RECEIVABLES SALE AGREEMENT
Exhibit
10.1
EXECUTION
COPY
______________________________________________________________________________
dated
as
of
December
20, 2005
between
PUGET
SOUND ENERGY, INC.,
as
Originator
AND
PSE
FUNDING, INC.,
as
Buyer
THIS
RECEIVABLES SALE AGREEMENT, dated as of December 20, 2005, is by and between
PUGET SOUND ENERGY, INC., a Washington corporation (“Originator”), and PSE
FUNDING, INC., a Washington corporation (“Buyer). Unless defined elsewhere
herein, capitalized terms used in this Agreement shall have the meanings
assigned to such terms in Exhibit
I
hereto
(or, if not defined in Exhibit
I
hereto,
the meaning assigned to such term in the Loan Agreement).
PRELIMINARY
STATEMENTS
WHEREAS,
Originator now owns, and from time to time hereafter will own, Receivables.
Originator wishes to contribute and sell and assign to Buyer, and Buyer wishes
to accept as a contribution and purchase from Originator, all of Originator's
right, title and interest in and to such Receivables, together with the Related
Security and Collections with respect thereto.
WHEREAS,
Originator and Buyer intend the transactions contemplated hereby to be true
sales of the Receivables from Originator to Buyer, providing Buyer with the
full
benefits of ownership of the Receivables, and Originator and Buyer do not intend
these transactions to be, or for any purpose to be characterized as, loans
from
Buyer to Originator.
WHEREAS,
in order to finance its purchases of such Receivables, Related Security and
Collections from the Originator, Buyer has entered into that certain Loan and
Servicing Agreement dated as of the date hereof (as the same may from time
to
time hereafter be amended, supplemented, restated or otherwise modified, the
“Loan Agreement”) by and among Buyer, as Borrower, Originator, as Servicer, the
commercial paper conduits from time to time party thereto as Conduit Lenders,
the entities from time to time party thereto as Committed Lenders, the financial
institutions from time to time party thereto as Managing Agents and JPMorgan
Chase Bank, N.A., as Program Agent.
NOW,
THEREFORE, in consideration of the foregoing premises and the mutual agreements
herein contained and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE
I
AMOUNTS
AND TERMS OF THE PURCHASES
Section
1.1 Purchases
of Receivables.
(a) Effective
on the date hereof, in consideration for the Purchase Price, in the case of
purchases hereunder, and upon the terms and subject to the conditions set forth
herein, Originator does hereby contribute, sell, assign, transfer, set-over
and
otherwise convey to Buyer, without recourse (except to the extent expressly
provided herein), and Buyer does hereby accept as a contribution or purchase,
as
applicable, from Originator, all of Originator's right, title and interest
in
and to all Receivables existing as of the close of business on the Business
Day
immediately prior to the date hereof and all Receivables thereafter arising
through and including the Termination Date, together, in each case, with all
Related Security relating thereto and all Collections thereof. In accordance
with the preceding sentence, on the date hereof Originator shall contribute
to
Buyer, and Buyer shall acquire all of Originator's right, title and interest
in
and to all Receivables existing as of the close of business on the Business
Day
immediately prior to the date hereof together with all Related Security and
Collections related thereto. On each Business Day after the date hereof,
Originator shall sell and Buyer shall acquire all of Originator’s right, title
and interest in and to all Receivables arising on the date hereof and thereafter
arising through and including the Termination Date, together with all Related
Security relating thereto and all Collections thereof. Buyer shall be obligated
to pay the Purchase Price for the Receivables purchased hereunder in accordance
with Section
1.2.
In
connection with the payment of the Purchase Price for any Receivables purchased
hereunder, Buyer may request that Originator deliver, and Originator shall
deliver, such approvals, opinions, information, reports or documents as Buyer
may reasonably request.
(b) It
is the
intention of the parties hereto that each Purchase of Receivables made hereunder
shall constitute a sale or contribution, as applicable, which sale or
contribution is absolute and irrevocable and provides Buyer with the full
benefits of ownership of the Receivables. Except for the Purchase Price Credits
owed pursuant to Section
1.3,
the
sales and contributions of Receivables hereunder are made without recourse
to
Originator; provided,
however,
that (i)
Originator shall be liable to Buyer for all representations, warranties,
covenants and indemnities made by Originator pursuant to the terms of the
Facility Documents to which Originator is a party, and (ii) such sale or
contribution does not constitute and is not intended to result in an assumption
by Buyer or any assignee thereof of any obligation of Originator or any other
Person arising in connection with the Receivables, the related Contracts and/or
other Related Security or any other obligations of Originator. In view of the
intention of the parties hereto that the Purchases of Receivables made hereunder
shall constitute sales or contributions of such Receivables rather than loans
secured thereby, Originator agrees that it will, on or prior to the date hereof
and in accordance with Section
4.1(e)(ii),
xxxx
its master data processing records relating to the Receivables with a legend
acceptable to Buyer and to the Program Agent (as Buyer's assignee), evidencing
that Buyer has purchased such Receivables as provided in this Agreement and
to
note in its financial statements that its Receivables have been sold to Buyer.
Upon the request of Buyer or the Program Agent (as Buyer's assignee), Originator
will execute and/or file such financing or continuation statements, or
amendments thereto or assignments thereof, and such other instruments or
notices, as may be necessary or appropriate to perfect and maintain the
perfection of Buyer's ownership interest in the Receivables and the Related
Security and Collections with respect thereto, or as Buyer or the Program Agent
(as Buyer's assignee) may reasonably request.
Section
1.2 Payment
for the Purchases.
(a) The
Receivables in existence on the close of business on the Business Day
immediately preceding the date hereof (the “Initial Cutoff Date”) are hereby
contributed to Buyer by Originator on the date hereof.
Each
Receivable coming into existence after the Initial Cutoff Date, shall be sold
to
the Buyer on the Business Day occurring immediately after the day such
Receivable is originated and the Purchase Price for such Receivable shall be
due
and owing in full by Buyer to Originator or its designee on such Business Day
(except that Buyer may, with respect to any such Purchase Price, offset against
such Purchase Price any amounts owed by Originator to Buyer hereunder and which
have become due but remain unpaid) and shall be paid to Originator in the manner
provided in the following paragraphs (b), (c) and (d).
(b) With
respect to any Receivables sold hereunder after the date hereof, on the first
Business Day after such Receivable is originated, such Receivable shall be
sold
to Buyer and on such date of Purchase, Buyer shall pay the Purchase Price
therefor in accordance with Section
1.2(d)
and in
the following manner:
(i) first,
by
delivery of immediately available funds, to the extent of funds available to
Buyer from Borrowings under the Loan Agreement or other cash on hand;
and
(ii) second,
unless
Originator has declared the Termination Date to have occurred pursuant to
Section
5.2,
by
accepting a contribution to its capital in an amount equal to the remaining
unpaid balance of such Purchase Price.
(c) From
and
after the Termination Date, Originator shall not be obligated to (but may,
at
its option) sell Receivables to Buyer unless Originator reasonably determines
that the Purchase Price therefor will be satisfied with funds available to
Buyer
from Borrowings under the Loan Agreement, Collections, other cash on hand or
otherwise.
(d) Although
the Purchase Price for each Receivable coming into existence after the Initial
Cutoff Date shall be paid in full by Buyer to Originator on the date such
Receivable is purchased, a precise reconciliation of the Purchase Price between
Buyer and Originator shall be effected on a monthly basis no later than each
Settlement Date with respect to all Receivables sold during the same Calculation
Period most recently ended prior to such Settlement Date and based on the
information contained in the Monthly Report delivered by the Servicer pursuant
to Article
VI
of the
Loan Agreement for such Calculation Period. Although such reconciliation shall
be effected no later than each Settlement Date, any contribution of capital
by
Originator to Buyer made pursuant to Section
1.2(b)
shall be
deemed to have occurred and shall be effective on the date that the Purchase
Price is paid.
(e) Each
contribution of a Receivable by Originator to Buyer shall be deemed to be a
Purchase of such Receivable by Buyer for all purposes of this Agreement. Buyer
hereby acknowledges that Originator shall have no obligations to make further
capital contributions to Buyer, in respect of Originator’s equity interest in
Buyer or otherwise, in order to provide funds to pay the Purchase Price to
Originator under this Agreement or for any other reason.
Section
1.3 Purchase
Price Credit Adjustments.
(a) If
on any
day the Outstanding Balance of a Receivable is:
(i) reduced
as a result of any defective or rejected or returned goods or services, any
discount or any adjustment or otherwise by Originator (other than cash
Collections on account of the Receivables),
(ii) reduced
or canceled as a result of a setoff in respect of any claim by any Person
(whether such claim arises out of the same or a related transaction or an
unrelated transaction), or
(b) if
any of
the representations and warranties set forth in Article
II
are not
true with respect to any Receivable on the date of its Purchase
hereunder,
then,
in
such event, Buyer shall be entitled to a credit (each, a “Purchase
Price Credit”)
against the Purchase Price otherwise payable hereunder in an amount equal to
the
amount of such reduction or cancellation in the case of clause (a) or the
Outstanding Balance of such Receivable in the case of clause (b). If such
Purchase Price Credit exceeds the Purchase Price for the Receivables sold on
such day, then Originator shall pay the remaining amount of such Purchase Price
Credit in cash within five (5) Business Days thereafter.
Section
1.4 Payments
and Computations, Etc.
All
amounts to be paid or deposited by Buyer hereunder shall be paid or deposited
in
accordance with the terms hereof on the day when due in immediately available
funds to the account of Originator designated from time to time by Originator
or
as otherwise directed by Originator. In the event that any payment owed by
any
Person hereunder becomes due on a day that is not a Business Day, then such
payment shall be made on the next succeeding Business Day. If any Person fails
to pay any amount hereunder when due, such Person agrees to pay, on demand,
the
Default Fee in respect thereof until paid in full; provided,
however,
that
such Default Fee shall not at any time exceed the maximum rate permitted by
applicable law. All computations of interest payable hereunder shall be made
on
the basis of a year of 360 days for the actual number of days (including the
first but excluding the last day) elapsed.
Section
1.5 Transfer
of Records.
(a) In
connection with the Purchases of Receivables hereunder, Originator hereby sells,
transfers, assigns and otherwise conveys to Buyer all of Originator's right
and
title to and interest in the Records relating to all Receivables sold hereunder,
without the need for any further documentation in connection with the Purchases.
In connection with such transfer, Originator hereby grants to each of Buyer,
the
Program Agent and the Servicer an irrevocable, non-exclusive license to use,
without royalty or payment of any kind, all software used by Originator to
account for the Receivables, to the extent necessary to administer the
Receivables, whether such software is owned by Originator or is owned by others
and used by Originator under license agreements with respect thereto,
provided
that
should the consent of any licensor of such software be required for the grant
of
the license described herein, to be effective, Originator hereby agrees that
upon the request of Buyer (or Buyer's assignee), Originator will use its
reasonable efforts to obtain the consent of such third-party licensor. The
license granted hereby shall be irrevocable until the indefeasible payment
in
full of the Borrower Obligations, and shall terminate on the date this Agreement
terminates in accordance with its terms.
(b) Originator
(i) shall take such action requested by Buyer and/or the Program Agent (as
Buyer's assignee), from time to time hereafter, that may be necessary or
appropriate to ensure that Buyer and its assigns under the Loan Agreement have
an enforceable ownership interest in the Records relating to the Receivables
purchased from Originator hereunder, and (ii) shall use its reasonable efforts
to ensure that Buyer, the Program Agent and the Servicer each has an enforceable
right (whether by license or sublicense or otherwise) to use all of the computer
software used to account for the Receivables and/or to recreate such
Records.
Section
1.6 Characterization.
If, notwithstanding the intention of the parties expressed in Section
1.1(b),
the
sale or contribution by Originator to Buyer of Receivables hereunder shall
be
characterized as a secured loan and not a sale or such sale shall for any reason
be ineffective or unenforceable, then this Agreement shall be deemed to
constitute a security agreement under the UCC and other applicable law. For
this
purpose and without being in derogation of the parties' intention that the
sale
of Receivables hereunder shall constitute a true sale thereof, Originator hereby
grants to Buyer a duly perfected security interest in all of Originator's right,
title and interest in, to and under all Receivables now existing and hereafter
arising, all Collections and Related Security with respect thereto, each
Lock-Box and Deposit Account, all other rights and payments relating to the
Receivables and all proceeds of the foregoing to secure the prompt and complete
payment of a loan deemed to have been made in an amount equal to the Purchase
Price of the Receivables together with all other obligations of Originator
hereunder, which security interest shall be prior to all other Adverse Claims
thereto. Buyer and its assigns shall have, in addition to the rights and
remedies which they may have under this Agreement, all other rights and remedies
provided to a secured creditor under the UCC and other applicable law, which
rights and remedies shall be cumulative.
Section
1.7 Additional
Grant of Security Interest.
As
security for the obligations of the Originator under this Agreement (including,
without limitation, those described in Section
1.3
herein),
the Originator hereby grants to the Buyer, a duly perfected first priority
security interest in all of the Originator’s right, title and interest in, to
and under all Receivables, Related Security with respect to such Receivables,
the Deposit Accounts, the Lock-Boxes and all proceeds
of the foregoing, including without limitation, all Collections of such
Receivables, that arise after the Termination Date.
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES
Section
2.1 Representations
and Warranties of Originator
.
Originator hereby represents and warrants to Buyer on the date hereof, and
on
the date of each Purchase hereunder that:
(a) Corporate
Existence and Power.
Originator is (a) a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation; (b) has all
requisite corporate power, and has all material governmental licenses,
authorizations, consents and approvals necessary to own its property and carry
on its business as now being conducted; and (c) is qualified to do business
in
all jurisdictions in which the nature of the business conducted by it makes
such
qualification necessary and where failure so to qualify could reasonably be
expected to have a Material Adverse Effect.
(b) Power
and Authority; Due Authorization, Execution and Delivery.
Originator has all necessary corporate power and authority to execute and
deliver this Agreement and each other Facility Document to which it is a party,
and to perform its obligations hereunder and thereunder and to use the proceeds
of the Purchases made hereunder. The execution and delivery by Originator of
this Agreement and each other Facility Document to which it is a party, and
the
performance of its obligations hereunder and thereunder and use of the proceeds
of the Purchases made hereunder have been duly authorized by all necessary
corporate action on its part. This Agreement and each other Facility Document
to
which Originator is a party has been duly and validly executed and delivered
by
Originator.
(c) No
Conflict.
None of
the execution and delivery by Originator of this Agreement and each other
Facility Document to which it is a party, nor the performance of its obligations
hereunder and thereunder will conflict with or result in a breach of, or a
default under, or require any consent under, (i) its certificate or articles
of
incorporation or by-laws, (ii) any law, rule or regulation applicable to it,
(iii) any agreement or instrument to which it is a party or by which it or
any
of its property is bound or subject, or (iv) any order, writ, judgment,
injunction or decree of any court or governmental authority or agency binding
on
or affecting it or its property, and will not result in or require the creation
or imposition of any Adverse Claim upon any of the revenues or on assets of
Originator or its Subsidiaries (except as created hereunder); and no transaction
contemplated hereby requires compliance with any bulk sales act or similar
law.
(d) Governmental
Authorization.
Other
than the filing of the financing statements required hereunder and the notice
to
the Washington Utilities and Transportation Commission (which Originator has
filed), no authorizations, approvals or consents of, and no notices to, or
filings or registrations with, any governmental authority or regulatory
authority or agency (other than informational filings) are necessary for the
execution and delivery by Originator of this Agreement and each other Facility
Document to which it is a party and the performance of its obligations hereunder
and thereunder or for the validity or enforceability hereof or
thereof.
(e) Actions,
Suits.
There
are not, in any court or before any arbitrator of any kind or before or by
any
governmental body, any actions, suits or proceedings pending or, to Originator's
knowledge, threatened against or affecting Originator or any of its businesses
or properties (i) except for actions, suits or proceedings (A) that exist as
of
the date of this Agreement and are disclosed in PSE’s Annual Report on Form 10-K
for the year ended December 31, 2004, PSE’s Quarterly Reports on Form 10-Q for
the quarters ended March 31, 2005, June 30, 2005 or September 30, 2005 or (B)
which, singly or in the aggregate, could not reasonably be expected to have
a
Material Adverse Effect or (ii) which affect in any adverse manner the binding
nature, validity or enforceability of any Facility Document. Originator is
not
in default with respect to any order of any court, arbitrator or governmental
body, which default could reasonably be expected to have a Material Adverse
Effect.
(f) Binding
Effect.
This
Agreement and each other Facility Document to which Originator is a party
constitute the legal, valid and binding obligations of Originator enforceable
against Originator in accordance with their respective terms, except as such
enforcement may be limited by applicable bankruptcy, insolvency, reorganization
or other similar laws relating to or limiting creditors' rights generally and
by
general principles of equity (regardless of whether enforcement is sought in
a
proceeding in equity or at law).
(g) Accuracy
of Information.
No
information, exhibit or report furnished by Originator or any of its Affiliates
to Buyer (or its assigns) in connection with the negotiation of, or compliance
with, this Agreement (including any Monthly Report, Weekly Report or Daily
Report) or any of the other Facility Documents contained any material
misstatement of fact or omitted to state a material fact or any fact necessary
to make the statements contained therein not misleading.
(h) Use
of
Proceeds.
Originator is not engaged principally, or as one of its important activities,
in
the business of extending credit for the purpose, whether immediate, incidental
or ultimate, of buying or carrying margin stock, as defined in Regulation U
promulgated by the Board of Governors of the Federal Reserve System from time
to
time, and no part of the proceeds of any purchase hereunder will be used to
buy
or carry any margin stock.
(i) Good
Title.
Immediately prior to each Purchase hereunder, Originator (i) is the legal and
beneficial owner of the Receivables and (ii) is the legal and beneficial owner
of the Related Security with respect thereto, in each case free and clear of
any
Adverse Claim, except as created by the Facility Documents. There have been
duly
filed all financing statements or other similar instruments or documents
necessary under the UCC (or any comparable law) of all appropriate jurisdictions
to perfect Originator’s ownership interest in each Receivable, its Collections
and the Related Security.
(j) Perfection.
This
Agreement, together with the filing of the financing statements contemplated
hereby, is effective to, and shall, upon each purchase hereunder, transfer
to
Buyer (and Buyer shall acquire from Originator) (i) legal and equitable title
to, with the right to sell and encumber each Receivable existing and hereafter
arising, together with the Collections with respect thereto, and (ii) all of
Originator's right, title and interest in the Related Security and Collections
associated with each Receivable, in each case, free and clear of any Adverse
Claim, except as created by the Facility Documents. There have been duly filed
all financing statements or other similar instruments or documents necessary
under the UCC (or any comparable law) of all appropriate jurisdictions to
perfect Buyer's ownership interest in the Receivables, the Related Security
and
the Collections.
(k) Jurisdiction
of Organization; Places of Business, and Location of Records.
The
jurisdiction of organization, principal places of business and chief executive
office of Originator and the offices where it keeps all of its Records are
located at the address(es) listed on Exhibit
II
or such
other locations of which Buyer has been notified in accordance with Section
4.2(a)
in
jurisdictions where all action required by Section
4.1(g)
and/or
Section
7.3(a)
has been
taken and completed. Originator's organizational number assigned to it by its
jurisdiction of organization and its Federal Employer’s Identification Number
are correctly set forth on Exhibit
II.
Originator has not, within a period of one year prior to the date hereof, (i)
changed the location of its principal place of business or chief executive
office or its organizational structure, (ii) changed its legal name, (iii)
changed its “location” (within the meaning of Section 9-307 of the UCC as in
effect in all applicable jurisdictions), or (iv) become a “new debtor” (as
defined in Section 9-102(a)(56) of the UCC as in effect in all applicable
jurisdictions) with respect to a currently effective security agreement
previously entered into by any other Person. Originator has not changed its
jurisdiction of organization. Originator is a Washington corporation and is
a
“registered organization” (within the meaning of Section 9-102 of the UCC as in
effect in the State of Washington).
(l) Collections.
The
conditions and requirements set forth in Section
4.1(i)
have at
all times been satisfied and duly performed. The names and addresses of all
Deposit Account Banks, together with the account numbers of the Deposit Accounts
at each Deposit Account Bank and the post office box number of each Lock-Box,
are listed on Exhibit
III.
Originator has not granted any Person, other than Buyer (and its assigns)
dominion and control or "control" (within the meaning of Section 9-104 of the
UCC of all applicable jurisdictions) of any Lock-Box or Deposit Account, or
the
right to take dominion and control or “control” (within the meaning of Section
9-104 of the UCC of all applicable jurisdictions) of any such Lock-Box or
Deposit Account at a future time or upon the occurrence of a future event.
On
and after the date which is 60 days after the date hereof, Originator has taken
all steps necessary to ensure that Buyer has “control” (within the meaning of
Section 9-104 of the UCC of all applicable jurisdictions) over all Deposit
Accounts. Originator has the ability to identify, within one (1) Business Day
of
receipt or deposit, all amounts that are received in any Lock-Box or deposited
to any Deposit Account as constituting Collections or non-Collections. Except
for proceeds of Excluded Receivables (which shall be electronically swept or
otherwise transferred out of such Deposit Account within one (1) Business Day
of
being deposited therein in accordance with Section 4.1(i)), no funds other
than
the proceeds of Receivables are deposited to any Deposit Account. All Alternate
Payment Locations are listed on Exhibit III.
(m) Material
Adverse Effect.
As of
the date of this Agreement, since December 31, 2004, no event has occurred
that
would have a material adverse effect on the financial condition or operations
of
Originator and its Subsidiaries. Since December 31, 2004, no event has occurred
that would have a material adverse effect on (x) the ability of Originator
to
perform its obligations under this Agreement or any other Facility Document
to
which it is a party, or (y) the collectibility of the Receivables generally
or
any material portion of the Receivables.
(n) Names.
In the
past five (5) years, Originator has not used any corporate or other names,
trade
names or assumed names other than the name in which it has executed this
Agreement.
(o) Ownership
of Buyer.
Originator owns, directly or indirectly, 100% of the issued and outstanding
capital stock of Buyer, free and clear of any Adverse Claim. Such capital stock
is validly issued, fully paid and nonassessable, and there are no options,
warrants or other rights to acquire securities of Buyer.
(p) PUHCA
Investment Company Act.
Puget
Energy, Inc., a public utility holding company under the Public Utility Holding
Company Act of 1935, as amended (“PUHCA”), which is exempt from regulation under
PUHCA and the Securities and Exchange Commission’s (“SEC”) rules thereunder
(except for regulation under Section 9(a)(2) of PUHCA) pursuant to Section
3(a)(1) and SEC Rule 2 under PUHCA, owns all of the issued and outstanding
common stock of Originator. Originator is not, and after giving effect to the
transactions contemplated hereby, will not be required to register as, an
“investment company” within the meaning of the Investment Company Act of 1940,
as amended, or any successor statute.
(q) Compliance
with Law.
Originator has complied in all material respects with all applicable statutes,
rules, regulations, orders and restrictions of any domestic or foreign
government or any instrumentality or agency thereof having jurisdiction over
the
conduct of its businesses or the ownership of its property, except for any
failure to comply with any of the foregoing that could not reasonably be
expected to have a Material Adverse Effect. Each Receivable, together with
the
Contract related thereto, does not contravene any laws, rules or regulations
applicable thereto (including,
without limitation, laws,
rules and regulations relating to truth in lending, fair credit billing, fair
credit reporting, equal credit opportunity, fair debt collection practices
or
privacy), and no part of such Contract is in violation of any such law, rule
or
regulation.
(r) Compliance
with Credit and Collection Policy.
Originator has complied in all material respects with the Credit and Collection
Policy with regard to each Receivable and the related Contract, and has not
made
any change to such Credit and Collection Policy, except as permitted under
Section
4.2(c)
and as
to which Buyer (or its assigns) has been notified, and if applicable, as to
which Buyer (or its assigns) has consented, in each case, in accordance with
Section
4.1(a)(vii).
(s) Payments
to Originator.
With
respect to each Receivable transferred to Buyer hereunder, the Purchase Price
received by Originator constitutes reasonably equivalent value in consideration
therefor and such transfer was not made for or on account of an antecedent
debt.
No transfer by Originator of any Receivable hereunder is or may be voidable
under any section of the Federal Bankruptcy Code.
(t) Enforceability
of Contracts.
Each
Contract with respect to each Receivable is effective to create, and has
created, a legal, valid and binding obligation of the related Obligor to pay
the
Outstanding Balance of the Receivable created thereunder and any accrued
interest thereon, enforceable against the Obligor in accordance with its terms,
except as such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws relating to or limiting creditors' rights
generally and by general principles of equity (regardless of whether enforcement
is sought in a proceeding in equity or at law).
(u) Eligible
Receivables.
Each
Receivable included in the Net Receivables Pool Balance as an Eligible
Receivable on the date of Purchase hereunder was an Eligible Receivable on
such
date.
(v) Accounting.
The
manner in which Originator accounts for the transactions contemplated by this
Agreement does not jeopardize the characterization of the transactions
contemplated herein as being true sales.
(w) Identification
of Receivables.
Originator identifies the receivables sold (or purported to be sold) to Buyer
hereunder and which are included in the Net Receivables Pool Balance on its
books and records (including any accounting system) with the account code “FERC
142 Account Receivable.”
(x) Nature
of Receivables.
No
Receivables arises from the sale of minerals or the like, including oil and
gas,
at the wellhead or the minehead.
(y) ERISA.
PSE and
any other Person which is under common control (within the meaning of Section
414(b) or (c) of the IRC) with PSE have fulfilled their obligations (if any)
under the minimum funding standards of ERISA and the IRC for each ERISA Plan
in
compliance in all material respects with the currently applicable provisions
of
ERISA and the IRC and have not incurred any liability to the PBGC or an ERISA
Plan under Title IV of ERISA (other than liability for premiums due in the
ordinary course). Assuming that the credit extended hereby does not involve
the
assets of any employee benefit plan subject to ERISA or any plan subject to
Section 4975 of the IRC, neither the execution of this Agreement nor the
consummation of the transactions contemplated hereby will involve a Prohibited
Transaction.
(z) Springing
Lien Indentures.
No
“default” or other event which, with the giving of notice or the passage of time
or both, would constitute a “default” has occurred under any Springing Lien
Indenture. No Adverse Claim has been created, and no event has occurred which,
with the giving of notice or the passage of time or both, would result in,
or
with the further action by a third party would result in, the creation of any
Adverse Claim, on the Receivables, Related Security or the Collections pursuant
to any Springing Lien Indenture or any other indenture, agreement, instrument
or
filing other than as contemplated by the Facility Documents.
ARTICLE
III
CONDITIONS
OF PURCHASE
Section
3.1 Conditions
Precedent to Initial Purchase.
The initial Purchase under this Agreement is subject to the conditions precedent
that (a) Buyer shall have received on or before the date of such purchase those
documents listed on Schedule
A,
(b) all
of the conditions to the Initial Borrowing under the Loan Agreement shall have
been satisfied or waived in accordance with the terms thereof and (c) Originator
shall have marked its books and records with a legend satisfactory to Buyer
(and
its assigns) identifying Buyer's ownership interest in the Receivables, Related
Security and Collections.
Section
3.2 Conditions
Precedent to Subsequent Purchases.
Buyer's obligation to pay for Receivables coming into existence after the
Initial Cutoff Date shall be subject to the further conditions precedent that
(a) the Facility Termination Date shall not have occurred; (b) Buyer (or its
assigns) shall have received such other approvals, opinions or documents as
it
may reasonably request; and (c) on the date such Receivable came into existence,
the following statements shall be true (and acceptance of the proceeds of any
payment for such Receivable shall be deemed a representation and warranty by
Originator that such statements are then true):
(a) the
representations and warranties set forth in Article
II
are true
and correct on and as of the date such Receivable came into existence as though
made on and as of such date unless such representations and warranties by their
terms refer to an earlier date, in which case they shall be correct on and
as of
such earlier date; and
(b) no
event
has occurred and is continuing that will constitute a Termination Event or
a
Potential Termination Event.
Notwithstanding
the foregoing conditions precedent, upon payment of the Purchase Price for
any
Receivable (whether by payment of cash, by offset of amounts owed to Buyer
and/or by capital contributions), title to such Receivable and the Related
Security and Collections with respect thereto shall vest in Buyer, whether
or
not the conditions precedent to Buyer's obligation to pay for such Receivable
were in fact satisfied. The failure of Originator to satisfy any of the
foregoing conditions precedent, however, shall give rise to a right of Buyer
to
rescind the related Purchase and direct Originator to pay to Buyer an amount
equal to the Purchase Price payment that shall have been made with respect
to
any Receivables related thereto.
ARTICLE
IV
COVENANTS
Section
4.1 Affirmative
Covenants of Originator.
Until the date on which this Agreement terminates in accordance with its terms,
Originator hereby covenants as set forth below:
(a) Financial
Reporting.
Originator will maintain, for itself and each of its Subsidiaries, a system
of
accounting established and administered in accordance with GAAP, and furnish
to
Buyer (or its assigns):
(i) Annual
Reporting.
As
soon as available and in any event within 120 days after the end of each fiscal
year of Originator, a copy of the Annual Report on Form 10-K (or any successor
form) for Originator for such year, together with a copy of the accompanying
report of Originator's independent certified public accounting
firm.
(ii) Quarterly
Reporting.
As soon
as available and in any event within 60 days after the close of each of the
first three quarterly accounting periods in each fiscal year of Originator,
a
copy of the Quarterly Report on Form 10-Q (or any successor form) for Originator
for such quarter.
(iii) Compliance
Certificate.
Together with the financial statements required hereunder, a compliance
certificate in substantially the form of Exhibit
IV
signed
by Originator's Authorized Officer and dated the date of such annual financial
statement or such quarterly financial statement, as the case may
be.
(iv) [Reserved.]
(v) S.E.C.
Filings.
Promptly upon the filing thereof, copies of all annual, quarterly, monthly
or
other regular reports, and promptly upon the request of Buyer (or its assigns),
copies of all registration statements, in each case, which Originator or any
of
its Subsidiaries files with the Securities and Exchange Commission.
(vi) Copies
of Notices.
Promptly upon its receipt of any notice, request for consent, financial
statements, certification, report or other communication under or in connection
with any Facility Document from any Person other than Buyer, the Program Agent,
any Managing Agent or any Lender, copies of the same.
(vii) Change
in Credit and Collection Policy.
At
least thirty (30) days prior to the effectiveness of any material change in
or
material amendment to the Credit and Collection Policy, a copy of the Credit
and
Collection Policy then in effect and a notice (A) indicating such change or
amendment, and (B) if such proposed change or amendment would be reasonably
likely to adversely affect the collectibility of the Receivables or decrease
the
credit quality of any newly created Receivables, requesting Buyer's consent
thereto.
(viii) Other
Information.
Promptly, from time to time, such other information, documents, records or
reports relating to the Receivables or the condition or operations, financial
or
otherwise, of Originator as Buyer (or its assigns) may from time to time
reasonably request in order to protect the interests of Buyer (and its assigns)
under or as contemplated by this Agreement.
(b) Notices.
Originator will notify the Buyer and the Program Agent in writing of any of
the
following promptly upon learning of the occurrence thereof, describing the
same
and, if applicable, the steps being taken with respect thereto:
(i) Termination
Events or Potential Termination Events.
The
occurrence of each Termination Event and each Potential Termination Event,
by a
statement of an Authorized Officer of Originator.
(ii) Judgment
and Proceedings.
(A) The
entry of any judgment or decree against Originator or any of its Subsidiaries
if
the aggregate amount of all judgments and decrees then outstanding against
Originator and its Subsidiaries exceeds $25,000,000, (B) the institution of
any
litigation, arbitration proceeding, investigation or governmental proceeding
against Originator which, individually or in the aggregate, could reasonably
be
expected to have a Material Adverse Effect and (C) any material development
in
any previously disclosed litigation, arbitration proceeding, investigation
or
governmental proceeding.
(iii) Material
Adverse Effect.
The
occurrence of any event or condition that has had, or could reasonably be
expected to have, a Material Adverse Effect.
(iv) Defaults
Under Other Agreements.
The
occurrence of (A) any “default” or other event which, with the giving of notice
or the passage of time or both, would constitute a “default” under any Springing
Lien Indenture or any other material financing arrangement pursuant to which
the
Originator is a debtor or an obligor, (B) the creation of any Adverse Claim
on,
or the occurrence of any event which, with the giving of notice or passage
of
time or both, would result in, or with further action by any third party would
result in, the creation of any Adverse Claim on the Receivables, the Related
Security or the Collections pursuant to any Springing Lien Indenture or any
other indenture, agreement, instrument or filing, or (C) a default or an event
of default under any other financing arrangement in excess of $25,000,000,
pursuant to which Originator is a debtor or an obligor.
(v) Downgrade
of the Originator.
Any
downgrade in the rating of any Indebtedness of Originator by S&P or by
Xxxxx'x, setting forth the Indebtedness affected and the nature of such
change.
(vi) Modification
of Springing Lien Indentures.
Any
amendment, restatement, supplement or modification, or any proposed amendment,
restatement, supplement or modification, of any provision of any Springing
Lien
Indenture which (A) is related to the accounts receivable exception to the
lien
or security interest granted thereunder or the circumstances under which such
exceptions will cease to exist or the events which could cause such exceptions
to cease to exist or (B) in any way could impair the Program Agent’s security
interest in the Receivables, Related Security and Collections or its rights
under the Facility Documents.
(c)
Compliance
with Laws and Preservation of Corporate Existence.
(i) Originator
will comply with the requirements of all applicable laws, rules, regulations
and
governmental approvals, and all orders, writs, injunctions and decrees of any
court or governmental authority or agency, if failure to comply with such
requirements could reasonably be expected to have a Material Adverse
Effect.
(ii) Originator
will (A) preserve and maintain its corporate existence, rights, franchises
and
privileges in the jurisdiction of its incorporation and (B) qualify and remain
qualified in good standing as a foreign corporation in each jurisdiction where
its business is conducted, except where the failure to so qualify could not
reasonably be expected to have a Material Adverse Effect.
(d) Audits.
Originator will furnish to Buyer (or its assigns) from time to time such
information with respect to it and the Receivables as Buyer (or its assigns)
may
reasonably request. Originator will, from time to time during regular business
hours as requested by Buyer (or its assigns), upon reasonable notice and at
the
sole cost of Originator, permit Buyer (or its assigns) or their respective
agents or representatives, (i) to examine and make copies of and abstracts
from
all Records in the possession or under the control of Originator relating to
the
Receivables and the Related Security, including,
without limitation,
the
related Contracts, and (ii) to visit the offices and properties of Originator
for the purpose of examining such materials described in clause (i) above,
and
to discuss matters relating to Originator's financial condition or the
Receivables and the Related Security or Originator's performance under any
of
the Facility Documents or Originator's performance under the Contracts and,
in
each case, with any of the Authorized Officers of Originator having knowledge
of
such matters (the activities referred to in the preceding clauses (i) and (ii),
collectively, an “Audit”). Notwithstanding the foregoing, (i) unless an Event of
Termination shall have occurred and be continuing or a Daily Reporting Period
shall be in effect, Originator shall not be responsible for the costs of more
than (A) during a Level 1 Ratings Period, one Audit performed during any
consecutive 12-month period and (B) during any other Ratings Period, two Audits
performed during any consecutive 12-month period and (ii) the Originator agrees
that it will cooperate with the Program Agent in connection with the performance
of an Audit to be completed within sixty (60) days after the date
hereof.
(e) Keeping
and Marking of Records and Books.
(i) Originator
will maintain and implement administrative and operating procedures
(including,
without limitation,
an
ability to recreate records evidencing Receivables 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 all Receivables (including,
without limitation,
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 (or its assigns) notice of any material change in the administrative
and operating procedures referred to in the previous sentence.
(ii) Originator
will (A) on or prior to the date hereof, xxxx its master data processing records
and other books and records relating to the Receivables with a legend,
acceptable to Buyer (or its assigns), describing Buyer's ownership interests
in
the Receivables and further describing the interests of the Program Agent (on
behalf of the Secured Parties) under the Loan Agreement and (B) upon the request
of Buyer (or its assigns), (x) xxxx each Contract with a legend describing
Buyer's ownership interests in the Receivables and further describing the
interests of the Program Agent (on behalf of the Secured Parties) and (y)
deliver to Buyer (or its assigns) all Contracts (including,
without limitation,
all
multiple originals of any such Contract) relating to the
Receivables.
(f) Compliance
with Contracts and Credit and Collection Policy.
Originator will timely (i) fully perform and comply with all provisions,
covenants and other promises required to be observed by it under the Contracts
related to the Receivables, and (ii) comply in all material respects with the
Credit and Collection Policy in regard to each Receivable and the related
Contract.
(g) Ownership.
Originator will take all necessary action to establish and maintain, irrevocably
in Buyer, (A) legal and equitable title to the Receivables, the Related Security
and the Collections and (B) all of Originator’s right, title and interest in the
Related Security associated with the Receivables, in each case free and clear
of
any Adverse Claims other than Adverse Claims in favor of Buyer (and its assigns)
(including,
without limitation,
the
filing of all financing statements or other similar instruments or documents
necessary under the UCC (or any comparable law) of all appropriate jurisdictions
to perfect Buyer's interest in such Receivables, Related Security and
Collections and such other action to perfect, protect or more fully evidence
the
interest of Buyer as Buyer (or its assigns) may reasonably
request).
(h) Lenders'
Reliance.
Originator acknowledges that the Program Agent and the Lenders are entering
into
the transactions contemplated by the Loan Agreement in reliance upon Buyer's
identity as a legal entity that is separate from Originator and any Affiliates
thereof. Therefore, from and after the date of execution and delivery of this
Agreement, Originator will take all reasonable steps including,
without limitation,
all
steps that Buyer or any assignee of Buyer may from time to time reasonably
request to maintain Buyer's identity as a separate legal entity and to make
it
manifest to third parties that Buyer is an entity with assets and liabilities
distinct from those of each Related Entity and not just a division of any
Related Entity. Without limiting the generality of the foregoing and in addition
to the other covenants set forth herein, Originator will:
(i) not
hold
itself out to third parties as liable for the debts of Buyer nor purport to
own
the Receivables and other assets acquired by Buyer,
(ii) take
all
other actions necessary on its part to ensure that Buyer is at all times in
compliance with the covenants set forth in Section
5.01(i)
of the
Loan Agreement, and
(iii) cause
all
tax liabilities arising in connection with the transactions contemplated herein
or otherwise to be allocated between Originator and Buyer on an arm's-length
basis and in a manner consistent with the procedures set forth in U.S. Treasury
Regulations §§1.1502-33(d) and 1.1552-1.
(i) Collections.
Originator will instruct all Obligors to remit all Collections directly to
a
Lock-Box, an Alternate Payment Location or Deposit Account. Originator will
cause (1) all items from all Lock-Boxes and all items received from all
Alternate Payment Locations to be processed and deposited into a Deposit Account
within one (1) Business Day after such receipt or to be directly deposited
by a
Deposit Account Bank into a Deposit Account, (2) all non-Collection amounts
deposited to any Deposit Account to be electronically swept or otherwise
transferred out of such Deposit Account within one (1) Business Day of being
deposited therein and (3) each Lock-Box and Deposit Account to be subject at
all
times on and after the date which is 60 days after the date hereof to a Blocked
Account Agreement that is in full force and effect. In the event any payments
relating to Receivables are remitted directly to Originator or any Affiliate
of
Originator, Originator will remit (or will cause all such payments to be
remitted) directly to a Deposit Account Bank and deposited into a Deposit
Account within two (2) Business Days following receipt thereof, and, at all
times prior to such remittance, Originator will itself hold or, if applicable,
will cause such payments to be held in trust for the exclusive benefit of Buyer
and its assigns. Originator will transfer exclusive ownership, dominion and
control and "control" (within the meaning of Section 9-104 of the UCC of all
applicable jurisdictions), subject to this Agreement, of each Lock-Box and
Deposit Account to Buyer and, will not grant the right to take dominion and
control or "control" (within the meaning of Section 9-104 of the UCC of all
applicable jurisdictions) of any Lock-Box or Deposit Account at a future time
or
upon the occurrence of a future event to any Person, except to Buyer (or its
assigns) as contemplated by this Agreement and the Loan Agreement. With respect
to each Deposit Account, Originator shall take all steps necessary to ensure
that Buyer (and its assigns) has “control” (within the meaning of Section 9-104
of the UCC of all applicable jurisdictions) over each such Deposit Account
on
and after the date which is 60 days after the date hereof.
(j) Taxes.
Originator will file all tax returns and reports required by law to be filed
by
it and will promptly pay and discharge, before the same shall become delinquent,
all taxes, assessments and governmental charges or levies imposed upon it or
upon its property, except any such taxes, assessments, charges or levies (i)
that are being diligently contested in good faith by appropriate proceedings
or
(ii) subject to the last sentence of this subsection (k), the non-payment of
which could not reasonably be expected to have a Material Adverse Effect.
Originator will pay when due any taxes payable in connection with the
Receivables, exclusive of taxes on or measured by income or gross receipts
of
Buyer or its assigns.
(k) Insurance.
Originator will maintain with responsible insurance companies or through its
program of self-insurance, insurance against at least such risks and in at
least
such amounts as is customarily maintained by similar businesses, or as may
be
required by any applicable law, rule or regulation, any governmental approval,
or any order, writ, injunction or decree of any court or governmental authority
or agency.
(l) Identification
of Receivables.
Originator shall at all times identify receivables sold (or purported to be
sold) to Buyer hereunder on its books and records (including its accounting
system) with the account code “FERC 142 Account Receivable.”
(m) Frequency
of Billing.
Originator will prepare and mail invoices with respect to all Receivables no
less frequently than monthly.
Section
4.2 Negative
Covenants of Originator.
Until the date on which this Agreement terminates in accordance with its terms,
Originator hereby covenants that:
(a) Name
and Jurisdiction Change, Offices and Records.
Originator will not change its name, jurisdiction of organization, identity
or
corporate structure (within the meaning of Sections 9-503 and/or 9-507 of the
UCC of all applicable jurisdictions), become a “new debtor” (as defined in
Section 9-102(a)(56) of the UCC of all applicable jurisdictions) with respect
to
a currently effective security agreement previously entered into by any other
Person, change its “location” (within the meaning of Section 9-307 of the UCC of
all applicable jurisdictions) or relocate its chief executive office, principal
place of business or any office where Records are kept unless it shall have:
(i)
given Buyer (or its assigns) at least forty-five (45) days' prior written notice
thereof and (ii) delivered to Buyer (or its assigns) all financing statements,
instruments and other documents requested by Buyer (or its assigns) in
connection with such change, event or relocation.
(b) Change
in Payment Instructions to Obligors.
Originator will not add or terminate any bank as a Deposit Account Bank, or
make
any change in the instructions to Obligors regarding payments to be made to
any
Lock-Box or Deposit Account, unless Buyer (or its assigns) shall have received,
at least ten (10) days before the proposed effective date therefor, (i) written
notice of such addition, termination or change and (ii) with respect to the
addition of a Deposit Account Bank or a Deposit Account or Lock-Box, an executed
Blocked Account Agreement and Lock-Box Transfer Notice, as applicable with
respect to the new Deposit Account or Lock-Box; provided,
however,
that
Originator may make changes in instructions to Obligors regarding payments
if
such new instructions require such Obligor to make payments to another existing
Deposit Account or Lock-Box.
(c) Modifications
to Contracts and Credit and Collection Policy.
Originator will not make any change to the Credit and Collection Policy that
could adversely affect the collectibility of the Receivables or decrease the
credit quality of any newly created Receivables. Except as otherwise permitted
in its capacity as Servicer pursuant to Section
6.02(d)
of the
Loan Agreement, Originator will not extend, amend or otherwise modify the terms
of any Receivable or any Contract related thereto other than in accordance
with
the Credit and Collection Policy.
(d) Sales,
Liens.
Originator will not sell, assign (by operation of law or otherwise) or otherwise
dispose of, or grant any option with respect to, or create or suffer to exist
any Adverse Claim upon (including,
without limitation,
the
filing of any financing statement) or with respect to, any Receivable, Related
Security or Collections, or upon or with respect to any Contract under which
any
Receivable arises, or any Lock-Box or Deposit Account, or assign any right
to
receive income with respect thereto (other than, in each case, the creation
of
the interests therein in favor of Buyer provided for herein), and Originator
will defend the right, title and interest of Buyer in, to and under any of
the
foregoing property, against all claims of third parties claiming through or
under Originator. Originator shall not create or suffer to exist any mortgage,
pledge, security interest, encumbrance, lien, charge or other similar
arrangement on any of its inventory, the sale of which results in a “FERC 142
Account Receivable”.
(e) Accounting
for Purchase.
Originator will not, and will not permit any Affiliate to, account for or treat
(whether in financial statements or otherwise) the transactions contemplated
hereby in any manner other than the sale of the Receivables and the Related
Security by Originator to Buyer or in any other respect account for or treat
the
transactions contemplated hereby in any manner other than as a sale of the
Receivables and the Related Security by Originator to Buyer except to the extent
that such transactions are not recognized on account of consolidated financial
reporting in accordance with generally accepted accounting
principles.
(f) Collections.
Except
for proceeds of Excluded Receivables (which shall be electronically swept or
otherwise transferred out of such Deposit Account within one (1) Business Day
of
being deposited therein in accordance with Section
4.1(i)),
Originator will not deposit or otherwise credit, or cause or permit to be so
deposited or credited, to any Deposit Account cash or cash proceeds other than
Collections. Except as may be required by the Program Agent pursuant to the
last
sentence of Section 6.02(b) of the Loan Agreement, Originator will not deposit
or otherwise credit, or cause or permit to be so deposited or credited, any
Collections or proceeds thereof to any lock-box account or to any other account
not covered by a Blocked Account Agreement.
ARTICLE
V
TERMINATION
EVENTS
Section
5.1 Termination
Events.
The occurrence of any one or more of the following events shall constitute
a
“Termination Event”:
(a) Originator
shall fail:
(i) to
make
any payment or deposit required hereunder when due and such failure continues
for two (2) Business Days, or to perform or observe any term, covenant or
agreement set forth in Section
4.1(c)(ii)(A),
(i)
or
(l)
or
Section
4.2,
(ii) to
perform or observe any term, covenant or agreement set forth in Section
4.1(d),
(g)
or
(h)
and
such failure shall continue for five (5) consecutive Business Days after the
earlier of (A) Originator obtaining knowledge thereof or (B) Buyer (or its
assigns) delivers written notice thereof, or
(iii) to
perform or observe any term, covenant or agreement hereunder (other than as
referred to in clauses (i) and (ii) of this subsection (a)) or any other
Facility Document to which it is a party and such failure shall continue for
thirty (30) consecutive days after the earlier of (A) Originator obtaining
knowledge thereof or (B) Buyer (or its assigns) delivers written notice
thereof.
(b) Any
representation, warranty, certification or statement made by Originator in
this
Agreement, any other Facility Document or in any other document delivered
pursuant hereto or thereto shall prove to have been materially false on the
date
as of which made or deemed made.
(c) Failure
of Originator to pay any Indebtedness when due in excess of $25,000,000 in
the
aggregate; or the default by Originator in the performance of any term,
provision or condition contained in any agreement under which any such
Indebtedness was created or is governed, the effect of which is to cause, or
to
permit the holder or holders of such Indebtedness to cause, such Indebtedness
to
become due prior to its stated maturity; or any such Indebtedness of Originator
shall be declared to be due and payable or required to be prepaid (other than
by
a regularly scheduled payment) prior to the date of maturity
thereof.
(d) (i)
Originator or any of its Significant Subsidiaries shall generally not pay its
debts as such debts become due or shall admit in writing its inability to pay
its debts generally or shall make a general assignment for the benefit of
creditors; or (ii) any proceeding shall be instituted by Originator or any
of
its Significant Subsidiaries seeking to adjudicate it bankrupt or insolvent,
or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts under any law relating
to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee or other
similar official for it or any substantial part of its property; (iii) any
proceeding shall be instituted against Originator or any of its Significant
Subsidiaries seeking to adjudicate it bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief or composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry of
an
order for relief or the appointment of a receiver, trustee or other similar
official for it or any substantial part of its property and such proceeding
continues undismissed or unstayed for a period of 60 consecutive days; or (iv)
Originator or any of its Significant Subsidiaries shall take any corporate
action to authorize any of the actions set forth in the foregoing clauses (i),
(ii) or (iii) of this subsection (d).
(e) A
Change
of Control shall occur.
(f) One
or
more final judgments for the payment of money in an amount in excess of
$25,000,000, individually or in the aggregate, shall be entered against
Originator on claims not covered by insurance or as to which the insurance
carrier has denied its responsibility, and such judgment shall continue
unsatisfied and in effect for sixty (60) days without a stay of execution or
otherwise being appropriately contested in good faith.
(g) Any
event
which constitutes a “default” (after the expiration of any applicable cure
period) under any Springing Lien Indenture, shall have occurred.
Section
5.2 Remedies.
Upon the occurrence and during the continuation of a Termination Event, Buyer
may take any of the following actions: (i) declare the Termination Date to
have
occurred, whereupon the Termination Date shall forthwith occur, without demand,
protest or further notice of any kind, all of which are hereby expressly waived
by Originator; provided,
however,
that
upon the occurrence of a Termination Event described in Section
5.1(d),
or of
an actual or deemed entry of an order for relief with respect to Originator
under the Federal Bankruptcy Code or under any other applicable bankruptcy,
insolvency, arrangement, moratorium or similar laws of any other jurisdiction
(foreign or domestic), the Termination Date shall automatically occur, without
demand, protest or any notice of any kind, all of which are hereby expressly
waived by Originator and (ii) to the fullest extent permitted by applicable
law,
declare that the Default Fee shall accrue with respect to any amounts then
due
and owing by Originator to Buyer. The aforementioned rights and remedies shall
be without limitation and shall be in addition to all other rights and remedies
of Buyer and its assigns otherwise available under any other provision of this
Agreement or any other Facility Document, by operation of law, at equity or
otherwise, all of which are hereby expressly preserved, including, without
limitation, all rights and remedies provided under the UCC in effect in any
jurisdiction, all of which rights shall be cumulative.
ARTICLE
VI
INDEMNIFICATION
Section
6.1 Indemnities
by Originator.
Without limiting any other rights that Buyer may have hereunder or under
applicable law, Originator hereby agrees to indemnify (and pay upon demand
to)
Buyer and its assigns, successors officers, directors, agents, employees and
Affiliates (each an “Indemnified Party”) from and against any and all damages,
losses, claims, taxes, liabilities, costs, expenses and for all other amounts
payable, including reasonable attorneys' fees (which attorneys may be employees
of Buyer or any such assign) and disbursements (all of the foregoing being
collectively referred to as “Indemnified Amounts”) awarded against or incurred
by any of them arising out of or as a result of this Agreement or the
acquisition, either directly or indirectly, by Buyer of an interest in the
Receivables, Contracts or Related Security, excluding,
however:
(a) Indemnified
Amounts to the extent a final judgment of a court of competent jurisdiction
holds that such Indemnified Amounts resulted from gross negligence or willful
misconduct on the part of the Indemnified Party seeking
indemnification;
(b) Indemnified
Amounts to the extent the same includes losses in respect of Receivables that
are uncollectible on account of the insolvency, bankruptcy or lack of
creditworthiness of the related Obligor; or
(c) taxes
imposed by the United States federal government or the jurisdiction in which
such Indemnified Party's principal executive office is located, on or measured
by the overall net or gross income of such Indemnified Party;
provided,
however,
that
nothing contained in this sentence shall limit the liability of Originator
or
limit the recourse of the Indemnified Parties to Originator for amounts
otherwise specifically provided to be paid by Originator under the terms of
this
Agreement or any other Facility Document. Without limiting the generality of
the
foregoing indemnification, Originator shall indemnify each Indemnified Party
for
Indemnified Amounts (including,
without limitation, losses
in
respect of uncollectible receivables, regardless of whether reimbursement
therefor would constitute recourse to Originator) relating to or resulting
from:
(i) any
representation or warranty made by Originator (or any officers of Originator)
under or in connection with this Agreement, any other Facility Document or
any
other information or report delivered by Originator pursuant hereto or thereto
that shall have been false or incorrect when made or deemed made;
(ii) the
failure by Originator, to comply with any applicable law, rule or regulation
with respect to any Receivable or Contract related thereto, or the nonconformity
of any Receivable or Contract included therein with any such applicable law,
rule or regulation or any failure of Originator to keep or perform any of its
obligations, express or implied, with respect to any Contract;
(iii) any
failure of Originator to perform its duties, covenants or other obligations
in
accordance with the provisions of this Agreement or any other Facility
Document;
(iv) any
products liability, personal injury or damage suit, or other similar claim
arising out of or in connection with merchandise, insurance or services that
are
the subject of any Contract or any Receivable;
(v) any
dispute, claim, offset or defense (other than discharge in bankruptcy of the
Obligor) of the Obligor to the payment of any Receivable (including,
without limitation,
a
defense based on such Receivable or the related Contract 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 sale of the
merchandise or service related to such Receivable or the furnishing or failure
to furnish such merchandise or services;
(vi) the
commingling of Collections of Receivables at any time with other
funds;
(vii) any
investigation, litigation or proceeding related to or arising from this
Agreement or any other Facility Document, the transactions contemplated hereby
or thereby, the use of the proceeds of any Purchase Price payment, the ownership
of the Receivables, any lien on accounts receivable under any Springing Lien
Indenture or any other investigation, litigation or proceeding relating to
Originator in which any Indemnified Party becomes involved as a result of any
of
the transactions contemplated hereby or by any other Facility
Document;
(viii) any
inability to litigate any claim against any Obligor in respect of any Receivable
as a result of such Obligor being immune from civil and commercial law and
suit
on the grounds of sovereignty or otherwise from any legal action, suit or
proceeding;
(ix) any
Termination Event or Potential Termination Event described in Section
5.1(d);
(x) any
failure to vest and maintain vested in Buyer, or to transfer to Buyer, legal
and
equitable title to, and ownership of, the Receivables and the Collections,
and
all of Originator's right, title and interest in the Related Security associated
with the Receivables, in each case, free and clear of any Adverse Claim (except
as created by the Facility Documents);
(xi) the
failure to have filed, or any delay in filing, financing statements or other
similar instruments or documents under the UCC of any applicable jurisdiction
or
other applicable laws with respect to any Receivable, the Related Security
and
Collections with respect thereto, and the proceeds of any thereof, whether
at
the time of the Purchase or at any subsequent time;
(xii) any
action or omission by Originator which reduces or impairs the rights of Buyer
with respect to any Receivable or the value of any such Receivable;
(xiii) any
attempt by any Person to void any Purchase hereunder under statutory provisions
or common law or equitable action; and
(xiv) the
failure of any Receivable included in the calculation of the Net Receivables
Pool Balance as an Eligible Receivable to be an Eligible Receivable at the
time
so included.
(xv) the
failure of (i) any Deposit Account Bank to remit any amounts or items of payment
held in a Deposit Account or in a Lock-Box pursuant to the instructions of
the
Program Agent given in accordance with this Agreement, the applicable Blocked
Account Agreement or the other Facility Documents, whether by reason of the
exercise of setoff rights or otherwise, (ii) any sub-servicer or any other
third
party with a contractual relationship with the Originator for the acceptance
or
processing of Collections, to remit any Collections received by it to a Lock-Box
or a Deposit Account.
Section
6.2 Other
Costs and Expenses.
Originator shall reimburse Buyer on demand for all reasonable costs and
out-of-pocket expenses in connection with the preparation, negotiation,
arrangement, execution, delivery and administration of this Agreement, the
transactions contemplated hereby and the other documents to be delivered
hereunder. Originator shall reimburse Buyer on demand for any and all costs
and
expenses of Buyer, if any, including reasonable counsel fees and expenses in
connection with the enforcement of this Agreement and the other documents
delivered hereunder and in connection with any restructuring or workout of
this
Agreement or such documents, or the administration of this Agreement following
a
Termination Event.
ARTICLE
VII
MISCELLANEOUS
Section
7.1 Waivers
and Amendments.
(a) No
failure or delay on the part of Buyer (or its assigns) in exercising any power,
right or remedy under this Agreement shall operate as a waiver thereof, nor
shall any single or partial exercise of any such power, right or remedy preclude
any other further exercise thereof or the exercise of any other power, right
or
remedy. The rights and remedies herein provided shall be cumulative and
nonexclusive of any rights or remedies provided by law. Any waiver of this
Agreement shall be effective only in the specific instance and for the specific
purpose for which given.
(b) No
provision of this Agreement may be amended, supplemented, modified or waived
except in writing signed by Originator and Buyer and, to the extent required
under the Loan Agreement and the Managing Agents.
Section
7.2 Notices
.
All
communications and notices provided for hereunder shall be in writing (including
bank wire, telecopy or electronic facsimile transmission or similar writing)
and
shall be given to the other parties hereto at their respective addresses or
telecopy numbers set forth on the signature pages hereof or at such other
address or telecopy number as such Person may hereafter specify for the purpose
of notice to each of the other parties hereto. Each such notice or other
communication shall be effective (i) if given by telecopy, upon the receipt
thereof, (ii) if given by mail, three (3) Business Days after the time such
communication is deposited in the mail with first class postage prepaid or
(iii)
if given by any other means, when received at the address specified in this
Section
7.2.
Section
7.3 Protection
of Ownership Interests of Buyer.
(a) Originator
agrees that from time to time, at its expense, it will promptly execute and
deliver all instruments and documents, and take all actions, that may be
necessary or desirable, or that Buyer (or its assigns) may reasonably request,
to perfect, protect or more fully evidence the interest of Buyer hereunder
and
the interests of the Secured Parties, or to enable Buyer (or its assigns) to
exercise and enforce their rights and remedies hereunder. Without limiting
the
foregoing, Originator will, upon the request of Buyer (or its assigns), file
such financing or continuation statements, or amendments thereto or assignments
thereof, and execute and file such other instruments and documents, that may
be
necessary or desirable, or that Buyer (or its assigns) may reasonably request,
to perfect, protect or evidence such interests. At any time after the occurrence
and during the continuation of an Event of Termination, Buyer (or its assigns)
may, at Originator's sole cost and expense, direct Originator to notify the
Obligors of Receivables of the ownership interests of Buyer under this Agreement
and may also direct that payments of all amounts due or that become due under
any or all Receivables be made directly to Buyer or its designee.
(b) If
Originator fails to perform any of its obligations hereunder, Buyer (or its
assigns) may (but shall not be required to) perform, or cause performance of,
such obligations, and Buyer's (or such assigns') costs and expenses incurred
in
connection therewith shall be payable by Originator as provided in Section
6.2.
Originator irrevocably authorizes Buyer (and its assigns) at any time and from
time to time in the sole and absolute discretion of Buyer (or its assigns),
and
appoints Buyer (and its assigns) as its attorney(ies)-in-fact, to act on behalf
of Originator (i) to authorize and/or execute on behalf of Originator as debtor
and to file financing or continuation statements (and amendments thereto and
assignments thereof) necessary or desirable in Buyer's (or its assigns') sole
and absolute discretion to perfect and to maintain the perfection and priority
of the interest of Buyer in the Receivables and (ii) to file a carbon,
photographic or other reproduction of this Agreement or any financing statement
with respect to the Receivables, the Related Security and the Collections as
a
financing statement in such jurisdictions and in such offices as Buyer (or
its
assigns) in their sole and absolute discretion deem necessary or desirable
to
perfect and to maintain the perfection and priority of Buyer's interests in
the
Receivables, the Related Security and the Collections. This appointment is
coupled with an interest and is irrevocable. The authorization by Originator
set
forth in the second sentence of this Section 7.3(b)
is
intended to meet all requirements for authorization by a debtor under Article
9
of any applicable enactment of the UCC, including,
without limitation,
Section
9-509 thereof.
Section
7.4 Reserved.
Section
7.5 Bankruptcy
Petition.
(a) Originator
and Buyer each hereby covenants and agrees that, prior to the date that is
one
year and one day after the payment in full of all outstanding senior
indebtedness of any Conduit Lender, it will not institute against, or join
any
other Person in instituting against, any Conduit Lender any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
similar proceeding under the laws of the United States or any state of the
United States.
(b) Originator
covenants and agrees that, prior to the date that is one year and one day after
the payment in full of all outstanding obligations of Buyer under the Loan
Agreement, it will not institute against, or join any other Person in
instituting against, Buyer any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or other similar proceeding under the
laws
of the United States or any state of the United States.
Section
7.6 Limitation
of Liability.
Except with respect to any claim arising out of the willful misconduct or gross
negligence of any Lender, the Program Agent or any Managing Agent, no claim
may
be made by Originator or any other Person against any Lender, the Program Agent
or any Managing Agent or their respective Affiliates, directors, officers,
employees, attorneys or agents for any special, indirect, consequential or
punitive damages in respect of any claim for breach of contract or any other
theory of liability arising out of or related to the transactions contemplated
by this Agreement, or any act, omission or event occurring in connection
therewith; and Originator hereby waives, releases, and agrees not to xxx upon
any claim for any such damages, whether or not accrued and whether or not known
or suspected to exist in its favor.
Section
7.7 CHOICE
OF LAW.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
Section
7.8 CONSENT
TO JURISDICTION.
Originator hereby irrevocably submits to the non-exclusive jurisdiction of
any
New York State or Federal court sitting in New York City in any action or
proceeding arising out of or relating to this Agreement, and each party hereto
hereby irrevocably agrees that all claims in respect of such action or
proceeding may be heard and determined in such New York State court or, to
the
extent permitted by law, in such Federal court. The parties hereto hereby
irrevocably waive, to the fullest extent they may effectively do so, the defense
of an inconvenient forum to the maintenance of such action or proceeding. The
parties hereto agree 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. Originator consents to the
service of any and all process in any such action or proceeding by the mailing
of copies of such process to it at its address specified in Section
7.2.
Nothing
in this Section
7.8
shall
affect the right of Buyer or its assigns to serve legal process in any other
manner permitted by law.
Section
7.9 WAIVER
OF JURY TRIAL.
EACH PARTY HERETO HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT,
CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED
WITH
THIS AGREEMENT, ANY DOCUMENT EXECUTED BY ORIGINATOR PURSUANT TO THIS AGREEMENT
OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER.
Section
7.10 Integration;
Binding Effect; Survival of Terms.
(a) This
Agreement and each other Facility Document contain the final and complete
integration of all prior expressions by the parties hereto with respect to
the
subject matter hereof and shall constitute the entire agreement among the
parties hereto with respect to the subject matter hereof superseding all prior
oral or written understandings.
(b) This
Agreement shall be binding upon and inure to the benefit of Originator, Buyer
and their respective successors and permitted assigns (including any trustee
in
bankruptcy). Originator may not assign any of its rights and obligations
hereunder or any interest herein without the prior written consent of Buyer.
Buyer may assign at any time its rights and obligations hereunder and interests
herein to any other Person without the consent of Originator. Without limiting
the foregoing, Originator acknowledges that Buyer, pursuant to the Loan
Agreement, may assign to the Program Agent, for the benefit of the Lenders,
its
rights, remedies, powers and privileges here-under and that the Program Agent
may further assign such rights, remedies, powers and privileges to the extent
permitted in the Loan Agreement. Originator agrees that the Program Agent,
as
the assignee of Buyer, shall, subject to the terms of the Loan Agreement, have
the right to enforce this Agreement and to exercise directly all of Buyer's
rights and remedies under this Agreement (including,
without limitation,
the
right to give or withhold any consents or approvals of Buyer to be given or
withheld hereunder) and Originator agrees to cooperate fully with the Program
Agent in the exercise of such rights and remedies. 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 terminated in
accordance with its terms; provided,
however,
that the
rights and remedies with respect to (i) any breach of any representation and
warranty made by Originator pursuant to Article
II;
(ii)
the indemnification and payment provisions of Article VI;
and
(iii) Section
7.5
shall be
continuing and shall survive any termination of this Agreement.
Section
7.11 Counterparts;
Severability; Section References.
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. Any provisions of this Agreement
which are prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or
render unenforceable such provision in any other jurisdiction. Unless otherwise
expressly indicated, all references herein to "Article," "Section," "Schedule"
or "Exhibit" shall mean articles and sections of, and schedules and exhibits
to,
this Agreement.
Section
7.12 Subordination.
Originator shall have the right to receive, and Buyer shall make, any and all
payments relating to any indebtedness, obligation or claim, Originator may
from
time to time hold or otherwise have against Buyer or any assets or properties
of
Buyer, whether arising hereunder or otherwise existing, provided
that,
after giving effect to any such payment, the aggregate Outstanding Balance
of
Receivables owned by Buyer at such time exceeds the sum of the Borrower
Obligations under the Loan Agreement. Originator hereby agrees that at any
time
during which the condition set forth in the proviso of the immediately preceding
sentence shall not be satisfied, Originator shall be subordinate in right of
payment to the prior payment of any indebtedness or obligation of Buyer owing
to
the Program Agent, any Managing Agent or any Lender under the Loan
Agreement.
[SIGNATURE
PAGE FOLLOWS]
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered by their duly authorized officers as of the date
hereof.
PUGET
SOUND ENERGY, INC.
By:
/s/ Xxxxxx X. Xxxxxx
Name:
Xxxxxx X. Xxxxxx
Title:
Vice President Finance & Treasurer
Address:
00000
XX
0xx
Xxxxxx,
XXX-00X
Xxxxxxxx,
XX 00000-0000
Mailing
Address for Notices:
X.X.
Xxx
00000
Xxxxxxxx,
XX 00000-0000
Attention:
Xxxx Xxxx, Assistant Treasurer
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
PSE
FUNDING, INC.
By:
/s/ Xxxxxx X. Xxxxxx
Name:
Xxxxxx X. Xxxxxx
Title:
President and Treasurer
Address:
00000
XX
0xx
Xxxxxx
Xxxxxxxx,
XX 00000-0000
Mailing
Address for Notices:
X.X.
Xxx
00000
Xxxxxxxx,
XX 00000-0000
Attention:
Xxxx Xxxx, Assistant Treasurer
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
Exhibit
I
Definitions
As
used
in this Agreement and the Exhibits, Schedules and Annexes thereto, capitalized
terms have the meanings set forth in this Exhibit I (such meanings to be equally
applicable to the singular and plural forms thereof). If a capitalized term
is
used in this Agreement, or any Exhibit, Schedule or Annex thereto, and not
otherwise defined therein or in this Exhibit I, such term shall have the meaning
assigned thereto in the Loan Agreement.
“Agreement”
means
this Receivables Sale Agreement, dated as of December 20, 2005, between
Originator and Buyer, as the same may be amended, restated, supplemented or
otherwise modified from time to time.
“Buyer”
has
the
meaning set forth in the preamble to this Agreement.
“Calculation
Period”
means
each calendar month or portion thereof which elapses during the term of this
Agreement. The first Calculation Period shall commence on the date of the
initial Purchase of Receivables hereunder and the final Calculation Period
shall
terminate on the Termination Date.
“Change
of Control”
means
the acquisition by any Person, or two or more Persons acting in concert, of
beneficial ownership (within the meaning of Rule 13d-3 of the Securities
and Exchange Commission under the Securities Exchange Act of 1934) of 20% or
more (by number of votes) of the outstanding shares of voting stock of
Originator.
“Credit
and Collection Policy”
means
Originator's credit and collection policies and practices relating to Contracts
and Receivables existing on the date hereof and summarized in Exhibit
V,
as
modified from time to time in accordance with this Agreement.
“Default
Fee”
means
a
per annum rate of interest equal to the sum of (i) the Prime Rate, plus
(ii) 2%
per annum.
“Dilutions”
means,
at any time, the aggregate amount of reductions or cancellations described
in
Section
1.3(a)
of this
Agreement.
“Discount
Factor”
means
a
percentage calculated to provide Buyer with a reasonable return on its
investment in the Receivables after taking account of (i) the time value of
money based upon the anticipated dates of collection of the Receivables and
the
cost to Buyer of financing its investment in the Receivables during such period
and (ii) the risk of nonpayment by the Obligors. Originator and Buyer may agree
from time to time to change the Discount Factor based on changes in one or
more
of the items affecting the calculation thereof, provided
that any
change to the Discount Factor shall take effect as of the commencement of a
Calculation Period, shall apply only prospectively and shall not affect the
Purchase Price payment made prior to the Calculation Period during which
Originator and Buyer agree to make such change.
“Facility
Documents”
means,
collectively, this Agreement, each Blocked Account Agreement and all other
instruments, documents and agreements executed and delivered in connection
herewith.
“Facility
Termination Date”
means
the “Termination Date” as defined in the Loan Agreement.
“Initial
Cutoff Date”
has
the
meaning set forth in Section
1.2(a)
of this
Agreement.
“Loan
Agreement”
shall
have the meaning set forth in the Preliminary Statements hereto.
“Material
Adverse Effect”
means
a
material adverse effect on (i) the financial condition, operations or prospects
of Originator and its Subsidiaries, (ii) the ability of Originator to perform
its obligations under this Agreement or any other Facility Document, (iii)
the
legality, validity or enforceability of this Agreement or any other Facility
Document, (iv) Originator's, Buyer's, the Program Agent's or any Secured Party's
interest in the Receivables generally or in any significant portion of the
Receivables, the Related Security or Collections with respect thereto, or (v)
the collectibility of the Receivables generally or of any material portion
of
the Receivables.
“Net
Value”
means,
as of any date of determination, an amount equal to the sum of (i) the aggregate
Outstanding Balance of the Receivables at such time, minus
(ii) the
sum of (A) the Aggregate Principal Balance outstanding at such time,
plus
(B) the
Required Reserves at such time.
“Net
Worth”
means
as of the last Business Day of each Calculation Period preceding any date of
determination, the excess, if any, of (a) the aggregate Outstanding Balance
of
the Receivables at such time, over
(b) the
Aggregate Principal Balance outstanding at such time.
“Original
Balance”
means,
with respect to any Receivable coming into existence after the Initial Cutoff
Date, the Outstanding Balance of such Receivable on the date it was
created.
“Originator”
has
the
meaning set forth in the preamble hereto.
“Potential
Termination Event”
means
an event which, with the passage of time or the giving of notice, or both,
would
constitute a Termination Event.
“Program
Agent”
has
the
meaning set forth in the Preliminary Statements hereto.
“Purchase”
means
each purchase or contribution pursuant to Section
1.1
of this
Agreement by Buyer from Originator of the Receivables and the Related Security
and Collections related thereto, together with all related rights in connection
therewith.
“Purchase
Price”
means,
with respect to each Purchase, the aggregate price to be paid by Buyer to
Originator for such Purchase in accordance with Section
1.2
of this
Agreement for the Receivables, Collections and Related Security being sold
to
Buyer, which price shall equal on any date (i) the product of (x) the
Outstanding Balance of such Receivables on such date, multiplied by
(y) one
minus the Discount Factor in effect on such date, minus (ii) any Purchase Price
Credits to be credited against the Purchase Price otherwise payable in
accordance with Section
1.3
of this
Agreement.
“Purchase
Price Credit”
has
the
meaning set forth in Section
1.3
of this
Agreement.
“Receivable”
means
all indebtedness and other obligations arising in connection with the sale
of
goods or the rendering of services by Originator and owed to Originator (at
the
times it arises, and before giving effect to any transfer or conveyance under
this Agreement) or Buyer (after giving effect to the transfers under this
Agreement) or in which Originator or Buyer has a security interest or other
interest, including,
without limitation,
any
indebtedness, obligation or interest constituting an account, chattel paper,
instrument or general intangible, and which are identified on the books and
records of Originator or Buyer (including its accounting system) with the
account code “FERC 142 Account Receivable,” interest, finance charges, sales
taxes and other taxes with respect thereto and including with respect to
Unbilled Receivables existing on the Termination Date, 100% of the amount
thereafter invoiced to any related Obligor after the Termination Date, and
further includes, without limitation, the obligation to pay any Finance Charges
with respect thereto. Indebtedness and other rights and obligations arising
from
any one transaction, including,
without limitation,
indebtedness and other rights and obligations represented by an individual
invoice, shall constitute a Receivable separate from a Receivable consisting
of
the indebtedness and other rights and obligations arising from any other
transaction; provided,
that any
indebtedness, rights or obligations referred to in the immediately preceding
sentence shall be a Receivable regardless or whether the account debtor or
Originator treats such indebtedness, rights or obligations as a separate payment
obligation.
“Related
Security”
means,
with respect to any Receivable:
(i) all
of
Originator's interest in the inventory and goods (including returned or
repossessed inventory or goods), if any, the sale, licensing, financing or
lease
of which by Originator gave rise to such Receivable, and all insurance contracts
with respect thereto,
(ii) all
other
security interests or liens and property subject thereto from time to time,
if
any, purporting to secure payment of such Receivable, whether pursuant to the
Contract related to such Receivable or otherwise, together with all financing
statements and security agreements describing any collateral securing such
Receivable,
(iii) all
guaranties, letters of credit, insurance, “supporting obligations” (within the
meaning of Section 9-102(a) of the UCC of all applicable jurisdictions) and
other agreements or arrangements of whatever character from time to time
supporting or securing payment of such Receivable whether pursuant to the
Contract related to such Receivable or otherwise,
(iv) all
service contracts and other contracts and agreements associated with such
Receivable,
(v) all
Records related to such Receivable,
(vi) all
of
Originator's right, title and interest in and to each Lock-Box and each Deposit
Account and any and all agreements related thereto, and
(vii) all
proceeds of any of the foregoing.
“Required
Capital Amount”
means,
as of any date of determination, an amount equal to the product of (i) 10%
multiplied by (ii) the aggregate Outstanding Balance of all Receivables at
such
time.
“Settlement
Date”
means,
with respect to each Calculation Period, the date that two (2) Business Days
after a Monthly Report is due.
“Termination
Date”
means
the earliest to occur of (i) the Facility Termination Date, (ii) the Business
Day immediately prior to the occurrence of a Termination Event set forth in
Section
5.1(d),
(iii)
the Business Day specified in a written notice from Buyer to Originator
following the occurrence of any other Termination Event, and (iv) the date
which
is 5 Business Days after Buyer's receipt of written notice from Originator
that
it wishes to terminate the facility evidenced by this Agreement.
“Termination
Event”
has
the
meaning set forth in Section
5.1
of this
Agreement.
All
accounting terms not specifically defined herein shall be construed in
accordance with GAAP. All terms used in Article 9 of the UCC in the State of
Illinois, and not specifically defined herein, are used herein as defined in
such Article 9.
Exhibit
II
Principal
Place of Business; Location(s) of Records; Federal Employer Identification
Number; Other Names; List of Alternate Payment Locations
|
Jurisdiction
of Organization
|
· WA
|
|
Chief
Executive Office/Principal Place of Business
|
· 00000
XX 0xx
Xxxxxx, Xxxxxxxx, XX 00000
|
|
Location(s)
of Records
|
· 00000
XX 0xx
Xxxxxx, Xxxxxxxx, XX 00000
· 00000
Xxxxx Xxxxx Xxxxxxx Xxxxxxx, XX 00000
|
|
Organizational
Number
|
· 179
010 055
|
|
Federal
Employer's Identification Number
|
· 00-0000000
|
|
Other
Names
|
· Puget
Sound Power & Light Company, Washington Energy Company,
Washington
Natural Gas Company, Puget Energy,
Inc.
|
Exhibit
III
Lock-boxes;
Deposit Accounts; Deposit Account Banks
|
Lock-Box
|
Related
Deposit Account
|
|
X.X.
Xxx Xx. 00000 at the U.S. Post Office branch located at 000xx
Xxxxxx XX, Xxxxxxxx, XX 00000
|
Union
Bank of California Account no. 0000000000 for receipts from Payment
Processing
|
|
N/A
|
Union
Bank of California Account no. 0000000000 for receipts from Xxxx
Payment
Consolidator
|
|
N/A
|
Key
Bank Account no. 479681024614 for Government Electronic Receipts,
APS
Receipts and Business Office Deposits
|
|
N/A
|
Key
Bank Account no. 479681024655 for receipts from Customer Internet
Payments
|
|
N/A
|
Key
Bank Account no. 479681052383 for receipts from
Checkfree
|
|
N/A
|
Key
Bank Account no. 479681024663 for receipts from Customer Credit Card
Payments
|
|
N/A
|
Citibank
Account no. 00000000 for receipts from Customer Direct
Debits
|
|
N/A
|
U.S.
Bank Account no. 153501775586 for receipts from Port Xxxxxxxx Business
Office
|
List
of Alternate Payment Locations
|
1.
Internet via PSE’s customer website found at: xxxx://xxx.xxx.xxx/xxxxxxx/xxxxxx/xxxxx.xxxx
|
|
2.
PSE Pay Station locations listed on PSE’s customer website found at:
xxxx://xxx.xxx.xxx/xxxxxxx/xxxxxxxxxxx/xxxxxxxxxxx.xxxx.
|
|
3.
Automatic Funds Transfer via a debit by PSE’s collection bank of the
Customer’s bank account and a credit to the Collection
Account
|
|
4.
Credit card Payments via
Payment-by-Phone
|
Exhibit
IV
Form
of Compliance Certificate
This
Compliance Certificate is furnished pursuant to that certain Amended and
Restated Receivables Sale Agreement dated as of December 20, 2005, between
Puget
Sound Energy, Inc. (“Originator”) and PSE Funding, Inc. (as amended, restated,
supplemented or otherwise modified from time to time, the “Agreement”).
Capitalized terms used and not otherwise defined herein are used with the
meanings attributed thereto in this Agreement.
THE
UNDERSIGNED HEREBY CERTIFIES THAT:
1.
I am
the duly elected ______________ of Originator.
2.
I have
reviewed the terms of the Agreement and I have made, or have caused to be made
under my supervision, a detailed review of the transactions and conditions
of
Originator and its Subsidiaries during the accounting period covered by the
attached financial statements.
3.
The
examinations described in paragraph 2 above did not disclose, and I have no
knowledge of, the existence of any condition or event which constitutes a
Termination Event or a Potential Termination Event during or at the end of
the
accounting period covered by the attached financial statements or as of the
date
of this Certificate, except as set forth below.
4.
Described below are the exceptions, if any, to paragraph 3 above by listing,
in
detail, the nature of the condition or event, the period during which it has
existed and the action which Originator has taken, is taking, or proposes to
take with respect to each such condition or event:
______________________________________________________
______________________________________________________
______________________________________________________
5.
As of
the date hereof, the jurisdiction of organization of Originator is [insert
state] and Originator is a "registered organization" (within the meaning of
Section 9-102 of the UCC in effect in such applicable jurisdiction) and
Originator has not changed its jurisdiction of organization since the date
of
the Agreement.
The
foregoing certifications and the financial statements delivered with this
Certificate in support hereof, are made and delivered this day of ,
20__.
______________________________
[Name]
Exhibit
V
Credit
and Collection Policy
Attached
Schedule
A
DOCUMENTS
TO BE DELIVERED TO BUYER
ON
OR
PRIOR TO THE PURCHASE
SEE
EXHIBIT G TO THE LOAN AGREEMENT.
TABLE
OF
CONTENTS
ARTICLE
I
AMOUNTS
AND TERMS OF THE PURCHASES
Section
1.1 Purchases
of Receivables.
Section
1.2 Payment
for the Purchases.
Section
1.3 Purchase
Price Credit Adjustments
Section
1.4 Payments
and Computations, Etc.
Section
1.5 Transfer
of Records.
Section
1.6 Characterization
Section
1.7 Additional
Grant of Security Interest.
ARTICLE
II
REPRESENTATIONS AND WARRANTIES
Section
2.1 Representations
and Warranties of Originator
ARTICLE
III
CONDITIONS OF PURCHASE
Section
3.1 Conditions
Precedent to Initial Purchase
Section
3.2 Conditions
Precedent to Subsequent Purchases
ARTICLE
IV
COVENANTS
Section
4.1 Affirmative
Covenants of Originator
Section
4.2 Negative
Covenants of Originator
ARTICLE
V
TERMINATION EVENTS
Section
5.1 Termination
Events
Section
5.2 Remedies
ARTICLE
VI
INDEMNIFICATION
Section
6.1 Indemnities
by Originator
Section
6.2 Other
Costs and Expenses
ARTICLE
VII
MISCELLANEOUS
Section
7.1 Waivers
and Amendments.
Section
7.2 Notices
Section
7.3 Protection
of Ownership Interests of Buyer.
Section
7.4 Reserved.
Section
7.5 Bankruptcy
Petition.
Section
7.6 Limitation
of Liability
Section
7.7 CHOICE
OF LAW
Section
7.8 CONSENT
TO JURISDICTION
Section
7.9 WAIVER
OF JURY TRIAL
Section
7.10 Integration;
Binding Effect; Survival of Terms.
Section
7.11 Counterparts;
Severability; Section References
Section
7.12 Subordination
Exhibits
and Schedules
Exhibit
I - Definitions
Exhibit
II - Principal
Place of Business; Location(s) of Records; Federal Employer Identification
Number; Other Names
Exhibit
III - Lock-Boxes;
Deposit Accounts; Deposit Account Banks; List of Alternate Payment
Locations
Exhibit
IV - Form
of
Compliance Certificate
Exhibit
V - Credit
and Collection Policy
Schedule
A List
of
Documents to Be Delivered to Buyer Prior to the Purchase
