Exhibit 10-m
Purchase and Sale Agreement
Dated as of October 29, 1999
between
Kansas City Power & Light Company,
as Originator,
and
Kansas City Power & Light Receivables Company,
as Buyer
Table of Contents
Section Heading Page
Section 1. Definitions and Related Matters 1
Section 1.1. Defined Terms 1
Section 1.2. Other Interpretive Matters 1
Section 2. Agreement to Contribute, Purchase and Sell 2
Section 2.1. Purchase and Sale 2
Section 2.2. Timing of Contribution, Purchases 2
Section 2.3. Purchase Price 2
Section 2.4. No Recourse or Assumption of Obligations 3
Section 3. Administration and Collection 3
Section 3.1. Originator to Act as Collection Agent 3
Section 3.2. Deemed Collections 3
Section 3.3. Application of Collections 4
Section 3.4. Responsibilities of Originator 4
Section 3.5. Maintenance of Sold Interest 4
Section 4. Representations and Warranties 5
Section 4.1. Mutual Representations and Warranties 5
Section 4.2. Additional Representations by Originator 5
Section 5. General Covenants 7
Section 5.1. Covenants 7
Section 5.2 Organizational Separateness 10
Section 6. Termination of Purchases 10
Section 6.1. Voluntary Termination 10
Section 6.2. Automatic Termination 10
Section 7. Indemnification 10
Section 7.1. Originator's Indemnity 10
Section 7.2 Indemnification Due to Failure to Consummate
Purchase 12
Section 7.3 Other Costs 12
Section 8. Miscellaneous 12
Section 8.1. Amendments, Waivers, etc 12
Section 8.2. Assignment of Receivables Purchase Agreement 12
Section 8.3. Binding Effect; Assignment 13
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Section 8.4. Survival 13
Section 8.5. Costs, Expenses and Taxes 13
Section 8.6. Execution in Counterparts; Integration 13
Section 8.7. Governing Law; Submission to Jurisdiction 13
Section 8.8. No Proceedings 14
Section 8.9. Loans by Buyer to Originator 14
Section 8.10. Notice 14
Section 8.11. Entire Agreement 14
Signature 15
Exhibit A Purchase Price
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This Purchase and Sale Agreement dated as of October 29,
1999 (this "Agreement") is between Kansas City Power & Light
Company, a Missouri corporation ("Originator"), and Kansas City
Power & Light Receivables Company, a Delaware corporation
("Buyer"). The parties agree as follows:
Section 1. Definitions and Related Matters.
Section 1.1. Defined Terms. In this Agreement, unless otherwise
specified or defined herein: (a) capitalized terms are used as
defined in Schedule I to the Receivables Sale Agreement dated as
of the date hereof (as amended or modified from time to time, the
"Second Tier Agreement") among Buyer, Originator, Amsterdam
Funding Corporation, the liquidity providers party thereto, and
ABN AMRO Bank N.V. as the Enhancer and the Agent, as such
agreement may be amended or modified from time to time; and
(b) terms defined in Article 9 of the UCC and not otherwise
defined herein are used as defined in such Article 9.
In addition, the following terms will have the meanings
specified below:
"Available Funds" is defined in Section 2.3(b) hereof.
"Closing Date" means the date on which this Agreement
and the Second Tier Agreement become effective in accordance
with their terms.
"Collection Agent Fee" is defined in Section 3.6 of the
Second Tier Agreement.
"Excluded Losses" is defined in Section 7.1 hereof.
"Initial Funding Date" means the date of the first
purchase by Buyer from Originator under this Agreement as
approved by the Agent.
"Settlement Date" means, with respect to any Settlement
Period, the twentieth day of the immediately succeeding
calendar month (or, if such day is not a Business Day, the
next preceding Business Day).
"Settlement Period" means a calendar month (or, in the
case of the first Settlement Period, the period from the
Initial Funding Date to the end of the calendar month in
which the Initial Funding Date occurs).
"Trigger Event" means that (x) the outstanding
principal amount of the Subordinated Note exceeds the value
of Buyer's interest in the Receivables (determined in
accordance with GAAP), and (y) such condition has continued
for five Business Days.
Section 1.2. Other Interpretive Matters. In this Agreement,
unless otherwise specified: (a) references to any Section or
Annex refer to such Section of, or Annex to, this Agreement, and
references in any Section or definition to any subsection or
clause refer to such subsection or clause of such Section or
definition; (b) "herein", "hereof", "hereto", "hereunder" and
similar terms refer to this Agreement as a whole and not to any
particular provision of this Agreement;
(c) "including" means including without limitation, and other
forms of the verb "to include" have correlative meanings; (d) the
word "or" is not exclusive; and (e) captions are solely for
convenience of reference and shall not affect the meaning of
this Agreement.
Section 2. Agreement to Contribute, Purchase and Sell.
Section 2.1. Purchase and Sale. On the terms and subject to the
conditions set forth in this Agreement, Originator hereby sells
to Buyer, and Buyer hereby purchases from Originator, all of
Originator's right, title and interest in, to and under the
Receivables and all proceeds thereof (including all Collections
with respect thereto), in each case whether now existing or
hereafter arising or acquired.
Section 2.2. Timing of Contribution, Purchases. $3,000,000 of
the Receivables existing at the opening of Originator's business
on the Initial Funding Date are hereby contributed by Originator
as capital to Buyer as of the Initial Funding Date. All of the
remaining Receivables existing at the opening of Originator's
business on the Initial Funding Date are hereby sold to Buyer as
of the Initial Funding Date. After the Initial Funding Date,
each Receivable shall be deemed to have been sold to Buyer
immediately (and without further action by any Person) upon the
creation of such Receivable. The proceeds with respect to each
Receivable (including all Collections with respect thereto) shall
be sold at the same time as such Receivable, whether such
proceeds (or Collections) exist at such time or arise or are
acquired thereafter.
Section 2.3. Purchase Price. (a) The aggregate purchase price
for the Receivables sold on the Initial Funding Date shall be
such amount as agreed upon prior to the Initial Funding Date
between Originator and Buyer to be the fair market value of such
Receivables on such date, which shall equal the excess of the
(i) estimated aggregate outstanding balance of such Receivables
over (ii) an amount agreed upon by Buyer and Originator
representing the uncertainty of payment and cost of purchase of
such Receivables. The purchase price for Receivables
subsequently sold during any Settlement Period shall be
calculated in accordance with the provisions set forth in
Exhibit A hereto.
(b) On the Initial Funding Date, Buyer shall pay Originator
the purchase price for the Receivables sold on that date. On
each Business Day after the Initial Funding Date on which
Originator sells any Receivables to Buyer pursuant to the terms
of Section 2.1, until the termination of the purchase and sale of
Receivables under Section 6 hereof, Buyer shall pay to Originator
the purchase price of such Receivables (i) by depositing into
such account as Originator shall specify immediately available
funds from monies then held by or on behalf of Buyer solely to
the extent that such monies do not constitute Collections that
are required to be identified or are deemed to be held by the
Collection Agent pursuant to the Second Tier Agreement for the
benefit of, or required to be distributed to, the Agent or the
Purchasers pursuant to the Second Tier Agreement or required to
be paid to the Collection Agent as the Collection Agent Fee, or
otherwise necessary to pay current expenses of Buyer (in its
reasonable discretion) (such available monies, the "Available
Funds") and provided that Originator has paid all amounts then
due by Originator hereunder or (ii) by increasing the principal
amount owed to Originator under the promissory note (as amended
or modified from time to time, the "Subordinated Note") executed
and delivered by Buyer to the order of Originator as of the
Initial Funding Date. The outstanding principal amount owed to
Originator under the
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Subordinated Note may be reduced from time
to time as provided in Section 3.2 hereof or by payments made by
Buyer from Available Funds, provided that Originator has paid all
amounts then due by Originator hereunder. Originator shall make
all appropriate record keeping entries with respect to amounts
due to Originator under the Subordinated Note to reflect payments
by Buyer thereon and increases of the principal amount thereof,
and Originator's books and records shall constitute rebuttable
presumptive evidence of the principal amount of and accrued
interest owed to Originator under the Subordinated Note.
Notwithstanding the foregoing, the Buyer shall not be allowed to
pay for Receivables through an increase in the Subordinated Note
if, after giving effect thereto, the outstanding principal amount
thereof would be greater than (i) the Eligible Receivables
Balance minus (ii) the Aggregate Investment minus
(iii) $2,500,000.
Section 2.4. No Recourse or Assumption of Obligations. Except
as specifically provided in this Agreement, the contribution,
purchase and sale of Receivables under this Agreement shall be
without recourse to Originator. Originator and Buyer intend the
transactions hereunder to constitute true sales of Receivables by
Originator to Buyer, providing Buyer with the full risks and
benefits of ownership of the Receivables (such that the
Receivables would not be property of Originator's estate in the
event of Originator's bankruptcy). If, however, despite the
intention of the parties, the conveyances provided for in this
Agreement are determined not to be "true sales" of Receivables
from Originator to Buyer, then this Agreement shall also be
deemed to be a "security agreement" within the meaning of Article
9 of the UCC and Originator hereby grants to Buyer a "security
interest" within the meaning of Article 9 of the UCC in all of
Originator's right, title and interest in and to such Receivables
(including the proceeds thereof), now existing and thereafter
created, to secure a non-recourse loan in an amount equal to the
aggregate purchase prices therefor and each of Originator's other
payment obligations (including the obligation to remit to Buyer
all Collection of all Receivables) under this Agreement.
Buyer shall not have any obligation or liability with
respect to any Receivable, nor shall Buyer have any obligation or
liability to any Obligor or other customer or client of
Originator (including any obligation to perform any of the
obligations of Originator under any Receivable).
Section 3. Administration and Collection.
Section 3.1. Originator to Act as Collection Agent.
Notwithstanding the sale of Receivables pursuant to this
Agreement, Originator shall continue to be responsible for the
servicing, administration and collection of the Receivables, all
on the terms set out in (and subject to any rights to terminate
Originator as Collection Agent pursuant to) the Second Tier
Agreement.
Section 3.2. Deemed Collections. If on any day the outstanding
balance of a Receivable is reduced or cancelled as a result of
any defective or rejected goods or services, any cash discount or
adjustment (including as a result of the application of any
special refund or other discounts or any reconciliation), any
setoff or credit (whether such claim or credit arises out of the
same, a related, or an unrelated transaction) or other similar
reason not arising from the financial inability of the Obligor to
pay undisputed indebtedness, (i) Originator shall be deemed to
have received on such day a Collection on such Receivable in the
amount of such reduction or cancellation and (ii) such Receivable
shall thereupon be, or be deemed to be reconveyed to Originator.
If on any day any representation, warranty, covenant or other
agreement of
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Originator related to a Receivable is discovered to
have been untrue or not satisfied as of the date such Receivable
was sold, (i) Originator shall be deemed to have received on such
day a Collection in the amount of the outstanding balance of such
Receivable and (ii) such Receivable shall thereupon be, or be
deemed to be reconveyed to Originator. Not later than the first
Settlement Date after Originator is deemed pursuant to this
Section 3.2 to have received any Collections, Originator shall
transfer to Buyer, in immediately available funds, the amount of
such deemed Collections; provided, however, that if no such
application is required under the Second Tier Agreement, Buyer
and Originator may agree to reduce the outstanding principal
amount of the Subordinated Note in lieu of all or part of such
transfer. To the extent that Buyer subsequently collects any
payment with respect to any such "receivable", Buyer shall pay
Originator an amount equal to the amount so collected, such
amount to be payable not later than the first Settlement Date
after Buyer has so collected such amount.
Section 3.3. Application of Collections. Any payment by an
Obligor in respect of any indebtedness owed by it to Originator
shall, except as otherwise specified by such Obligor (including
by reference to a particular invoice), or required by the related
contracts or law, be applied, first, as a Collection of any
Receivable or Receivables then outstanding of such Obligor in the
order of the age of such Receivables, starting with the oldest of
such Receivables, and, second, to any other indebtedness of such
Obligor to Originator.
Section 3.4. Responsibilities of Originator. Originator shall
pay when due all Taxes payable in connection with the Receivables
or their creation or satisfaction. Originator shall perform all
of its obligations under agreements related to the Receivables to
the same extent as if interests in the Receivables had not been
transferred hereunder. The Agent's or any Purchaser's exercise
of any rights hereunder or under the Second Tier Agreement shall
not relieve Originator from such obligations. Neither the Agent
nor any Purchaser shall have any obligation to perform any
obligation of Originator or any other obligation (other than the
obligation to act in good faith and with commercial
reasonableness) or liability in connection with the Receivables.
Section 3.5. Maintenance of Sold Interest. If at any time on or
before the Liquidity Termination Date the Aggregate Investment
plus the Reserve Amount exceeds the Eligible Receivable Balance,
then the Originator shall no later than the date on which the
Collection Agent is obligated to deliver its next Periodic Report
as provided in Section 3.3 of the Second Tier Agreement pay to
the Buyer an amount equal to such excess; provided that if no
such application is required under the Second Tier Agreement,
Buyer and Originator may agree to reduce the outstanding
principal amount of the Subordinated Note in lieu of all or part
of such transfer.
Section 4. Representations and Warranties.
Section 4.1. Mutual Representations and Warranties. Each of
Originator and Buyer represents and warrants to the other as
follows:
(a) Existence and Power. It is a corporation, duly
organized, validly existing and in good standing under the
laws of its state of incorporation and has all corporate
power and authority and all governmental licenses,
authorizations, consents and approvals required to carry on
its business in each jurisdiction in which its business is
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now conducted, except where failure to obtain such license,
authorization, consent or approval could not reasonably be
expected to have a material adverse effect on (i) its
ability to perform its obligations under, or the
enforceability of, any Transaction Document to which it is a
party, (ii) its business or financial condition, (iii) the
interests of Buyer under any Transaction Document or (iv)
the enforceability or collectibility of any Receivable.
(b) Authorization and No Contravention. Its
execution, delivery and performance of each Transaction
Document to which it is a party (i) are within its corporate
powers, (ii) have been duly authorized by all necessary
corporate action, (iii) do not contravene or constitute a
default under: (A) any applicable law, rule or regulation,
(B) its charter or by-laws or (C) any agreement, order or
other instrument to which it is a party or its property is
subject and (iv) will not result in any Adverse Claim on any
Receivable or Collection or give cause for the acceleration
of any of its indebtedness.
(c) No Consent Required. Other than the filing of
financing statements no approval, authorization or other
action by, or filings with, any Governmental Authority or
other Person is required in connection with the execution,
delivery and performance by it of any Transaction Document
to which it is a party or any transaction contemplated
thereby.
(d) Binding Effect. Each Transaction Document to
which it is a party constitutes the legal, valid and binding
obligation of such Person enforceable against such Person in
accordance with its terms, except as limited by bankruptcy,
insolvency, or other similar laws of general application
relating to or affecting the enforcement of creditors'
rights generally and subject to general principles of
equity.
Section 4.2. Additional Representations by Originator.
Originator further represents and warrants to Buyer as follows:
(a) Perfection of Ownership Interest. Immediately
preceding its sale of Receivables to Buyer, Originator was
the owner of, and effectively sold, such Receivables to
Buyer, free and clear of any Adverse Claim, except for the
interests of the Purchasers (through the Agent) therein that
are created by the Second Tier Agreement.
(b) Accuracy of Information. All written information
furnished by Originator in connection with any Transaction
Document, or any transaction contemplated thereby, is true
and accurate in all material respects as of the date it was
dated (and was not incomplete by omitting to state a
material fact necessary to make such information not
materially misleading in light of the circumstances when
made).
(c) No Actions, Suits. Except as disclosed by the
Originator in its most recent filings with the SEC under the
Securities Exchange Act of 1934, there are no actions, suits
or other proceedings (including matters relating to
environmental liability) pending or threatened against or
affecting Originator or any of its properties, that (i) is
reasonably likely to have a material adverse effect on the
financial condition of the Originator or on
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the collectibility of the Receivables or (ii) seeks to challenge
the validity of Originator's obligations under any
Transaction Document to which it is a party or any
transaction contemplated thereby. Originator is not in
default of any contractual obligation or in violation of any
order, rule or regulation of any Governmental Authority,
which default or violation could reasonably be expected to
have a material adverse effect upon (i) the financial
condition or the Originator or (ii) the collectibility of
the Receivables.
(d) No Material Adverse Change. Except as disclosed
by the Originator in its most recent filings with the SEC
under the Securities Exchange Act of 1934, there has been no
material adverse change in (i) the collectibility of the
Receivables or (ii) the Originator's financial condition,
business or operations or its ability to perform its
obligations under any Transaction Document.
(e) Accuracy of Exhibits. All information on Exhibits
D and E of the Second Tier Agreement (to the extent
describing Originator) is true and complete, subject to any
changes permitted by, and notified to the Agent in
accordance with the Second Tier Agreement.
(f) Sales by Originator. Each sale by Originator to
Buyer of an interest in Receivables has been made for
"reasonably equivalent value" (as such term is used in
Section 548 of the Bankruptcy Code) and not for or on
account of "antecedent debt" (as such term is used in
Section 547 of the Bankruptcy Code) owed by Originator to
Buyer.
(g) Year 2000 Problem. Originator has reviewed the
areas within its business and operations which could be
adversely affected by, and has developed or is developing a
program to address on a timely basis, the "Year 2000
Problem" (that is, the risk that computer applications used
by Originator and its Subsidiaries may be unable to
recognize and perform properly date-sensitive functions
involving certain dates prior to and any date on or after
December 31, 1999). Based on such review and program,
Originator believes as of the date hereof the Year 2000
Problem will not have a material adverse effect on the
ability of the Originator to perform its obligations under
the Transaction Documents.
Section 5. General Covenants.
Section 5.1. Covenants. Originator hereby covenants and agrees
to comply with the following covenants and agreements, unless
Buyer (with the consent of the Agent) shall otherwise consent:
(a) Financial Reporting. Originator will maintain a
system of accounting established and administered in
accordance with GAAP and will furnish to Buyer:
(i) Within 90 days after each fiscal year of the
Originator, copies of the Originator's annual audited
financial statements (including a consolidated balance
sheet, consolidated statement of income and retained
earnings and statement of cash flows, with related
footnotes) certified by independent certified
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public accountants satisfactory to the Agent and prepared
on a consolidated basis in conformity with GAAP;
(ii) Within 45 days after each (except the last)
fiscal quarter of each fiscal year of the Originator,
copies of the Originator's unaudited financial
statements (including at least a consolidated balance
sheet as of the close of such quarter and statements of
earnings and sources and applications of funds for the
period from the beginning of the fiscal year to the
close of such quarter) certified by a Designated
Financial Officer and prepared in a manner consistent
with the financial statements described in part (A) of
clause (i) of this Section 5.1(a);
(iii) Promptly upon becoming available, a copy of
each report or proxy statement filed by the Originator
with the Securities and Exchange Commission or any
securities exchange; and
(iv) with reasonable promptness such other
information (including non-financial information) as
Buyer may reasonably request.
(b) Notices. Promptly and in any event within five
Business Days after a Designated Financial Officer of
Originator obtains knowledge of any of the following,
Originator will notify Buyer and provide a description of:
(i) Potential Termination Events. The occurrence
of any Potential Termination Event;
(ii) Representations and Warranties. The failure
of any representations or warranty herein to be true
when made in any material respect;
(iii) Downgrading. The downgrading, withdrawal or
suspension of any rating by any rating agency of any
indebtedness of the Originator;
(iv) Litigation. The institution of any
litigation, arbitration proceeding or governmental
proceeding reasonably likely to be material to the
Originator or the collectibility or quality of the
Receivables which is not referenced in the Originator's
filings with the SEC; or
(v) Judgments. The entry of any judgment or
decree against the Originator if the aggregate amount
of all judgments then outstanding against the
Originator exceeds $10,000,000.
(c) Conduct of Business. The Originator will perform
all actions necessary to remain duly incorporated, validly
existing and in good standing in its jurisdiction of
incorporation and to maintain all requisite authority to
conduct its business in each jurisdiction in which it
conducts business except where the failure to do so could
not reasonably be expected to have a material adverse effect
on the collectibility of the Receivables. The Agent hereby
agrees that nothing in this Agreement or any other
Transaction Document would restrict or prohibit the
Originator's plan of merger with
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Western Resources pursuant to that certain Amended and Restated
Agreement and Plan of Merger (Amended Agreement) dated as
of March 18, 1998 between the Originator and Western Resources;
provided, that (i) the surviving corporation agrees to assume
all duties and obligations of the Originator under this Agreement
and all other Transaction Documents to which the Originator is a
party and (ii) the surviving corporation executes all
documents and agreements reasonably necessary (including any
UCC-1 and UCC-3 financing statements) to maintain the
Agent's first priority perfected security interest in the
Receivables, Related Security and Collections.
(d) Compliance with Laws. The Originator will comply
with all laws, regulations, judgments and other directions
or orders imposed by any Governmental Authority to which the
Originator or any Receivable, any Related Security or
Collection may be subject, except where the failure to do so
could not reasonably be expected to have a material adverse
effect on the collectibility of the Receivables.
(e) Furnishing Information and Inspection of Records.
Originator will furnish to Buyer such information concerning
the Receivables as Buyer may reasonably request. With
reasonable notice, Originator will permit, at any time
during regular business hours, Buyer (or any representatives
thereof) (i) to examine and make copies of all Records,
(ii) to visit the offices and properties of Originator for
the purpose of examining the Records and (iii) to discuss
matters relating hereto with any of Originator's officers,
directors, employees or independent public accountants
having knowledge of such matters. Once a year, Buyer may
(at the expense of Originator) have an independent public
accounting firm conduct an audit of the Records or make test
verification of the Receivables and Collections in
connection with the audit and test verifications conducted
on behalf of the Agent under the Second Tier Agreement.
(f) Keeping Records. (i) Originator will have and
maintain (A) administrative and operating procedures
(including an ability to recreate Records if originals are
destroyed), (B) adequate facilities, personnel and equipment
and (C) all Records and other information necessary or
advisable for collecting the Receivables (including Records
adequate to permit the immediate identification of each new
Receivable and all Collections of, and adjustments to, each
existing Receivable). Originator will give Buyer prior
notice of any material change in such administrative
operating procedures.
(ii) Originator will, (A) at all times from and after
the date hereof, clearly and conspicuously xxxx its computer
and master data processing books and records with a legend
describing Buyer's interest in the Receivables and the
Collections.
(g) Perfection. (i) The Originator will at its
expense, promptly execute and deliver all instruments and
documents and take all action necessary or requested by the
Buyer (including the execution and filing of financing or
continuation statements, amendments thereto or assignments
thereof) to vest and maintain vested in the Buyer a valid,
first priority perfected security interest in the
Receivables, the Collections, and proceeds thereof free and
clear of any Adverse Claim (and a perfected ownership
interest in the Receivables and Collections to the extent of
the Sold Interest). To the extent
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permitted by applicable law, the Buyer will be permitted to
sign and file any continuation statements, amendments
thereto and assignments thereof without the Buyer's signature.
(ii) The Originator will not change its name, identity
or corporate structure or relocate its chief executive
office or the Records except after fifteen (15) days advance
notice to the Buyer and the delivery to the Buyer of all
financing statements, instruments and other documents
(including direction letters) requested by the Buyer.
(iii) The Originator will at all times maintain its
chief executive offices within a jurisdiction in the USA
(other than in the states of Florida, Maryland and
Tennessee) in which Article 9 of the UCC is in effect. If
the Originator moves its chief executive office to a
location that imposes Taxes, fees or other charges to
perfect the Buyer's interests hereunder the Originator will
pay all such amounts and any other costs and expenses
incurred in order to maintain the enforceability of the
Transaction Documents, the Sold Interest and the interests
of the Buyer in the Receivables, the Related Security and
Collections.
(h) Payments on Receivables, Accounts. The Originator
will at all times instruct all Obligors to deliver payments
on the Receivables to a Lock-Box or to a Designated Payee
(as set forth in the Second Tier Agreement). The Originator
will also instruct each Designated Payee to pay all
Collections it receives to a Collection Account. If any
such payments or other Collections are received by the
Originator, it shall hold such payments in trust for the
benefit of the Buyer and promptly (but in any event within
two Business Days after receipt) remit such funds at the
direction of the Buyer. The Originator will cause each
Collection Bank to comply with the terms of each applicable
Collection Letter. After the occurrence of a Termination
Event, the Originator will not, and will not permit any
Collection Agent or other Person to, commingle Collections
or other funds to which the Buyer is entitled with any other
funds. The Originator shall only add a Collection Bank or
Lock-Box to those listed on Exhibit F of the Second Tier
Agreement if the Buyer has received notice of such addition,
a copy of any new Lock-Box, as applicable, Agreement and an
executed and acknowledged copy of a Collection Letter
substantially in the form of Exhibit G of the Second Tier
Agreement (with such changes as are acceptable to the Buyer)
from any new Collection Bank. The Originator shall only
terminate a Collection Bank or Lock-Box upon 30 days advance
notice to the Buyer. If the long term unsecured
indebtedness of the Originator is rated less than BBB by S&P
or Baa2 by Xxxxx'x (or either S&P or Xxxxx'x has withdrawn
or suspended such rating), the Originator agrees that it
will not access any Lock-Box without the consent of the
Buyer.
(i) Sales and Adverse Claims Relating to Receivables.
Except as otherwise provided herein, the Originator will not
(by operation of law or otherwise) dispose of or otherwise
transfer, or create or suffer to exist any Adverse Claim
upon, any Receivable or any proceeds thereof.
(j) Extension or Amendment of Receivables. Except as
otherwise permitted in the Second Tier Agreement and then
subject to Section 1.5 of the Second Tier Agreement, the
Originator will not extend, amend, rescind or cancel any
Receivable.
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(k) Performance of Duties. Originator will perform
its duties or obligations in accordance with the provisions
of each of the Transaction Documents to which it is a party.
Originator (at its expense) will (i) fully and timely
perform in all material respects all agreements, if any,
required to be observed by it in connection with each
Receivable, (ii) comply in all material respects with the
Credit and Collection Policy, and (iii) refrain from any
action that could reasonably be expected to impair the
rights of Buyer in the Receivables or Collections.
Section 5.2. Organizational Separateness. Originator agrees not
to take any action that would cause Buyer to violate its limited
liability company agreement or operating agreement. Buyer agrees
to conduct its business in a manner consistent with its limited
liability company agreement and operating agreement.
Section 6. Termination of Purchases.
Section 6.1. Voluntary Termination. The purchase and sale of
Receivables pursuant to this Agreement may be terminated by
either party, upon at least five Business Days' prior written
notice to the other party.
Section 6.2. Automatic Termination. The purchase and sale of
Receivables pursuant to this Agreement shall automatically
terminate upon the occurrence of (i) a Bankruptcy Event with
respect to Originator, (ii) a Trigger Event, or (iii) the
Liquidity Termination Date.
Section 7. Indemnification.
Section 7.1. Originator's Indemnity. Without limiting any other
rights any Person may have hereunder or under applicable law,
Originator hereby indemnifies and holds harmless Buyer and its
officers, managers, agents and employees (each an "Indemnified
Party") from and against any and all damages, losses, claims,
liabilities, penalties, Taxes, costs and expenses (including
reasonable attorneys' fees and court costs actually incurred)
(all of the foregoing collectively, the "Indemnified Losses") at
any time imposed on or incurred by any Indemnified Party arising
out of or otherwise relating to any Transaction Document, the
transactions contemplated thereby, or any action taken or omitted
by any of the Indemnified Parties, whether arising by reason of
the acts to be performed by Originator hereunder or otherwise,
excluding only Indemnified Losses ("Excluded Losses") to the
extent (a) a final judgment of a court of competent jurisdiction
holds such Indemnified Losses resulted solely from gross
negligence or willful misconduct of the Indemnified Party seeking
indemnification, (b) solely due to the credit risk or financial
inability to pay of the Obligor and for which reimbursement would
constitute recourse to Originator or the Collection Agent for
uncollectible Receivables or (c) such Indemnified Losses include
Taxes on, or measured by, the overall net income of the Buyer.
Without limiting the foregoing indemnification, but subject to
the limitations set forth in clauses (a), (b) and (c) of the
previous sentence, Originator shall indemnify each Indemnified
Party for Indemnified Losses relating to or resulting from:
(i) any representation or warranty made by or on
behalf of Originator under or in connection with this
Agreement, any Periodic Report or any other information or
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report delivered by Originator pursuant to the Transaction
Documents, which shall have been false or incorrect in any
material respect when made or deemed made;
(ii) the failure by Originator to comply with any
applicable law, rule or regulation related to any
Receivable, or the nonconformity of any Receivable with any
such applicable law, rule or regulation;
(iii) the failure of Originator to vest and maintain
vested in Buyer, a perfected ownership or security interest
in the Receivables and the other property conveyed pursuant
hereto, free and clear of any Adverse Claim;
(iv) any commingling of funds to which Buyer is
entitled hereunder with any other funds;
(v) any failure of a Lock-Box Bank to comply with the
terms of the applicable Lock-Box Letter;
(vi) any dispute, claim, offset or defense (other than
discharge in bankruptcy of the Obligor or financial
inability of the Obligor to pay) of the Obligor to the
payment of any Receivable, or any other claim resulting from
the rendering of services related to such Receivable or the
furnishing or failure to furnish any such services or other
similar claim or defense not arising from the financial
inability of any Obligor to pay undisputed indebtedness;
(vii) any failure of Originator to perform its duties or
obligations in accordance with the provisions of this
Agreement or any other Transaction Document to which
Originator is a party; or
(viii) any environmental liability claim, products
liability claim or personal injury or property damage suit
or other similar or related claim or action of whatever
sort, arising out of or in connection with any Receivable or
any other suit, claim or action of whatever sort relating to
any of Originator's obligations under the Transaction
Documents.
Section 7.2. Indemnification Due to Failure to Consummate
Purchase. Originator will indemnify Buyer on demand and hold it
harmless against all costs (including, without limitation,
breakage costs) and expenses incurred by Buyer resulting from any
failure by Originator to consummate a purchase after Buyer has
requested a transfer of the applicable Receivables to the
Purchasers under the terms of the Second Tier Agreement.
Section 7.3. Other Costs. If Buyer becomes obligated to
compensate the Purchasers under the Second Tier Agreement or any
other Transaction Document for any costs or indemnities pursuant
to any provision of the Second Tier Agreement or any other
Transaction Document, which obligation is triggered directly or
indirectly by Originator's failure to perform any obligations
hereunder, then Originator shall, on demand, reimburse Buyer for
the amount of any compensation.
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Section 8. Miscellaneous.
Section 8.1. Amendments, Waivers, etc. No amendment of this
Agreement or waiver of any provision hereof or consent to any
departure by either party therefrom shall be effective without
the written consent of the party that is sought to be bound. Any
such waiver or consent shall be effective only in the specific
instance given. No failure or delay on the part of either party
to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof; nor shall any single or
partial exercise of any right hereunder preclude any other or
further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any
remedies provided by law. Originator agrees that the Purchasers
may rely upon the terms of this Agreement, and that the terms of
this Agreement may not be amended, nor any material waiver of
those terms be granted, without the consent of the Agent;
provided that Originator and Buyer may agree to an adjustment of
the purchase price for any Receivable without the consent of the
Agent provided that any such adjustment shall be prospective only
and the purchase price paid for any Receivable shall be an amount
not less than adequate consideration that represents fair value
for such Receivable.
Section 8.2. Assignment of Receivables Purchase Agreement.
Originator hereby acknowledges that on the date hereof Buyer has
assigned all of its right, title and interest in, to and under
this Agreement to the Agent for the benefit of the Purchasers
pursuant to the Second Tier Agreement and that the Agent and the
Purchasers are third party beneficiaries hereof. Originator
hereby further acknowledges that after the occurrence and during
the continuation of a Termination Event all provisions of this
Agreement shall inure to the benefit of the Agent and the
Purchasers, including the enforcement of any provision hereof to
the extent set forth in the Second Tier Agreement, but that
neither the Agent nor any Purchaser shall have any obligations or
duties under this Agreement. No purchases shall take place
hereunder at any time that the Buyer has ceased to sell Purchase
Interests under the Second Tier Agreement. Originator hereby
further acknowledges that the execution and performance of this
Agreement are conditions precedent for the Agent and the
Purchasers to enter into the Second Tier Agreement and that the
agreement of the Agent and Purchasers to enter into the Second
Tier Agreements will directly or indirectly benefit Originator
and constitutes good and valuable consideration for the rights
and remedies of the Agent and each Purchaser with respect hereto.
Section 8.3. Binding Effect; Assignment. This Agreement shall
be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns and shall also, to
the extent provided herein, inure to the benefit of the parties
to the Second Tier Agreement. Originator acknowledges that
Buyer's rights under this Agreement are being assigned to the
Agent under the Second Tier Agreement and consents to such
assignment and to the exercise of those rights directly by the
Agent, to the extent permitted by the Second Tier Agreement.
Section 8.4. Survival. The rights and remedies with respect to
any breach of any representation and warranty made by Originator
or Buyer pursuant to Section 4 and the indemnification provisions
of Section 7 shall survive any termination of this Agreement.
Section 8.5. Costs, Expenses and Taxes. In addition to the
obligations of Originator under Section 7, each party hereto
agrees to pay within 30 days of demand all costs and expenses
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incurred by the other party and its assigns (other than Excluded
Losses) in connection with the enforcement of, or any actual or
claimed breach of, this Agreement, including the reasonable fees
and expenses of counsel to any of such Persons incurred in
connection with any of the foregoing or in advising such Persons
as to their respective rights and remedies under this Agreement
in connection with any of the foregoing. Originator also agrees
to pay on demand 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.
Section 8.6. Execution in Counterparts; Integration. This
Agreement may be executed in any number of counterparts and by
the different parties 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.
Section 8.7. Governing Law; Submission to Jurisdiction. This
Agreement shall be governed by, and construed in accordance with,
the internal laws (and not the law of conflicts) of the State of
Illinois. Originator hereby submits to the nonexclusive
jurisdiction of the United States District Court for the Northern
District of Illinois and of any Illinois state court sitting in
Chicago for purposes of all legal proceedings arising out of, or
relating to, the Transaction Documents or the transactions
contemplated thereby. Originator hereby irrevocably waives, to
the fullest extent permitted by law, any objection it may now or
hereafter have to the venue of any such proceeding and any claim
that any such proceeding has been brought in an inconvenient
forum. Nothing in this Section 8.7 shall affect the right of
Buyer to bring any action or proceeding against Originator or its
property in the courts of other jurisdictions.
Section 8.8. No Proceedings. Originator agrees, for the benefit
of the parties to the Second Tier Agreement, that it will not
institute against Buyer, or join any other Person in instituting
against Buyer, any proceeding of a type referred to in the
definition of Bankruptcy Event until one year and one day after
no investment, loan or commitment is outstanding under the Second
Tier Agreement. In addition, all amounts payable by Buyer to
Originator pursuant to this Agreement shall be payable solely
from funds available for that purpose (after Buyer has satisfied
all obligations then due and owing under the Second Tier
Agreement).
Section 8.9. Loans by Buyer to Originator. Buyer may make
loans to Originator from time to time if so agreed between such
parties and to the extent that Buyer has funds available for that
purpose after satisfying its obligations under this Agreement and
the Second Tier Agreement. Any such loan shall be payable upon
demand (and may be prepaid with penalty or premium) and shall
bear interest at such rate as Buyer and Originator shall from
time to time agree.
Section 8.10. Notices. Unless otherwise specified, all notices
and other communications hereunder shall be in writing (including
by telecopier or other facsimile communication), given to the
appropriate Person at its address or telecopy number set forth in
the Second Tier Agreement or at such other address or telecopy
number as such Person may specify, and effective when received at
the address specified by such Person.
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Section 8.11. Entire Agreement. This Agreement constitutes the
entire understanding of the parties thereto concerning the
subject matter thereof. Any previous or contemporaneous
agreements, whether written or oral, concerning such matters are
superseded thereby.
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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.
Kansas City Power & Light
Company, as Originator
By /s/Xxxxxx Xxxxxxx
Name: Xxxxxx Xxxxxxx
Title: Executive Vice President &
Chief Financial Officer
Kansas City Power & Light
Receivables Company, as Buyer
By /s/Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: President
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Exhibit A
Purchase Price
All capitalized terms used, and not otherwise defined,
herein have the meanings set forth for such terms in the
Receivables Sale Agreement dated as of October 29, 1999 among
Kansas City Power & Light Receivables Company ("Seller"), as the
Seller, Kansas City Power & Light Receivables Company ("KCPL"),
as the Initial Collection Agent, ABN AMRO Bank N.V., as the
Agent, the Liquidity Providers party thereto, ABN AMRO Bank N.V.,
as the Enhancer, and Amsterdam Funding Corporation or, if not
defined therein, in the Purchase and Sale Agreement dated as of
October 29, 1999 between KCPL, as the Originator ("Originator"),
and Seller, as the Buyer ("Buyer").
The purchase price applicable to the Receivables purchased
on any day after the Initial Funding Date by Buyer from
Originator shall be equal to 99.25% times the aggregate
outstanding balance of such Receivables. The foregoing purchase
price was calculated to yield to the Buyer a reasonable profit
return on its equity and was calculated assuming, among other
things, that charge-offs of Receivables in any year will average
approximately one-half of one percent (0.5%) of the average
outstanding balance of the Receivables and that LIBOR (which
represents the index for the Buyer's cost of funds) would average
approximately 6%. If the Originator or Buyer determines that
charge-offs in any twelve-month period have exceeded one percent
(1.0%) of the average outstanding balance of Receivables during
such period, or if LIBOR subsequently rises above 7.5% or falls
below 4.5%, then the Originator and the Buyer agree to negotiate
in good faith to re-set the purchase price percentage so as to
reflect in an equitable manner the impact of such revised charge-
off ratio or revised cost of funds on the Buyer's anticipated
equity return. Any such change in the purchase price percentage
shall not take effect unless and until both parties agree to such
adjustment. In the event that (i) the purchase price is adjusted
due to increased charge-offs and average charge-off experience
over a twelve-month period subsequently reduces to one-half of
one percent, (ii) the purchase price is adjusted due to an
increase in LIBOR and LIBOR subsequently reduces below 6.5% for a
three-month consecutive period or (iii) the purchase price is
adjusted due to a decrease in LIBOR and LIBOR subsequently
increases above 5.5% for the three-month consecutive period then
the Originator and Buyer may subsequently agree to readjust the
purchase price percentage as set forth above to reflect the
equitable impact of such changes. All purchase price adjustments
pursuant to the foregoing provisions shall be prospective only
and shall not operate to adjust retroactively the purchase price
previously paid for any Receivables.
