A.
2
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SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE PUBLIC UTILITY HOLDING COMPANY ACT OF
1935, THE UNDERSIGNED COMPANY HAS DULY CAUSED THIS STATEMENT TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED THEREUNTO DULY AUTHORIZED.
PENNSYLVANIA ELECTRIC COMPANY
/s/ T. G. Howson
---------------------------
T.G. Howson,
Vice President and Treasurer
Date: August 31, 1999
3
EXHIBITS TO BE FILED BY EDGAR
Exhibits
F-1(a) "Past-tense" opinion of Berlack, Israels & Liberman LLP.
F-2(a) "Past-tense" opinion of Ryan, Russell, Ogden & Seltzer
LLP.
F-3(a) "Past-tense" opinion of Richards, Layton & Finger P.A.
[BERLACK, ISRAELS & LIBERMAN LLP LETTERHEAD]
Exhibit F-1(a)
--------------
August 31, 1999
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Pennsylvania Electric Company
Application on Form U-1
SEC File No. 70-8403
-----------------------------
Ladies and Gentlemen:
We refer to our opinion, dated June 2, 1994, filed as Exhibit F-1 to
Amendment No. 3, dated the same date, to the Application on Form U-1, dated
March 30, 1994, as amended, under the Public Utility Holding Company Act of 1935
(the "Act"), filed by Pennsylvania Electric Company, a Pennsylvania corporation
("Penelec"), with the Securities and Exchange Commission (the "Commission") and
docketed in SEC File No. 70-8403. (The Application, as thus amended, is
hereinafter referred to as the "Application").
The Application contemplated, among other things, the organization
by Penelec of a special purpose Delaware corporate subsidiary, Penelec Preferred
Capital, Inc., to become the sole general partner of a newly formed Delaware
limited partnership, Penelec Capital, L.P. ("Penelec Capital"), the issuance and
sale by Penelec Capital of up to 5,000,000 preferred securities, representing
preferred limited partner interests (the "Preferred Securities"), the proceeds
of which, together with the capital contribution of the general partner, would
be used to purchase subordinated debentures issued by Penelec (the "Subordinated
Debentures"). Penelec would guarantee (the "Guarantee") the payment by Penelec
Capital of distributions on the Preferred Securities and of amounts due upon
liquidation of Penelec Capital or redemption of the Preferred Securities, all to
the extent set forth in the Guarantee. The Preferred Securities would be issued
by Penelec Capital pursuant to an Amended and Restated Limited Partnership
Agreement and one or more Actions thereunder (collectively, the "Limited
Partnership Agreement") and the Subordinated Debentures would be issued by
Penelec pursuant to an indenture between Penelec and United States Trust Company
of New York, as Trustee (the "Indenture").
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Securities and Exchange Commission
August 31, 1999
Page 2
For many years, we have participated in various proceedings related
to the issuance and sale of securities by Penelec, its parent, GPU, Inc., and
its affiliates, Metropolitan Edison Company and Jersey Central Power & Light
Company, and we are familiar with the terms of the outstanding securities of the
corporations comprising the GPU holding company system.
In addition to the examination recited in the aforesaid opinion, we
have examined a signed copy of your Commission's Order, dated June 24, 1994,
forthwith permitting the Application, as then amended, to become effective. We
attended the closing of the transactions contemplated by the Application and
examined the various instruments, documents, agreements and certificates
executed and delivered at the closing. We have also examined a copy of the
Company's Certificate Pursuant to Rule 24 of Completion of Transactions, dated
this date, under the Act, with which this opinion is being filed, certifying to
the completion of the transactions proposed in the Application.
With respect to all matters of Pennsylvania law, we have relied upon
the opinion of Ryan, Russell, Ogden & Seltzer LLP and, with respect to all
matters of Delaware law, we have relied upon the opinion of Richards, Layton &
Finger, P.A., which opinions are being filed as Exhibits F-2(a) and F-3(a),
respectively, to the aforesaid Rule 24 Certificate.
Based upon the foregoing, and assuming that all action under state
"Blue Sky" laws to permit the consummation of the subject transactions has been
completed, we are of the opinion that:
(a) All State laws applicable to the proposed transactions have been
complied with;
(b) At the time of the proposed transactions, Penelec Capital, the
issuer of the Preferred Securities, was duly formed and validly existing
in good standing as a limited partnership;
(c) Penelec, the issuer of the Subordinated Debentures and the
Guarantee, is validly organized and duly existing;
(d) The Preferred Securities were validly issued, fully paid and
non-assessable limited partner interests, and the holders thereof were
entitled to the rights and privileges appertaining thereto set forth in
the Limited Partnership Agreement;
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Securities and Exchange Commission
August 31, 1999
Page 3
(e) The Subordinated Debentures were valid and binding obligations
of Penelec in accordance with their terms, and the Guarantee was the valid
and binding obligation of Penelec in accordance with its terms subject, in
each case, to applicable bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium and other laws affecting creditors'
rights generally (including, without limitation, the Atomic Energy Act and
applicable regulations of the Nuclear Regulatory Commission thereunder)
and general equitable principles; and
(f) The consummation of the proposed transactions did not violate
the legal rights of the holders of any securities issued by Penelec or any
"associate company" thereof, as defined in the Act.
We hereby consent to the filing of this opinion as an exhibit to the
Rule 24 Certificate and in any proceedings before the Commission that may be
held in connection therewith.
Very truly yours,
BERLACK, ISRAELS & LIBERMAN LLP
[RYAN, RUSSELL, OGDEN & SELTZER LLP LETTERHEAD]
Exhibit F-2(a)
--------------
August 31, 1999
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Pennsylvania Electric Company
Application on Form U-1
SEC File No. 70-8403
-----------------------------
Ladies and Gentlemen:
We refer to the opinion, dated June 2, 1994, filed as Exhibit F-2 to
Amendment No. 3, dated the same date, to the Application on Form U-1, dated
March 30, 1994, as amended, under the Public Utility Holding Company Act of 1935
(the "Act"), filed by Pennsylvania Electric Company, a Pennsylvania corporation
("Penelec"), with the Securities and Exchange Commission (the "Commission") and
docketed in SEC File No. 70-8403. (The Application, as thus amended, is
hereinafter referred to as the "Application").
The Application contemplated, among other things, the organization
by Penelec of a special purpose Delaware corporate subsidiary, Penelec Preferred
Capital, Inc., to become the sole general partner of a newly formed Delaware
limited partnership, Penelec Capital, L.P. ("Penelec Capital"), the issuance and
sale by Penelec Capital of up to 5,000,000 preferred securities, representing
preferred limited partner interests(the "Preferred Securities"), the proceeds of
which, together with the capital contribution of the general partner, would be
used to purchase subordinated debentures issued by Penelec (the "Subordinated
Debentures"). Penelec would guarantee (the "Guarantee") the payment by Penelec
Capital of distributions on the Preferred Securities and of amounts due upon
liquidation of Penelec Capital or redemption of the Preferred Securities, all to
the extent set forth in the Guarantee. The Preferred Securities would be issued
by Penelec Capital pursuant to an Amended and Restated Limited Partnership
Agreement and one or more Actions thereunder (collectively, the "Limited
Partnership Agreement") and the Subordinated Debentures would be issued by
Penelec pursuant to an indenture between Penelec and United States Trust Company
of New York, as Trustee (the "Indenture").
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Securities and Exchange Commission
August 31, 1999
Page 2
We are familiar with the corporate history of Penelec and the terms
of its outstanding securities. We have also examined such other instruments,
agreements and documents and made such further investigation as we have deemed
necessary as a basis for this opinion.
This opinion is limited to the laws of the Commonwealth of
Pennsylvania, and we have not considered and express no opinion on the laws of
any other jurisdiction, including federal laws and rules and regulations
relating thereto. Our opinions are rendered only with respect to Pennsylvania
laws and rules, regulations and orders thereunder which are currently in effect.
Based upon the foregoing, and assuming that all action under state
"Blue Sky" laws to permit the consummation of the subject transactions has been
completed, we are of the opinion that:
(a) All Pennsylvania laws applicable to the proposed transactions
have been complied with;
(b) At the time of the proposed transactions, Penelec Capital, the
issuer of the Preferred Securities, was duly formed and validly existing
in good standing as a limited partnership;
(c) Penelec, the issuer of the Subordinated Debentures and the
Guarantee, is validly organized and duly existing;
(d) The Preferred Securities were validly issued, fully paid and
non-assessable limited partner interests, and the holders thereof were
entitled to the rights and privileges appertaining thereto set forth in
the Limited Partnership Agreement;
(e) The Subordinated Debentures were valid and binding obligations
of Penelec in accordance with their terms, and the Guarantee was the valid
and binding obligation of Penelec in accordance with its terms subject, in
each case, to applicable bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium and other laws affecting creditors'
rights generally (including, without limitation, the Atomic Energy Act and
applicable regulations of the Nuclear Regulatory Commission thereunder)
and general equitable principles; and
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Securities and Exchange Commission
August 31, 1999
Page 3
(f) The consummation of the proposed transactions did not violate
the legal rights of the holders of any securities issued by Penelec or its
subsidiaries, Ninevah Water Company, Penelec Capital and Penelec Capital
II, L.P.
We hereby consent to the filing of this opinion as an exhibit to the
Rule 24 Certificate and in any proceedings before the Commission that may be
held in connection therewith. The firm of Berlack, Israels & Liberman LLP is
authorized to rely on this opinion for the purpose of rendering its opinion,
dated the date hereof, which is being filed as Exhibit F-1 (a) to the
Application. Except as stated above, without our prior written consent, this
opinion may not be furnished or quoted to, or relied upon by, any other person
or entity for any purpose.
Very truly yours,
RYAN, RUSSELL, OGDEN & SELTZER LLP
[Letterhead of Richards, Layton & Finger, P.A.]
Exhibit F-3(a)
--------------
August 31, 1999
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Pennsylvania Electric Company
Application on Form U-1
SEC File No. 70-8403
-----------------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for Penelec Capital, L.P.,
a Delaware limited partnership (the "Partnership"), in connection with the
matters set forth herein. At the Partnership's request, this opinion is being
furnished to you. Initially capitalized terms used herein and not otherwise
defined are used as defined in the LP Agreement (as defined below).
The Application (as defined below) contemplated, among other things,
(i) the organization by Pennsylvania Electric Company, a Pennsylvania
corporation ("Pennsylvania Electric"), of Penelec Preferred Capital, Inc., a
Delaware corporation (the "General Partner"), to become the sole general partner
of the Partnership, and (ii) the issuance and sale by the Partnership of up to
5,000,000 Preferred Partner Interests. The issuance and sale on July 5, 1999, by
the Partnership of the Preferred Partner Interests pursuant to the LP Agreement
are hereinafter referred to as the "Transaction."
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
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Securities and Exchange Commission
August 31, 1999
Page 2
(a) The Certificate of Limited Partnership of the Partnership, dated
as of May 10, 1994 (the "Partnership Certificate"), as filed in the office of
the Secretary of State of the State of Delaware (the "Secretary of State") on
May 10, 1994;
(b) The Limited Partnership Agreement of the Partnership, dated as
of May 10, 1994;
(c) The Application on Form U-1, dated March 30, 1994 (the "Original
Application"), under the Public Utility Holding Company Act of 1935, filed by
Pennsylvania Electric Company with the Securities and Exchange Commission and
docketed in SEC File No. 70-8403, as amended by Amendment No. 1 to the Original
Application, dated April 12, 1994, Amendment No. 2 to the Original Application,
dated May 6, 1994, and Amendment No. 3 to the Original Application, dated June
2, 1994 (as so amended, the "Application");
(d) The Certificate Pursuant to Rule 24 of Completion of
Transactions, dated August 31, 1999 (the "Rule 24 Certificate");
(e) The Amended and Restated Limited Partnership Agreement of the
Partnership, dated as of June 27, 1994 (the "Agreement");
(f) The Action of the General Partner, dated as of June 27, 1994
(the "Action"), relating to the Preferred Partner Interests;
(g) The Certificate of Incorporation of the General Partner, dated
May 6, 1994 (the "Certificate of Incorporation"), as filed in the office of the
Secretary of State on May 9, 1994;
(h) The By-Laws of the General Partner (the "By-Laws");
(i) A certificate of an officer of the General Partner;
(j) A Certificate of Good Standing for the Partnership, dated July
5, 1994, obtained from the Secretary of State; and
(k) A Certificate of Good Standing for the General Partner, dated
July 5, 1994, obtained from the Secretary of State.
The Agreement as amended and supplemented by the Action is
referred to as the "LP Agreement."
For purposes of this opinion, we have not reviewed any documents
other than the documents listed in paragraphs (a) through (k) above. In
particular, we have not reviewed any document (other
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Securities and Exchange Commission
August 31, 1999
Page 3
than the documents listed in paragraphs (a) through (k) above) that is referred
to in or incorporated by reference into the LP Agreement or the Application. We
have assumed that there exists no provision in any document that we have not
reviewed that is inconsistent with the opinions stated herein. We have conducted
no independent factual investigation of our own but rather have relied solely
upon the foregoing documents, the statements and information set forth therein
and the additional matters recited or assumed herein, all of which we have
assumed to be true, complete and accurate in all material respects.
With respect to all documents examined by us, we have assumed (i)
the authenticity of all documents submitted to us as authentic originals, (ii)
the conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the LP
Agreement constituted at the time of the Transaction and constitutes the entire
agreement among the parties thereto with respect to the subject matter thereof,
including with respect to the admission of partners to, and the creation,
operation and termination of, the Partnership, and that the LP Agreement and the
Partnership Certificate were at the time of the Transaction and are in full
force and effect and have not been amended, (ii) that on or prior to the
consummation of the Transaction, the Board of Directors of the General Partner
duly adopted resolutions (collectively, the "Resolutions") authorizing the
General Partner's execution and delivery of, and the performance of its
obligations under, the LP Agreement, (iii) that the Certificate of Incorporation
and the By-Laws were at the time of the Transaction and are in full force and
effect and have not been amended, (iv) except to the extent provided in
paragraph 2 below, the due organization or due formation, as the case may be,
and valid existence in good standing of each party to the documents examined by
us under the laws of the jurisdiction governing its organization or formation,
(v) the legal capacity of natural persons who were at the time of the
Transaction or are parties to the documents examined by us, (vi) except to the
extent set forth in the last sentence of paragraph 3 below, that each of the
parties to the documents examined by us had at the time of the Transaction and
has the power and authority to execute and deliver, and to perform its
obligations under, such documents, (vii) the due authorization, execution and
delivery by all parties thereto of all documents examined by us, including the
LP Agreement, (viii) at the time of the Transaction, the receipt by each
Preferred Partner of a Certificate and the payment for the Preferred Partner
Interests
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Securities and Exchange Commission
August 31, 1999
Page 4
acquired by it, in accordance with the LP Agreement, (ix) that the books and
records of the Partnership had set forth at the time of the Transaction and set
forth all information required by the LP Agreement and the Delaware Revised
Uniform Limited Partnership Act (6 Del. C. Section 17-101, et seq.), including
all information with respect to all Persons admitted as Partners and their
contributions to the Partnership, (x) that at the time of the Transaction, the
Preferred Partner Interests were issued and sold to the Preferred Partners in
accordance with the LP Agreement, (xi) that the Preferred Partners, as limited
partners of the Partnership, have taken no action other than actions required or
permitted by the LP Agreement and have exercised no rights or powers other than
rights and powers the exercise of which are required or permitted by the LP
Agreement, and (xii) that neither the Partnership, the General Partner nor
Pennsylvania Electric Company have at any time derived income from or connected
with sources within the State of Delaware or have had any assets, activities
(other than the Partnership's and the General Partner's maintenance of a
registered office and registered agent in the State of Delaware and the
Partnership's and the General Partner's filing of documents with the Secretary
of State) or employees in the State of Delaware. We have not participated in the
preparation of the Application or the Rule 24 Certificate, and assume no
responsibility for their contents.
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our opinions
are rendered only with respect to Delaware laws and rules, regulations and
orders thereunder which are currently in effect.
Based upon the foregoing, and upon our examination of such questions
of law and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. At the time of the Transaction, the Transaction did not violate
applicable Delaware law.
2. At the time of the Transaction, the Partnership was duly formed
and validly existing in good standing as a limited partnership under the laws of
the State of Delaware.
3. Upon issuance and payment as contemplated by the LP Agreement at
the time of the Transaction, the Preferred Partner Interests were validly issued
and, subject to the qualifications
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Securities and Exchange Commission
August 31, 1999
Page 5
set forth herein, were fully paid and nonassessable limited partner interests in
the Partnership, as to which the Preferred Partners, as limited partners of the
Partnership, had no liability in excess of their obligations to make payments
provided for in the LP Agreement and their share of the Partnership's assets and
undistributed profits (subject to the obligation of a Preferred Partner to repay
any funds wrongfully distributed to it). At the time of the Transaction, each
Preferred Partner was entitled to the rights and privileges of a Preferred
Partner that are set forth in the LP Agreement. At the time of the Transaction,
the General Partner had the requisite corporate power and authority under the
General Corporation Law of the State of Delaware (8 Del. C. Section 101, et
seq.), the Certificate of Incorporation, the By-Laws and the Resolutions to
execute and deliver, and to perform its obligations under, the LP Agreement.
4. At the time of the Transaction, the consummation of the
Transaction did not violate the legal rights of Pennsylvania Electric Company,
in its capacity as the sole stockholder of the General Partner, the General
Partner, in its capacity as a general partner of the Partnership, or the
Preferred Partners, in their capacity as limited partners of the Partnership.
In rendering the opinions expressed herein, we express no opinion
regarding applicable law relating to fiduciary duties.
The opinion expressed in the second sentence of paragraph 3 above is
subject to (i) bankruptcy, insolvency, moratorium, receivership, reorganization,
liquidation, fraudulent conveyance and transfer, and other similar laws relating
to or affecting the rights and remedies of creditors generally, and (ii)
principles of equity (regardless of whether considered and applied in a
proceeding in equity or at law).
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Rule 24 Certificate. We also consent to
Berlack, Israels & Liberman's and Ryan, Russell, Ogden & Seltzer LLP's relying
as to matters of Delaware law upon this opinion in connection with opinions to
be rendered by them to you in connection with the Rule 24 Certificate. Except as
stated above, without our prior written consent, this opinion may not be
furnished or quoted to, or relied upon by, any other person or entity for any
purpose.
Very truly yours,
BJK/cgb
