PURCHASE AND SALE AGREEMENT
Dated as of April 30, 2003
by and among
CONSOL ENERGY INC., CONSOL SALES COMPANY, CONSOL OF KENTUCKY INC.,
CONSOL PENNSYLVANIA COAL COMPANY, CONSOLIDATION COAL COMPANY, ISLAND
CREEK COAL COMPANY, WINDSOR COAL COMPANY, XXXXXXX COAL COMPANY,
KEYSTONE COAL MINING CORPORATION, EIGHTY-FOUR MINING COMPANY, CNX GAS
COMPANY LLC, CNX MARINE TERMINALS INC.
and
CNX FUNDING CORPORATION
TABLE OF CONTENTS
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PAGE
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ARTICLE I AGREEMENT TO PURCHASE AND SELL....................................2
1.1 Agreement To Purchase and Sell...................................2
1.2 Timing of Purchases..............................................3
1.3 Consideration for Purchases......................................3
1.4 Purchase and Sale Termination Date...............................3
1.5 Intention of the Parties.........................................3
ARTICLE II CALCULATION OF PURCHASE PRICE.....................................4
2.1 Calculation of Purchase Price....................................4
ARTICLE III PAYMENT OF PURCHASE PRICE.........................................5
3.1 Contribution of Receivables and Initial Purchase Price Payment...5
3.2 Subsequent Purchase Price Payments...............................5
3.3 Settlement as to Specific Receivables and Dilution...............6
3.4 Reconveyance of Receivables......................................7
ARTICLE IV CONDITIONS OF PURCHASES...........................................7
4.1 Conditions Precedent to Initial Purchase.........................7
4.2 Certification as to Representations and Warranties...............9
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE ORIGINATORS.................9
5.1 Organization and Good Standing...................................9
5.2 Due Qualification................................................9
5.3 Power and Authority; Due Authorization..........................10
5.4 Valid Sale; Binding Obligations.................................10
5.5 No Violation....................................................10
5.6 Proceedings.....................................................10
5.7 Bulk Sales Acts.................................................11
5.8 Government Approvals............................................11
5.9 Financial Condition.............................................11
5.10 Licenses, Contingent Liabilities, and Labor Controversies.......11
5.11 Margin Regulations..............................................11
5.12 Quality of Title................................................12
5.13 Accuracy of Information.........................................12
5.14 Offices; State of Formation.....................................13
5.15 Trade Names.....................................................13
5.16 Taxes...........................................................13
5.17 Compliance With Applicable Laws.................................13
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5.18 Reliance on Separate Legal Identity.............................13
5.19 Investment Company..............................................13
5.20 Security Interest...............................................14
ARTICLE VI COVENANTS OF THE ORIGINATOR......................................14
6.1 Affirmative Covenants...........................................14
6.2 Reporting Requirements..........................................16
6.3 Negative Covenants..............................................16
6.4 Substantive Consolidation.......................................17
ARTICLE VII ADDITIONAL RIGHTS AND OBLIGATIONS IN RESPECT OF THE RECEIVABLES..19
7.1 Rights of the Company...........................................19
7.2 Responsibilities of the Originators.............................19
7.3 Further Action Evidencing Purchases.............................20
7.4 Application of Collections......................................20
ARTICLE VIII PURCHASE AND SALE TERMINATION EVENTS.............................21
8.1 Purchase and Sale Termination Events............................21
8.2 Remedies........................................................21
ARTICLE IX INDEMNIFICATION..................................................22
9.1 Indemnities by the Originators..................................22
ARTICLE X MISCELLANEOUS....................................................23
10.1 Amendments, Etc.................................................23
10.2 Notices, Etc....................................................24
10.3 No Waiver, Cumulative Remedies..................................24
10.4 Binding Effect; Assignability...................................24
10.5 Governing Law...................................................25
10.6 Costs, Expenses and Taxes.......................................25
10.7 Submission to Jurisdiction......................................25
10.8 Waiver of Jury Trial............................................25
10.9 Captions and Cross-References; Incorporation by Reference.......26
10.10 Execution in Counterparts.......................................26
10.11 Acknowledgment and Agreement....................................26
EXHIBIT A - Form of Purchase Report
EXHIBIT B - Form of Company Note
EXHIBIT C - Form of Originator Assignment Certificate
EXHIBIT D - Proceedings
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EXHIBIT E - Office Locations
EXHIBIT F - Trade Names
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PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement"), dated as of April 30,
2003, is by and among CONSOL ENERGY INC., a Delaware corporation, CONSOL SALES
COMPANY, a Delaware corporation, CONSOL OF KENTUCKY INC., a Delaware
corporation, CONSOL PENNSYLVANIA COAL COMPANY, a Delaware corporation,
CONSOLIDATION COAL COMPANY, a Delaware corporation, ISLAND CREEK COAL COMPANY, a
Delaware corporation, WINDSOR COAL COMPANY, a West Virginia corporation, XXXXXXX
COAL COMPANY, a Delaware corporation, KEYSTONE COAL MINING CORPORATION, a
Pennsylvania corporation, EIGHTY-FOUR MINING COMPANY, a Pennsylvania
corporation, CNX MARINE TERMINALS INC., a Delaware corporation, CNX GAS COMPANY
LLC, a Virginia limited liability company (each, an "Originator", and
collectively, the "Originators"), CONSOL ENERGY INC., a Delaware corporation
("CONSOL Energy" or "Servicer"), as the initial Servicer, and CNX FUNDING
CORPORATION, a Delaware corporation (the "Company").
Definitions
-----------
Unless otherwise indicated, certain terms that are capitalized and used
throughout this Agreement are defined in Exhibit I to the Receivables Purchase
Agreement of even date herewith (as the same may be amended, supplemented or
otherwise modified from time to time, the "Receivables Purchase Agreement") by
and among CONSOL Energy Inc., as Servicer, the Company, the Sub-Servicers party
thereto, the Conduit Purchasers party thereto, the Conduit Agents party thereto,
and PNC Bank, National Association, as the Administrator (the "Administrator").
All references herein to months are to calendar months unless otherwise
expressly indicated.
Background
----------
(a) The Company is a special purpose corporation, all of the
outstanding stock of which is owned by CONSOL Energy Inc.
(b) The Originators generate Receivables in the ordinary course of
their businesses.
(c) The Originators, in order to finance their businesses, wish to
sell Receivables to the Company, and the Company is willing, on the terms
and subject to the conditions set forth herein, to purchase Receivables
from the Originators.
(d) The Originators and the Company intend this transaction to be a
true sale of Receivables and the Related Rights by the Originators to the
Company, providing the Company with the full benefits of ownership of the
Receivables and the Originators and the Company do not intend the
transactions hereunder to be, or for any purpose to be, characterized as a
loan from the Company to the Originators.
(e) The Company intends to sell the Purchased Interest in the
Receivables to the Conduit Purchasers pursuant to the Receivables Purchase
Agreement.
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NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the parties hereto agree as follows:
ARTICLE I
AGREEMENT TO PURCHASE AND SELL
1.1 Agreement To Purchase and Sell.
------------------------------
On the terms and subject to the conditions set forth in this
Agreement (including Article IV), each Originator, agrees to sell to the
Company, and the Company agrees to purchase from such Originator, from time to
time on or after the Closing Date, but before the Purchase and Sale Termination
Date, all of such Originator's right, title and interest in and to:
(a) each Receivable of such Originator that existed and was owing to
the Originator at the closing of the Originator's business on March 31,
2003 (the "Cut-off Date") other than Receivables contributed pursuant to
Section 3.1 (the "Contributed Receivables");
(b) each Receivable created by such Originator from and including
the Cut-off Date to and including the Purchase and Sale Termination Date;
(c) all rights to, but not the obligations under, all Related
Security;
(d) all monies due or to become due with respect to any of the
foregoing;
(e) all books and records related to any of the foregoing; and
(f) all collections and other proceeds of any of the foregoing (as
defined in the applicable UCC) that are or were received by such Originator
on or after the Cut-off Date, including, without limitation, all funds
which either are received by such Originator, the Company or the Servicer
from or on behalf of the Obligors in payment of any amounts owed
(including, without limitation, invoice price, finance charges, interest
and all other charges) in respect of Receivables, or are applied to such
amounts owed by the Obligors (including, without limitation, insurance
payments that such Originator or Servicer applies in the ordinary course of
its business to amounts owed in respect of any Receivable and net proceeds
of sale or other disposition of repossessed goods or other collateral or
property of the Obligors or any other parties directly or indirectly liable
for payment of such Receivables) (clauses (a) through (f), collectively,
the ("Collateral")).
All purchases and contributions hereunder shall be made without recourse, but
shall be made pursuant to, and in reliance upon, the representations, warranties
and covenants of the Originators set forth in this Agreement and each other
Transaction Document. No obligation or liability to any Obligor on any
Receivable is intended to be assumed by the Company hereunder, and any such
assumption is expressly disclaimed. The Company's foregoing commitment to
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purchase Receivables and the proceeds and rights described in clauses (c)
through (f) (collectively, the "Related Rights") is herein called the "Purchase
Facility."
1.2 Timing of Purchases.
-------------------
(a) Closing Date Purchases. Each Originator's entire right, title
and interest in (i) each Receivable that existed and was owing to such
Originator at the Cut-off Date (other than Contributed Receivables), (ii)
all Receivables created by such Originator from and including the Cut-off
Date, to and including the Closing Date (other than Contributed
Receivables), and (iii) all Related Rights, automatically shall be deemed
to have been sold to the Company on the Closing Date.
(b) Regular Purchases. After the Closing Date, until the Purchase
and Sale Termination Date, each Receivable (and the Related Rights) created
by each Originator shall be deemed to have been sold to the Company
immediately (and without further action) upon the creation of such
Receivable.
1.3 Consideration for Purchases.
---------------------------
On the terms and subject to the conditions set forth in this
Agreement, the Company agrees to make Purchase Price payments to each Originator
and to reflect all contributions in accordance with Article III.
1.4 Purchase and Sale Termination Date.
----------------------------------
The "Purchase and Sale Termination Date" shall be the earliest to
occur of (a) the date of the termination of this Agreement pursuant to Section
8.2 and (b) the Payment Date immediately following the day on which the
Originators shall have given notice to the Company at or prior to 10:00 a.m.
(New York City time) that the Originators desire to terminate this Agreement.
1.5 Intention of the Parties.
------------------------
It is the express intent of the parties hereto that the transfers of
the Receivables and Related Rights by the Originators to the Company, as
contemplated by this Agreement be, and be treated as, sales or contributions, as
applicable, and not as loans secured by the Receivables and Related Rights. If,
however, notwithstanding the intent of the parties, such transactions are deemed
to be loans, each Originator hereby grants to the Company a first priority
security interest in all of such Originator's right, title and interest in and
to the Receivables and the Related Rights now existing and hereafter created by
such Originator, all monies due or to become due and all amounts received with
respect thereto, and all proceeds thereof, to secure all of such Originator's
obligations hereunder.
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ARTICLE II
CALCULATION OF PURCHASE PRICE
2.1 Calculation of Purchase Price.
-----------------------------
On the Closing Date and on each Monthly Settlement Date thereafter,
the Servicer shall deliver to the Company and the Originators a report in
substantially the form of Exhibit A (each such report being herein called a
"Purchase Report") with respect to the matters set forth therein and the
Company's purchases of Receivables from the Originators:
(a) that are to be made on the Closing Date (in the case of the
Purchase Report to be delivered on the Closing Date (relating to Receivables
existing or created on the Cutoff Date)), or
(b) that were made during the period commencing on the first day of
each calendar month to (and including) the last day of such calendar month (in
the case of each subsequent Purchase Report to be delivered on each Monthly
Settlement Date).
The "Purchase Price" (to be paid to the Originators in accordance with the terms
of Article III) for the Receivables and the Related Rights that are purchased
hereunder from the Originators shall be determined in accordance with the
following formula:
PP = OB X FMVD
where:
PP = Purchase Price for each Receivable as calculated on the relevant
Payment Date.
OB = The Outstanding Balance of such Receivable on the relevant
Payment Date.
FMVD= Fair Market Value Discount, as measured on such Payment Date,
which is equal to the quotient (expressed as percentage) of
(a) one divided by (b) the sum of (i) one, plus (ii) the
Expected Loss Proxy, plus (iii) the Servicing Cost Proxy,
plus (iv) the Factoring Fee Proxy, plus (v) the product of
(A) the Euro- Rate on such Payment Date plus 2.50% and (B) a
fraction, the numerator of which is the Days' Sales
Outstanding (as calculated in the most recently delivered
Information Package immediately preceding such Payment Date)
and the denominator of which is 365.
"Expected Loss Proxy" = The quotient, to be calculated once per year in the
month immediately following the distribution of CONSOL Energy's Form 10-K, of
(i) the sum of actual charge-offs and bad debt accrual recorded on the books of
the Originators related to the
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Receivables during the prior three fiscal years, divided by (ii) the total
credit sales of the Originators during the prior three fiscal years.
"Factoring Fee Proxy" = 0.25%
"Payment Date" means (i) the Closing Date and (ii) each Business Day
thereafter that the Originators are open for business.
"Servicing Cost Proxy" = 0.03%
ARTICLE III
PAYMENT OF PURCHASE PRICE
3.1 Contribution of Receivables and Initial Purchase Price Payment.
--------------------------------------------------------------
(a) On the Closing Date the Originator CONSOL Energy Inc. shall, and
hereby does, contribute to the capital of the Company either cash or Receivables
and Related Rights with respect thereto consisting of each Receivable of such
Originator that existed and was owing to such Originator on the Closing Date
beginning with the oldest of such Receivables and continuing chronologically
thereafter such that the aggregate Outstanding Balance of all such Contributed
Receivables and such cash shall be at least equal to $10,000,000. The Company
shall reflect a capital contribution on its books and records from the
Originator CONSOL Energy Inc. contributing such Receivables or cash. The value
of any such capital contribution consisting of Receivables and Related Rights
shall be calculated using the formula set forth in the Purchase Price.
(b) On the terms and subject to the conditions set forth in this
Agreement, the Company agrees to pay to each Originator the Purchase Price for
the purchase to be made from such Originator on the Closing Date partially in
cash (in an amount to be agreed between the Company and such Originator and set
forth in the initial Purchase Report and as allocated among the Originators on a
pro rata basis according to the amount of Receivables sold by each Originator)
and partially by issuing a promissory note in the form of Exhibit B to such
Originator with an initial principal balance equal to the remaining Purchase
Price (the promissory note, as it may be amended, supplemented, indorsed or
otherwise modified from time to time, together with all promissory notes issued
from time to time in substitution therefor or renewal thereof in accordance with
the Transaction Documents, each being herein called a "Company Note").
3.2 Subsequent Purchase Price Payments.
----------------------------------
On each Payment Date subsequent to the Closing Date, on the terms and
subject to the conditions set forth in this Agreement, the Company shall pay to
each Originator the Purchase Price for the Receivables generated by such
Originator on such Payment Date:
(a) First, the Purchase Price shall be paid in cash to the extent
the Company has cash available therefor (the amount of any cash paid to the
Originators shall be
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allocated among the Originators on a pro rata basis according to the amount
of Receivables sold by each Originator); and
(b) Second, to the extent any portion of the Purchase Price remains
unpaid, the principal amount outstanding under the Company Note issued to
such Originator shall be increased by an amount equal to such remaining
Purchase Price.
Servicer shall make all appropriate record keeping entries with respect to
the Company Note or otherwise to reflect the foregoing payments, and Servicer's
books and records shall constitute rebuttable presumptive evidence of the
principal amount of, and accrued interest on, the Company Note at any time.
Furthermore, Servicer shall hold the Company Note for the benefit of the
relevant Originator. Each Originator hereby irrevocably authorizes Servicer to
xxxx the Company Note "CANCELLED" and to return such Company Note to the Company
upon the final payment thereof after the occurrence of the Purchase and Sale
Termination Date.
3.3 Settlement as to Specific Receivables and Dilution.
--------------------------------------------------
(a) If, on the day of purchase or contribution of any Receivable
from any Originator hereunder, any of the representations or warranties set
forth in Sections 5.4 and 5.12 are not true with respect to such Receivable
or as a result of any action or inaction of such Originator, on any day,
any of such representations or warranties set forth in Sections 5.4 and
5.12 is no longer true with respect to such a Receivable, then the Purchase
Price (or in the case of a Contributed Receivable, the Outstanding Balance
of such Receivable, (the "Contributed Value")) with respect to such
Receivables shall be reduced by an amount equal to the Outstanding Balance
of such Receivable and shall be accounted to such Originator as provided in
subsection (c) below; provided, that if the Company thereafter receives
payment on account of Collections due with respect to such Receivable, the
Company promptly shall deliver such funds to such Originator.
(b) If, on any day, the Outstanding Balance of any Receivable
(including any Contributed Receivable) purchased or contributed hereunder
is reduced or adjusted as a result of any defective, rejected, returned
goods or services, or any discount or other adjustment made by any
Originator, the Company or Servicer or any setoff or dispute between any
Originator or the Servicer and an Obligor as indicated on the books of the
Company (or, for periods prior to the Closing Date, the books of any
Originator), then the Purchase Price or Contributed Value, as the case may
be, with respect to such Receivable shall be reduced by the amount of such
net reduction and shall be accounted to such Originator as provided in
subsection (c) below.
(c) Any reduction in the Purchase Price (or Contributed Value) of
any Receivable pursuant to subsection (a) or (b) above shall be applied as
a credit for the account of the Company against the Purchase Price of
Receivables subsequently purchased by the Company from any Originator
hereunder; provided, however, if there have been no purchases of
Receivables from such Originator (or insufficiently large purchases of
Receivables) to create a Purchase Price sufficient to so apply such credit
against, the amount of such credit
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(i) shall be paid in cash to the Company by such Originator in the
manner and for application as described in the following proviso, or
(ii) shall be deemed to be a payment under, and shall be deducted
from the principal amount outstanding under, the Company Note payable to
such Originator;
provided, further, that at any time (y) when a Termination Event or Unmatured
Termination Event exists under the Receivables Purchase Agreement or (z) on or
after the Purchase and Sale Termination Date, the amount of any such credit
shall be paid by such Originator to the Company by deposit in immediately
available funds into the relevant Lock-Box Account for application by Servicer
to the same extent as if Collections of the applicable Receivable in such amount
had actually been received on such date.
(d) Each Purchase Report (other than the Purchase Report delivered
on the Closing Date) shall include, in respect of the Receivables
previously generated by each Originator (including Contributed
Receivables), a calculation of the aggregate reductions described in
subsection (a) or (b) relating to such Receivables since the last Purchase
Report delivered hereunder, as indicated on the books of the Company (or,
for such period prior to the Closing Date, the books of such Originator).
3.4 Reconveyance of Receivables.
---------------------------
In the event that any Originator has paid to the Company the full
Outstanding Balance of any Receivable pursuant to Section 3.3, the Company shall
reconvey such Receivable to such Originator, without representation or
warranty, but free and clear of all liens, security interests, charges, and
encumbrances created by the Company.
ARTICLE IV
CONDITIONS OF PURCHASES
4.1 Conditions Precedent to Initial Purchase.
----------------------------------------
The initial purchase hereunder is subject to the condition precedent
that Servicer (on the Company's behalf) shall have received, on or before the
Closing Date, the following, each (unless otherwise indicated) dated the Closing
Date, and each in form and substance satisfactory to Servicer (acting on the
Company's behalf):
(a) An Originator Assignment Certificate in the form of Exhibit C
from each Originator, duly completed, executed and delivered by such
Originator;
(b) A copy of the resolutions of the Board of Directors of each
Originator approving the Transaction Documents to be delivered by it and
the transactions contemplated hereby and thereby, certified by the
Secretary or Assistant Secretary of such Originator;
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(c) Good standing certificates for each Originator issued as of a
recent date acceptable to Servicer by the Secretary of State of the
jurisdiction of each such Originator's organization and the jurisdiction
where each such Originator's chief executive office is located;
(d) A certificate of the Secretary or Assistant Secretary of each
Originator certifying the names and true signatures of the officers
authorized on such Person's behalf to sign the Transaction Documents to be
delivered by it (on which certificate Servicer and the Company may
conclusively rely until such time as the Servicer shall receive from such
Person a revised certificate meeting the requirements of this subsection
(d));
(e) The certificate of incorporation, certificate of formation or
limited liability company agreement or other organizational document of
each Originator, duly certified by the Secretary of State of the
jurisdiction of such Originator's organization as of a recent date
acceptable to the Servicer, each duly certified by the Secretary or an
Assistant Secretary of such Originator;
(f) Originals of the proper financing statements (Form UCC-1) that
have been duly executed or otherwise authenticated and name each Originator
as the debtor/seller and the Company as the secured party/purchaser (and
the Administrator (for the benefit of the Conduit Purchasers), as assignee
of the Company) of the Receivables generated by such Originator as may be
necessary or, in the Servicer's or the Administrator's opinion, desirable
under the UCC of all appropriate jurisdictions to perfect the Company's
ownership interest in all Receivables and such other rights, accounts,
instruments and moneys (including, without limitation, Related Security) in
which an ownership or security interest may be assigned to it hereunder;
(g) A written search report from a Person satisfactory to the
Servicer listing all effective financing statements that name each
Originator as debtor or seller and that are filed in the jurisdictions in
which filings were made pursuant to the foregoing subsection (f), together
with copies of such financing statements (none of which, except for those
(i) described in the foregoing subsection (f) or (ii) as to which proper
financing statements (Form UCC-3), duly executed and suitable for filing
under the UCC of all jurisdictions that the Administrator may deem
necessary or desirable to release all security interests and other rights
of any Person in the Receivables, Contracts or Related Security previously
granted by such Originator have been received by the Administrator, shall
cover any Receivable or any Related Rights which are to be sold to the
Company hereunder), and tax and judgment lien search reports from a Person
satisfactory to the Servicer showing no evidence of such liens filed
against such Originator;
(h) A favorable opinion of Xxxxxx Xxxxx & Xxxxxxx, counsel to the
Originators in form and substance satisfactory to the Servicer and the
Administrator;
(i) A Company Note in favor of each Originator, duly executed by the
Company; and
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(j) A certificate from an officer of each Originator to the effect
that the Servicer and such Originator have placed on the most recent, and
have taken all steps reasonably necessary to ensure that there shall be
placed on each subsequent, data processing report that it generates which
are of the type that a proposed purchaser or lender would use to evaluate
the Receivables, the following legend (or the substantive equivalent
thereof), which legend shall be placed on a separate "declaration page" and
which indicates that: "THE RECEIVABLES ASSOCIATED WITH THE FOLLOWING
COMPANY ACCOUNT NUMBERS (which company account numbers shall be listed on
such "declaration page") HAVE BEEN SOLD: TO CNX FUNDING CORPORATION
PURSUANT TO A PURCHASE AND SALE AGREEMENT, DATED AS OF APRIL 30, 2003 AS
AMENDED, BETWEEN THE ORIGINATORS AND CNX FUNDING CORPORATION; AND AN
UNDIVIDED, FRACTIONAL OWNERSHIP INTEREST IN SUCH RECEIVABLES HAS BEEN SOLD
TO THE CONDUIT PURCHASERS PURSUANT TO A RECEIVABLES PURCHASE AGREEMENT,
DATED AS OF APRIL 30, 2003, AS AMENDED, AMONG CONSOL ENERGY INC., AS THE
SERVICER, CNX FUNDING CORPORATION, THE SUB-SERVICERS PARTY THERETO, THE
CONDUIT PURCHASERS PARTY THERETO, THE CONDUIT AGENTS PARTY THERETO, AND PNC
BANK, NATIONAL ASSOCIATION, AS ADMINISTRATOR."
4.2 Certification as to Representations and Warranties.
--------------------------------------------------
Each Originator, by accepting the Purchase Price related to each
purchase of Receivables generated by such Originator, shall be deemed to have
certified that the representations and warranties contained in Article V are
true and correct on and as of such day, with the same effect as though made on
and as of such day.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE ORIGINATORS
In order to induce the Company to enter into this Agreement and to make
purchases and accept contributions hereunder, each Originator hereby makes the
representations and warranties set forth in this Article V.
5.1 Organization and Good Standing.
------------------------------
Each Originator has been duly organized and is validly existing as a
corporation, partnership or limited liability company in good standing under the
laws of the State of its organization, with power and authority to own its
properties and to conduct its business as such properties are presently owned
and such business is presently conducted.
5.2 Due Qualification.
-----------------
Each Originator is duly licensed and in good standing in the
jurisdiction where its chief executive office is located and is qualified to do
business as a foreign corporation,
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partnership or limited liability company in good standing in all other
jurisdictions in which (a) the ownership or lease of its property or the conduct
of its business requires such licensing or qualification and (b) the failure to
be so licensed or qualified would be reasonably likely to have a Material
Adverse Effect.
5.3 Power and Authority; Due Authorization.
--------------------------------------
Each Originator has (a) all necessary power, authority and legal
right (i) to execute and deliver, and perform its obligations under, each
Transaction Document to which it is a party and (ii) to generate, own, sell,
contribute and assign Receivables on the terms and subject to the conditions
herein and therein provided; and (b) duly authorized such execution and delivery
and such sale, contribution and assignment and the performance of such
obligations by all necessary organizational action.
5.4 Valid Sale; Binding Obligations.
-------------------------------
Each sale or contribution, as the case may be, made by each
Originator pursuant to this Agreement shall constitute a valid sale or
contribution, as the case may be, transfer, and assignment of Receivables to the
Company, enforceable against creditors of, and purchasers from, such Originator;
and this Agreement constitutes, and each other Transaction Document to be signed
by each Originator, when duly executed and delivered, will constitute, a legal,
valid, and binding obligation of such Originator, enforceable in accordance with
its terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, or other similar laws affecting the enforcement of creditors'
rights generally and by general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
5.5 No Violation.
------------
The consummation of the transactions contemplated by this Agreement
and the other Transaction Documents and the fulfillment of the terms hereof or
thereof, will not (a) conflict with, result in any breach of any of the terms
and provisions of, or constitute (with or without notice or lapse of time) a
default under (i) any Originator's certificate of formation, limited liability
company agreement or any other organizational document of such Originator or
(ii) any indenture, loan agreement, mortgage, deed of trust, or other material
agreement or instrument to which it is a party or by which it is bound, (b)
result in the creation or imposition of any Adverse Claim upon any of its
properties pursuant to the terms of any such indenture, loan agreement,
mortgage, deed of trust, or other agreement or instrument, other than the
Transaction Documents, or (c) violate any law or any order, rule or regulation
applicable to it of any court or of any state or foreign regulatory body,
administrative agency, or other governmental instrumentality having jurisdiction
over it or any of its properties.
5.6 Proceedings.
-----------
Except as set forth in Exhibit D, there is no action, suit,
proceeding or investigation pending before any court, regulatory body,
arbitrator, administrative agency, or other tribunal or governmental
instrumentality (a) asserting the invalidity of any Transaction Document, (b)
seeking to prevent the issuance of any Originator Assignment Certificate or the
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consummation of any of the transactions contemplated by any Transaction Document
or (c) seeking any determination or ruling that will probably have a Material
Adverse Effect.
5.7 Bulk Sales Acts.
---------------
No transaction contemplated hereby requires compliance with, or will
be subject to avoidance under, any bulk sales act or similar law.
5.8 Government Approvals.
--------------------
Except for the filing of the UCC financing statements referred to in
Article IV, all of which, at the time required in Article IV, shall have been
duly made and shall be in full force and effect, no authorization or approval or
other action by, and no notice to or filing with, any governmental authority or
regulatory body is required for any Originator's due execution, delivery and
performance of any Transaction Document to which it is a party.
5.9 Financial Condition.
-------------------
(a) Material Adverse Effect. Since December 31, 2002, no event has
occurred that has had, or is reasonably likely to have, a Material Adverse
Effect.
(b) Solvent. On the date hereof, (both before and after giving
effect to such purchase and, in the case of CONSOL Energy Inc., after
giving effect to the CONSOL Guaranty and any payments required thereunder)
each Originator shall be Solvent; provided, however, that Consolidation
Coal Company, Windsor Coal Company, Keystone Coal Mining Corporation, and
Eighty-Four Mining Company do not make this representation.
(c) Improvement of Financial Condition. Each purchase hereunder from
such Originator shall improve the financial condition of the applicable
Originator.
5.10 Licenses, Contingent Liabilities, and Labor Controversies.
---------------------------------------------------------
(a) No Originator has failed to obtain any licenses, permits,
franchises or other governmental authorizations necessary to the ownership
of its properties or to the conduct of its business, which violation or
failure to obtain would be reasonably likely to have a Material Adverse
Effect.
(b) There are no labor controversies pending against the Originator
that have had (or are reasonably likely to have) a Material Adverse Effect.
5.11 Margin Regulations.
------------------
No use of any funds acquired by any Originator under this Agreement
will conflict with or contravene any of Regulations T, U and X promulgated by
the Federal Reserve Board from time to time.
-11-
5.12 Quality of Title.
----------------
(a) Each Receivable of each Originator (together with the Related
Rights with respect to such Receivable) which is to be sold to the Company
hereunder is or shall be owned by such Originator, free and clear of any
Adverse Claim, except as provided herein and in the Receivables Purchase
Agreement. Whenever the Company makes a purchase or accepts a contribution
hereunder, it shall have acquired and shall continue to have maintained a
valid and perfected ownership interest (free and clear of any Adverse
Claim) in all Receivables generated by each Originator and all Collections
related thereto, and in such Originator's entire right, title and interest
in and to the Related Rights with respect thereto.
(b) No effective financing statement or other instrument similar in
effect covering any Receivable generated by any Originator or any Related
Rights is on file in any recording office except such as may be filed in
favor of the Company (and the Administrator as assignee of the Company) or
the Administrator, as the case may be, in accordance with this Agreement or
in favor of the Company (and the Administrator as assignee of the Company)
or the Administrator, in accordance with the Receivables Purchase
Agreement.
(c) Unless otherwise identified to the Company on the date of the
purchase or contribution hereunder, each Receivable purchased hereunder is
on the date of purchase or contribution, an Eligible Receivable.
(d) Each of (1) the federal judgment filed on January 17, 1996,
against CONSOL Energy Inc. in favor of the Secretary of Labor (referred to
as Filing Number 94-CV-2103) in the U.S. Western District Court of
Pennsylvania in the approximate amount of $200,000, and (2) the judgment
filed on June 25, 2001, against Eighty-Four Mining Company in favor of
Washington Xxxxx Development Company, Inc. (referred to as Filing Number
GD-99-5121) in the Allegheny County, Pennsylvania Prothonotary's Office in
the approximate amount of $85,000 have been paid off or otherwise satisfied
by the Originators, does not constitute a judgment or outstanding
obligation of the Originators, and does not constitute an Adverse Claim
upon any Receivable or Related Rights of the Originators.
5.13 Accuracy of Information.
-----------------------
All factual written information heretofore or contemporaneously
furnished (and prepared) by any Originator to the Company or the Administrator
for purposes of or in connection with any Transaction Document or any
transaction contemplated hereby or thereby is, and all other such factual
written information hereafter furnished (and prepared) by such Originator to the
Company or the Administrator pursuant to or in connection with any Transaction
Document will be, true and accurate in every material respect on the date as of
which such information is dated or certified.
-12-
5.14 Offices; State of Formation.
---------------------------
Each Originator's principal place of business and chief executive
office is located at the address specified in Exhibit E, each Originator's state
of formation is as specified in Exhibit E, and the offices where each Originator
keeps all its books, records and documents evidencing its Receivables, the
related Contracts and all other agreements related to such Receivables are
located at the addresses specified in Exhibit E (or at such other locations,
notified to the Servicer and the Administrator in accordance with Section
6.l(f), in jurisdictions where all action required by Section 7.3 has been taken
and completed).
5.15 Trade Names.
-----------
No Originator uses any trade name other than its actual
organizational name and the trade names set forth in Exhibit F. From and after
the date that fell five (5) years before the date hereof, except as set forth in
Exhibit F, no Originator has been known by any legal name other than its
organizational name as of the date hereof, nor has any Originator been the
subject of any merger or other organizational reorganization.
5.16 Taxes.
-----
Each Originator has filed all tax returns and reports required by law
to have been filed by it and has paid all taxes and governmental charges thereby
shown to be owing, except any such taxes or charges which are being diligently
contested in good faith by appropriate proceedings and for which adequate
reserves, if any, required under GAAP shall have been set aside on its books.
5.17 Compliance With Applicable Laws.
-------------------------------
Each Originator is in compliance with the requirements of all
applicable laws, rules, regulations and orders of all governmental authorities,
a breach of any of which, individually or in the aggregate, would be reasonably
likely to have a Material Adverse Effect.
5.18 Reliance on Separate Legal Identity.
-----------------------------------
Each Originator acknowledges that the Conduit Purchasers and the
Administrator are entering into the Receivables Purchase Agreement in reliance
upon the Company's identity as a legal entity separate from each Originator.
5.19 Investment Company.
------------------
No Originator is an "investment company," or a company "controlled"
by an "investment company" within the meaning of the Investment Company Act of
1940, as amended. In addition, no Originator is a "holding company," a
"subsidiary company" of a "holding company" or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company" within the meaning
of the Public Utility Holding Company Act of 1935, as amended.
-13-
5.20 Security Interest.
-----------------
This Agreement creates a valid and continuing security interest (as
defined in the applicable UCC) in the Collateral in favor of the Company, which
security interest is prior to all other Adverse Claims, and is enforceable as
such against creditors of and purchasers from the Originators. The Collateral
constitutes "accounts," "general intangibles" or "tangible chattel paper" within
the meaning of the applicable UCC. Each Originator owns and has good and
marketable title to the Collateral free and clear of any Adverse Claim. Each
Originator has caused or will have caused, within ten (10) days, the filing of
all appropriate UCC financing statements in the proper filing offices in the
appropriate jurisdictions under applicable law in order to perfect the security
interest in the Collateral granted to the Company hereunder. Other than the
security interest granted to the Company pursuant to this Agreement, no
Originator has pledged, assigned, sold, granted a security interest in, or
otherwise conveyed any of the Collateral. No Originator has authorized the
filing of and no Originator is aware of any UCC financing statements against it
that included a description of collateral covering the Collateral other than any
UCC financing statement relating to the security interest granted to the Company
hereunder or that has been terminated. No Originator is aware of any judgment or
tax lien filings against it.
ARTICLE VI
COVENANTS OF THE ORIGINATORS
6.1 Affirmative Covenants.
--------------------
From the date hereof until the first day following the Purchase and
Sale Termination Date, each Originator agrees as follows, unless the
Administrator and the Company shall otherwise consent in writing, that it will:
(a) Compliance With Laws, Etc. Comply in all material respects with
all applicable laws, rules, regulations and orders with respect to the
Receivables generated by it and the Contracts and other agreements related
thereto except where the failure to so comply would not materially and
adversely affect the collectibility of such Receivables or the rights of
the Company hereunder.
(b) Preservation of Organizational Existence. Preserve and maintain
its existence as a corporation, partnership or limited liability company
and all rights, franchises and privileges in the jurisdiction of its
formation, and qualify and remain qualified in good standing as a foreign
corporation, partnership or limited liability company in each jurisdiction
where the failure to preserve and maintain such existence, rights,
franchises, privileges and qualification would be reasonably likely to have
a Material Adverse Effect.
(c) Receivables Reviews. (i) At any time and from time to time
during regular business hours upon reasonable notice (such notice to be
required only if no Purchase and Sale Termination Event or Unmatured
Purchase and Sale Termination
-14-
Event then exists), permit the Company or the Administrator, or their
respective agents or representatives, (A) to examine and make copies of and
abstracts from all books, records and documents (including, without
limitation, computer tapes and disks) in possession or under the control of
any Originator relating to the Receivables, including, without limitation,
the related Contracts and purchase orders and other agreements related
thereto, and (B) to visit the offices and properties of any Originator for
the purpose of examining such materials described in clause (i)(A) next
above and to discuss matters relating to Receivables originated by it or
the performance hereunder with any of the officers or employees of any
Originator having knowledge of such matters, and (ii) without limiting the
foregoing clause (i) above, annually or if a Purchase and Sale Termination
Event or Unmatured Purchase and Sale Termination Event exist then from time
to time on request of the Administrator, permit certified public
accountants or other auditors acceptable to the Originators and
Administrator to conduct, at such Originator's expense, a review of such
Originator's books and records with respect to such Receivables.
(d) Keeping of Records and Books of Account. Maintain and implement
administrative and operating procedures (including, without limitation, an
ability to re-create records evidencing Receivables it generates in the
event of the destruction of the originals thereof), and keep and maintain
all documents, books, records and other information reasonably necessary or
advisable for the collection of such Receivables (including, without
limitation, records adequate to permit the daily identification of each new
Receivable and all Collections of and adjustments to each existing
Receivable).
(e) Performance and Compliance With Receivables and Contracts.
Timely and fully perform and comply with all provisions, covenants and
other promises required to be observed by it under the Contracts and all
other agreements related to the Receivables.
(f) Location of Offices; State of Formation. Keep its principal
place of business, chief executive office and state of formation, and the
offices where it keeps its records concerning or related to Receivables, at
the address(es) and states referred to in Exhibit E or, upon 30 days' prior
written notice to the Company and the Administrator, at such other
locations in jurisdictions where all action required by Section 7.3 shall
have been taken and completed.
(g) Credit and Collection Policies. Comply in all material respects
with its Credit and Collection Policy in connection with the Receivables
that it generates and all Contracts and other agreements related thereto.
(h) Post Office Boxes. On or prior to the date hereof, deliver to
the Servicer (on behalf of the Company) a certificate from an authorized
officer of each Originator to the effect that (i) the name of the renter of
all post office boxes into which Collections may from time to time be
mailed have been changed to the name of the Company (unless such post
office boxes are in the name of the relevant Lock-Box Banks) and (ii) all
relevant postmasters have been notified that each of the Servicer and the
Administrator
-15-
are authorized to collect mail delivered to such post office boxes (unless
such post office boxes are in the name of the relevant Lock-Box Banks).
6.2 Reporting Requirements.
----------------------
From the date hereof until the first day following the Purchase and
Sale Termination Date, each Originator will, unless the Servicer (on behalf of
the Company) shall otherwise consent in writing, furnish to the Company and the
Administrator:
(a) Purchase and Sale Termination Events. As soon as possible after
knowledge of the occurrence of, and in any event within five Business Days
after knowledge of the occurrence of each Purchase and Sale Termination
Event or each Unmatured Purchase and Sale Termination Event in respect of
the applicable Originator, the statement of the chief financial officer or
chief accounting officer of such Originator describing such Purchase and
Sale Termination Event or Unmatured Purchase and Sale Termination Event and
the action that such Originator proposes to take with respect thereto, in
each case in reasonable detail;
(b) Proceedings. As soon as possible and in any event within ten
Business Days after any Originator otherwise has knowledge thereof, written
notice of (i) litigation, investigation or proceeding of the type described
in Section 5.6 not previously disclosed to the Company and (ii) all
material adverse developments that have occurred with respect to any
previously disclosed litigation, proceedings and investigations; and
(c) Other. Promptly, from time to time, such other information,
documents, records or reports respecting the Receivables or the conditions
or operations, financial or otherwise, of any Originator as the Company,
the Conduit Purchasers or the Administrator may from time to time
reasonably request in order to protect the interests of the Company, the
Conduit Purchasers or the Administrator under or as contemplated by the
Transaction Documents.
(d) Preservation of Security Interest. Each Originator shall (and
shall cause the Servicer to) take any and all action as the Administrator
may require to preserve and maintain the perfection and priority of the
security interest of the Company in the Collateral pursuant to this
Agreement.
6.3 Negative Covenants.
------------------
From the date hereof until the date following the Purchase and Sale
Termination Date, each Originator agrees that, unless the Servicer (on behalf of
the Company) and the Administrator shall otherwise consent in writing, it shall
not:
(a) Sales, Liens, Etc. Except as otherwise provided herein or in any
other Transaction Document, sell, assign (by operation of law or otherwise)
or otherwise dispose of, or create or suffer to exist any Adverse Claim
upon or with respect to, any
-16-
Receivable or related Contract or Related Security, or any interest
therein, or any Collections thereon, or assign any right to receive income
in respect thereof.
(b) Extension or Amendment of Receivables. Except as otherwise
permitted in Section 4.2(a) of the Receivables Purchase Agreement, extend,
amend or otherwise modify the terms of any Receivable in any material
respect generated by it, or amend, modify or waive, in any material
respect, any term or condition of any Contract related thereto (which term
or condition relates to payments under, or the enforcement of, such
Contract).
(c) Change in Business or Credit and Collection Policy. Make any
material change in the character of its business or materially alter its
Credit and Collection Policy, which change would, in either case,
materially change the credit standing required of particular Obligors or
potential Obligors or impair, in any material respect, the collectibility
of the Receivables generated by it in any case, without the consent of the
Administrator.
(d) Receivables Not to Be Evidenced by Promissory Notes or Chattel
Paper. Take any action to cause or permit any Receivable generated by it to
become evidenced by any "instrument" or "chattel paper" (as defined in the
applicable UCC).
(e) Mergers, Acquisitions, Sales, Etc. (i) Be a party to any merger
or consolidation, except a merger or consolidation where any Originator is
the surviving entity, or (ii) directly or indirectly sell, transfer,
assign, convey or lease (A) whether in one or a series of transactions, all
or substantially all of its assets or (B) any Receivables or any interest
therein (other than pursuant to this Agreement).
(f) Lock-Box Banks. Make any changes in its instructions to
Obligors regarding Collections or add or terminate any bank as a Lock-Box
Bank unless the requirements of paragraph 2(g) of Exhibit IV to the
Receivables Purchase Agreement have been met.
(g) Accounting for Purchases. Account for or treat (whether in
financial statements or otherwise) the transactions contemplated hereby in
any manner other than as sales of the Receivables and Related Rights by
such Originator to the Company.
(h) Transaction Documents. Enter into, execute, deliver or otherwise
become bound by any agreement, instrument, document or other arrangement
that restricts the right of such Originator to amend, supplement, amend and
restate or otherwise modify, or to extend or renew, or to waive any right
under, this Agreement or any other Transaction Documents, except that the
Originators may enter into agreements that restrict the right of such
Originators to increase the Purchase Limit to an amount greater than
$200,000,000.
6.4 Substantive Consolidation.
-------------------------
Each Originator hereby acknowledges that this Agreement and the other
Transaction Documents are being entered into in reliance upon the Company's
identity as a legal
-17-
entity separate from each Originator and its Affiliates. Therefore, from and
after the date hereof, each Originator shall take all reasonable steps necessary
to make it apparent to third Persons that the Company is an entity with assets
and liabilities distinct from those of each Originator and any other Person, and
is not a division of any other Originator, its Affiliates or any other Person.
Without limiting the generality of the foregoing and in addition to and
consistent with the other covenants set forth herein, the Originators shall take
such actions as shall be required in order that:
(a) the Originators shall not be involved in the day-to-day
management of the Company;
(b) the Originators shall maintain separate organizational records
and books of account from the Company and otherwise will observe
organizational formalities and have a separate area from the Company for
their businesses;
(c) the financial statements and books and records of the
Originators shall be prepared after the date of creation of the Company to
reflect and shall reflect the separate existence of the Company; provided,
that the Company's assets and liabilities may be included in a consolidated
financial statement issued by an affiliate of the Company; provided,
however, that any such consolidated financial statement shall make clear
that the Company's assets are not available to satisfy the obligations of
such affiliate;
(d) except as permitted by the Receivables Purchase Agreement, (i)
the Originators shall maintain their assets separately from the assets of
the Company, (ii) and the Company's assets, and records relating thereto,
have not been, are not, and shall not be, commingled with those of any
Originator;
(e) all of the Company's business correspondence and other
communications shall be conducted in the Company's own name and on its own
stationery;
(f) no Originator shall act as an agent for the Company, other than
CONSOL Energy in its capacity as the Servicer, and in connection therewith,
shall present itself to the public as an agent for the Company and a legal
entity separate from the Company;
(g) no Originator shall conduct any of the business of the Company
in its own name;
(h) no Originator shall pay any liabilities of the Company out of
its own funds or assets;
(i) each Originator shall maintain an arm's-length relationship with
the Company;
(j) no Originator shall assume or guarantee or become obligated for
the debts of the Company or hold out its credit as being available to
satisfy the obligations of the Company;
-18-
(k) no Originator shall acquire obligations of the Company;
(l) each Originator shall allocate fairly and reasonably overhead or
other expenses that are properly shared with the Company, including,
without limitation, shared office space;
(m) each Originator shall identify and hold itself out as a separate
and distinct entity from the Company;
(n) each Originator shall correct any known misunderstanding
regarding its separate identity from the Company;
(o) no Originator shall enter into, or be a party to, any
transaction with the Company, except in the ordinary course of its business
and on terms which are intrinsically fair and not less favorable to it than
would be obtained in a comparable arm's-length transaction with an
unrelated third party; and
(p) no Originator shall pay the salaries of the Company's employees,
if any.
ARTICLE VII
ADDITIONAL RIGHTS AND OBLIGATIONS IN
RESPECT OF THE RECEIVABLES
7.1 Rights of the Company.
---------------------
Each Originator hereby authorizes the Company (who may further
authorize another Person), the Servicer, or their respective designees to take
any and all steps in such Originator's name necessary or desirable, in their
respective determination, to collect all amounts due under any and all
Receivables, including, without limitation, endorsing the name of such
Originator on checks and other instruments representing Collections and
enforcing such Receivables and the provisions of the related Contracts that
concern payment and/or enforcement of rights to payment.
7.2 Responsibilities of the Originators.
-----------------------------------
Anything herein to the contrary notwithstanding:
(a) Collection Procedures. Each Originator agrees to direct its
respective Obligors to make payments of Receivables directly to a post
office box related to the relevant Lock-Box Account at a Lock-Box Bank or
directly to the Lock-Box Account. Each Originator further agrees to
transfer any Collections that it receives directly to the Servicer (for the
Company's account) within two (2) Business Days of receipt thereof, and
agrees that all such Collections shall be deemed to be received in trust
for the Company and shall be maintained and segregated separate and apart
from all other funds and monies of such Originator until transfer of such
Collections to the Servicer.
-19-
(b) Each Originator shall perform its obligations hereunder, and the
exercise by the Company or its designee of its rights hereunder shall not
relieve any Originator from such obligations.
(c) None of the Company, the Servicer or the Administrator shall
have any obligation or liability to any Obligor or any other third Person
with respect to any Receivables, Contracts related thereto or any other
related agreements, nor shall the Company, the Servicer, the Conduit
Agents, the Conduit Purchasers or the Administrator be obligated to perform
any of the obligations of any Originator thereunder.
(d) Each Originator hereby grants to the Company (who may further
grant to another Person) an irrevocable power of attorney, with full power
of substitution, coupled with an interest, to take in the name of such
Originator all steps necessary or advisable to endorse, negotiate or
otherwise realize on any writing or other right of any kind held or
transmitted by such Originator or transmitted or received by the Company
(whether or not from such Originator) in connection with any Receivable.
7.3 Further Action Evidencing Purchases.
-----------------------------------
Each Originator agrees that from time to time, at its expense, it
will promptly execute and deliver all further instruments and documents, and
take all further action that the Servicer may reasonably request in order to
perfect, protect or more fully evidence the Receivables and Related Rights
purchased by or contributed to the Company hereunder, or to enable the Company
to exercise or enforce any of its rights hereunder or under any other
Transaction Document. Without limiting the generality of the foregoing, upon the
request of the Servicer, each Originator will:
(a) execute and file such financing or continuation statements, or
amendments thereto or assignments thereof, and such other instruments or
notices, as may be necessary or appropriate; and
(b) xxxx the master data processing records that evidence or list
(i) such Receivables and (ii) related Contracts with the legend set forth
in Section 4.l(j).
Each Originator hereby authorizes the Company or its designee to file one or
more financing or continuation statements, and amendments thereto and
assignments thereof, relative to all or any of the Receivables and Related
Rights now existing or hereafter generated by such Originator. If any Originator
fails to perform any of its agreements or obligations under this Agreement, the
Company or its designee may (but shall not be required to) itself perform, or
cause performance of, such agreement or obligation, and the expenses of the
Company or its designee incurred in connection therewith shall be payable by
such Originator as provided in Section 9.1.
7.4 Application of Collections.
--------------------------
Any payment by an Obligor in respect of any indebtedness owed by it
to any Originator shall, except as otherwise specified by such Obligor or
otherwise required by contract or law and unless otherwise instructed by the
Company (or any other Person to whom the
-20-
Company has assigned such right to instruct), be applied as a Collection of any
Receivable or Receivables of such Obligor to the extent of any amounts then due
and payable thereunder before being applied to any other indebtedness of such
Obligor.
ARTICLE VIII
PURCHASE AND SALE TERMINATION EVENTS
8.1 Purchase and Sale Termination Events.
------------------------------------
Each of the following events or occurrences described in this Section
8.1 shall constitute a "Purchase and Sale Termination Event":
(a) a Termination Event (as defined in the Receivables Purchase
Agreement) shall have occurred and, in the case of a Termination Event
(other than one described in paragraph (f) of Exhibit V of the Receivables
Purchase Agreement), the Administrator, shall have declared the Facility
Termination Date to have occurred; or
(b) any Originator shall fail to make any payment or deposit to be
made by it hereunder when due and such failure shall remain unremedied for
one Business Day;
(c) any representation or warranty made or deemed to be made by any
Originator (or any of its officers) under or in connection with this
Agreement, any other Transaction Documents, or any other information or
report delivered pursuant hereto or thereto shall prove to have been
incorrect or untrue in any material respect when made or deemed made, and
shall remain incorrect or untrue for thirty (30) calendar days after
knowledge or notice thereof (if the warranty is of a type that is capable
of being cured);
(d) any Originator shall fail to perform or observe any other term,
covenant or agreement contained in this Agreement on its part to be
performed or observed and such failure shall remain unremedied for ten (10)
Business Days after written notice thereof shall have been given by the
Servicer to such Originator.
8.2 Remedies.
--------
(a) Optional Termination. Upon the occurrence of a Purchase and Sale
Termination Event, the Company (and not the Servicer) shall have the
option, by notice to the Originators (with a copy to the Administrator), to
declare the Purchase and Sale Termination Date to have occurred.
(b) Remedies Cumulative. Upon any termination of the Purchase
Facility pursuant to Section 8.2(a), the Company shall have, in addition to
all other rights and remedies under this Agreement, all other rights and
remedies provided under the UCC of each applicable jurisdiction and other
applicable laws, which rights shall be cumulative.
-21-
ARTICLE IX
INDEMNIFICATION
9.1 Indemnities by the Originators.
------------------------------
Without limiting any other rights which the Company may have
hereunder or under applicable law, each Originator hereby agrees to indemnify
the Company and each of its officers, directors, employees and agents (each of
the foregoing Persons being individually called a "Purchase and Sale Indemnified
Party"), forthwith on demand, from and against any and all damages, losses,
claims, judgments, liabilities and related costs and expenses, including
reasonable attorneys' fees and disbursements (all of the foregoing being
collectively called "Purchase and Sale Indemnified Amounts") awarded against or
incurred by any of them arising out of or as a result of the failure of any
Originator to perform its obligations under this Agreement or any other
Transaction Document, or arising out of the claims asserted against a Purchase
and Sale Indemnified Party relating to the transactions contemplated herein or
therein or the use of proceeds thereof or therefrom, excluding, however, (i)
Purchase and Sale Indemnified Amounts to the extent resulting from gross
negligence or willful misconduct on the part of such Purchase and Sale
Indemnified Party, (ii) any indemnification which has the effect of recourse for
non-payment of the Receivables to any indemnitor (except as otherwise
specifically provided under this Section 9.1) and (iii) any tax based upon or
measured by net income or gross receipts. Without limiting the foregoing, each
Originator agrees that it shall indemnify each Purchase and Sale Indemnified
Party for Purchase and Sale Indemnified Amounts relating to or resulting from:
(a) the transfer by such Originator of an interest in any Receivable
to any Person other than the Company;
(b) the breach of any representation or warranty made by such
Originator (or any of its officers) under or in connection with this
Agreement or any other Transaction Document, or any written information or
report delivered by such Originator pursuant hereto or thereto, which shall
have been false or incorrect in any material respect when made or deemed
made;
(c) the failure by such Originator to comply with any applicable
law, rule or regulation with respect to any Receivable generated by such
Originator or the related Contract, or the nonconformity of any Receivable
generated by such Originator or the related Contract with any such
applicable law, rule or regulation;
(d) the failure to vest and maintain vested in the Company an
ownership interest in the Receivables generated by such Originator free and
clear of any Adverse Claim, other than an Adverse Claim arising solely as a
result of an act of the Company, whether existing at the time of the
purchase of such Receivables or at any time thereafter;
(e) the failure to file, or any delay in filing, financing
statements or other similar instruments or documents under the UCC of any
applicable jurisdiction or other
-22-
applicable laws with respect to any Receivables or purported Receivables
generated by such Originator, whether at the time of any purchase or
contribution or at any subsequent time;
(f) any dispute, claim, offset or defense (other than discharge in
bankruptcy) of the Obligor to the payment of any Receivable or purported
Receivable generated by such Originator (including, without limitation, a
defense based on such Receivable's or the related Contract's not being a
legal, valid and binding obligation of such Obligor enforceable against it
in accordance with its terms), or any other claim resulting from the
services related to any such Receivable or the furnishing of or failure to
furnish such services;
(g) any product liability claim arising out of or in connection with
services that are the subject of any Receivable generated by such
Originator; and
(h) any tax or governmental fee or charge (other than any tax
excluded pursuant to clause (iii) in the proviso to the preceding
sentence), all interest and penalties thereon or with respect thereto, and
all out-of-pocket costs and expenses, including the reasonable fees and
expenses of counsel in defending against the same, which may arise by
reason of the purchase or ownership of the Receivables generated by such
Originator or any Related Security connected with any such Receivables.
If for any reason the indemnification provided above in this Section 9.1 is
unavailable to a Purchase and Sale Indemnified Party or is insufficient to hold
such Purchase and Sale Indemnified Party harmless, then each Originator agrees
that it shall contribute to the amount paid or payable by such Purchase and Sale
Indemnified Party to the maximum extent permitted under applicable law.
ARTICLE X
MISCELLANEOUS
10.1 Amendments, Etc.
---------------
(a) The provisions of this Agreement may from time to time be
amended, modified or waived, if such amendment, modification or waiver is
in writing and consented to by the Company and the Originators (with
respect to an amendment) or by the Company (with respect to a waiver or
consent by it).
(b) No failure or delay on the part of the Company, the Servicer,
the Originators or any third-party beneficiary in exercising any power or
right hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power or right preclude any other or further
exercise thereof or the exercise of any other power or right. No notice to
or demand on the Company, the Servicer or the Originators in any case shall
entitle it to any notice or demand in similar or other circumstances. No
waiver or approval by the Company or the Servicer under this Agreement
shall, except as
-23-
may otherwise be stated in such waiver or approval, be applicable to
subsequent transactions. No waiver or approval under this Agreement shall
require any similar or dissimilar waiver or approval thereafter to be
granted hereunder.
(c) The Transaction Documents contain a final and complete
integration of all prior expressions by the parties hereto with respect to
the subject matter thereof and shall constitute the entire agreement among
the parties hereto with respect to the subject matter thereof, superseding
all prior oral or written understandings.
10.2 Notices, Etc.
------------
All notices and other communications provided for hereunder shall,
unless otherwise stated herein, be in writing (including facsimile
communication) and shall be personally delivered or sent by certified mail,
postage prepaid, or by facsimile, to the intended party at the address or
facsimile number of such party set forth under its name on the signature pages
hereof or at such other address or facsimile number as shall be designated by
such party in a written notice to the other parties hereto. All such notices and
communications shall be effective (i) if personally delivered, when received,
(ii) if sent by certified mail three (3) Business Days after having been
deposited in the mail, postage prepaid, and (iii) if transmitted by facsimile,
when sent, receipt confirmed by telephone or electronic means.
10.3 No Waiver, Cumulative Remedies.
------------------------------
The remedies herein provided are cumulative and not exclusive of any
remedies provided by law. Without limiting the foregoing, each Originator hereby
authorizes the Company, at any time and from time to time, to the fullest extent
permitted by law, to set off, against any obligations of such Originator to the
Company arising in connection with the Transaction Documents (including, without
limitation, amounts payable pursuant to Section 9.1) that are then due and
payable or that are not then due and payable but are accruing in respect of the
then current Settlement Period, any and all indebtedness at any time owing by
the Company to or for the credit or the account of such Originator.
10.4 Binding Effect; Assignability.
-----------------------------
This Agreement shall be binding upon and inure to the benefit of the
Company and the Originators and their respective successors and permitted
assigns. The Originators may not assign any of their rights hereunder or any
interest herein without the prior written consent of the Company, except as
otherwise herein specifically provided. This Agreement shall create and
constitute the continuing obligations of the parties hereto in accordance with
its terms, and shall remain in full force and effect until such time as the
parties hereto shall agree. The rights and remedies with respect to any breach
of any representation and warranty made by the Originators pursuant to Article V
and the indemnification and payment provisions of Article IX and Section 10.6
shall be continuing and shall survive any termination of this Agreement. Neither
the Company nor any other Person may waive a breach of Section 5.20 of this
Agreement for so long as the Notes are outstanding.
-24-
10.5 Governing Law.
-------------
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
10.6 Costs, Expenses and Taxes.
-------------------------
In addition to the obligations of the Originators under Article IX,
each Originator agrees to pay on demand:
(a) all reasonable costs and expenses in connection with the
enforcement of this Agreement, the Originator Assignment Certificates and
the other Transaction Documents; and
(b) all stamp and other taxes and fees payable or determined to be
payable in connection with the execution, delivery, filing and recording of
this Agreement or the other Transaction Documents to be delivered
hereunder, and agrees to indemnify each Purchase and Sale Indemnified Party
against any liabilities with respect to or resulting from any delay in
paying or omission to pay such taxes and fees.
10.7 Submission to Jurisdiction.
--------------------------
EACH PARTY HERETO HEREBY IRREVOCABLY (a) SUBMITS TO THE NON-EXCLUSIVE
JURISDICTION OF NEW YORK COUNTY, NEW YORK OR UNITED STATES FEDERAL COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK, OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO ANY TRANSACTION DOCUMENT; (b) AGREES THAT ALL CLAIMS IN RESPECT OF
SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH STATE OR UNITED
STATES FEDERAL COURT; (c) WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO
SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING; (d) IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN
ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES OF SUCH PROCESS TO SUCH
PERSON AT ITS ADDRESS SPECIFIED IN SECTION 10.2; AND (e) AGREES THAT A FINAL
JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW. NOTHING IN THIS SECTION 10.7 SHALL AFFECT THE COMPANY'S RIGHT
TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING ANY
ACTION OR PROCEEDING AGAINST THE ORIGINATOR OR ITS PROPERTY IN THE COURTS OF ANY
OTHER JURISDICTIONS.
10.8 Waiver of Jury Trial.
--------------------
EACH PARTY HERETO WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION
OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER OR RELATING TO THIS
AGREEMENT, ANY OTHER TRANSACTION DOCUMENT, OR
-25-
ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE
FUTURE BE DELIVERED IN CONNECTION HEREWITH OR ARISING FROM ANY RELATIONSHIP
EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT,
AND AGREES THAT (a) ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT
AND NOT BEFORE A JURY AND (b) ANY PARTY HERETO (OR ANY ASSIGNEE OR THIRD-PARTY
BENEFICIARY OF THIS AGREEMENT) MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF
THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF ANY OTHER
PARTY OR PARTIES HERETO TO WAIVER OF ITS OR THEIR RIGHT TO TRIAL BY JURY.
10.9 Captions and Cross-References; Incorporation by Reference.
---------------------------------------------------------
The various captions (including, without limitation, the table of
contents) in this Agreement are included for convenience only and shall not
affect the meaning or interpretation of any provision of this Agreement.
References in this Agreement to any underscored Section or Exhibit are to such
Section or Exhibit of this Agreement, as the case may be. The Exhibits hereto
are hereby incorporated by reference into and made a part of this Agreement.
10.10 Execution in Counterparts.
-------------------------
This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which when taken together
shall constitute one and the same Agreement.
10.11 Acknowledgment and Agreement.
----------------------------
By execution below, each Originator expressly acknowledges and agrees
that all of the Company's rights, title, and interests in, to, and under this
Agreement (but not its obligations), shall be assigned by the Company pursuant
to the Receivables Purchase Agreement, and each Originator consents to such
assignment. Each of the parties hereto acknowledges and agrees that the
Administrator, the Conduit Agents and the Conduit Purchasers are third-party
beneficiaries of the rights of the Company arising hereunder and under the other
Transaction Documents to which the Originators are a party.
[SIGNATURE PAGE FOLLOWS]
-26-
[SIGNATURE PAGE 1 OF 7 TO PURCHASE
AND SALE AGREEMENT]
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective officers thereunto duly authorized as of the date first
above written.
CONSOL ENERGY INC., as an Originator and
as initial Servicer
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Address: 0000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: Treasurer
Telephone: 000-000-0000
Facsimile: 000-000-0000
CONSOL SALES COMPANY, as an Originator
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Address: 0000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: Treasurer
Telephone: 000-000-0000
Facsimile: 000-000-0000
CONSOL OF KENTUCKY INC., as an
Originator
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Address: 0000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
-27-
Attention: Treasurer
Telephone: 000-000-0000
Facsimile: 000-000-0000
CONSOL PENNSYLVANIA COAL COMPANY, as an
Originator
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Address: 0000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: Treasurer
Telephone: 000-000-0000
Facsimile: 000-000-0000
CONSOLIDATION COAL COMPANY, as an
Originator
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Address: 0000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: Treasurer
Telephone: 000-000-0000
Facsimile: 000-000-0000
ISLAND CREEK COAL COMPANY, as an
Originator
By:
-------------------------------------
Name:
-----------------------------------
-28-
Title:
----------------------------------
Address: 0000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: Treasurer
Telephone: 000-000-0000
Facsimile: 000-000-0000
WINDSOR COAL COMPANY, as an Originator
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Address: 0000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: Treasurer
Telephone: 000-000-0000
Facsimile: 000-000-0000
XXXXXXX COAL COMPANY, as an Originator
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Address: 0000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: Treasurer
Telephone: 000-000-0000
Facsimile: 000-000-0000
KEYSTONE COAL MINING CORPORATION, as an
Originator
-29-
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Address: 0000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: Treasurer
Telephone: 000-000-0000
Facsimile: 000-000-0000
EIGHTY-FOUR MINING COMPANY, as an
Originator
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Address: 0000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: Treasurer
Telephone: 000-000-0000
Facsimile: 000-000-0000
CNX MARINE TERMINALS INC., as an
Originator
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Address: 0000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: President
Telephone: 000-000-0000
Facsimile: 000-000-0000
-30-
CNX GAS COMPANY LLC, as an Originator
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Address: 0000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: President
Telephone: 000-000-0000
Facsimile: 000-000-0000
CNX FUNDING CORPORATION, as the Company
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Address: CONSOL Xxxxx
Xxxxxxxx Xxxxx 000
0000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: Treasurer
Telephone:
Facsimile:
-31-
Exhibit A
to Purchase and Sale Agreement
FORM OF PURCHASE REPORT
ORIGINATOR: ________________________________________________
PURCHASER: CNX FUNDING CORPORATION
DATE: ________________________________________________
I. OUTSTANDING BALANCE OF RECEIVABLES
PURCHASED:________
II. FAIR MARKET VALUE DISCOUNT:
1/[1 + (ELP + SCP + FFP + ((E-R + 2.50%)
X (DSO)))]
--------
365
ELP = Expected Loss Proxy = __________
FFP = Factoring Fee Proxy = 0.25%
SCP = Servicing Cost Proxy = 0.03%
E-R = Euro-Rate = ________
DSO = Days' Sales Outstanding = ___________________
Fair Market Value Discount = _______________________
III. PURCHASE PRICE (I X II) = $________________________
A-1
Exhibit B
to Purchase and Sale Agreement
FORM OF COMPANY NOTE
B-1
Exhibit C
to Purchase and Sale Agreement
FORM OF ORIGINATOR ASSIGNMENT CERTIFICATE
C-1
Exhibit D
to Purchase and Sale Agreement
PROCEEDINGS
None. (The Originators have delivered to the Company and the Administrator a
schedule of significant litigation but the Originators do not believe that any
such litigation will probably have a Material Adverse Effect.)
D-1
Exhibit E
to Purchase and Sale Agreement
OFFICE LOCATIONS
----------------
Each Originator maintains books and records relating to Receivables at:
0000 Xxxxxxxxxx Xxxx, Xxxxxxxxxx, XX 00000
The Principal Place of Business and Chief Executive Office of each Originator
is:
0000 Xxxxxxxxxx Xxxx, Xxxxxxxxxx, XX 00000
The state of Formation of each Originator is:
CONSOL Energy Inc. Delaware
Consol Sales Company Delaware
CONSOL of Kentucky Inc. Delaware
Consol Pennsylvania Coal Company Delaware
Consolidation Coal Company Delaware
Island Creek Coal Company Delaware
Windsor Coal Company West Virginia
McELROY COAL COMPANY Delaware
Keystone Coal Mining Corporation Pennsylvania
Eighty-Four Mining Company Pennsylvania
CNX Gas Company LLC Virginia
CNX Marine Terminals Inc. Delaware
E-1
Exhibit F
to Purchase and Sale Agreement
TRADE NAMES
-----------
Legal Name/Trade Names/Fictitious Names of each Originator
----------------------------------------------------------
CONSOL Energy Inc.
Consol Sales Company
CONSOL of Kentucky Inc.
Consol Pennsylvania Coal Company
Consolidation Coal Company
Island Creek Coal Company
Windsor Coal Company
XxXXXXX COAL COMPANY
Keystone Coal Mining Corporation
Eighty-Four Mining Company
CNX Gas Company LLC f/a/k/a Pocahontas Gas Partnership and Xxxxxxxx Production
Company
CNX Marine Terminals Inc. f/a/k/a Consolidation Coal Sales Company
F-1
