EXHIBIT 10.3
EXECUTION COPY
RECEIVABLES PURCHASE AGREEMENT
Dated as of December 30, 2003
among
NIPSCO RECEIVABLES CORPORATION
as the Seller
and
CAFCO, LLC
as the Conduit Purchaser
and
CITIBANK, N.A.,
and
DANSKE BANK A/S, CAYMAN ISLANDS BRANCH
as the Bank Purchasers
and
CITICORP NORTH AMERICA, INC.
as the Agent
and
NORTHERN INDIANA PUBLIC SERVICE COMPANY
as the Servicer
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS................................................................. 1
SECTION 1.01 Certain Defined Terms........................................... 1
SECTION 1.02 Other Terms..................................................... 22
ARTICLE II AMOUNTS AND TERMS OF THE PURCHASES......................................... 22
SECTION 2.01 Purchase Facility............................................... 22
SECTION 2.02 Making Purchases................................................ 23
SECTION 2.03 Receivable Interest Computation................................. 24
SECTION 2.04 Settlement Procedures........................................... 25
SECTION 2.05 Payment of Certain Fees......................................... 28
SECTION 2.06 Payments and Computations, Etc.................................. 28
SECTION 2.07 Dividing or Combining Receivable Interests...................... 29
SECTION 2.08 Increased Costs................................................. 29
SECTION 2.09 Taxes........................................................... 30
SECTION 2.10 Security Interest............................................... 31
ARTICLE III CONDITIONS OF PURCHASES................................................... 32
SECTION 3.01 Conditions Precedent to Initial Purchase........................ 32
SECTION 3.02 Conditions Precedent to All Purchases and Reinvestments......... 33
ARTICLE IV REPRESENTATIONS AND WARRANTIES............................................. 34
SECTION 4.01 Representations and Warranties of the Seller.................... 34
SECTION 4.02 Representations and Warranties of the Servicer.................. 37
ARTICLE V COVENANTS................................................................... 38
SECTION 5.01 Covenants of the Seller......................................... 38
SECTION 5.02 Agreed Upon Procedures.......................................... 45
-i-
ARTICLE VI ADMINISTRATION AND COLLECTION OF RECEIVABLES............................... 46
SECTION 6.01 Designation of Servicer......................................... 46
SECTION 6.02 Duties of Servicer.............................................. 46
SECTION 6.03 Certain Rights of the Agent..................................... 48
SECTION 6.04 Rights and Remedies............................................. 49
SECTION 6.05 Covenants of the Servicer....................................... 50
SECTION 6.06 Indemnities by the Servicer..................................... 50
SECTION 6.07 Cash Collateral Account......................................... 51
ARTICLE VII EVENTS OF TERMINATION..................................................... 53
SECTION 7.01 Events of Termination........................................... 53
ARTICLE VIII THE AGENT................................................................ 55
SECTION 8.01 Authorization and Action........................................ 55
SECTION 8.02 Agent's Reliance, Etc........................................... 55
SECTION 8.03 CNAI and Affiliates............................................. 56
SECTION 8.04 Indemnification of Agent........................................ 56
SECTION 8.05 Delegation of Duties............................................ 56
SECTION 8.06 Action or Inaction by Agent..................................... 56
SECTION 8.07 Notice of Events of Termination; Action by Agent................ 57
SECTION 8.08 Non-Reliance on Agent and Other Parties......................... 57
SECTION 8.09 Successor Agent................................................. 57
ARTICLE IX INDEMNIFICATION............................................................ 58
SECTION 9.01 Indemnities by the Seller....................................... 58
ARTICLE X MISCELLANEOUS............................................................... 60
SECTION 10.01 No Waiver; Amendments, Etc..................................... 60
SECTION 10.02 Notices, Etc................................................... 61
-ii-
SECTION 10.03 Assignability.................................................. 61
SECTION 10.04 Costs and Expenses............................................. 63
SECTION 10.05 No Proceedings................................................. 63
SECTION 10.06 Confidentiality................................................ 63
SECTION 10.07 GOVERNING LAW.................................................. 64
SECTION 10.08 Execution in Counterparts...................................... 64
SECTION 10.09 Integration; Binding Effect; Survival of Termination........... 64
SECTION 10.10 Consent to Jurisdiction........................................ 65
SECTION 10.11 WAIVER OF JURY TRIAL........................................... 65
SECTION 10.12 Ratable Payments............................................... 65
SECTION 10.13 Limitation of Liability........................................ 65
SECTION 10.14 Intent of the Parties.......................................... 66
SECTION 10.15 Release Upon Termination....................................... 66
SCHEDULES
SCHEDULE I - Blocked Account Banks
SCHEDULE II - Credit and Collection Policy
SCHEDULE III - Special Concentration Limits
ANNEXES
ANNEX A - Form of Monthly Report
ANNEX B - Form of Blocked Account Agreement
ANNEX C - Form of Assignment and Acceptance
ANNEX D - Form of Funds Transfer Letter
ANNEX E - Forms of Termination Agreements
ANNEX F - Forms of Contracts
ANNEX G - Form of Cash Collateral Agreement
ANNEX H Additional Representations and Warranties of the Seller
-iii-
RECEIVABLES PURCHASE AGREEMENT
Dated as of December 30, 2003
THIS RECEIVABLES PURCHASE AGREEMENT (this "Agreement") is
entered into as of December 30, 2003 by and among (i) NIPSCO RECEIVABLES
CORPORATION, an Indiana corporation, as Seller, (ii) CAFCO, LLC, a Delaware
limited liability company, as Conduit Purchaser, (iii) CITIBANK, N.A. (together
with any successor thereto, "Citibank") and Danske Bank A/S, Cayman Islands
Branch (together with any successor thereto, "Danske"), each as a Bank
Purchaser, (iv) CITICORP NORTH AMERICA, INC., a Delaware corporation (together
with any successor thereto, "CNAI"), as Agent for the Conduit Purchaser and the
Bank Purchasers, and (v) NORTHERN INDIANA PUBLIC SERVICE COMPANY, an Indiana
corporation, as Servicer.
PRELIMINARY STATEMENTS. The Seller has acquired, and may
continue to acquire, Receivables from NIPSCO, either by purchase or by
contribution to the capital of the Seller. The Seller is prepared to sell
undivided fractional ownership interests (referred to herein as "Receivable
Interests") in the Receivables. The Conduit Purchaser may, in its sole
discretion, purchase such Receivable Interests, and the Bank Purchasers have
agreed to purchase such Receivable Interests, in each case on the terms and
conditions set forth herein. Accordingly, the parties agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 Certain Defined Terms. As used in this Agreement,
the following terms shall have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the terms defined):
"Accounting Based Consolidation Event" means the
consolidation, for financial and/or regulatory accounting purposes, of all or
any portion of the assets and liabilities of the Conduit Purchaser that are the
subject of this Agreement or any other Transaction Document with all or any
portion of the assets and liabilities of Citibank or the Agent or any of their
affiliates as the result of the existence of, or occurrence of any change in,
accounting standards or the issuance of any pronouncement, interpretation or
release, including, without limitation, the Financial Accounting Standards Board
Interpretation No. 46, by any accounting body or any other body charged with the
promulgation or administration of accounting standards, including, without
limitation, the Financial Accounting Standards Board, the International
Accounting Standards Board, the American Institute of Certified Public
Accountants, the Federal Reserve Board of Governors and the Securities and
Exchange Commission, and shall occur as of the date that such consolidation (i)
shall have occurred with respect to the financial statements of Citibank or the
Agent or any of their affiliates or (ii) shall have been required to have
occurred, regardless of whether such financial statements were prepared as of
such date.
"Adjusted Eurodollar Rate" means, for any Fixed Period, an
interest rate per annum obtained by dividing (i) the Eurodollar Rate for such
Fixed Period by (ii) a percentage equal to 100% minus the Eurodollar Rate
Reserve Percentage for such Fixed Period.
"Adverse Claim" means a lien, security interest or other
charge or encumbrance, or other right or claim in, of or on any asset or
property of a Person in favor of another Person.
"Affected Person" has the meaning specified in Section 2.08.
"Affiliate" means, for any Person, any other Person which (i)
is a Subsidiary of such Person or (ii) directly or indirectly, is in control of,
is controlled by, or is under common control with such Person. For purposes of
this definition, "control" means the power, directly or indirectly, to cause the
direction of the management and policies of a Person, whether through ownership
of voting securities, by contract or otherwise.
"Agent" means CNAI, in its capacity as contractual
representative for the Conduit Purchaser and Bank Purchasers hereunder, and any
successor thereto in such capacity appointed pursuant to Article VIII.
"Agent's Account" means the special account (account number
4063-6695) of the Agent maintained at the office of Citibank at 000 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx or such other account as the Agent shall designate in writing
to the Seller and the Servicer.
"Aggregate Commitment" means, at any time, the total of the
Commitments of all Bank Purchasers at such time.
"Alternate Base Rate" means a fluctuating interest rate per
annum as shall be in effect from time to time, which rate shall at all times be
equal to the higher of:
(a) the rate of interest announced publicly by
Citibank in New York, New York, from time to time as
Citibank's base rate; and
(b) the Federal Funds Rate plus 0.50%.
"Amortization Date" means, for any Receivable Interest, (i) in
the case of a Receivable Interest owned by the Conduit Purchaser, the earlier of
(a) the Business Day which the Seller or the Agent so designates by notice to
the other at least one Business Day in advance and (b) the Termination Date and
(ii) in the case of a Receivable Interest owned by a Bank Purchaser, the earlier
of (a) the Business Day which the Seller so designates by notice to the Agent at
least five Business Days in advance and (b) the Termination Date.
"Applicable Eurodollar Rate Margin" means a rate per annum
equal to (i) 0.95% during a Xxxxx 0 Xxxxxxx Xxxxxx, Xxxxx 0 Ratings Period or
Xxxxx 0 Xxxxxxx Xxxxxx, (xx) 1.25% during any period of time (other than a Level
1 Ratings Period, a Level 2 Ratings Period or a Level 3 Ratings Period) during
which NIPSCO's Debt Rating has not been withdrawn by either S&P or Xxxxx'x and
is no less than BB+ by S&P and Ba1 by Xxxxx'x, and (iii) 1.75% at any period of
time during which NIPSCO's Debt Rating has been withdrawn by either S&P or
Xxxxx'x or is less than BB+ by S&P or Ba1 by Xxxxx'x.
-2-
"Asset Purchase Agreement" means any secondary market
agreement, asset purchase agreement or other liquidity agreement entered into by
one or more Bank Purchasers for the benefit of the Conduit Purchaser, to the
extent relating to the sale or transfer of interests in, or other financing of,
Receivable Interests.
"Assignee Rate" means, for any Fixed Period for any Receivable
Interest, an interest rate per annum equal to the sum of the Applicable
Eurodollar Rate Margin plus the Adjusted Eurodollar Rate for such Fixed Period;
provided, however, that in case of:
(i) any Fixed Period on or prior to the first
day of which the Conduit Purchaser or Bank Purchaser shall
have notified the Agent that the introduction of or any change
in, or in the interpretation of, any law or regulation makes
it unlawful, or any central bank or other governmental
authority asserts that it is unlawful, for the Conduit
Purchaser or such Bank Purchaser to fund such Receivable
Interest at the Assignee Rate set forth above (and the Conduit
Purchaser or such Bank Purchaser shall not have subsequently
notified the Agent that such circumstances no longer exist),
(ii) any Fixed Period of less than one month,
(iii) any Fixed Period as to which the Agent does
not receive notice, by no later than 12:00 noon (New York City
time) on the third Business Day preceding the first day of
such Fixed Period, that the related Receivable Interest will
not be funded by the issuance of commercial paper, or
(iv) any Fixed Period for a Receivable Interest
the Capital of which allocated to the Conduit Purchaser or a
Bank Purchaser is less than $500,000,
the Assignee Rate for such Fixed Period for the affected Conduit Purchaser or
Bank Purchaser shall be an interest rate per annum equal to the Alternate Base
Rate in effect from time to time during such Fixed Period; and provided further
that at all times following the occurrence and during the continuation of an
Event of Termination the Assignee Rate shall be an interest rate per annum equal
to the Alternate Base Rate in effect from time to time plus 2%.
"Assignment and Acceptance" means an assignment and acceptance
agreement entered into by a Bank Purchaser, an Eligible Assignee and the Agent,
pursuant to which such Eligible Assignee may become a party to this Agreement,
in substantially the form of Annex C hereto.
"Balanced Payment Plan" means a balanced or levelized payment
plan of the Originator made available to an Obligor.
"Bank Purchasers" means Citibank, Danske and each Eligible
Assignee that shall become a party to this Agreement pursuant to Section 10.03.
"Blocked Account" means an account maintained at a bank for
the purpose of receiving Collections, with respect to which account a Blocked
Account Agreement has been executed.
-3-
"Blocked Account Agreement" means an agreement, in
substantially the form of Annex B (or in such other form as may be approved in
writing by the Agent) duly executed by the Seller, the Originator, the Agent and
a Blocked Account Bank.
"Blocked Account Bank" means any bank at which a Blocked
Account is maintained.
"Business Day" means any day on which (i) banks are not
authorized or required to close in New York City, New York and (ii) if this
definition of "Business Day" is utilized in connection with the Eurodollar Rate,
dealings are carried out in the London interbank market.
"CAFCO" means CAFCO, LLC, a Delaware limited liability
company, together with its successors and permitted assigns.
"Capital" of any Receivable Interest means the original amount
paid to the Seller for such Receivable Interest at the time of its purchase by a
Purchaser pursuant to this Agreement, as such amount may be divided or combined
in accordance with Section 2.07, in each case as reduced from time to time by
Collections received by such Purchaser from distributions made pursuant to
Section 2.04 on account of such Capital held by such Purchaser; provided that if
such Capital shall have been reduced by any distribution and thereafter all or a
portion of such distribution is rescinded or must otherwise be returned for any
reason, such Capital shall be increased by the amount of such rescinded or
returned distribution, as though it had not been received by such Purchaser.
"Cash Collateral Account" has the meaning specified in Section
6.07.
"Cash Collateral Agreement" has the meaning specified in
Section 6.07.
"Cash Collateral Bank" has the meaning specified in Section
6.07.
"Citibank" has the meaning specified in the preamble.
"CNAI" has the meaning specified in the preamble.
"Collections" means, with respect to any Receivable, all cash
collections and other cash proceeds of such Receivable, including, without
limitation, all cash proceeds of Related Security with respect to such
Receivable, and any collection of such Receivable deemed to have been received
pursuant to Section 2.04(e), but excluding amounts received from any Obligor
under a Balanced Payment Plan to the extent constituting a prepayment for goods
or services not yet provided to such Obligor.
"Commitment" of any Bank Purchaser means, (a) with respect to
Citibank, $75,000,000; (b) with respect to Dankse, $75,000,000 and (c) with
respect to any other Bank Purchaser that has entered into an Assignment and
Acceptance, the amount set forth therein as such Bank Purchaser's Commitment, in
each case as such amount may be reduced or increased by any Assignment and
Acceptance entered into among such Bank Purchaser, an Eligible Assignee and the
Agent and, in each case, as such amount may be reduced (or terminated) pursuant
to the terms of this Agreement. Any reduction (or termination) of the Program
Limit
-4-
pursuant to the terms of this Agreement below the amount of the Aggregate
Commitment shall reduce (or terminate) each Bank Purchaser's Commitment ratably
in accordance with their respective Commitments.
"Concentration Account" means the special account (account
number 628215570) of the Originator maintained at Bank One, N.A., at its offices
at 0 Xxxx Xxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000.
"Concentration Limit" means, for any Obligor at any time, 3.0%
of the Net Receivables Pool Balance (the "Normal Concentration Limit"), or such
other percentage of the Net Receivables Pool Balance (a "Special Concentration
Limit") as is set forth on Schedule III, or otherwise agreed to by the Seller
and the Agent and designated by the Agent (subject to Section 10.01) in a
writing delivered to the Seller; provided that in the case of an Obligor and its
Affiliates, the Concentration Limit shall be calculated as if such Obligor and
such Affiliates were a single Obligor; and provided further that the Agent may
reduce any Special Concentration Limit upon three Business Days' notice to the
Seller.
"Conduit Purchaser" means CAFCO and any other Eligible
Assignee that becomes an owner by assignment or otherwise of a Receivable
Interest originally purchased by CAFCO and, to the extent of the undivided
interests so purchased, shall include any Eligible Assignees that become
participants.
"Consolidated Subsidiary" means at any date, any Subsidiary
the accounts of which are consolidated with those of NIPSCO in its consolidated
financial statements as of such date.
"Consolidation Fee" has the meaning set forth in Section
2.05(b).
"Contract" means each of the tariffs pursuant to which the
Originator shall provide gas or electricity to customers from time to time and
pursuant to which rates payable by such Customers for gas or electricity are
set, in one of the forms set forth in Annex F.
"CP Fixed Period Date" means, for any Receivable Interest held
by the Conduit Purchaser, the date of purchase of such Receivable Interest and
thereafter the 18th day of each calendar month or any other day as shall have
been agreed to in writing by the Agent and the Seller prior to the last Business
Day of the preceding Fixed Period for such Receivable Interest or, if there is
no preceding Fixed Period, prior to the date of purchase of such Receivable
Interest.
"CP Rate" means, for any Fixed Period for any Receivable
Interest, to the extent the Conduit Purchaser funds such Receivable Interest for
such Fixed Period by issuing commercial paper, the per annum rate equivalent to
the weighted average of the per annum rates paid or payable by the Conduit
Purchaser from time to time as interest on or otherwise (by means of interest
rate xxxxxx or otherwise) in respect of those promissory notes issued by the
Conduit Purchaser that are allocated, in whole or in part, by the Agent (on
behalf of the Conduit Purchaser) to fund the purchase or maintenance of such
Receivable Interest during such Fixed Period as determined by the Agent (on
behalf of the Conduit Purchaser) and reported to the Seller and the Servicer,
which rates shall reflect and give effect to the commissions of placement
-5-
agents and dealers in respect of such promissory notes, to the extent such
commissions are allocated, in whole or in part, to such promissory notes by the
Agent (on behalf of the Conduit Purchaser); provided, however, that if any
component of such rate is a discount rate, in calculating the "CP Rate" for such
Fixed Period the Agent shall for such component use the rate resulting from
converting such discount rate to an interest bearing equivalent rate per annum.
"Credit and Collection Policy" means those receivables credit
and collection policies and practices of NIPSCO in effect on the date of this
Agreement and described in Schedule II hereto, as modified in compliance with
this Agreement.
"Danske" has the meaning specified in the preamble.
"Debt" means, as to any Person, at any date, without
duplication, (i) all obligations of such Person for borrowed money, (ii) all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments, (iii) all obligations of such Person to pay the deferred
purchase price of property or services, (iv) all obligations of such Person as
lessee under capital leases, (v) all Debt of others secured by an Adverse Claim
on any asset of such Person, whether or not such Debt is assumed by such Person,
(vi) all Debt of others Guaranteed by such Person and (vii) all obligations of
such Person in respect of unfunded vested benefits under plans covered by Title
IV of ERISA.
"Debt Rating" for any Person, shall mean the rating by S&P or
Xxxxx'x of such Person's long-term public senior unsecured non-credit-enhanced
debt.
"Default Ratio" means the ratio (expressed as a percentage)
computed as of the last day of each calendar month by dividing (i) the aggregate
Outstanding Balance of all Receivables that were Defaulted Receivables on such
day or that would have been Defaulted Receivables on such day had they not been
written off the books of the Originator or the Seller during such month by (ii)
the aggregate Outstanding Balance of all Receivables on such day.
"Defaulted Receivable" means a Receivable:
(i) as to which a Final Xxxx has been mailed or
otherwise transmitted to the Obligor thereof;
(ii) as to which the Obligor thereof or any other
Person obligated thereon has taken any action, or suffered any
event to occur, of the type described in Section 7.01(f); or
(iii) which consistent with the Credit and
Collection Policy, would be written off the Seller's books as
uncollectible.
"Deferred Purchase Price" has the meaning specified in the
Sale Agreement.
"Delinquent Receivable" means a Receivable that is not a
Defaulted Receivable and:
-6-
(i) as to which any payment, or part thereof,
remains unpaid for 31 or more days from the original due date
for such payment; or
(ii) which, consistent with the Credit and
Collection Policy, would be classified as delinquent by the
Seller.
"Deposit Date" means each day on which any Collections are
deposited in any of the Blocked Accounts or on which any Transaction Party shall
receive Collections of Pool Receivables.
"Designated Obligor" means, at any time, any Obligor of any
Receivable, unless the Agent has provided the Seller with three Business Days'
prior notice that such Obligor shall not be considered a Designated Obligor.
"Diluted Receivable" means that portion of any Receivable
which is either (a) reduced or canceled as a result of (i) any defective,
rejected or returned merchandise or services or any failure by any Transaction
Party to deliver any merchandise or goods or provide any services or otherwise
to perform under any related Contract, order or invoice, (ii) any change in the
terms of, or cancellation of, a Contract or invoice or any cash discount,
discount for quick payment or other adjustment by any Transaction Party which
reduces the amount payable by the Obligor on the related Receivable or (iii) any
set-off by an Obligor in respect of any claim by such Obligor (whether such
claim arises out of the same or a related transaction or an unrelated
transaction), or (b) subject to any specific offset, counterclaim or defense
whatsoever (except the discharge in bankruptcy of the Obligor thereof).
"Dollars" and "$" each mean the lawful currency of the United
States of America.
"Dynamic Loss Reserve" means, on any date, the product of (i)
the applicable Stress Factor, (ii) the Loss Horizon Ratio for the calendar month
then most recently ended and (iii) the Maximum Loss Ratio.
"Eligible Assignee" means, (i) CNAI or any of its Affiliates,
(ii) any Person managed by Citibank, CNAI or any of their respective Affiliates
and rated at least A-1 by S&P and P-1 by Xxxxx'x, (iii) any Purchaser hereunder
or (iv) any financial or other institution acceptable to the Agent.
"Eligible Receivable" means, at any time, a Receivable that
satisfies all of the following criteria:
(a) such Receivable arose from the sale of goods
and/or provision of services by the Originator in the ordinary
course of business;
(b) such Receivable constitutes an "account" as
defined in Article 9 of the UCC as in effect in the State of
New York;
(c) the Obligor of such Receivable (i) is a
United States resident, (ii) is not an Affiliate of any
Transaction Party, and (iii) is a Designated Obligor;
-7-
(d) such Receivable is denominated and payable
only in Dollars in the United States;
(e) the sale or granting of a security interest
in such Receivable does not contravene or conflict with any
law, rule or regulation or require the consent or approval of,
or notice to, the related Obligor or any other Person;
(f) such Receivable arises under a Contract that
has been duly authorized and that, together with such
Receivable, is in full force and effect and constitutes the
legal, valid and binding obligation of the Obligor of such
Receivable enforceable against such Obligor in accordance with
its terms and is not subject to any dispute, offset,
counterclaim or defense whatsoever (except the discharge in
bankruptcy of such Obligor;)
(g) such Receivable, together with the Contract
related thereto, does not contravene in any material respect
any laws, rules or regulations applicable thereto (including,
without limitation, laws, rules and regulations relating to
usury, truth in lending, fair credit billing, fair credit
reporting, equal credit opportunity, fair debt collection
practices and privacy) and no party to the Contract related
thereto is in violation of any such law, rule or regulation in
any material respect;
(h) such Receivable satisfies all applicable
requirements of the Credit and Collection Policy and such
other criteria and requirements (other than those relating to
the collectibility of such Receivable) as the Agent may from
time to time specify to the Seller upon 30 days' notice;
(i) the Contract related to the Receivable
requires that the full payment of such Receivable be made
within 30 days of the original billing date;
(j) the representations and warranties set forth
in Section 4.01(h) of this Agreement and Section 4.01(j) of
the Sale Agreement, are true and correct with respect to such
Receivable;
(k) such Receivable arises under a Contract,
which (i) does not contain a provision that requires the
Obligor thereunder to consent to the sale or assignment of the
rights of the Seller or the Originator thereunder in the
manner contemplated by the Transaction Documents and (ii) does
not contain a confidentiality provision that would restrict
the ability of the Agent or the Purchasers to exercise their
rights under this Agreement, including, without limitation,
their right to review invoices delivered pursuant to such
Contract;
(l) the Agent has not notified the Seller prior
to the applicable date of purchase that the Agent has
determined, in its sole discretion, that such Receivable (or
class of Receivables) may not be treated as an "Eligible
Receivable" hereunder;
-8-
(m) such Receivable is not a Defaulted
Receivable or a Delinquent Receivable; and the Obligor thereof
is not the Obligor of Defaulted Receivables in the aggregate
amount of 5% or more of the aggregate Outstanding Balance of
all Receivables of such Obligor;
(n) such Receivable has not been extended,
rewritten or otherwise modified from the original terms
thereof except in accordance with the Credit and Collection
Policy;
(o) the Originator has satisfied and fully
performed all obligations on its part with respect to such
Receivable required to be fulfilled by it, and no further
action is required to be performed by any Person with respect
thereto other than payment thereon by the applicable Obligor;
(p) such Receivable is an obligation
representing all or part of the sales price of merchandise or
services within the meaning of Section 3(c)(5) of the
Investment Company Act of 1940, as amended, and a purchase of
such Receivable with the proceeds of notes would constitute a
"current transaction" within the meaning of Section 3(a)(3) of
the Securities Act of 1933, as amended; and
(q) such Receivable did not arise out of the
sale at the wellhead or minehead of oil, gas or other
minerals.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"ERISA Affiliate" means, with respect to any Person, any (i)
corporation which is a member of the same controlled group of corporations
(within the meaning of Section 414(b) of the IRC) as such Person; (ii)
partnership or other trade or business (whether or not incorporated) under
common control (within the meaning of Section 414(c) of the IRC) with such
Person or (iii) member of the same affiliated service group (within the meaning
of Section 414(m) of the IRC) as such Person, any corporation described in
clause (i) above or any partnership or other trade or business described in
clause (ii) above.
"Eurocurrency Liabilities" has the meaning assigned to that
term in Regulation D of the Board of Governors of the Federal Reserve System, as
in effect from time to time.
"Eurodollar Rate" means, for any Fixed Period, the rate
appearing on Page 3750 of the Telerate Service (or on any successor or
substitute page of such service, or any successor to or substitute for such
service, providing rate quotations comparable to those currently provided on
such page of such service, as determined by the Agent from time to time for
purposes of providing quotations of interest rates applicable to dollar deposits
in the London interbank market) at approximately 11:00 A.M., London time, two
Business Days prior to the commencement of such Fixed Period, as the rate for
dollar deposits with a maturity comparable to such Fixed Period. In the event
that such rate is not available at such time for any reason, then the
"Eurodollar Rate" shall be the rate at which dollar deposits of $5,000,000 and
for a maturity comparable to such Fixed Period are offered by the principal
London office of Citibank in
-9-
immediately available funds in the London interbank market at approximately
11:00 A.M., London time, two Business Days prior to the commencement of such
Fixed Period, as determined by the Agent.
"Eurodollar Rate Reserve Percentage" means, for any Fixed
Period in respect of which Yield is computed by reference to the Eurodollar
Rate, the reserve percentage applicable two Business Days before the first day
of such Fixed Period under regulations issued from time to time by the Board of
Governors of the Federal Reserve System (or any successor) (or if more than one
such percentage shall be applicable, the daily average of such percentages for
those days in such Fixed Period during which any such percentage shall be so
applicable) for determining the maximum reserve requirement (including, without
limitation, any emergency, supplemental or other marginal reserve requirement)
with respect to liabilities or assets consisting of or including Eurocurrency
Liabilities (or with respect to any other category of liabilities that includes
deposits by reference to which the interest rate on Eurocurrency Liabilities is
determined) having a term equal to such Fixed Period.
"Event of Termination" has the meaning specified in Section
7.01.
"Existing Receivables Facility" means each of the following:
(i) the Trade Receivables Purchase and Sale Agreement dated as of May 31, 1988
among NIPSCO, as the seller, CRC Funding, LLC (successor to Corporate
Receivables Corporation), as the investor, Citibank and CNAI, individually and
as agent, as amended, restated, supplemented or otherwise modified from time to
time, together with the other agreements referred to therein, and (ii) the Trade
Receivables Purchase and Sale Agreement dated as of May 31, 1988 among NIPSCO,
as seller, Citibank and CNAI, individually and as agent, as amended, restated,
supplemented or otherwise modified from time to time, together with the other
agreements referred to therein.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it
"Fees" means each of the Consolidation Fee, Program Fee and
Liquidity Fee.
"Final Xxxx" means, as to any account number of any Obligor,
the xxxx rendered with respect to such account number upon termination of
service for any reasons, including, without limitation, upon such Obligor's
request or for nonpayment by such Obligor.
"Financial Officer" of any Person means, the chief financial
officer, principal accounting officer, treasurer or assistant treasurer of such
Person.
"Fixed Period" means, with respect to any Receivable Interest:
-10-
(a) in the case of any Fixed Period in respect of which
Yield is computed by reference to the CP Rate or the Alternate Base Rate, each
successive period of one month, ending on each Settlement Date; and
(b) in the case of any Fixed Period in respect of which
Yield is computed by reference to the Adjusted Eurodollar Rate, each successive
period of one month, ending on each CP Fixed Period Date provided that a notice
shall have been given by the Seller and received by the Agent (including notice
by telephone, confirmed in writing) not later than 11:00 A.M. (New York City
time) on the day which occurs three Business Days before the first day of such
Fixed Period, each such Fixed Period for such Receivable Interest to commence on
the last day of the immediately preceding Fixed Period for such Receivable
Interest (or, if there is no such Fixed Period, on the date of purchase of such
Receivable Interest), except that if the Agent shall not have received such
notice before 11:00 A.M. (New York City time) on such day, such Fixed Period
shall be one day; provided, however, that:
(i) any Fixed Period (other than of one day)
which would otherwise end on a day which is not a Business Day
shall be extended to the next succeeding Business Day
(provided, however, that if Yield in respect of such Fixed
Period is computed by reference to the Eurodollar Rate, and
such Fixed Period would otherwise end on a day which is not a
Business Day, and there is no subsequent Business Day in the
same calendar month as such day, such Fixed Period shall end
on the next preceding Business Day);
(ii) in the case of any Fixed Period of one day,
(A) if such Fixed Period is the initial Fixed Period for a
Receivable Interest, such Fixed Period shall be the day of the
purchase of such Receivable Interest; (B) any subsequently
occurring Fixed Period which is one day shall, if the
immediately preceding Fixed Period is more than one day, be
the last day of such immediately preceding Fixed Period and,
if the immediately preceding Fixed Period is one day, be the
day next following such immediately preceding Fixed Period;
and (C) if such Fixed Period occurs on a day immediately
preceding a day which is not a Business Day, such Fixed Period
shall be extended to the next succeeding Business Day; and
(iii) in the case of any Fixed Period for any
Receivable Interest which commences before the Amortization
Date for such Receivable Interest and would otherwise end on a
date occurring after such Amortization Date, such Fixed Period
shall end on such Amortization Date and the duration of each
Fixed Period which commences on or after the Amortization Date
for such Receivable Interest shall be of such duration
(including, without limitation, one day) as shall be selected
by the Agent.
"Funds Transfer Letter" means a letter in substantially the
form of Annex D hereto executed and delivered by the Seller to the Agent, as the
same may be amended or restated in accordance with the terms thereof.
-11-
"Guarantee" means, as to any Person, any obligation,
contingent or otherwise, of such Person directly or indirectly guaranteeing any
Debt or other obligation of any other Person and, without limiting the
generality of the foregoing, any obligation, direct or indirect, contingent or
otherwise, of such Person (i) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Debt or other obligation (whether arising by
virtue of partnership arrangements, by agreement to keep-well, to purchase
assets, goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise) or (ii) entered into for the purpose of
assuring in any other manner the obligee of such Debt or other obligation of the
payment thereof or to protect such obligee against loss in respect thereof (in
whole or in part), provided that the term "Guarantee" shall not include
endorsements for collection or deposit in the ordinary course of business. The
term "Guarantee" used as a verb has a corresponding meaning.
"Incipient Event of Termination" means an event that but for
notice or lapse of time or both would constitute an Event of Termination.
"Indemnified Amounts" has the meaning specified in Section
10.01.
"Indemnified Party" has the meaning specified in Section
10.01.
"Investor Rate" means, for any Fixed Period for any Receivable
Interest held by the Conduit Purchaser (a) to the extent the Conduit Purchaser
funds such Receivables Interest for such Fixed Period by issuing commercial
paper, the CP Rate; and (b) to the extent the Conduit Purchaser funds such
Receivables Interest for such Fixed Period other than by issuing commercial
paper, (i) a rate equal to the Assignee Rate or (ii) such other rate as the
Agent and the Seller shall agree in writing.
"Involuntary Bankruptcy Event" means the occurrence of an
event that, but for notice or lapse of time or both, would constitute such an
Event of Termination of the type described in Section 7.01(f).
"IRC" means the Internal Revenue Code of 1986, as amended from
time to time, and any successor statute.
"Level 1 Ratings Period" means any period of time during which
NIPSCO's Debt Rating has not been withdrawn by either S&P or Moody's and is no
less than (i) BBB+ by S&P and (ii) Baa1 by Moody's.
"Level 2 Ratings Period" means any period of time (other than
a Level 1 Ratings Period) during which NIPSCO's Debt Rating has not been
withdrawn by either S&P or Moody's and is no less than (i) BBB by S&P and (ii)
Baa2 by Moody's.
"Level 3 Ratings Period" means any period of time (other than
a Level 1 Ratings Period or a Level 2 Ratings Period) during which NIPSCO's Debt
Rating has not been withdrawn by either S&P or Moody's and is no less than (i)
BBB- by S&P and (ii) Baa3 by Moody's.
-12-
"Level 4 Ratings Period" means any period of time during which
NIPSCO's Debt Rating has been withdrawn by either S&P or Moody's or is less than
(i) BBB- by S&P or (ii) Baa3 by Moody's.
"Liquidation Day" means, for any Receivable Interest, (i) each
day during a Fixed Period for such Receivable Interest on which the conditions
set forth in Section 3.02 are not satisfied (and such failure of conditions is
not waived by the Agent), and (ii) each day which occurs on or after the
Amortization Date for such Receivable Interest (including, without limitation,
each day during the Liquidation Period).
"Liquidation Fee" means, for (i) any Fixed Period for which
Yield is computed by reference to the Investor Rate and a reduction of Capital
is made for any reason (x) on a Settlement Date, if the Agent shall have
received less than three Business Days' notice of such reduction and the amount
of such reduction is greater than $75,000,000 or (y) in any amount on any day
other than a Settlement Date or (ii) any Fixed Period for which Yield is
computed by reference to the Eurodollar Rate and a reduction of Capital is made
for any reason on any day other than the last day of such Fixed Period, the
amount, if any, by which (A) the additional Yield (calculated without taking
into account any Liquidation Fee or any shortened duration of such Fixed Period
pursuant to clause (iii) of the definition thereof) which would have accrued
during such Fixed Period (or, in the case of clause (i) above, until the
maturity of the underlying commercial paper tranches) on the reductions of
Capital of the Receivable Interest relating to such Fixed Period had such
reductions remained as Capital, exceeds (B) the income, if any, received by the
Conduit Purchaser or the Bank Purchaser which holds such Receivable Interest
from the investment of the proceeds of such reductions of Capital.
"Liquidation Period" means the period commencing on the day
following the last day of the Revolving Period and ending on the later of the
Termination Date and the date on which no Capital of or Yield on any Receivable
Interest shall be outstanding and all other Seller Obligations shall be paid in
full.
"Liquidity Commitment" means, (a) with respect to Citibank,
$125,000,000 (b) with respect to Danske, $75,000,000 and (c) with respect to any
other Bank Purchaser that has entered into an Asset Purchase Agreement, the
amount set forth therein as such Bank Purchaser's maximum purchase amount, in
each case as such amount may be reduced or increased by any Assignment and
Acceptance entered into among such Bank Purchaser, an Eligible Assignee and the
Agent or any assignment in accordance with any Asset Purchase Agreement, and, in
each case, as such amount may be reduced (or terminated) pursuant to the terms
of this Agreement or the related Asset Purchase Agreement.
"Liquidity Fee" means, with respect to each Fixed Period, a
fee payable on each Settlement Date to the Agent, for the benefit of the Bank
Purchasers, equal to:
LFR x C x ED
---
360
where:
-13-
LFR = the Liquidity Fee Rate for such Fixed Period
C = the greater of (i) the Aggregate Commitment or (ii)
the aggregate Capital of all Receivable Interests
during such Fixed Period
ED = the actual number of days elapsed during such Fixed
Period
The Liquidity Fee shall be allocated to the Bank Purchasers
ratably in accordance with their respective Commitments; provided, however, that
if the aggregate Capital of all Receivable Interests during such Fixed Period
exceeds the Aggregate Commitment, that portion of the Liquidity Fee payable on
or as a result of such excess shall be paid solely to Citibank.
"Liquidity Fee Rate" means a rate per annum equal to (i) 0.25%
during any Level 1 Ratings Period or any Level 2 Ratings Period; (ii) 0.325%
during any Level 3 Ratings Period or (iii) 0.50% during any Level 4 Ratings
Period.
"Loss Horizon Ratio" means a ratio (expressed as a percentage)
computed as of the last day of each calendar month by dividing (i) the aggregate
original Outstanding Balance of Receivables which arose during the three
calendar month period ending on such day by (ii) the aggregate Outstanding
Balance of all Eligible Receivables as of such day.
"Loss Ratio" means a ratio (expressed as a percentage)
computed as of the last day of each calendar month (the "specified month") by
dividing (i) the sum of the aggregate Outstanding Balances of (a) all
Receivables written-off (net of recoveries) during the specified month, plus (b)
all Receivables as to which any payment, or part thereof, remains unpaid for at
least 61 days, but no more than 90 days, from the original due date therefor on
such date, plus (c) all Delinquent Receivables in excess of 7% of the aggregate
Outstanding Balance of all billed Receivables on such date plus (d) all
Receivables for which a Final Xxxx was issued during such month, to the extent
such amount exceeds 7.5% of the aggregate Outstanding Balance of all billed
Receivables on such date by (ii) the aggregate original Outstanding Balance of
billed Receivables which arose during the third calendar month immediately
preceding the specified month.
"Loss Reserve" means, on any date, an amount equal to:
LRP x NRPB
where:
LRP = the Loss Reserve Percentage on such date
NRPB = the Net Receivables Pool Balance at the close of
business of the Servicer on such date
"Loss Reserve Percentage" means, on any date, the greatest of
(i) the Dynamic Loss Reserve, (ii) four times the Normal Concentration Limit and
(iii) 12%.
-14-
"Majority Bank Purchasers" means Bank Purchasers representing
more than 50% of the aggregate Liquidity Commitments of all Bank Purchasers.
"Material Adverse Effect" means a material adverse effect on
(i) the ability of any Transaction Party to perform its obligations under any
Transaction Document, (ii) the legality, validity or enforceability of this
Agreement or any other Transaction Document, (iii) any Purchaser's or the
Agent's interest in the Receivables generally or in any material portion of the
Receivables, the Related Security or the Collections with respect thereto, or
(iv) the collectibility of the Receivables generally or of any material portion
of the Receivables.
"Maximum Loss Ratio" means, on any date, the highest
Three-Month Loss Ratio during the twelve calendar month period then most
recently ended.
"Maximum Receivable Interest" means (i) at any time during a
Level 1 Ratings Period, 97%, (ii) at any time during a Level 2 Ratings Period,
95%, and (iii) at any other time, 93%.
"Monthly Report" means a report in substantially the form of,
and containing the information described in, Annex A, and such additional
information as the Agent may reasonably request from time to time, duly
completed and furnished by the Servicer to the Agent and each Bank Purchaser
pursuant to Section 6.02(g).
"Moody's" means Xxxxx'x Investors Service, Inc.
"Net Receivables Pool Balance" means at any time the aggregate
Outstanding Balance of Pool Receivables that are Eligible Receivables reduced by
the sum of (i) the aggregate amount by which the Outstanding Balance of Eligible
Receivables of each Obligor (treating each Obligor and its Affiliates as if they
were a single Obligor) exceeds the Concentration Limit for such Obligor, and
(ii) the aggregate amount of the Outstanding Balances of Defaulted Receivables.
"NIPSCO" means Northern Indiana Public Service Company, an
Indiana corporation, and any successor thereto.
"Non-Defaulted Receivable" means any Receivable that is not a
Defaulted Receivable.
"Normal Concentration Limit" has the meaning specified in the
definition of "Concentration Limit".
"Obligor" means a Person obligated to make payments pursuant
to a Contract in respect of a Receivable.
"Origination Date" means (i) the date of this Agreement, with
respect to Receivables existing on such date and (ii) the date on which such
Receivable is created, with respect to each other Receivable.
"Originator" means NIPSCO.
-15-
"Other Companies" means, collectively, the Originator and all
of its Subsidiaries and Affiliates except the Seller.
"Other Taxes" has the meaning specified in Section 2.09.
"Outstanding Balance" means, for any Receivable, the unpaid
principal amount thereof; it being acknowledged and agreed that with respect to
an Obligor under a Balanced Payment Plan, the current amount invoiced to such
Obligor may not reflect the Outstanding Balance of the Receivable from such
Obligor because such invoiced amount may constitute, in whole or in part, either
(a) a prepayment for goods or services not yet provided by the Originator, or
(b) a payment for goods or services previously provided in a prior billing
cycle.
"Percentage" means, at any time with respect to any Bank
Purchaser, a fraction (expressed as a percentage), the numerator of which is
equal to its Commitment at such time, and the denominator of which is equal to
the aggregate Commitments of all Bank Purchasers at such time.
"Permitted Investments" means any of the following investments
denominated and payable solely in Dollars: (a) readily marketable debt
securities issued by, or the full and timely payment of which is guaranteed by
the full faith and credit of, the federal government of the United States of
America, (b) insured demand deposits, time deposits and certificates of deposit
of any commercial bank rated at least A-1+ by S&P and P-1 by Moody's, (c) no
load money market funds rated in the highest ratings category by each of Moody's
and S&P (without the "r" symbol attached to any such rating by S&P), (d)
commercial paper of any corporation incorporated under the laws of the United
States or any political subdivision thereof, provided that such commercial paper
is rated at least A-1+ (and without any "r" symbol attached to any such rating)
by S&P and at least Prime-1 by Moody's and (e) any other securities or
investments of a passive nature approved in writing by the Agent.
"Person" means an individual, partnership, corporation
(including a business trust), limited liability company, joint stock company,
trust, unincorporated association, joint venture or other entity, or a
government or any political subdivision or agency thereof.
"Pool Receivable" means any Receivable which has been acquired
by the Seller from NIPSCO pursuant to the Sale Agreement.
"Program Fee" means, with respect to each Fixed Period, a fee
payable on each Settlement Date to the Agent, for the ratable benefit of the
Purchasers based upon the Capital of their respective Receivable Interests,
equal to:
PFR x C x ED
---
360
where:
PFR = the Program Fee Rate for such Fixed Period
C = aggregate Capital of all Receivable Interests during
such Fixed Period
-16-
ED = the actual number of days elapsed during such Fixed
Period
"Program Fee Rate" means a rate per annum equal to (i) 0.125%
during any Xxxxx 0 Ratings Period or any Level 2 Ratings Period; (ii) 0.175%
during any Level 3 Ratings Period or (iii) 0.25% during any Level 4 Ratings
Period.
"Program Limit" means $200,000,000, as such amount may be
reduced pursuant to Section 2.01(b). References to the unused portion of the
Program Limit shall mean, at any time, the Program Limit (as then reduced
pursuant to Section 2.01(b)), minus the aggregate outstanding Capital of all
Receivable Interests under this Agreement.
"Purchasers" means, collectively, the Bank Purchasers and the
Conduit Purchaser.
"Receivable" means the indebtedness and other obligations of
any Obligor resulting from the provision or sale of merchandise, goods or
services by the Originator under a Contract, whether billed or unbilled,
including, without limitation, the right to payment of any interest or finance
charges, late payment charges, delinquency charges, extension or collection fees
and all other obligations of such Obligor with respect thereto, and including,
without limitation, 100% of the amount invoiced to any Obligor after the
Termination Date if any portion of the goods or services covered by such invoice
were provided on or prior to the Termination Date; provided, however, that any
Receivable repurchased by the Originator pursuant to Section 2.04 of the Sale
Agreement shall thereafter cease to be considered a Receivable.
"Receivable Interest" means, at any time, an undivided
percentage ownership interest in (i) all then outstanding Pool Receivables
arising prior to the time of the most recent computation or recomputation of
such undivided percentage interest pursuant to Section 2.03, (ii) all Related
Security with respect to such Pool Receivables, and (iii) all Collections with
respect to, and other proceeds of, such Pool Receivables. Such undivided
percentage interest shall be computed at the times and in the manner specified
in Section 2.03 as
C + TR
------
NRPB
where:
C = the Capital of such Receivable Interest at the time
of computation
TR = the Total Reserves for such Receivable Interest at
the time of computation
NRPB = the Net Receivables Pool Balance at the time of
computation
Each Receivable Interest shall be determined from time to time pursuant to the
provisions of Section 2.03. Notwithstanding the foregoing, from and after the
date on which the Amortization
-17-
Date shall have occurred for all Receivable Interests and until each Receivable
Interest is reduced to zero in accordance with Section 2.03, (i) the sum of all
Receivable Interests shall be equal to 100% and (ii) each Receivable Interest
shall be calculated as the percentage equivalent of a fraction, the numerator of
which is the Capital of such Receivable Interest, and the denominator of which
is equal to the aggregate Capital of all Receivable Interests.
"Related Security" means with respect to any Receivable:
(i) all of the Seller's interest in any
merchandise or goods (including returned merchandise or
goods), if any, relating to any sale giving rise to such
Receivable;
(ii) all security interests or liens and property
subject thereto from time to time purporting to secure payment
of such Receivable, whether pursuant to the Contract related
to such Receivable or otherwise, together with all financing
statements authorized by an Obligor describing any collateral
securing such Receivable;
(iii) all guaranties, insurance 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 other books, records and other
information (including, without limitation, computer programs,
tapes, discs, punch cards, data processing software and
related property and rights) relating to such Receivable and
the related Obligor;
(v) all of the Seller's right, title and
interest in and to all invoices or other agreements or
documents that evidence, secure or otherwise relate to such
Receivable; and
(vi) all of the Seller's right, title and
interest in, to and under the Sale Agreement.
"Revolving Period" means the period beginning on the date of
the initial purchase hereunder and terminating at the close of business on the
Business Day immediately preceding the Termination Date.
"S&P" means Standard & Poor's, a division of The XxXxxx-Xxxx
Companies, Inc.
"Sale Agreement" means the Receivables Sale Agreement of even
date herewith between the Seller and NIPSCO, as amended, restated, supplemented
or otherwise modified from time to time in accordance with the terms hereof and
thereof.
"Scheduled Commitment Termination Date" means December 28,
2004, unless, prior to such date (or the date so extended pursuant to this
clause), upon the Seller's request,
-18-
made not more than 60 nor less than 45 days prior to the then Scheduled
Commitment Termination Date, each Bank Purchaser shall in its sole discretion
consent, which consent shall be given not more than 30 days prior to the then
current Scheduled Commitment Termination Date, to the extension of the Scheduled
Commitment Termination Date to a date occurring up to 364 days after the then
current Scheduled Commitment Termination Date. Each Bank Purchaser hereby agrees
to respond to any such request from the Seller within 30 days of its receipt
thereof; provided, however, that any failure of any Bank Purchaser to respond to
the Seller's request for such extension shall be deemed a denial of such request
by such Bank Purchaser.
"SEC" means the Securities and Exchange Commission.
"Seller" has the meaning specified in the preamble.
"Seller Obligations" means all present and future indebtedness
and other liabilities and obligations (howsoever created, arising or evidenced,
whether direct or indirect, absolute or contingent, or due or to become due) of
the Seller to any Purchaser, the Agent and/or any other Person, arising under or
in connection with this Agreement or any other Transaction Document or the
transactions contemplated hereby or thereby, and shall include, without
limitation, all Capital, Yield, Fees and Servicer Fees and all other amounts due
or to become due under the Transaction Documents (whether in respect of fees,
expenses, indemnifications or otherwise), including, without limitation,
interest, fees and other obligations that accrue after the commencement of any
bankruptcy, insolvency or similar proceeding with respect to any Transaction
Party (in each case whether or not allowed as a claim in such proceeding).
"Servicer" means at any time the Person then authorized
pursuant to Section 6.01 to administer and collect Receivables.
"Servicer Default" means the occurrence of either of the
following events: (i) an Involuntary Bankruptcy Event or (ii) an Event of
Termination.
"Servicer Fee" has the meaning specified in Section 2.05(a).
"Settlement Date" means, for any Receivable Interest, (i) the
last day of each Fixed Period for such Receivable Interest (or if such day is
not a Business Day, the next succeeding Business Day), and (ii) during a Level 4
Ratings Period or following the occurrence of an Event of Termination or an
Involuntary Bankruptcy Event, each other Liquidation Day for such Receivable
Interest specified by the Agent; provided, however, that, in the case of a
Receivable Interest held by the Conduit Purchaser, if Yield with respect to such
Receivable Interest is computed by reference to the Investor Rate and no
Liquidation Day exists on the last day of a Fixed Period for such Receivable
Interest, the Settlement Date for such Receivable Interest for such Fixed Period
shall be the second Business Day after the last day of such Fixed Period.
"Special Concentration Limit" has the meaning specified in the
definition of "Concentration Limit".
"Stress Factor" means 1.50; provided, however, that during any
Level 4 Ratings Period, the "Stress Factor" shall be 2.00.
-19-
"Subsidiary" means any corporation or other entity of which
securities having ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions are at the time directly
or indirectly owned by NIPSCO, or one or more Subsidiaries, or by NIPSCO and one
or more Subsidiaries.
"Tangible Net Worth" means at any time the excess of (a) the
Outstanding Balance of all Non-Defaulted Receivables, minus (b) the aggregate
outstanding Capital hereunder, minus (c) the outstanding Deferred Purchase
Price.
"Taxes" has the meaning specified in Section 2.09.
"Termination Agreements" means the agreements providing for
the termination of an Existing Receivables Facility in the forms attached hereto
as Annex E.
"Termination Date" means the earliest of (a) the Scheduled
Commitment Termination Date, (b) the date determined pursuant to Section 7.01,
(c) the date the Program Limit reduces to zero pursuant to Section 2.01(b) and
(d) December 26, 2006.
"Three-Month Loss Ratio" means, as of the last day of any
calendar month, the average of the Loss Ratios for such month and the two
immediately preceding calendar months.
"Total Reserves" means, for any Receivable Interest on any
date, an amount equal to:
(YFR + LR) x C
--
AC
where:
YFR = the Yield and Fee Reserve at the time of computation
LR = the Loss Reserve at the time of computation
C = the Capital of such Receivable Interest at the time of
computation
AC = the aggregate Capital of all Receivable Interests at
the time of computation
"Transaction Documents" means this Agreement, the Sale
Agreement, the Blocked Account Agreements, the Termination Agreements, the
certificate or articles of incorporation and by-laws of the Seller and all
amendments, waivers and other agreements executed and delivered pursuant hereto
or thereto to which a Transaction Party is a party.
"Transaction Party" means any of the Seller, the Originator or
the Servicer.
"Turnover Ratio" means, for any calendar month, a number of
days obtained by multiplying (i) a fraction, the numerator of which is equal to
the Net Receivables Pool Balance as of the last day of such calendar month and
the denominator of which is equal to the aggregate amount of Collections of Pool
Receivables during such month, times (ii) 30.
-20-
"UCC" means the Uniform Commercial Code as from time to time
in effect in the specified jurisdiction.
"Yield" means the aggregate amount for the Conduit Purchaser
and the Bank Purchasers of the following:
(i) for each Receivable Interest for any Fixed
Period to the extent the Conduit Purchaser will be funding
such Receivable Interest through the issuance of commercial
paper or other promissory notes at a fixed rate,
IR x C x ED + LF
---
360
(ii) for each Receivable Interest for any Fixed
Period to the extent (x) the Conduit Purchaser will not be
funding such Receivable Interest through the issuance of
commercial paper or other promissory notes at a fixed rate, or
(y) a Bank Purchaser will be funding such Receivable Interest,
AR x C x ED + LF
---
360
where:
AR = the Assignee Rate for such Receivable Interest for
such Fixed Period
C = the Capital of such Receivable Interest during such
Fixed Period
ED = the actual number of days elapsed during such Fixed
Period
IR = the Investor Rate for such Receivable Interest for
such Fixed Period
LF = the Liquidation Fee, if any, for such Receivable
Interest for such Fixed Period
provided, that no provision of this Agreement shall require the payment or
permit the collection of Yield in excess of the maximum permitted by applicable
law; and provided further that Yield for any Receivable Interest shall not be
considered paid by any distribution to the extent that at any time all or a
portion of such distribution is rescinded or must otherwise be returned for any
reason.
"Yield and Fee Reserve" means, for any Receivable Interest on
any date, an amount equal to
(AC x YFRP) + AUYF
-21-
where:
AC = the aggregate Capital of all Receivable Interests at
the close of business of the Servicer on such date
YFRP = the Yield and Fee Reserve Percentage on such date
AUYF = accrued and unpaid Yield, Servicer Fee and Fees on
such date for all Receivable Interests
"Yield and Fee Reserve Percentage" means, on any date, a
percentage equal to
[(ABR x 1.5) + PFR + LFR + SF] x TR
where:
ABR = the Alternate Base Rate in effect on such date
PFR = the Program Fee Rate in effect on such date
LFR = the Liquidity Fee Rate in effect on such date
SF = the Servicer Fee in effect on such date, expressed as
a rate per annum
TR = a fraction, the numerator of which is equal to the
average Turnover Ratio for the three calendar month
period then most recently ended, and the denominator
of which is 360
SECTION 1.02 Other Terms. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles. All terms used in Article 9 of the UCC in the
State of New York, as in effect on the date hereof and not specifically defined
herein, are used herein as defined in such Article 9.
Unless otherwise expressly indicated, all references herein to
"Article," "Section," "Schedule" or "Annex" shall mean articles and sections of,
and schedules and annexes to, this Agreement.
ARTICLE II
AMOUNTS AND TERMS OF THE PURCHASES
SECTION 2.01 Purchase Facility. (a) On the terms and
conditions hereinafter set forth, the Conduit Purchaser may, in its sole
discretion, and if and to the extent the Conduit Purchaser does not make a
purchase, the Bank Purchasers shall, ratably in accordance with their respective
Commitments, severally and not jointly, purchase Receivable Interests from the
Seller from time to time during the period from the date hereof to the
Termination Date;
-22-
provided, however, that (i) under no circumstances shall the Conduit Purchaser
make any such purchase if, after giving effect to such purchase, the aggregate
outstanding Capital of all Receivable Interests would exceed the Program Limit;
and (ii) under no circumstances shall the Bank Purchasers be obligated to make
any such purchase if, after giving effect to such purchase, the aggregate
outstanding Capital of all Receivable Interests would exceed the Aggregate
Commitment.
(b) If the Seller determines that the facility provided
for in this Agreement exceeds its funding needs, the Seller may, upon at least
five Business Days' notice to the Agent and each Bank Purchaser, (i) reduce the
Program Limit to zero or, from time to time, reduce in part the unused portion
of the Program Limit or (ii) reduce the Aggregate Commitment to zero or, from
time to time, reduce in part the unused portion of the Aggregate Commitment;
provided that each partial reduction of the Program Limit or the Aggregate
Commitment shall be in the amount of at least $1,000,000 or an integral multiple
thereof. Any reduction of the Program Limit below the amount of the Aggregate
Commitment, and any reduction of the Aggregate Commitment pursuant to this
Section 2.01(b), shall reduce each Bank Purchaser's Commitment ratably in
accordance with their respective Commitments. Any termination of the Program
Limit or the Aggregate Commitment pursuant to this Section 2.01(b) shall
terminate each Bank Purchaser's Commitment.
(c) Until the Amortization Date for a Receivable
Interest, the Collections attributable to such Receivable Interest shall be
automatically reinvested pursuant to (and subject to the priority of payments
set forth in) Section 2.04 in additional undivided percentage interests in the
Receivables by making an appropriate readjustment of such Receivable Interest.
SECTION 2.02 Making Purchases. (a) Each purchase of a
Receivable Interest by the Purchasers shall be made on at least three Business
Days' notice from the Seller to the Agent. Each such notice of a purchase shall
specify (i) the amount requested to be paid to the Seller (such amount, which
shall not be less than $5,000,000, being referred to herein as the initial
"Capital" of the Receivable Interest then being purchased), (ii) the date of
such purchase (which shall be a Business Day) and (iii) if the Assignee Rate is
to apply to such Receivable Interest, the duration of the initial Fixed Period
for such Receivable Interest. The Conduit Purchaser shall promptly notify the
Seller and the Agent whether it has determined to make the requested purchase on
the terms specified by the Seller.
If the Conduit Purchaser has determined not to make the entire
amount of a proposed purchase, the Agent shall promptly send notice of the
proposed purchase to all of the Bank Purchasers concurrently by telecopier,
telex or cable specifying the date of such purchase, the aggregate amount of
Capital of the Receivable Interest being purchased by such Bank Purchasers
(which amount shall be, subject to clause (e) below, equal to the portion of the
purchase price not funded by the Conduit Purchaser), each such Bank Purchaser's
portion thereof (determined ratably in accordance with their respective
Commitments), whether the Yield for the Fixed Period for such Receivable
Interest is calculated based on the Adjusted Eurodollar Rate or the Alternate
Base Rate, and the duration of the Fixed Period for such Receivable Interest
(which shall be one day if the Seller has not selected another period in
accordance with the provisions set forth in the definition of "Fixed Period").
-23-
(b) On the date of each such purchase of a Receivable
Interest, the Conduit Purchaser and/or Bank Purchasers shall, upon satisfaction
of the applicable conditions set forth in Article III, make available to the
Seller in same day funds an aggregate amount equal to the initial Capital of
such Receivable Interest, at the account set forth in the Funds Transfer Letter;
provided, however, if such purchase is being made by the Bank Purchasers
following the designation by the Agent of an Amortization Date for a Receivable
Interest owned by the Conduit Purchaser pursuant to clause (i)(a) of the
definition of Amortization Date and any Capital of such Receivable Interest is
outstanding on such date of purchase, the Seller hereby directs the Bank
Purchasers to pay the proceeds of such purchase (to the extent of the
outstanding Capital on such Receivable Interest of the Conduit Purchaser) to the
Agent's Account, for application to the reduction of the outstanding Capital of
such Receivable Interest of the Conduit Purchaser.
(c) Effective on the date of each purchase pursuant to
this Section 2.02 and each reinvestment pursuant to Section 2.04, the Seller
hereby sells and assigns to the Agent, for the benefit of the Purchaser(s)
making such purchase or reinvestment, an undivided percentage ownership
interest, to the extent of the Receivable Interest then being purchased or in
respect of which the reinvestment is being made, in each Receivable then
existing and in the Related Security and Collections with respect thereto.
(d) Notwithstanding the foregoing, the Conduit Purchaser
shall not make purchases under this agreement at any time in an amount which
would exceed the Program Limit less the aggregate outstanding Capital held by
the Conduit Purchaser.
(e) Notwithstanding the foregoing, a Bank Purchaser shall
not be obligated to make purchases under this Section 2.02 at any time in an
amount which would exceed such Bank Purchaser's Commitment less the sum of (i)
the portion of Capital held by such Bank Purchaser, plus (ii) such Bank
Purchaser's ratable share (determined in accordance with their respective
Liquidity Commitments) of the aggregate outstanding portion of Capital held by
the Conduit Purchaser (whether or not any portion thereof has been assigned by
the Conduit Purchaser under an Asset Purchase Agreement), determined after
giving effect to any reductions of the Capital held by the Conduit Purchaser to
be made on the date of such purchase from the proceeds of purchases by the Bank
Purchasers. Each Bank Purchaser's obligation shall be several, such that the
failure of any Bank Purchaser to make available to the Seller any funds in
connection with any purchase shall not relieve any other Bank Purchaser of its
obligation, if any, hereunder to make funds available on the date of such
purchase, but no Bank Purchaser shall be responsible for the failure of any
other Bank Purchaser to make funds available in connection with any purchase.
SECTION 2.03 Receivable Interest Computation. Each Receivable
Interest shall be initially computed on its date of purchase. Thereafter until
the Amortization Date for such Receivable Interest, such Receivable Interest
shall be automatically recomputed (or deemed to be recomputed) on each day other
than a Liquidation Day. Any Receivable Interest, as computed (or deemed
recomputed) as of the day immediately preceding the Amortization Date for such
Receivable Interest, shall thereafter remain constant; provided, however, that
from and after the date on which the Amortization Date shall have occurred for
all Receivable Interests and until each Receivable Interest becomes zero in
accordance with the next sentence, (i) the
-24-
sum of all Receivable Interests shall be equal to 100% and (ii) each Receivable
Interest shall be calculated as the percentage equivalent of a fraction, the
numerator of which is the Capital of such Receivable Interest, and the
denominator of which is equal to the aggregate Capital of all Receivable
Interests. Each Receivable Interest shall become zero when Capital thereof and
Yield thereon shall have been paid in full, and all Fees and other Seller
Obligations are indefeasibly paid in full.
SECTION 2.04 Settlement Procedures. (a) Except as otherwise
herein provided, Collection of the Receivables shall be administered by the
Servicer in accordance with the terms of Article VI of this Agreement and this
Section 2.04. The Seller shall provide to the Servicer on a timely basis all
information needed for such administration, including notice of the occurrence
of any Liquidation Day and current computations of each Receivable Interest.
(b) Subject to Section 2.04(c) below, on each Deposit
Date, the Servicer shall apply all Collections deposited in any Blocked Account
or the Concentration Account on such Deposit Date or received by the Servicer on
such Deposit Date in the following order and priority:
(i) set aside and hold in trust for the Agent an
amount equal to the Seller Obligations owing to the Agent in
respect of costs and expenses incurred in connection with the
enforcement of any Transaction Document or the collection of
any amounts due thereunder;
(ii) set aside and hold in trust for the
Purchasers and the Agent an amount equal to the aggregate
Yield, Fees and Servicer Fee (to the extent payable by the
Purchasers under Section 2.05) accrued through such day for
all Receivable Interests and not previously set aside, such
amount to be allocated among the Purchasers and the Agent
ratably in accordance with the proportion of such amounts
payable to (or, in the case of the Servicer Fee, payable by)
each such Person;
(iii) if the sum of the Receivable Interests are
greater than the Maximum Receivable Interests, set aside and
hold in trust for the Purchasers and the Agent an amount equal
to the amount of such excess;
(iv) with respect to each Receivable Interest, if
such day is not a Liquidation Day for such Receivable
Interest, reinvest with the Seller on behalf of the
Purchaser(s) that hold such Receivable Interest the percentage
of such Collections represented by such Receivable Interest,
by recomputation of such Receivable Interest pursuant to
Section 2.03;
(v) if such day is a Liquidation Day for one or
more Receivable Interests, set aside and hold in trust for the
Purchaser(s) that hold such Receivable Interests (ratably in
proportion to the Capital of such Receivable Interests) an
amount equal to the lesser of (A) all of the remaining
Collections and (B) the Capital of such Receivable Interests;
provided that if amounts are set aside and held in trust on
any Liquidation Day occurring prior to the Amortization Date
for
-25-
the relevant Receivable Interests, and thereafter prior to the
next Settlement Date the conditions set forth in Section 3.02
are satisfied or waived by the Agent, such previously set
aside amounts shall, to the extent not previously distributed
pursuant to Section 2.04(c) or (d), be reinvested in
accordance with the preceding subsection (iv) on the day of
such subsequent satisfaction or waiver of conditions;
(vi) if any Seller Obligations (other than Yield,
Fees, Servicer Fees and Capital) are then due and payable by
the Seller to any Indemnified Party, pay to each such
Indemnified Party (ratably in accordance with the amounts
owing to each) the Seller Obligations so due and payable;
(vii) pay to the Servicer the portion (if any) of
the accrued and unpaid Servicer Fee payable by the Seller
pursuant to Section 2.05; and
(viii) release to the Seller any remaining
Collections.
On or before each Settlement Date for a Receivable Interest,
the Servicer shall deposit or cause to be deposited into the Agent's Account all
Collections set aside for the Purchasers (including any amounts set aside for
the Agent) pursuant to clauses (i), (ii), (iii) or (v) of this Section 2.04(b)
(excluding, if such Settlement Date is not a Liquidation Day, any amounts set
aside on account of accrued Servicer Fee, which amounts shall be retained by the
Servicer for its own account in payment of such Servicer Fee).
(c) From and after the commencement of any Level 4
Ratings Period or the occurrence of an Event of Termination, after the
establishment of the Cash Collateral Account, at the direction of the Agent, the
Servicer shall comply with the following:
(i) The Servicer shall cause all Collections to
be deposited into the Cash Collateral Account by no later than
the close of business on the applicable Deposit Date.
(ii) All Collections deposited in the Cash
Collateral Account pursuant to this Section 2.04(c) shall be
allocated among the Purchasers pro rata based on the Seller
Obligations held by or payable to the Purchasers; provided
that if the amount so allocated exceeds the accrued and unpaid
Seller Obligations held by or payable to any Purchaser, such
excess shall be re-allocated to the other Purchasers ratably
in proportion to the amount of Seller Obligations held by or
payable to such other Purchasers.
(iii) On each Settlement Date for a Receivable
Interest, the Agent shall cause all Collections allocated to
the Purchasers pursuant to this Section 2.04(c) that have not
been previously withdrawn hereunder (or such lesser amount as
the Agent may specify in its sole discretion) to be withdrawn
and remitted to the Agent's Account.
(d) On each Settlement Date, the Agent shall distribute
the funds deposited into the Agent's Account pursuant to this Section 2.04 as
follows:
-26-
(i) first, pro rata to the Purchasers and the
Agent in payment in full of all accrued Yield and Fees then
due and payable to each of them;
(ii) second, if such distribution occurs on a
Liquidation Day for any Receivable Interest(s) held by one or
more Purchasers, pro rata to such Purchasers in reduction to
zero of all Capital of such Receivables Interests;
(iii) third, to the Purchasers and the Agent in
payment in full of all other Seller Obligations payable to the
Purchasers and the Agent until such Seller Obligations have
been reduced to zero; and
(iv) fourth, if such distribution occurs on a
Liquidation Day, to the Servicer in payment in full of the
accrued and unpaid Servicer Fee payable by the Purchasers
pursuant to Section 2.05.
After the Capital, Yield, Fees and Servicer Fee with respect
to each Receivable Interest held by the Purchasers, and all other Seller
Obligations held by or owing to the Purchasers, have been paid in full, all
additional Collections with respect to each such Receivable Interest shall be
paid to the Seller for its own account.
(e) For the purposes of this Section 2.04:
(i) if on any day any Pool Receivable (or
portion thereof) becomes a Diluted Receivable, the Seller
shall be deemed to have received on such day a Collection of
such Pool Receivable in an amount equal to the Outstanding
Balance of such Pool Receivable (or portion thereof);
(ii) if on any day any of the representations or
warranties contained in Section 4.01(h) is no longer true with
respect to any Receivable, the Seller shall be deemed to have
received on such day a Collection of such Receivable in full;
(iii) except as otherwise required by applicable
law or the relevant Contract, or as otherwise specified by
such Obligor, any payment received from an Obligor of any
Receivables shall be applied as a Collection of the
Receivables of such Obligor in the order of the age of such
Receivables, starting with the oldest such Receivable; and
(iv) if and to the extent the Agent or any
Purchaser shall be required for any reason to pay over to an
Obligor any amount received on its behalf hereunder, such
amount shall be deemed not to have been so received but rather
to have been retained by the Seller and, accordingly, the
Agent or such Purchaser, as the case may be, shall have a
claim against the Seller for such amount, payable when and to
the extent that any distribution from or on behalf of such
Obligor is made in respect thereof.
(f) Within one Business Day after the end of each Fixed
Period in respect of which Yield is computed by reference to the Investor Rate,
the Agent shall furnish the Seller
-27-
with an invoice setting forth the amount of the accrued and unpaid Yield and
Fees for such Fixed Period with respect to the Receivable Interests held by the
Conduit Purchaser.
SECTION 2.05 Payment of Certain Fees. (a) The Servicer shall
be entitled to receive a fee (the "Servicer Fee") of 0.25% per annum on the
average daily aggregate Capital of all Receivable Interests, payable in arrears
on each Settlement Date out of Collections available for such purpose pursuant
to Section 2.04. Upon three Business Days' notice to the Agent, the Servicer (if
not the Originator, the Seller or its designee or an Affiliate of the Seller)
may, with the prior written consent of the Agent, elect to be paid, as such fee,
another percentage per annum on the average daily Outstanding Balance of the
Receivables. The portion of the Servicer Fee payable by each Purchaser shall be
equal to 0.25% per annum on the average daily Capital of each Receivable
Interest owned by such Purchaser, payable on each Settlement Date for such
Receivable Interest. Notwithstanding anything herein to the contrary, the
Servicer Fee shall be payable only from Collections pursuant to, and subject to
the priority of payments set forth in, Section 2.04. To the extent such
Collections are not sufficient to pay the Servicer Fee in full, none of the
Seller, the Agent or the Purchasers shall have any liability for the deficiency.
(b) If the Agent notifies the Seller that an Accounting
Based Consolidation Event has occurred, the Seller shall pay to the Agent an
accounting adjustment fee (the "Consolidation Fee"), which shall accrue at the
Applicable Eurodollar Rate Margin on the daily average amount of Capital of all
Receivable Interests of the Conduit Purchaser during the period commencing on
and including the date that an Accounting Based Consolidation Event shall occur
to but excluding the date on which the Capital of the Receivable Interests of
the Conduit Purchaser has been reduced to zero, calculated based on a the number
of actual days elapsed and a 360-day year. Such accounting adjustment fee shall
be payable in arrears on each Settlement Date, commencing with the first
Settlement Date occurring after the occurrence of an Accounting Based
Consolidation Event.
SECTION 2.06 Payments and Computations, Etc. (a) All amounts
to be paid by the Seller or the Servicer to the Agent or any Purchaser hereunder
shall be paid no later than 11:00 A.M. (New York City time) on the day when due
in same day funds to the Agent's Account. All amounts to be deposited by the
Seller or the Servicer into the Cash Collateral Account or any other account
shall be deposited no later than 11:00 A.M. (New York City time) on the date
when due.
(b) Each of the Seller and the Servicer shall, to the
extent permitted by law, pay interest on any amount not paid or deposited by it
when due hereunder, at an interest rate per annum equal to 2.00% per annum above
the Alternate Base Rate, payable on demand.
(c) All computations of interest under subsection (b)
above and all computations of Yield, Fees, and other amounts 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. Whenever any payment or deposit
to be made hereunder shall be due on a day other than a Business Day, such
payment or deposit shall be made on the next succeeding Business Day and such
extension of time shall be included in the computation of such payment or
deposit.
-28-
SECTION 2.07 Dividing or Combining Receivable Interests.
Either the Seller or (following an Event of Termination or an Involuntary
Bankruptcy Event) the Agent may, upon notice to the other party received at
least three Business Days prior to the last day of any Fixed Period in the case
of the Seller giving notice, or up to the last day of such Fixed Period in the
case of the Agent giving notice, either (i) divide any Receivable Interest into
two or more Receivable Interests having aggregate Capital equal to the Capital
of such divided Receivable Interest, or (ii) combine any two or more Receivable
Interests originating on such last day or having Fixed Periods ending on such
last day into a single Receivable Interest having Capital equal to the aggregate
of the Capital of such Receivable Interests; provided, however, that no
Receivable Interest owned by the Conduit Purchaser may be combined with a
Receivable Interest owned by any Bank Purchaser.
SECTION 2.08 Increased Costs. (a) If CNAI, the Conduit
Purchaser, any Bank Purchaser, or any other Person (including any bank or other
financial institution providing liquidity and/or credit support to the Conduit
Purchaser in connection with the Conduit Purchaser's commercial paper program)
which enters into a commitment to purchase Receivable Interests or interests
therein (each, an "Affected Person") determines that compliance with any change
in any law or regulation or any guideline or request or in the interpretation or
administration thereof from any central bank or other governmental authority
(whether or not having the force of law) affects or would affect the amount of
the capital required or expected to be maintained by such Affected Person and
such Affected Person determines that the amount of such capital is increased by
or based upon the existence of any commitment to make purchases of or otherwise
to maintain the investment in Receivables or interests therein related to this
Agreement or to the funding thereof, then, upon demand by such Affected Person
(with a copy to the Agent), the Seller shall pay to the Agent for the account of
such Affected Person (as a third-party beneficiary, in the case of an Affected
Person that is not a party to this Agreement), from time to time as specified by
such Affected Person, additional amounts sufficient to compensate such Affected
Person in the light of such circumstances, to the extent that such Affected
Person reasonably determines such increase in capital to be allocable to the
existence of any of such commitments.
(b) If, due to either (i) the introduction of or any
change in or in the interpretation of any law or regulation or (ii) compliance
with any guideline or request from any central bank or other governmental
authority (whether or not having the force of law), there shall be any increase
in the cost to any Affected Person of agreeing to purchase or purchasing, or
maintaining the ownership of Receivable Interests, then, upon demand by such
Affected Person (with a copy to the Agent), the Seller shall pay to the Agent,
for the account of such Affected Person, from time to time as specified by such
Affected Person, additional amounts sufficient to compensate such Affected
Person for such increased costs.
(c) A certificate of the Affected Person setting forth
such amount or amounts (including computation of such amount or amounts) as
shall be necessary to compensate the Affected Person as specified in paragraph
(a) or (b) above, as the case may be, delivered to the Seller shall be
conclusive and binding absent manifest error. Each Affected Person shall
designate a different funding office for its purchases with respect to
Receivable Interests hereunder if such designation will avoid the need for, or
reduce the amount of, compensation
-29-
pursuant to this Section 2.08 and will not, in the sole opinion of such Affected
Person, be disadvantageous to such Affected Person and will not result in any
material expense.
(d) Failure on the part of any Affected Person to demand
compensation for any increased costs or reduction in amounts received or
receivable or reduction in return on capital with respect to any period shall
not constitute a waiver of such Affected Person's right to demand compensation
with respect to any other period. The protection of this Section shall be
available to each Affected Person regardless of any possible contention of the
invalidity or inapplicability of the law, rule, regulation, guideline or other
change or condition which shall have occurred or been imposed.
SECTION 2.09 Taxes. (a) Any and all payments and deposits
required to be made hereunder or under any other Transaction Document by the
Servicer or the Seller shall be made free and clear of and without deduction for
any and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding net income
taxes that are imposed by the United States and franchise taxes and net income
taxes that are imposed on an Affected Person by the state or foreign
jurisdiction under the laws of which such Affected Person is organized or any
political subdivision thereof (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes"). If the Seller or the Servicer shall be required by law to deduct
any Taxes from or in respect of any sum payable hereunder to any Affected
Person, (i) the Seller shall make an additional payment to such Affected Person,
in an amount sufficient so that, after making all required deductions (including
deductions applicable to additional sums payable under this Section 2.09), such
Affected Person receives an amount equal to the sum it would have received had
no such deductions been made, (ii) the Seller or the Servicer, as the case may
be, shall make such deductions and (iii) the Seller or the Servicer, as the case
may be, shall pay the full amount deducted to the relevant taxation authority or
other authority in accordance with applicable law.
(b) In addition, the Seller agrees to pay any present or
future stamp or other documentary taxes or any other excise or property taxes,
charges or similar levies which arise from any payment made hereunder or under
any other Transaction Document or from the execution, delivery or registration
of, or otherwise with respect to, this Agreement or any other Transaction
Document (hereinafter referred to as "Other Taxes").
(c) The Seller will indemnify each Affected Person for
the full amount of Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Section 2.09) paid by such Affected Person and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto
whether or not such Taxes or Other Taxes were correctly or legally asserted.
This indemnification shall be made within thirty days from the date the Affected
Person makes written demand therefor (and a copy of such demand shall be
delivered to the Agent). A certificate as to the amount of such indemnification
submitted to the Seller and the Agent by such Affected Person, setting forth, in
reasonable detail, the basis for and the calculation thereof, shall be
conclusive and binding for all purposes absent manifest error.
-30-
(d) Each Affected Person who is organized outside the
United States shall, prior to the date hereof (or, in the case of any Person who
becomes an Affected Person after the date hereof, prior to the date on which it
so becomes an Affected Person), (x) deliver to the Seller and the Agent such
certificates, documents or other evidence, as required by the IRC or Treasury
regulations issued pursuant thereto, including Internal Revenue Service Form
W-8BEN or Form W-8ECI and any other certificate or statement of exemption
required by Treasury Regulation Section 1.1441-1(a) or Section 1.1441-6(c) or
any subsequent version thereof, properly completed and duly executed by such
Affected Person establishing that such payment is (i) not subject to withholding
under the IRC because such payment is effectively connected with the conduct by
such Affected Person of a trade or business in the United States or (ii) totally
exempt from United States tax under a provision of an applicable tax treaty and
(y) upon request of the Seller or the Agent, and to the extent it may do so
under applicable law, furnish any other government forms which are necessary or
required under an applicable tax treaty or otherwise by law to reduce or
eliminate any withholding tax. Each such Affected Person that changes its
funding office shall promptly notify the Seller and the Agent of such change
and, upon written request from the Seller or the Agent, shall deliver any new
certificates, documents or other evidence required pursuant to the preceding
sentence prior to the immediately following due date of any payment by the
Seller hereunder. Unless the Seller and the Agent have received forms or other
documents satisfactory to them indicating that payments hereunder are not
subject to United States withholding tax, notwithstanding paragraph (a), the
Seller or the Agent shall withhold taxes from such payments at the applicable
statutory rate in the case of payments to or for any Affected Person organized
under the laws of a jurisdiction outside the United States.
(e) The Seller shall not be required to pay any amounts
to any Affected Person in respect of Taxes and Other Taxes pursuant to
paragraphs (a), (b) and (c) above if the obligation to pay such amounts would
not have arisen but for a failure by such Affected Person to comply with the
provisions of paragraph (d) above unless such Affected Person is unable to
comply with paragraph (d) because of (i) a change in applicable law, regulation
or official interpretation thereof or (ii) an amendment, modification or
revocation of any applicable tax treaty or a change in official position
regarding the application or interpretation thereof, in each case after the date
hereof (or, in the case of any Person who became an Affected Person after the
date hereof, after the date on which it so became an Affected Person).
SECTION 2.10 Security Interest. As security for the
performance by the Seller of all the terms, covenants and agreements on the part
of the Seller (whether as Seller or otherwise) to be performed under this
Agreement or any other Transaction Document, including the punctual payment when
due of all Seller Obligations, the Seller hereby assigns to the Agent for its
benefit and the ratable benefit of the other Indemnified Parties, and hereby
grants to the Agent for its benefit and the ratable benefit of the other
Indemnified Parties, a security interest in, all of the Seller's right, title
and interest in and to (A) the Sale Agreement, including, without limitation,
(i) all rights of the Seller to receive moneys due or to become due under or
pursuant to the Sale Agreement, (ii) all security interests and property subject
thereto from time to time purporting to secure payment of monies due or to
become due under or pursuant to the Sale Agreement, (iii) all rights of the
Seller to receive proceeds of any insurance, indemnity, warranty or guaranty
with respect to Sale Agreement, (iv) claims of the Seller for damages arising
out of or for breach of or default under the Sale Agreement, and (v) the right
of the Seller to compel performance and otherwise exercise all remedies
thereunder, (B) all Receivables, whether now
-31-
owned and existing or hereafter acquired or arising, all Related Security and
Collections with respect thereto and all Blocked Accounts and funds on deposit
therein, (C) the Cash Collateral Account, all funds on deposit therein and all
investments made with such funds, (D) all other assets of the Seller, including,
without limitation, all accounts, chattel paper, goods, instruments, investment
property, deposit accounts and general intangibles (as those terms are defined
in the UCC as in effect on the date hereof in the State of New York), including
undivided interests in any of the foregoing, owned by the Seller and not
otherwise purchased under this Agreement and (E) to the extent not included in
the foregoing, all proceeds of any and all of the foregoing.
ARTICLE III
CONDITIONS OF PURCHASES
SECTION 3.01 Conditions Precedent to Initial Purchase. The
initial purchase of a Receivable Interest under this Agreement is subject to the
conditions precedent that the Agent shall have received on or before the date of
such purchase the following, each (unless otherwise indicated) dated such date,
in form and substance satisfactory to the Agent:
(a) Certified copies of the resolutions of the Board of
Directors of each Transaction Party approving this Agreement and the Sale
Agreement and certified copies of all documents evidencing other necessary
corporate action and governmental approvals, if any, with respect to this
Agreement and the other Transaction Documents.
(b) A certificate of the Secretary or Assistant Secretary
of each Transaction Party certifying the names and true signatures of the
officers of such Transaction Party authorized to sign the Transaction Documents
to which it is a party.
(c) Acknowledgment copies or time stamped receipt copies
(or other evidence of filing) of proper financing statements, duly filed on or
before the date of such initial purchase under the UCC of all jurisdictions that
the Agent may deem necessary or desirable in order to perfect the ownership and
security interests contemplated by this Agreement and the Sale Agreement.
(d) Acknowledgment copies or time stamped receipt copies
of proper financing statements necessary to release all security interests and
other rights of any Person in the Receivables, Contracts or Related Security
previously granted by any Transaction Party or any of their respective
Affiliates.
(e) Completed requests for information, dated on or
before the date of such initial purchase, listing all effective financing
statements filed in the jurisdictions referred to in subsection (c) above that
name the Seller or the Originator as debtor, together with copies of such
financing statements (none of which shall cover any Receivables, Contracts,
Related Security or the collateral referred to in Section 2.10 except to the
extent the Agent shall have received executed termination statements therefor
pursuant to subsection (d) above).
(f) Executed copies of Blocked Account Agreements for
each Blocked Account.
-32-
(g) Favorable opinions of Xxxxxx Xxxxxx & Xxxxx, counsel
for the Seller, the Servicer and the Originator, relating to true sale and
substantive consolidation issues, enforceability of this Agreement and the other
Transaction Documents, perfection of security interests, non-contravention of
laws and agreements, general corporate matters and such other matters as the
Agent may reasonably request.
(h) A favorable opinion of Sidley Xxxxxx Xxxxx & Xxxx
LLP, counsel for the Agent, relating to filing priority of security interests.
(i) An executed copy of the Funds Transfer Letter.
(j) An executed copy of the Sale Agreement.
(k) A copy of the by-laws of each Transaction Party,
certified by the Secretary or Assistant Secretary of such Transaction Party.
(l) A copy of the certificate or articles of
incorporation or certificate or articles of formation (as applicable) of each
Transaction Party, certified as of a recent date by the Secretary of State or
other appropriate official of the State of incorporation or formation (as
applicable) of such Transaction Party, and a certificate as to the good standing
of each Transaction Party from such Secretary of State or other official, dated
as of a recent date.
(m) The opening pro forma balance sheet of the Seller
referred to in Section 4.01(e).
(n) Executed copies of the Termination Agreements
relating to the Existing Receivables Facilities.
SECTION 3.02 Conditions Precedent to All Purchases and
Reinvestments. (a) Each purchase (including the initial purchase) and each
reinvestment hereunder shall be subject to the further conditions precedent that
(a) the Servicer shall have delivered to the Agent and each Bank Purchaser all
Monthly Reports required to be delivered hereunder, each duly completed and
containing information covering the most recently ended reporting period for
which information is required pursuant to Section 6.02(g), (b) on the date of
such purchase or reinvestment the following statements shall be true, except
that the statements in clause (iii) below are required to be true only if such
purchase or reinvestment is by the Conduit Purchaser (and acceptance of the
proceeds of such purchase or reinvestment shall be deemed a representation and
warranty by the Seller and the Servicer (each as to itself) that such statements
are then true):
(i) The representations and warranties contained
in Sections 4.01 and 4.02 are correct on and as of the date of
such purchase or reinvestment as though made on and as of such
date; and
(ii) No event has occurred and is continuing, or
would result from such purchase or reinvestment, that
constitutes an Event of Termination, an Involuntary Bankruptcy
Event or, in the case of a purchase, an Incipient Event of
Termination; and
-33-
(iii) The Agent shall not have given the Seller
notice that the Conduit Purchaser has terminated the
reinvestment of Collections in Receivable Interests; and
(iv) NIPSCO's Debt Rating shall be at least BBB -
from S&P and Baa3 from Xxxxx'x; and
(v) NIPSCO shall have sold or contributed to the
Seller, pursuant to the Sale Agreement, all Receivables that
arose on or prior to such date; and
(c) The Agent shall have received such other approvals,
opinions or documents as it may reasonably request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01 Representations and Warranties of the Seller. The
Seller hereby represents and warrants as follows as of the date hereof and as of
the date of each purchase or reinvestment hereunder:
(a) The Seller is a corporation duly formed and validly
existing under the laws of Indiana, and is duly qualified to do business, and is
in good standing, in every jurisdiction where the nature of its business
requires it to be so qualified.
(b) The execution, delivery and performance by the Seller
of the Transaction Documents, including the Seller's use of the proceeds of
purchases and reinvestments, (i) are within the Seller's corporate powers, (ii)
have been duly authorized by all necessary corporate action, (iii) do not
contravene (1) the Seller's certificate or articles of incorporation or by-laws,
(2) any law, rule or regulation applicable to the Seller, (3) any contractual
restriction binding on or affecting the Seller or its property or (4) any order,
writ, judgment, award, injunction or decree binding on or affecting the Seller
or its property, and (iv) do not result in or require the creation of any
Adverse Claim upon or with respect to any of its properties (except as created
pursuant to this Agreement). Each of the Transaction Documents has been duly
executed and delivered by the Seller.
(c) No authorization or approval or other action by, and
no notice to or filing with, any governmental authority or regulatory body is
required for the due execution, delivery and performance by the Seller of the
Transaction Documents to which it is a party or any other document to be
delivered thereunder other than those that have been obtained or made and except
for the filing of UCC financing statements which are referred to therein.
(d) Each of the Transaction Documents to which the Seller
is a party constitutes the legal, valid and binding obligation of the Seller
enforceable against the Seller in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization or other
similar laws affecting the enforcement of creditors' rights generally and by
general principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law.
-34-
(e) The opening pro forma balance sheet of the Seller as
of November 30, 2003, giving effect to the initial purchase to be made under
this Agreement, a copy of which has been furnished to the Agent and each Bank
Purchaser, fairly presents the financial condition of the Seller as of such
date, in accordance with generally accepted accounting principles, and since its
formation there has been no (i) material adverse change in the business,
operations, property or financial condition of the Seller or (ii) other event or
circumstance which has had or will have a Material Adverse Effect.
(f) There is no pending or (to the best knowledge of the
Seller) threatened action or proceeding affecting the Seller before any court,
governmental agency or arbitrator. The Seller is not in default in any material
respect of any order of any court, arbitrator or governmental agency.
(g) No proceeds of any purchase or reinvestment will be
used for a purpose that violates or would be inconsistent with, Regulation T, U
or X promulgated by the Board of Governors of the Federal Reserve System from
time to time.
(h) Each Receivable treated as or represented to be a
Pool Receivable is owned by the Seller free and clear of any Adverse Claim
(except as created in favor of the Agent and the Purchasers hereunder). The
Purchasers have acquired a valid and perfected first priority ownership interest
or security interest in each Pool Receivable now existing or hereafter arising
and in the Related Security and Collections with respect thereto, in each case
free and clear of any Adverse Claim. No effective financing statement or other
instrument similar in effect is filed in any recording office listing the Seller
as debtor, covering any Receivable, Related Security or Collections except such
as may be filed in favor of the Agent in accordance with this Agreement. No
effective financing statement or other instrument similar in effect, is filed in
any recording office listing NIPSCO as debtor, covering any Receivable, Related
Security or Collections except such as may be filed in favor of the Seller and
assigned to the Agent in accordance with this Agreement.
(i) Each Monthly Report (if prepared by any Transaction
Party or one of their respective Affiliates, or to the extent that information
contained therein is supplied by any Transaction Party or an Affiliate),
information, exhibit, financial statement, document, book, record or report
furnished or to be furnished in writing at any time by or on behalf of any
Transaction Party to the Agent, the Conduit Purchaser or the Bank Purchasers in
connection with this Agreement is or will be accurate in all material respects
as of its date or (except as otherwise disclosed to the Agent, the Conduit
Purchaser or the Bank Purchasers, as the case may be, at such time) as of the
date so furnished, and no such Monthly Report, information, exhibit, financial
statement, document, book, record or report, as of its date, contains or will
contain any untrue statement of a material fact or omits or will omit to state a
material fact necessary in order to make the statements contained therein, in
the light of the circumstances under which they were made, not materially
misleading.
(j) The principal place of business and chief executive
office of the Seller and the office where the Seller keeps its records
concerning the Receivables are located at the address or addresses referred to
in Section 5.01(b).
-35-
(k) The names and addresses of all the Blocked Account
Banks together with the account numbers of the Blocked Accounts of the Seller at
such Blocked Account Banks are as specified in Schedule I hereto, as such
Schedule I may be updated from time to time pursuant to Section 5.01(g).
(l) Each purchase of a Receivable Interest and each
reinvestment of Collections in Receivables will constitute (i) a "current
transaction" within the meaning of Section 3(a)(3) of the Securities Act of
1933, as amended, and (ii) a purchase or other acquisition of notes, drafts,
acceptances, open accounts receivable or other obligations representing part or
all of the sales price of merchandise or services within the meaning of Section
3(c)(5) of the Investment Company Act of 1940, as amended.
(m) In the past five (5) years, the Seller has not used
any corporate name, tradename or doing-business-as name other than the name in
which it has executed this Agreement. The Seller's organizational identification
number is 2003111700069.
(n) The Seller was formed on November 13, 2003 and the
Seller did not engage in any business activities prior to the date of this
Agreement. The Seller has no Subsidiaries. NIPSCO directly owns 100% of the
capital stock of the Seller, free and clear of any Adverse Claims.
(o) (i) The fair value of the property of the Seller is
greater than the total amount of liabilities, including contingent liabilities,
of the Seller, (ii) the present fair salable value of the assets of the Seller
is not less than the amount that will be required to pay all probable
liabilities of the Seller on its debts as they become absolute and matured,
(iii) the Seller does not intend to, and does not believe that it will, incur
debts or liabilities beyond the Seller's abilities to pay such debts and
liabilities as they mature and (iv) the Seller is not engaged in a business or a
transaction, and is not about to engage in a business or a transaction, for
which the Seller's property would constitute unreasonably small capital.
(p) With respect to each Receivable, the Seller (i) shall
have received such Receivable as a contribution to the capital of the Seller by
Originator or (ii) shall have purchased such Receivable from Originator in
exchange for payment (made by the Seller to Originator in accordance with the
provisions of the Sale Agreement) of cash, Deferred Purchase Price, or a
combination thereof in an amount which constitutes fair consideration and
reasonably equivalent value. Each such sale referred to in clause (ii) of the
preceding sentence shall not have been made for or on account of an antecedent
debt owed by Originator to the Seller and no such sale or capital contribution
is or may be voidable or subject to avoidance under any section of the United
States Bankruptcy Code.
(q) The Seller and its ERISA Affiliates are in compliance
in all material respects with ERISA, and no Adverse Claim exists in favor of the
Pension Benefit Guaranty Corporation on any of the Receivables.
(r) Each Receivable included as an Eligible Receivable in
the calculation of the Net Receivables Pool Balance on any Monthly Report
satisfies the requirements of eligibility
-36-
contained in the definition of "Eligible Receivable" as of the date of the
information reported in such Monthly Report.
(s) On the date of each purchase and reinvestment
hereunder (and after giving effect thereto), the sum of the Receivable Interests
does not exceed the Maximum Receivable Interest.
(t) Each of the representations and warranties set forth
on Annex H are true and correct.
SECTION 4.02 Representations and Warranties of the Servicer.
NIPSCO, in its capacity as Servicer, hereby represents and warrants as follows
as of the date hereof and as of the date each purchase or reinvestment
hereunder:
(a) The Servicer is a corporation duly incorporated,
validly existing and in good standing under the laws of Indiana, and is duly
qualified to do business, and is in good standing, in every jurisdiction where
the nature of its business requires it to be so qualified.
(b) The execution, delivery and performance by the
Servicer of this Agreement and any other documents to be delivered by it
hereunder (i) are within the Servicer's corporate powers, (ii) have been duly
authorized by all necessary corporate action, (iii) do not contravene (1) the
Servicer's charter or by-laws, (2) any law, rule or regulation applicable to the
Servicer, (3) any contractual restriction binding on or affecting the Servicer
or its property or (4) any order, writ, judgment, award, injunction or decree
binding on or affecting the Servicer or its property (unless, in the case of the
preceding clauses (3) and (4), such non-contravention would not reasonably be
expected to have a Material Adverse Effect), and (iv) do not result in or
require the creation of any Adverse Claim upon or with respect to any of its
properties. This Agreement has been duly executed and delivered by the Servicer.
(c) No authorization or approval or other action by, and
no notice to or filing with, any governmental authority or regulatory body is
required for the due execution, delivery and performance by the Servicer of this
Agreement or any other document to be delivered by it hereunder (other than
those that have been obtained or made).
(d) This Agreement constitutes the legal, valid and
binding obligation of the Servicer enforceable against the Servicer in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by general principles of equity,
regardless of whether such enforceability is considered in a proceeding in
equity or at law.
(e) The balance sheets of the Servicer and its
Subsidiaries as of December 31, 2002, and the related statements of income and
retained earnings of the Servicer and its Subsidiaries as of and for the fiscal
year, then ended certified by Deloitte & Touche LLP, independent public
accountants, copies of which have been furnished to the Agent and each Bank
Purchaser, fairly present the financial condition of the Servicer and its
Subsidiaries as at such date and the results of the operations of the Servicer
and its Subsidiaries for the fiscal year ended on such date, all in accordance
with generally accepted accounting principles consistently
-37-
applied. Since December 31, 2002, there has been no material adverse change in
the business, operations, property or financial condition of the Servicer.
(f) There is no pending or (to the best knowledge of the
Servicer) threatened action or proceeding affecting the Servicer or any of its
Subsidiaries before any court, governmental agency or arbitrator which (if
adversely determined) would constitute an Event of Termination or otherwise have
a Material Adverse Effect, except as disclosed in the Servicer's financial
statements referred to in Section 4.02(e).
(g) On the date of each purchase and reinvestment
hereunder (and after giving effect thereto) the sum of the Receivable Interests
does not exceed the Maximum Receivable Interest.
(h) Servicer is able, on any date on which it is required
to make such an identification under the terms of this Agreement, to produce a
report identifying which amounts paid into the Blocked Accounts constitute
Collections and which amounts constitute other amounts.
(i) All of the representations and warranties of NIPSCO
made pursuant to the Sale Agreement are true and correct.
ARTICLE V
COVENANTS
SECTION 5.01 Covenants of the Seller. Until the later of (i)
the Termination Date and (ii) the date on which no Capital of or Yield on any
Receivable Interest shall be outstanding and all Fees and other Seller
Obligations are paid in full:
(a) Compliance with Laws, Etc. The Seller will comply in
all respects with all applicable laws, rules, regulations and orders and
preserve and maintain its corporate existence, rights, franchises,
qualifications, and privileges except to the extent that the failure so to
comply with such laws, rules and regulations or the failure so to preserve and
maintain such rights, franchises, qualifications, and privileges would not
reasonably be expected to have a Material Adverse Effect.
(b) Offices, Records and Books of Account. The Seller
will keep its principal place of business and chief executive office and the
office where it keeps its records concerning the Receivables at (i) the address
of the Seller set forth under its name on the signature pages to this Agreement,
or (ii) upon 30 days' prior written notice to the Agent, at any other locations
in jurisdictions where all actions reasonably requested by the Agent to protect
and perfect the interest in the Receivables have been taken and completed. The
Seller also will maintain and implement administrative and operating procedures
(including, without limitation, an ability to recreate records evidencing
Receivables and related Contracts 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 daily
identification of each Receivable and all Collections of and adjustments to each
existing Receivable).
-38-
(c) Performance and Compliance with Contracts and Credit
and Collection Policy. The Seller will, at its expense, (i) timely and fully
perform and comply in all material respects with all provisions, covenants and
other promises required to be observed by it under the Contracts related to the
Receivables and (ii) timely and fully comply in all material respects with the
Credit and Collection Policy in regard to each Receivable and the related
Contracts.
(d) Sales, Liens, Etc. The Seller will not sell, assign
(by operation of law or otherwise) or otherwise dispose of, or create or suffer
to exist any Adverse Claim (except for the interest in favor of the Agent
created pursuant to this Agreement) upon or with respect to, any Receivable,
Related Security, related Contract or Collections, or upon or with respect to
any Blocked Account or any other asset of the Seller, or assign any right to
receive income in respect thereof.
(e) Extension or Amendment of Receivables and Contracts.
Except as provided in Section 6.02(c), the Seller will not extend, amend or
otherwise modify the terms of any Receivable or amend, modify or waive any term
or condition of any Contract related thereto.
(f) Change in Business or Credit and Collection Policy.
The Seller will not make any change in the character of its business or in the
Credit and Collection Policy, except for any such change in the Credit and
Collection Policy that would not impair the collectibility of any Receivable.
(g) Addition or Termination of Blocked Accounts; Change
in Payment Instructions to Obligors. The Seller will not add or terminate any
bank as a Blocked Account Bank from those listed in Schedule I to this
Agreement, or make any change in its instructions to Obligors regarding payments
to be made in respect of the Receivables, unless the Agent shall have received
notice of such addition, termination or change (including an updated Schedule I)
and with respect to each new Blocked Account, a fully executed Blocked Account
Agreement. The Seller will deposit, or cause to be deposited, all Collections in
a Blocked Account.
(h) Deposits to Blocked Accounts. The Seller will cause
all Obligors to be instructed to remit all their payments in respect of
Receivables to the Originator or to Blocked Accounts, it being acknowledged and
agreed that certain Obligors who currently make payment by wire transfer to
other accounts, and certain intermediaries (for example, Western Union) who
transfer amounts on behalf of Obligors to other accounts, will be required by no
later than 90 days after the date of this Agreement, to make payments to Blocked
Accounts. If the Seller shall receive any Collections directly, the Seller shall
promptly (and in any event within one Business Day) cause such Collections to be
deposited into a Blocked Account. The Seller will not permit any funds to be
deposited into any Blocked Account other than Collections of Receivables and
prepayments made under any Balanced Payment Plan.
(i) Further Assurances; Change in Name or Jurisdiction of
Origination, etc.
(i) The Seller agrees from time to time, at its
expense, promptly to execute and deliver all further
instruments and documents, and to take all further actions,
that may be necessary or desirable, or that the Agent may
reasonably request, to perfect, protect or more fully evidence
the Receivable Interests
-39-
purchased under this Agreement and/or security interest
granted pursuant to this Agreement, or to enable the Conduit
Purchaser, the Bank Purchasers or the Agent to exercise and
enforce their respective rights and remedies under this
Agreement. Without limiting the foregoing, the Seller will,
upon the request of the Agent, execute and file such financing
or continuation statements, or amendments thereto, and such
other instruments and documents, that may be necessary or
desirable, or that the Agent may reasonably request, to
perfect, protect or evidence such Receivable Interests.
(ii) The Seller authorizes the Agent to file
financing or continuation statements, and amendments thereto
and assignments thereof, relating to the Receivables and the
Related Security, the related Contracts and the Collections
with respect thereto and the other Collateral described in
Section 2.10 without the signature of the Seller. A photocopy
or other reproduction of this Agreement shall be sufficient as
a financing statement where permitted by law.
(iii) The Seller shall at all times be organized
under the laws of the State of Indiana and shall not take any
action to change its jurisdiction of organization.
(iv) The Seller will not change its name,
identity or corporate structure unless the Agent shall have
received at least thirty (30) days advance written notice of
such change and all action by the Seller necessary or
appropriate to perfect or maintain the perfection of the
Receivable Interests (including, without limitation, the
filing of all financing statements and the taking of such
other action as the Agent may request in connection with such
change or relocation) shall have been duly taken.
(j) Reporting Requirements. The Seller will cause to be
provided to the Agent and each Bank Purchaser the following:
(i) a Form 10-K for NIPSCO as soon as (and if)
available and in any event within 120 days after the end of
each fiscal year of NIPSCO, which will include an audited
consolidated balance sheet of NIPSCO and its Consolidated
Subsidiaries as of the end of such fiscal year and the related
audited consolidated statements of income, cash flows and
changes in common stockholders' equity for such fiscal year,
setting forth in each case in comparative form the figures for
the previous fiscal year, all reported on in a manner
acceptable to the United States Securities and Exchange
Commission by independent public accountants of nationally
recognized standing; provided, however, that such Form 10-K
need not be provided if it is available, within the above
referenced time period, via the XXXXX system of the United
States Securities and Exchange Commission ("XXXXX") on the
Internet;
(ii) a Form 10-Q for NIPSCO as soon as (and if)
available and in any event within 60 days after the end of
each of the first three quarters of each fiscal year of
NIPSCO, which will include a consolidated balance sheet of
NIPSCO and
-40-
its Consolidated Subsidiaries, as of the end of such quarter
and the related consolidated statement of income for such
quarter and for the portion of NIPSCO's fiscal year ended at
the end of such quarter, and the related consolidated
statement of cash flows for the portion of NIPSCO's fiscal
year ended at the end of such quarter, setting forth in each
case in comparative form (A) for the consolidated balance
sheet, the figures as of the end of NIPSCO's previous fiscal
year, (B) for the consolidated statement of income, the
figures for the corresponding quarter and the corresponding
portion of NIPSCO's previous fiscal year and (C) for the
consolidated statement of cash flows, the figures for the
corresponding portion of NIPSCO's previous fiscal year; the
delivery of such financial statement shall constitute a
certification (subject to normal year-end adjustments) as to
fairness of presentation and conformity with generally
accepted accounting principles consistently applied; provided,
however, that such Form 10-Q need not be provided if it is
available, within the above referenced time period, via XXXXX
on the Internet;
(iii) as soon as available and in any event within
120 days after the end of the fourth fiscal quarter of each
fiscal year of the Seller and, within 60 days after the end of
each of the first three quarters of each fiscal year of the
Seller, a balance sheet of the Seller as of the end of such
quarter and a statement of income and retained earnings of the
Seller for the period commencing at the end of the previous
fiscal year and ending with the end of such quarter, certified
by a Financial Officer of the Seller as having been prepared
in accordance with generally accepted accounting principles
consistently applied;
(iv) as soon as possible and in any event within
five Business Days after obtaining knowledge of the occurrence
of each Event of Termination or Incipient Event of
Termination, a statement of a Financial Officer of the Seller
setting forth details of such Event of Termination or
Incipient Event of Termination and the action that the Seller
has taken and proposes to take with respect thereto;
(v) promptly after the sending or filing
thereof, copies of all reports that NIPSCO or any of its
Affiliates files with the SEC or distributes to its
shareholders; provided, however, that such reports need not be
provided if they are available via XXXXX on the Internet;
(vi) promptly after the filing or receiving
thereof, copies of all reports and notices that the Seller or
any Affiliate files under ERISA with the Internal Revenue
Service or the Pension Benefit Guaranty Corporation or the
U.S. Department of Labor or that the Seller or any Affiliate
receives from any of the foregoing or from any multiemployer
plan (within the meaning of Section 4001(a)(3) of ERISA) to
which the Seller or any Affiliate is or was, within the
preceding five years, a contributing employer, in each case in
respect of the assessment of withdrawal liability or an event
or condition which could, in the aggregate, result in the
imposition of liability on the Seller and/or any such
Affiliate in excess of $50,000,000, other than the liability
for payment of amounts
-41-
required to satisfy a minimum funding requirement standard
under ERISA Section 302, or an alternative minimum funding
standard under ERISA Section 305, provided that such required
funding amounts do not include any waived funding deficiency
with the meaning of ERISA Section 302;
(vii) at least thirty days prior to any change in
the name or jurisdiction of organization of any Transaction
Party, a notice setting forth the new name or jurisdiction of
organization, as applicable, and the effective date thereof;
(viii) promptly and in any event within five
Business Days after the Seller obtains knowledge thereof,
notice of any "Event of Termination" or "Facility Termination
Date" under the Sale Agreement;
(ix) as soon as possible and in any event no
later than the day of occurrence thereof, notice that NIPSCO
has stopped selling to the Seller, pursuant to the Sale
Agreement, all newly arising Receivables;
(x) at the time of the delivery of the financial
statements provided for in clause (i) of this paragraph, a
certificate of a Financial Officer of NIPSCO or the Seller, as
applicable, to the effect that, to the best of such officer's
knowledge, no Event of Termination or Incipient Event of
Termination has occurred and is continuing or, if any Event of
Termination or Incipient Event of Termination has occurred and
is continuing, specifying the nature and extent thereof;
(xi) promptly after receipt thereof, copies of
all notices received by the Seller from the Originator under
the Sale Agreement;
(xii) promptly upon learning thereof, notice of
any downgrade in the Debt Rating (or the withdrawal by either
S&P or Xxxxx'x of a Debt Rating) of any Transaction Party,
setting forth the Debt affected and the nature of such change
(or withdrawal);
(xiii) promptly after the occurrence thereof any
event or condition that has had, or could reasonably be
expected to have, a Material Adverse Effect; and
(xiv) such other information respecting the
Receivables or the condition or operations, financial or
otherwise, of any Transaction Party as the Agent or any Bank
Purchaser may from time to time reasonably request.
(k) Separateness. (i) The Seller shall at all times
maintain at least one independent director who (w) is not currently and has not
been during the five years preceding the date of this Agreement an officer,
director or employee of an Affiliate of the Seller or any Other Company, (x) is
not a current or former officer or employee of the Seller, (y) is not a
stockholder of any Other Company or any of their respective Affiliates and (z)
who (A) has prior experience as an independent director for a corporation whose
charter documents required the unanimous consent of all independent directors
thereof before such corporation could consent to the institution of bankruptcy
or insolvency proceedings against it or could file a petition seeking relief
under any applicable federal or state law relating to bankruptcy and (B) has at
least three
-42-
years of employment experience with one or more entities that provide, in the
ordinary course of their respective businesses, advisory, management or
placement services to issuers of securitization or structured finance
instruments, agreements or securities.
(ii) The Seller shall not direct or participate
in the management of any of the Other Companies' operations.
(iii) The Seller shall conduct its business from
an office separate from that of the Other Companies (but which
may be located in the same facility as one or more of the
Other Companies). The Seller shall have stationery and other
business forms separate from that of the Other Companies.
(iv) The Seller shall at all times be adequately
capitalized in light of its contemplated business.
(v) The Seller shall at all times provide for
its own operating expenses and liabilities from its own funds
except that common overhead expenses may be shared by the
Seller and the Other Companies on a basis reasonably related
to use.
(vi) The Seller shall maintain its assets and
transactions separately from those of the Other Companies and
reflect such assets and transactions in financial statements
separate and distinct from those of the Other Companies and
evidence such assets and transactions by appropriate entries
in books and records separate and distinct from those of the
Other Companies. The Seller shall hold itself out to the
public under the Seller's own name as a legal entity separate
and distinct from the Other Companies. The Seller shall not
hold itself out as having agreed to pay, or as being liable,
primarily or secondarily, for, any obligations of the Other
Companies.
(vii) The Seller shall not maintain any joint
account with any Other Company or become liable as a guarantor
or otherwise with respect to any Debt or contractual
obligation of any Other Company.
(viii) The Seller shall not make any payment or
distribution of assets with respect to any obligation of any
Other Company or grant an Adverse Claim on any of its assets
to secure any obligation of any Other Company.
(xi) The Seller shall not make loans, advances or
otherwise extend credit to any of the Other Companies except
as expressly contemplated by the Sale Agreement.
(x) The Seller shall hold regular duly noticed
meetings of its Board of Directors, make and retain minutes of
such meetings and otherwise observe all corporate formalities.
(xi) The Seller shall have bills of sale (or
similar instruments of assignment) and, if appropriate, UCC-1
financing statements, with respect to all assets purchased
from any of the Other Companies, in each case to the extent
such
-43-
bills of sale and UCC-1 financing statements would be
customarily prepared in transactions with non-Affiliates.
(xii) The Seller shall not engage in any
transaction with any of the Other Companies, except as
permitted by this Agreement and as contemplated by the Sale
Agreement.
(xiii) The Seller shall prepare its financial
statements separately from those of any of the Other Companies
and shall insure that any consolidated financial statements of
any Other Company that are filed with the Securities and
Exchange Commission or any other governmental agency or are
furnished to any creditors of any Other Company do not treat
any of the Pool Receivables as an asset of the Originator.
(l) Transaction Documents. The Seller will not terminate,
amend, waive or modify, or consent to any termination, amendment, waiver or
modification of, any provision of any Transaction Document or grant any other
consent or other indulgence under any Transaction Document, in each case without
the prior written consent of the Agent (acting with the consent or at the
direction of the Majority Bank Purchasers or, to the extent required under
Section 10.01, all the Bank Purchasers). The Seller will perform all of its
obligations under the Sale Agreement and will enforce the Sale Agreement in
accordance with its terms. The Seller will take all actions to perfect and
enforce its rights and interests (and the rights and interests of the Agent and
the Purchasers as assignees of Seller) under the Sale Agreement as the Agent may
from time to time reasonably request, including, without limitation, making
claims to which it may be entitled under any indemnity, reimbursement or similar
provision contained in the Sale Agreement.
(m) Nature of Business. The Seller will not engage in any
business other than the purchase of Receivables, Related Security and
Collections from the Originator and the transactions contemplated by this
Agreement and the Sale Agreement. The Seller will not create or form any
Subsidiary.
(n) Mergers, Etc. The Seller will not merge with or into
or consolidate with or into, or convey, transfer, lease or otherwise dispose of
(whether in one transaction or in a series of transactions), all or
substantially all of its assets (whether now owned or hereafter acquired) to, or
acquire all or substantially all of the assets or capital stock or other
ownership interest of, or enter into any joint venture or partnership agreement
with, any Person, other than as contemplated by this Agreement and the Sale
Agreement.
(o) Distributions, Etc. The Seller will not declare or
make any dividend payment or other distribution of assets, properties, cash,
rights, obligations or securities on account of any membership interests or
other equity interests of the Seller, or return any capital to its members or
other equity holders as such, or purchase, retire, defease, redeem or otherwise
acquire for value or make any payment in respect of any membership interests or
other equity of the Seller or any warrants, rights or options to acquire any
membership interests or other equity of the Seller, now or hereafter
outstanding; provided, however, that the Seller may declare and pay cash
dividends to its sole member out of Collections available for such purpose
pursuant to
-44-
the Transaction Documents so long as (i) no Event of Termination shall then
exist or would occur as a result thereof, (ii) such dividends are in compliance
with all applicable law, and (iii) such dividends have been approved by all
necessary and appropriate corporate action of the Seller and its board of
directors.
(p) Debt. The Seller shall not create, incur, guarantee,
assume or suffer to exist any indebtedness or other liabilities, whether direct
or contingent, other than (i) as a result of the endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary
course of business, (ii) the incurrence of obligations under this Agreement,
(iii) the incurrence of other obligations pursuant to, and, as expressly
contemplated in, the Sale Agreement, and (iv) the incurrence of operating
expenses in the ordinary course of business.
(q) Articles of Incorporation and By-Laws. The Seller
will not amend, modify or delete (or permit any amendment, modification or
deletion of) (i) the definition of "Independent Director" in its Articles of
Incorporation as in effect on the date hereof or (ii) any other provision of its
Articles of Incorporation or by-laws as in effect on the date hereof if,
pursuant to the terms thereof, such amendment, modification or deletion requires
the consent of the Independent Director thereunder.
(r) Tangible Net Worth. The Seller will maintain Tangible
Net Worth at all times equal to at least 15% of the Outstanding Balance of the
Receivables which are not Defaulted Receivables at such time.
(s) Taxes. The Seller will file all tax returns and
reports required by law to be filed by it and will promptly pay all taxes and
governmental charges at any time owing, except such as are being contested in
good faith by appropriate proceedings and for which appropriate reserves have
been established. The Seller will pay when due any taxes payable in connection
with the Receivables, exclusive of taxes on or measured by income or gross
receipts of the Agent, the Conduit Purchaser or the Bank Purchasers.
(t) Treatment as Sales. The Seller shall not account for
or treat (whether in financial statements or otherwise) the transactions
contemplated by the Sale Agreement in any manner other than as the sale and/or
absolute conveyance of Receivables by NIPSCO to the Seller.
(u) Investments. The Seller shall not make any loans to,
advances to, investments in or otherwise acquire any capital stock or equity
security of, or any equity interest in, any other Person.
SECTION 5.02 Agreed Upon Procedures. Until the later of (i)
the Termination Date and (ii) the date on which no Capital of or Yield on any
Receivable Interest shall be outstanding and all Fees and other Seller
Obligations have been paid in full, each of the Seller and the Servicer shall
from time to time, upon the Agent's request and at the expense of the Seller or
the Servicer, as applicable (A) cause independent public accountants or others
satisfactory to the Agent to furnish to the Agent reports showing
reconciliations, aging and test verifications of, and trial balances for, the
Receivables and/or a written report of agreed upon procedures conducted by such
accountants or others with respect to the Pool Receivables, Credit
-45-
and Collection Policy, Blocked Account activity and the Seller's performance of
its obligations under this Agreement and the Receivables Sale Agreement on a
scope and in a form reasonably requested by the Agent for such agreed upon
procedures, (B) during regular business hours permit the Agent or its agents or
representatives (x) to conduct periodic agreed upon procedures with respect to
the Receivables, the Related Security and the related books and records and
collections systems of the Seller or the Servicer, as the case may be, (y) to
examine and make copies of and abstracts from all books, records and documents
(including, without limitation, computer tapes and disks) in the possession or
under the control of the Seller or the Servicer, as the case may be, relating to
Receivables and the Related Security, including, without limitation, the
Contracts, and (z) to visit the offices and properties of the Seller or the
Servicer, as the case may be, for the purpose of examining such materials
described in clause (y) above, and to discuss matters relating to Pool
Receivables and the Related Security or the Seller's or the Servicer's
performance under the Transaction Documents or under the Contracts with any of
the officers or employees of the Seller or the Servicer, as the case may be,
having knowledge of such matters. Notwithstanding the foregoing, so long as (a)
no Event of Termination has occurred and (b) a Level 4 Period is not in effect,
(i) the Agent will not cause more than one (1) agreed upon procedures review
pursuant to clause (A) above to be conducted in any calendar year, and (ii) the
agreed upon procedures review to be conducted pursuant to clause (A) shall be
conducted by the independent public accountants then engaged to audit the
Originator's financial statements.
ARTICLE VI
ADMINISTRATION AND COLLECTION
OF RECEIVABLES
SECTION 6.01 Designation of Servicer. The servicing,
administration and collection of the Receivables shall be conducted by the
Servicer so designated hereunder from time to time. Until the Agent gives notice
to the Seller of the designation of a new Servicer, NIPSCO is hereby designated
as, and hereby agrees to perform the duties and obligations of, the Servicer
pursuant to the terms hereof. NIPSCO may not resign from the obligations and
liabilities hereby imposed on it. The Agent at any time, may designate as
Servicer any Person (including itself) to succeed NIPSCO or any successor
Servicer, on such terms and conditions as the Agent and such successor Servicer
shall agree. The Servicer may, with the prior consent of the Agent, subcontract
with any other Person for the servicing, administration or collection of the
Receivables. Any such subcontract shall not affect the Servicer's liability for
performance of its duties and obligations pursuant to the terms hereof.
SECTION 6.02 Duties of Servicer. (a) The Servicer shall take
or cause to be taken all such actions as may be necessary or advisable to
collect each Receivable from time to time, all in accordance in all material
respects with applicable laws, rules and regulations, with reasonable care and
diligence, and in accordance with the Credit and Collection Policy. The Seller,
each Purchaser and the Agent hereby appoint the Servicer, from time to time
designated pursuant to Section 6.01, as their agent to enforce their respective
rights and interests in the Receivables, the Related Security and the related
Contracts. In performing its duties as Servicer, the Servicer shall exercise the
same care and apply the same policies as it would exercise and apply if it owned
such Receivables and shall act in such manner as it reasonably deems to be in
the best interests of the Purchasers and the Agent. Following the occurrence and
during the
-46-
continuation of a Servicer Default the Agent shall have the sole right to direct
the Servicer to commence or settle any legal action to enforce collection of any
Receivable or any Related Security with respect thereto.
(a) The Servicer shall administer the Collections in
accordance with Section 2.04. If so instructed by the Agent, at any time during
a Level 4 Period or following the occurrence of an Event of Termination, the
Servicer shall transfer to the Agent (by wire transfer of funds to the account
specified by the Agent) all Collections set aside or required to be set aside
for the Agent or any Purchaser pursuant to Section 2.04 by the Business Day
following the Servicer's receipt of such Collections.
(c) If no Servicer Default shall have occurred and be
continuing, NIPSCO, while it is the Servicer, may, in accordance with the Credit
and Collection Policy, extend the maturity or adjust the Outstanding Balance of
any Receivable as the Servicer deems appropriate to maximize Collections
thereof, provided that the classification of any such Receivable as a Delinquent
Receivable or Defaulted Receivable shall not be affected by any such extension.
Following the occurrence and during the continuation of a Servicer Default, the
Servicer may grant such extensions or adjustments only with the prior written
consent of the Agent. In no event shall the Servicer be entitled to make any
Purchaser or the Agent a party to any litigation involving the Transaction
Documents or the Receivables without such Purchaser's or the Agent's prior
written consent.
(d) The Servicer shall hold in trust for the Seller, the
Agent and each Purchaser, in accordance with their respective interests, all
documents, instruments and records (including, without limitation, computer
tapes or disks) which evidence or relate to Receivables. The Servicer shall xxxx
the Seller's and the Originator's master data processing records evidencing the
Receivables with a legend, reasonably acceptable to the Agent, evidencing that
Receivable Interests therein have been sold. At the request of the Agent
following a Servicer Default, the Servicer shall xxxx each invoice which
evidence or relate to Receivables with a legend, reasonably acceptable to the
Agent, evidencing that Receivable Interests therein have been sold and shall
deliver to the Agent a copy (which may be in electronic form) of each invoice
evidencing each Receivable.
(e) The Servicer shall, as soon as practicable following
receipt and identification thereof, and in any event within two Business Days,
turn over to the Seller or such other Person as may be entitled thereto any cash
collections or other cash proceeds received in any Blocked Account and not
constituting Collections of Receivables, including, without limitation, any
prepayments made under any Balanced Payment Plan.
(f) The Servicer shall, from time to time at the request
of the Agent following (i) the occurrence and during the continuation of any
Event of Termination or (ii) the commencement of any Level 3 Ratings Period of
Level 4 Ratings Period, furnish to the Agent (promptly after any such request) a
calculation of the amounts set aside for the Purchasers and the Agent pursuant
to Section 2.04.
(g) On or prior to the sixteenth Business Day of each
calendar month and, following the occurrence of an Event of Termination, at such
other times and covering such other
-47-
periods as the Agent may request, the Servicer shall prepare and forward to the
Agent and each Bank Purchaser a Monthly Report relating to the Receivables as of
the close of business on the last day of the immediately preceding calendar
month or such other period, as the case may be.
SECTION 6.03 Certain Rights of the Agent. (a) The Agent is
hereby authorized at any time to instruct the Obligors of Pool Receivables, or
any of them, to make payment of all amounts payable under any Pool Receivable to
any account designated by the Agent and the Seller or the Servicer shall, at the
Agent's request, send notices to the Obligors of Pool Receivables, or any of
them, instructing them to make payment in the manner requested by the Agent. At
any time during the Liquidation Period or after the commencement of a Level 4
Ratings Period, the Agent may have each Blocked Account transferred into the
name of the Agent and/or assume exclusive control of the Blocked Accounts, and
may take such actions to effect such transfer or assumption as it may determine
to be necessary or appropriate (including, without limitation, delivering the
notices attached to the Blocked Account Agreements).
(b) At any time following the designation of a Servicer
other than NIPSCO:
(i) At the Agent's request and at the Seller's
expense, the Servicer shall (and if the Servicer shall fail to
do so, the Agent may) notify each Obligor of Receivables of
the ownership of Receivable Interests under this Agreement and
direct that payments be made directly to the Agent or its
designee.
(ii) At the Agent's request and at the Seller's
or the Servicer's expense, the Seller and the Servicer shall
(A) assemble all of the documents, instruments and other
records (including, without limitation, computer tapes and
disks) that evidence or relate to the Receivables and the
related Contracts and Related Security, or that are otherwise
necessary or desirable to collect the Receivables, and shall
make the same available to the Agent at a place selected by
the Agent or its designee, and (B) segregate all cash, checks
and other instruments received by it from time to time
constituting Collections of Receivables in a manner acceptable
to the Agent and, promptly upon receipt, remit all such cash,
checks and instruments, duly indorsed or with duly executed
instruments of transfer, to the Agent or its designee.
(c) Each of the Seller and the Servicer authorizes the
Agent, and hereby irrevocably appoints the Agent as its attorney-in-fact coupled
with an interest, with full power of substitution and with full authority in
place of the Seller or the Servicer, following the occurrence and during the
continuation of a Servicer Default, to take any and all steps in the Seller's or
the Servicer's name and on behalf of the Seller or the Servicer that are
necessary or desirable, in the determination of the Agent, to collect amounts
due under the Receivables, including, without limitation, endorsing the
Seller's, the Servicer's or the Originator's name on checks and other
instruments representing Collections of Receivables and enforcing the
Receivables and the Related Security and related Contracts.
(d) If replaced as Servicer, NIPSCO agrees that it will
(i) terminate, and (to the extent requested by the Agent) will cause each
existing sub-servicer to terminate, its collection activities in a manner and to
the extent requested by the Agent to facilitate the
-48-
transition to a new Servicer and (ii) transfer to the Agent (or its designee),
or (to the extent permitted by applicable law and contract) license to the Agent
(or its designee) the use of, all software used in connection with the
collection of the Receivables. (To the extent any such transfer or license would
require the payment of any license fee or other amount the Servicer agrees to
pay such fee or other amount out of its own funds promptly upon demand by the
Agent.) The Servicer shall cooperate with and assist any successor Servicer in
the performance of its responsibilities as Servicer (including, without
limitation, providing access to, and transferring, to such successor Servicer
all records related to the Receivables and allowing (to the extent permitted by
applicable law and contract) the successor Servicer to use all licenses,
hardware or software necessary or desirable to collect or obtain or store
information regarding the Receivables).
(e) Following the occurrence of an Event of Termination,
the Servicer shall, upon the request of the Agent acting (and if the Servicer
fails to do so the Agent may itself) deliver a notice to all applicable
Obligors, in form and substance satisfactory to the Agent, stating that (i) the
Receivables have been sold to the Seller and ownership interests in the
Receivables have been sold to the Purchasers hereunder and (ii) effective
immediately all payments on the Receivables must be made without any setoff.
Such notice shall be delivered by the Servicer as soon as practicable and in any
event within three Business Days after such written request by the Agent. From
and after the date the Agent requests the Servicer to deliver such notice, (i)
the Servicer shall require all payments by Obligors to be made without any
setoff, and shall make available to the Agent such information as may be
required to determine whether such payments are being so made and (ii) NIPSCO
and the Seller shall, and shall cause each other Transaction Party to, pay, or
cause to be paid, when due all amounts (including, without limitation, in
respect of credit card charges) owing by any Transaction Party to any Obligor
without any set off of such amounts against Receivables due from such Obligor.
SECTION 6.04 Rights and Remedies. (a) If the Servicer or the
Seller fails to perform any of its obligations under this Agreement, the Agent
may (but shall not be required to) itself perform, or cause performance of, such
obligation; and the Agent's costs and expenses reasonably incurred in connection
therewith shall be payable by the Servicer or the Seller, as applicable.
(b) The Seller and the Servicer shall perform their
respective obligations under the Contracts related to the Receivables to the
same extent as if Receivable Interests had not been sold and the exercise by the
Agent on behalf of the Conduit Purchaser and the Bank Purchasers of their rights
under this Agreement shall not release the Servicer or the Seller from any of
their duties or obligations with respect to any Receivables or related
Contracts. None of the Agent, the Conduit Purchaser or the Bank Purchasers shall
have any obligation or liability with respect to any Receivables or related
Contracts, nor shall any of them be obligated to perform the obligations of the
Seller thereunder.
(c) In the event of any conflict between the provisions
of Article VI of this Agreement and Article VI of the Sale Agreement, the
provisions of this Agreement shall control.
-49-
(d) The Agent's rights and powers under this Article VI
shall not subject the Agent to any liability if any action taken by it proves to
be inadequate or invalid, nor shall such powers confer any obligation whatsoever
upon the Agent.
SECTION 6.05 Covenants of the Servicer.
(a) Change in Credit and Collection Policy. The Servicer
will not make any change in the Credit and Collection Policy except for any such
change that would not (i) impair the collectibility of any Receivables or the
ability of the Servicer to perform its obligations under this Agreement or (ii)
otherwise be reasonably likely to have a Material Adverse Effect. In the event
that the Servicer makes any material change to the Credit and Collection Policy,
it shall, promptly following such change, provide the Agent with an updated
Credit and Collection Policy and a summary of all material changes.
(b) Other Covenants. NIPSCO (both individually and in its
capacity as Servicer) shall perform and comply with all covenants required to be
performed or observed by it pursuant to the Sale Agreement and each other
Transaction Document.
(c) Perfection and Priority of Security Interests. The
Servicer shall, from time to time, at its expense, promptly deliver all
instruments and documents and take all actions that may be necessary or
desirable, or that the Agent may reasonably request, to perfect, protect or more
fully evidence the Receivable Interests purchased under this Agreement and/or
the first priority security interest granted pursuant to this Agreement. Without
limiting the foregoing, the Servicer will, upon the request of the Agent, file
such financing or continuation statements, or amendments thereto, and such other
instruments and documents, that may be necessary or desirable, or that the Agent
may reasonably request, to perfect, protect, evidence or maintain the priority
of such Receivable Interests or security interest.
SECTION 6.06 Indemnities by the Servicer. Without limiting any
other rights that the Agent, the Conduit Purchaser, any Bank Purchaser, any
other Affiliated Person or any of their respective Affiliates (each, a "Special
Indemnified Party") may have hereunder or under applicable law, and in
consideration of its appointment as Servicer, NIPSCO hereby agrees to indemnify
each Special Indemnified Party from and against any and all claims, losses and
liabilities (including reasonable attorneys' fees) (all of the foregoing being
collectively referred to as "Special Indemnified Amounts") arising out of or
resulting from any of the following (excluding, however, (a) Special Indemnified
Amounts resulting from gross negligence or willful misconduct on the part of
such Special Indemnified Party, and (b) any income taxes or any other tax or fee
measured by income incurred by such Special Indemnified Party arising out of or
as a result of this Agreement or the ownership of Receivable Interests or in
respect of any Receivable or any Contract):
(i) any representation or warranty or statement
made or deemed made by the Servicer under or in connection
with this Agreement, the Sale Agreement or any Monthly Report
which shall have been incorrect in any respect when made or
deemed made;
-50-
(ii) the failure by the Servicer to comply with
any applicable law, rule or regulation with respect to any
Receivable or Contract;
(iii) 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 Receivables, the
Contracts and the Related Security and Collections in respect
thereof, whether at the time of any purchase or reinvestment
or at any subsequent time;
(iv) any failure of the Servicer to perform its
duties or obligations in accordance with the provisions of
this Agreement or any other Transaction Document;
(v) the commingling of Collections of
Receivables at any time by the Servicer with other funds;
(vi) any action by the Servicer (other than an
action required by the Transaction Documents) reducing or
impairing the rights of the Agent, the Conduit Purchaser or
the Bank Purchasers with respect to any Receivable or the
value of any Receivable;
(vii) if NIPSCO has been terminated by the Agent
as the Servicer prior to the occurrence of a Servicer Default
and when a Level 4 Period is not in effect, any Servicer Fees
or other costs and expenses payable to any replacement
Servicer, to the extent in excess of the Servicer Fees payable
to NIPSCO in its capacity as Servicer hereunder;
(viii) any claim brought by any Person other than a
Special Indemnified Party arising from any activity by the
Servicer or its Affiliates in servicing, administering or
collecting any Receivable; or
(ix) any change in the Credit and Collection
Policy which impairs the collectibility of any Receivable or
the ability of the Servicer to perform its obligations under
this Agreement.
Notwithstanding anything to the contrary in this Agreement,
solely for purposes of the Servicer's indemnification obligations in clauses (i)
and (iv) of this Section 6.06, any representation, warranty or covenant
qualified by the occurrence or non-occurrence of a Material Adverse Effect or
similar concepts of materiality shall be deemed to be not so qualified.
SECTION 6.07 Cash Collateral Account. (a) At any time after
the commencement of any Level 3 Ratings Period or Level 4 Ratings Period or the
occurrence of an Event of Termination, the Agent may establish and maintain, in
the name of the Agent on behalf of the Purchasers, with Citibank or another
financial institution acceptable to the Agent, a segregated interest bearing
deposit account (such account being the "Cash Collateral Account", and the
financial institution holding such account being the "Cash Collateral Bank").
Each of the Seller and the Servicer agrees that the Agent shall have exclusive
dominion and control over the Cash Collateral Account and all monies,
instruments and other property from time to time
-51-
deposited in or credited to the Cash Collateral Account. The Servicer shall
deliver to the Agent, concurrently with the establishment of the Cash Collateral
Account, a control agreement with respect to the Cash Collateral Account in
substantially the form attached as Annex G or in such other form as the Agent
may approve (a "Cash Collateral Agreement"), duly executed by the Seller, the
Servicer and the Cash Collateral Bank.
(b) Subject to the terms of the relevant Cash Collateral
Agreement, the Servicer may invest funds on deposit in the Cash Collateral
Account, reinvest proceeds of any such investments which may mature or be sold,
and invest interest or other income received from any such investments, in each
case in such Permitted Investments as the Servicer may select; provided that
each such Permitted Investment shall have a maturity date no later than the next
succeeding Settlement Date. Such proceeds, interest or income which are not so
invested or reinvested in Permitted Investments shall, except as otherwise
provided in this Agreement or the relevant Cash Collateral Agreement, be
deposited and held in the Cash Collateral Account. Neither the Agent nor any of
its Affiliates shall be liable to the Seller, the Servicer or any other Person
for, or with respect to, any decline in value of amounts on deposit in the Cash
Collateral Account. Permitted Investments from time to time purchased and held
pursuant to this Section 6.07 shall be referred to as "Collateral Securities"
and shall, for purposes of this Agreement, constitute part of the funds held in
the Cash Collateral Account in amounts equal to their respective outstanding
principal amounts. Each such Permitted Investment shall be made in the name of
the Agent or its designee.
(c) Following the occurrence of any Event of Termination,
the Agent may, at any time or from time to time after funds are either deposited
in the Cash Collateral Account or invested in Collateral Securities, after
selling, if necessary, any Collateral Securities, withdraw funds then held in
the Cash Collateral Account. The Seller agrees that Permitted Investments are of
a type customarily sold on a recognized market and, accordingly, no notice of
sale of any Permitted Investments shall be required. To the extent notice of
sale of any Collateral Securities shall be required by law, at least ten days'
notice to the Seller of the time and place of any public sale or the time after
which any private sale is to be made shall constitute reasonable notification.
The Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.
(d) The Agent shall have the sole right of withdrawal
with respect to the Cash Collateral Account. None of the Seller, the Servicer or
any Person claiming on behalf of or through the Seller or the Servicer shall
have any right to withdraw any of the funds held in the Cash Collateral Account.
(e) The Seller agrees that it will not (i) sell or
otherwise dispose of any interest in the Cash Collateral Account or any funds
held therein, or (ii) create or permit to exist any Adverse Claim upon or with
respect to the Cash Collateral Account or any funds held therein, except the
Adverse Claim in favor of the Agent for the benefit of the Purchasers created
pursuant to this Agreement.
(f) The Agent shall exercise reasonable care in the
custody and preservation of any funds held in the Cash Collateral Account and
shall be deemed to have exercised such
-52-
care if such funds are accorded treatment substantially equivalent to that which
the Agent accords its own property, it being understood that the Agent shall not
have any responsibility for taking any necessary steps to preserve rights
against any parties with respect to any such funds.
ARTICLE VII
EVENTS OF TERMINATION
SECTION 7.01 Events of Termination. If any of the following
events (each an "Event of Termination") shall occur and be continuing:
(a) (i) The Servicer shall fail to perform or observe any
term, covenant or agreement under this Agreement (other than as referred to in
clause (ii) of this subsection (a)) and such failure shall remain unremedied for
three Business Days after notice or (ii) any Transaction Party shall fail to
make when due any payment or deposit to be made by it under this Agreement or
any other Transaction Document (including, without limitation, any failure to
make a deposit into the Cash Collateral Account when due) or (iii) the Servicer
shall fail to maintain a Cash Collateral Account subject to a duly executed Cash
Collateral Agreement as and when required pursuant to Section 6.07; or
(b) Any representation or warranty made or deemed made by
any Transaction Party (or any of their respective officers) under or in
connection with this Agreement or any other Transaction Document or any
certificate, report or other statement delivered by any Transaction Party
pursuant to this Agreement or any other Transaction Document shall prove to have
been incorrect or untrue in any material respect when made or deemed made or
delivered; or
(c) (i) The Seller shall fail to perform or observe any
term, covenant or agreement contained in Section 5.01(h) or Section 6.03(a), or
(ii) the Seller shall fail to perform or observe any other term, covenant or
agreement contained in this Agreement or any other Transaction Document on its
part to be performed or observed and such failure shall remain unremedied for
ten Business Days after the first date on which the Seller receives written
notice thereof from the Agent; or
(d) (i) Any Transaction Party or any Consolidated
Subsidiary shall default beyond any applicable period of grace in any payment of
principal or interest on any indebtedness for any borrowed money for which such
Transaction Party or any Consolidated Subsidiary is liable in a principal amount
then outstanding of $25,000,000 or more or (ii) any other event of default
(other than a failure to pay principal or interest) shall occur under any
mortgage, indenture, agreement or instrument under which there may be issued, or
by which there may be secured or evidenced, any indebtedness for any borrowed
money for which any Transaction Party or any Consolidated Subsidiary is liable
in a principal amount then outstanding of $25,000,000 and either (A) the
occurrence of such event shall result in such indebtedness becoming or being
declared due and payable prior to the date on which it could otherwise become
due and payable or (B) the occurrence of such event shall permit the holders of
such indebtedness to declare such indebtedness to be due and payable prior to
the date on which it would otherwise become due and payable; or
-53-
(e) Any purchase or any reinvestment pursuant to this
Agreement shall for any reason cease to create, or any Receivable Interest shall
for any reason cease to be, a valid and perfected first priority undivided
percentage ownership or security interest to the extent of the pertinent
Receivable Interest in each Pool Receivable and the Related Security and
Collections with respect thereto; or the security interest created pursuant to
Section 2.10 shall for any reason cease to be a valid and perfected first
priority security interest in the collateral referred to in that Section; or
(f) Any Transaction Party 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 any proceeding shall be instituted by or against any Transaction
Party seeking to adjudicate it a 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, custodian or other similar
official for it or for any substantial part of its property and, in the case of
any such proceeding instituted against it (but not instituted by it), either
such proceeding shall remain undismissed or unstayed for a period of 45 days, or
any of the actions sought in such proceeding (including, without limitation, the
entry of an order for relief against, or the appointment of a receiver, trustee,
custodian or other similar official for, it or for any substantial part of its
property) shall occur; or any Transaction Party shall take any corporate or
other action to authorize any of the actions set forth above in this subsection
(f); or
(g) As of the last day of any calendar month, the Default
Ratio shall exceed 8.50%; or
(h) The sum of the Receivable Interests shall exceed the
Maximum Receivable Interests for five consecutive Business Days; or
(i) There shall have occurred or shall exist any event or
condition which has had or will have a Material Adverse Effect; or
(j) An "Event of Termination" shall occur under the Sale
Agreement, or the Sale Agreement shall cease to be in full force and effect or
any Transaction Party shall so state in writing; or
(k) NIPSCO shall cease to own, directly or indirectly,
all of the outstanding membership interests of the Seller, free and clear of any
Adverse Claim; or
(l) The Internal Revenue Service shall file notice of a
lien pursuant to Section 6323 of the IRC with regard to any of the assets of the
Seller or the Originator and such lien shall not have been released within five
Business Days, or the Pension Benefit Guaranty Corporation shall, or shall
indicate its intention to, file notice of a lien pursuant to Section 4068 of
ERISA with regard to any of the assets of the Seller, the Originator or any
Subsidiaries of the Originator; or
(m) One or more judgments or decrees shall be entered
against any Transaction Party or any Consolidated Subsidiary involving in the
aggregate a liability (not paid
-54-
or fully covered by insurance) of $5,000,000 or more and all such judgments or
decrees shall not have been vacated, dismissed, discharged, bonded or stayed
within 30 days from the entry thereof;
then, and in any such event, any or all of the following actions may be taken by
notice to the Seller, the Agent may, in its discretion, declare the Termination
Date to have occurred (in which case the Termination Date shall be deemed to
have occurred); provided that, automatically upon the occurrence of any event
(without any requirement for the giving of notice) described in paragraph (f) of
this Section 7.01, the Termination Date shall occur and NIPSCO (if it is then
serving as the Servicer) shall cease to be the Servicer, and the Agent or its
designee shall become the Servicer. Upon any such declaration or designation or
upon such automatic termination, the Conduit Purchaser, the Bank Purchasers and
the Agent shall have, in addition to the rights and remedies which they may have
under this Agreement, all other rights and remedies provided after default under
the UCC and under other applicable law, which rights and remedies shall be
cumulative.
ARTICLE VIII
THE AGENT
SECTION 8.01 Authorization and Action. Each Purchaser hereby
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers under this Agreement as are delegated to the Agent by
the terms hereof, together with such powers as are reasonably incidental
thereto. The Agent shall not have any duties other than those expressly set
forth in the Transaction Documents, and no implied obligations or liabilities
shall be read into any Transaction Document, or otherwise exist, against the
Agent. The Agent does not assume, nor shall it be deemed to have assumed, any
obligation to, or relationship of trust or agency with, any Transaction Party,
the Conduit Purchaser or the Bank Purchasers. Notwithstanding any provision of
this Agreement or any other Transaction Document, in no event shall the Agent
ever be required to take any action which exposes the Agent to personal
liability or which is contrary to any provision of any Transaction Document or
applicable law.
SECTION 8.02 Agent's Reliance, Etc. Neither the Agent nor any
of its directors, officers, agents or employees shall be liable for any action
taken or omitted to be taken by it or them as Agent under or in connection with
this Agreement (including, without limitation, the Agent's servicing,
administering or collecting Receivables as Servicer), in the absence of its or
their own gross negligence or willful misconduct. Without limiting the
generality of the foregoing, the Agent: (a) may consult with legal counsel
(including counsel for the Seller or the Servicer), independent certified public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (b) makes no warranty or
representation to the Conduit Purchaser or any Bank Purchaser (whether written
or oral) and shall not be responsible to the Conduit Purchaser or any Bank
Purchaser for any statements, warranties or representations (whether written or
oral) made in or in connection with this Agreement; (c) shall not have any duty
to ascertain or to inquire as to the performance or observance of any of the
terms, covenants or conditions of this Agreement on the part of any Transaction
Party or to inspect the property (including the books and records) of any
Transaction Party; (d) shall not be responsible to the
-55-
Conduit Purchaser or any Bank Purchaser for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement or
any other instrument or document furnished pursuant hereto; and (e) shall incur
no liability under or in respect of this Agreement by acting upon any notice
(including notice by telephone), consent, certificate or other instrument or
writing (which may be by telecopier or telex) believed by it to be genuine and
signed or sent by the proper party or parties.
SECTION 8.03 CNAI and Affiliates. The obligation of Citibank
to purchase Receivable Interests under this Agreement may be satisfied by CNAI
or any of its Affiliates. With respect to any Receivable Interest or interest
therein owned by it, CNAI shall have the same rights and powers under this
Agreement as any Bank Purchaser and may exercise the same as though it were not
the Agent. CNAI and any of its Affiliates may generally engage in any kind of
business with the Transaction Parties or any Obligor, any of their respective
Affiliates and any Person who may do business with or own securities of the
Transaction Parties or any Obligor or any of their respective Affiliates, all as
if CNAI were not the Agent and without any duty to account therefor to the
Conduit Purchaser or the Bank Purchasers.
SECTION 8.04 Indemnification of Agent. Each Bank Purchaser
agrees to indemnify the Agent (to the extent not reimbursed by the Transaction
Parties), ratably according to the respective Percentage of such Bank Purchaser,
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by, or asserted
against the Agent in any way relating to or arising out of this Agreement or any
other Transaction Document or any action taken or omitted by the Agent under
this Agreement or any other Transaction Document, provided that no Bank
Purchaser shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Agent's gross negligence or willful misconduct.
SECTION 8.05 Delegation of Duties. The Agent may execute any
of its duties through agents or attorneys-in-fact and shall be entitled to
advice of counsel concerning all matters pertaining to such duties. The Agent
shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
SECTION 8.06 Action or Inaction by Agent. The Agent shall in
all cases be fully justified in failing or refusing to take action under any
Transaction Document unless it shall first receive such advice or concurrence of
the Bank Purchasers or the Majority Bank Purchasers, as the case may be, and
assurance of its indemnification by the Bank Purchasers, as it deems
appropriate. The Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement or any other Transaction Document
in accordance with a request or at the direction of the Bank Purchasers or the
Majority Bank Purchasers, as the case may be, and such request or direction and
any action taken or failure to act pursuant thereto shall be binding upon the
Conduit Purchaser and all Bank Purchasers. The Purchasers and the Agent agree
that unless any action to be taken by the Agent under a Transaction Document (i)
specifically requires the advice or concurrence of all the Bank Purchasers or
(ii) may be taken by the Agent alone or without any advice or concurrence of any
Bank Purchaser, then the Agent may take action based upon the advice or
concurrence of the Majority Bank Purchasers.
-56-
SECTION 8.07 Notice of Events of Termination; Action by Agent.
The Agent shall not be deemed to have knowledge or notice of the occurrence of
any Incipient Event of Termination or of any Event of Termination unless the
Agent has received notice from any Purchaser or the Seller stating that an
Incipient Event of Termination or Event of Termination has occurred hereunder
and describing such Incipient Event of Termination or Event of Termination. If
the Agent receives such a notice, it shall promptly give notice thereof to the
Bank Purchasers. The Agent shall take such action concerning an Incipient Event
of Termination or an Event of Termination or any other matter hereunder as may
be directed by the Bank Purchasers or the Majority Bank Purchasers, as the case
may be (subject to the other provisions of this Article VIII), but until the
Agent receives such directions, the Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, as the Agent deems
advisable and in the best interests of the Purchasers.
SECTION 8.08 Non-Reliance on Agent and Other Parties. Each
Purchaser expressly acknowledges that neither the Agent nor any of its
directors, officers, agents or employees has made any representations or
warranties to it and that no act by the Agent hereafter taken, including any
review of the affairs of the Transaction Parties, shall be deemed to constitute
any representation or warranty by the Agent. Each Purchaser represents and
warrants to the Agent that, independently and without reliance upon the Agent or
any other Purchaser and based on such documents and information as it has deemed
appropriate, it has made and will continue to make its own appraisal of and
investigation into the business, operations, property, prospects, financial and
other conditions and creditworthiness of each Transaction Party and the
Receivables and its own decision to enter into this Agreement and to take, or
omit, action under any Transaction Document. Except for items expressly required
to be delivered under any Transaction Document by the Agent to any Purchaser,
the Agent shall not have any duty or responsibility to provide any Purchaser
with any information concerning the Transaction Parties or any of their
Affiliates that comes into the possession of the Agent or any of its directors,
officers, agents, employees, attorneys-in-fact or Affiliates.
SECTION 8.09 Successor Agent. The Agent may, upon at least
thirty (30) days notice to the Seller, the Servicer and each Bank Purchaser,
resign as Agent. Except as provided below, such resignation shall not become
effective until a successor Agent is appointed by the Majority Bank Purchasers
and has accepted such appointment. If no successor Agent shall have been so
appointed by the Majority Bank Purchasers within 30 days after the departing
Agent's giving of notice of resignation, the departing Agent may, on behalf of
the Majority Bank Purchasers, appoint a successor Agent, which successor Agent
shall have short-term debt ratings of at least A-1 from S&P and P-1 from Xxxxx'x
and shall be either a commercial bank having a combined capital and surplus of
at least $250,000,000 or an Affiliate of such an institution and (so long as no
Event of Termination has occurred and is continuing hereunder) shall be
acceptable to the Seller. If no successor Agent shall have been so appointed by
the Majority Bank Purchasers within 60 days after the departing Agent's giving
of notice of resignation, the departing Agent may, on behalf of the Majority
Bank Purchasers, petition a court of competent jurisdiction to appoint a
successor Agent, which successor Agent shall have short-term debt ratings of at
least A-1 from S&P and P-1 from Xxxxx'x, and shall be either a commercial bank
having a combined capital and surplus of at least $250,000,000 or an Affiliate
of such an institution. Upon such acceptance of its appointment as Agent
hereunder by a successor Agent, such successor Agent shall succeed to and become
vested with all the rights and duties of the
-57-
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations under the Transaction Documents. After any retiring Agent's
resignation hereunder, the provisions of Section 6.06, Article IX and this
Article VIII shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was the Agent.
ARTICLE IX
INDEMNIFICATION
SECTION 9.01 Indemnities by the Seller. Without limiting any
other rights that the Agent, the Conduit Purchaser, the Bank Purchasers, the
Affected Persons or any of their respective Affiliates (each, an "Indemnified
Party") may have hereunder or under applicable law, the Seller hereby agrees to
indemnify each Indemnified Party from and against any and all claims, losses and
liabilities (including reasonable attorneys' fees) (all of the foregoing being
collectively referred to as "Indemnified Amounts") arising out of or resulting
from this Agreement or any other Transaction Document or the use of proceeds of
purchases or reinvestments or the ownership of Receivable Interests or in
respect of any Receivable or any Contract, excluding, however, (a) Indemnified
Amounts resulting from gross negligence or willful misconduct on the part of
such Indemnified Party, or (b) recourse (except as otherwise specifically
provided in this Agreement) for uncollectible Receivables or delayed payment
thereon due to creditworthiness of the Obligors. Without limiting or being
limited by the foregoing, the Seller shall pay on demand to each Indemnified
Party any and all amounts necessary to indemnify such Indemnified Party from and
against any and all Indemnified Amounts relating to or resulting from any of the
following:
(i) the failure of any Receivable represented by
the Seller or the Servicer to be an Eligible Receivable
hereunder to be an "Eligible Receivable" at the time of such
representation;
(ii) any representation, warranty or statement
made or deemed made by any Transaction Party (or any of their
respective officers) under or in connection with this
Agreement or any of the other Transaction Documents which
shall have been incorrect in any respect when made;
(iii) the failure by any Transaction Party to
comply with any applicable law, rule or regulation with
respect to any Receivable or the related Contract; or the
failure of any Receivable or the related Contract to conform
to any such applicable law, rule or regulation;
(iv) the failure to vest (a) in the Purchasers a
first priority perfected undivided percentage ownership
interest, to the extent of each Receivable Interest, in the
Receivables and the Related Security and Collections in
respect thereof, or (b) in the Agent a first priority
perfected security interest in all of the property described
in Section 2.10, in each case free and clear of any Adverse
Claim;
(v) the failure to have filed, or any delay in
filing, financing statements or other similar instruments or
documents under the UCC of any applicable
-58-
jurisdiction or other applicable laws with respect to any
Receivables and the Related Security and Collections in
respect thereof, whether at the time of any purchase or
reinvestment or at any subsequent time;
(vi) any dispute, claim or defense (other than
discharge in bankruptcy) of an 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, goods or services
related to such Receivable or the furnishing or failure to
furnish such merchandise, goods or services or relating to
collection activities with respect to such Receivable;
(vii) any failure of any Transaction Party to
perform its duties or obligations in accordance with the
provisions hereof and each other Transaction Document or to
perform its duties or obligations under the Contracts or to
timely and fully comply in all respects with the applicable
Originator's Credit and Collection Policy in regard to each
Receivable and the related Contract;
(viii) any products liability, environmental or
other claim arising out of or in connection with merchandise,
goods or services which are the subject of any Contract or any
credit card issued by the Originator or any Contract related
thereto;
(ix) the commingling of Collections of
Receivables at any time with other funds;
(x) any investigation, litigation or proceeding
(actual or threatened) related to this Agreement or any other
Transaction Document or the use of proceeds of purchases or
reinvestments or the ownership of Receivable Interests or in
respect of any Receivable or Related Security or Contract;
(xi) any failure of any Transaction Party to
comply with its covenants contained in this Agreement or any
other Transaction Document;
(xii) any setoff with respect to any Receivable;
(xiii) any claim brought by any Person other than
an Indemnified Party arising from any activity by the Seller
or any Affiliate of the Seller in servicing, administering or
collecting any Receivable; or
(xiv) the failure by any Transaction Party to pay
when due any taxes, including, without limitation, sales,
excise or personal property taxes.
Notwithstanding anything to the contrary in this Agreement,
solely for purposes of the Seller's indemnification obligations in this Article
IX, any representation, warranty or covenant qualified by the occurrence or
non-occurrence of a Material Adverse Effect or similar concepts of materiality
shall be deemed to be not so qualified.
-59-
ARTICLE X
MISCELLANEOUS
SECTION 10.01 No Waiver; Amendments, Etc. No failure on the
part of the Conduit Purchaser, the Bank Purchasers or the Agent to exercise, and
no delay in exercising, any right hereunder shall operate as a waiver thereof;
nor shall any single or partial exercise of any right hereunder preclude any
other or further exercise thereof or the exercise of any other right. No
amendment or waiver of any provision of this Agreement or consent to any
departure by any Transaction Party therefrom shall be effective unless in a
writing signed by the Agent and the Majority Bank Purchasers (and, in the case
of any amendment, also signed by the Seller), and then such amendment, waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no amendment, waiver or consent
shall, unless in writing and signed by the Servicer in addition to the Agent,
affect the rights or duties of the Servicer under this Agreement; provided,
further, that no amendment, waiver or consent shall, unless in writing and
signed by each Bank Purchaser (or, in the case of clause (c) below, each Bank
Purchaser having its fees reduced or delayed) in addition to the Agent:
(a) change (directly or indirectly) the
definitions of Eligible Receivable, Delinquent Receivable, Default Ratio,
Defaulted Receivable, Net Receivables Pool Balance, Loss Reserve, Yield and Fee
Reserve or Total Reserves contained in this Agreement, or increase the then
existing Concentration Limit or Special Concentration Limit for any Obligor or
change the calculation of Receivable Interest as set forth in such definition;
(b) reduce the amount of Capital or Yield that
is payable on account of any Receivable Interest or delay any scheduled date for
payment thereof;
(c) reduce fees (including, without limitation,
the Liquidity Fees and Program Fees) payable by the Seller to the Conduit
Purchaser or the Bank Purchasers or delay the dates on which such fees are
payable;
(d) extend the Scheduled Commitment Termination
Date (except as set forth in the definition thereof);
(e) change or waive any Event of Termination;
(f) change any of the provisions of this Section
or the definition of "Majority Bank Purchasers";
(g) change or waive any of the provisions of
Section 2.04(c); or
(h) waive any breach of the representations and
warranties referred to in Section 4.01(t):
and provided, further, that no amendment, waiver or consent shall increase the
Commitment or Liquidity Commitment of any Bank Purchaser unless in writing and
signed by such Bank Purchaser.
-60-
SECTION 10.02 Notices, Etc. All notices and other
communications hereunder shall, unless otherwise stated herein, be in writing
(which shall include facsimile communication) and faxed or delivered, to each
party hereto, at its address set forth under its name on the signature pages
hereof or at such other address as shall be designated by such party in a
written notice to the other parties hereto. Notices and communications by
facsimile shall be effective when sent (and shall be followed by hard copy sent
by regular mail), and notices and communications sent by other means shall be
effective when received.
SECTION 10.03 Assignability. (a) This Agreement and the
Conduit Purchaser's rights and obligations hereunder (including ownership of
each Receivable Interest) shall be assignable by the Conduit Purchaser and its
successors and permitted assigns to any Eligible Assignee. Each assignor of a
Receivable Interest or any interest therein shall notify the Agent and the
Seller of any such assignment. Each assignor of a Receivable Interest or any
interest therein may, in connection with the assignment or participation,
disclose to the assignee or participant any information relating to the
Transaction Parties, including the Receivables, furnished to such assignor by or
on behalf of any Transaction Party or by the Agent; provided that, prior to any
such disclosure, the assignee or participant agrees to preserve the
confidentiality of any confidential information relating to the Transaction
Parties received by it from any of the foregoing entities in a manner consistent
with Section 10.06(b).
(b) Assignment by Bank Purchasers. Each Bank Purchaser
may assign to any Eligible Assignee or to any other Bank Purchaser all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitment, Liquidity Commitment and any
Receivable Interests or interests therein owned by it); provided, however that
(i) each such assignment shall be of a constant,
and not a varying, percentage of all rights and obligations
under this Agreement,
(ii) the amount being assigned pursuant to each
such assignment (determined as of the date of the Assignment
and Acceptance with respect to such assignment) shall in no
event be less than the lesser of (x) $25,000,000 and (y) all
of the assigning Bank Purchaser's Commitment,
(iii) the parties to each such assignment shall
execute and deliver to the Agent, for its acceptance and
recording in the Register (as defined below), an Assignment
and Acceptance, together with a processing and recordation fee
of $2,500, and
(iv) concurrently with such assignment, it shall
assign to such assignee Bank Purchaser or other Eligible
Assignee an equal percentage of its rights and obligations
under the Asset Purchase Agreement to which such assignor Bank
Purchaser is a party.
Upon such execution, delivery, acceptance and recording from
and after the effective date specified in such Assignment and Acceptance, (x)
the assignee thereunder shall be a party to this Agreement and, to the extent
that rights and obligations under this Agreement
-61-
have been assigned to it pursuant to such Assignment and Acceptance, have the
rights and obligations of a Bank Purchaser thereunder and (y) the assigning Bank
Purchaser shall, to the extent that rights and obligations have been assigned by
it pursuant to such Assignment and Acceptance, relinquish such rights and be
released from such obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Bank Purchaser's rights and obligations under this Agreement, such Bank
Purchaser shall cease to be a party hereto). In addition, any Bank Purchaser or
any of its Affiliates may assign any of its rights (including, without
limitation, rights to payment of Capital and Yield) under this Agreement to any
Federal Reserve Bank without notice to or consent of any Transaction Party, any
other Bank Purchaser or Conduit Purchaser or the Agent.
(c) Register. The Agent shall maintain at its address
referred to on the signature page of this Agreement (or such other address of
the Agent notified by the Agent to the other parties hereto) a copy of each
Assignment and Acceptance delivered to it and accepted by it and a register for
the recordation of the names and addresses of the Bank Purchasers and the
Conduit Purchaser, the Commitment and Liquidity Commitment of each Bank
Purchaser and the aggregate outstanding Capital of the Receivable Interest or
interests therein owned by each Conduit Purchaser and Bank Purchaser from time
to time (the "Register"). The entries in the Register shall be conclusive and
binding for all purposes, absent manifest error, and the Seller, the Servicer,
the Agent, the Conduit Purchaser and the Bank Purchasers may treat each Person
whose name is recorded in the Register as a Bank Purchaser or Conduit Purchaser,
as the case may be, under this Agreement for all purposes of this Agreement. The
Register shall be available for inspection by the Seller, the Conduit Purchaser
or any Bank Purchaser at any reasonable time and from time to time upon
reasonable prior notice.
(d) Procedure. Upon its receipt of an Assignment and
Acceptance executed by an assigning Bank Purchaser and an Eligible Assignee or
assignee Bank Purchaser, the Agent shall, if such Assignment and Acceptance has
been duly completed, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the Seller.
(e) Participations. Each Bank Purchaser may sell
participations to one or more Eligible Assignees in or to all or a portion of
its rights and obligations under this Agreement (including, without limitation,
all or a portion of its Commitment, Liquidity Commitment and the interests in
the Receivable Interests owned by it); provided, however, that
(i) such Bank Purchaser's obligations under this
Agreement (including, without limitation, its Commitment to
the Seller hereunder) shall remain unchanged,
(ii) such Bank Purchaser shall remain solely
responsible to the other parties to this Agreement for the
performance of such obligations, and
(iii) concurrently with the sale of such
participation, the selling Bank Purchaser shall sell to such
bank or other entity a participation in an equal percentage of
its rights and obligations under the Asset Purchase Agreement
to which such Bank Purchaser is a party.
-62-
The Agent, the Conduit Purchaser, the other Bank Purchasers,
the Seller and the Servicer shall have the right to continue to deal solely and
directly with such Bank Purchaser in connection with such Bank Purchaser's
rights and obligations under this Agreement.
(f) Assignments by Agent. This Agreement and the rights
and obligations of the Agent herein shall be assignable by the Agent and its
successors and assigns; provided that in the case of an assignment to a Person
that is not an Affiliate of the Agent, so long as no Event of Termination has
occurred and is continuing, such assignment shall require the Seller's consent
(not to be unreasonably withheld or delayed).
(g) No Assignment by Seller or Servicer. Neither the
Seller nor the Servicer may assign any of its rights or obligations hereunder or
any interest herein without the prior written consent of the Agent.
SECTION 10.04 Costs and Expenses. In addition to the rights of
indemnification granted under Section 10.01 hereof, the Seller agrees to pay on
demand all reasonable costs and expenses in connection with the preparation,
execution, delivery and administration (including periodic auditing and the
other activities contemplated in Section 5.02, subject to the limitations
described therein) of this Agreement, any Asset Purchase Agreement and the
Transaction Documents, including, without limitation, the reasonable fees and
out-of-pocket expenses of counsel for the Agent, the Conduit Purchaser, the Bank
Purchasers and their respective Affiliates with respect thereto and with respect
to advising the Agent, the Conduit Purchaser, the Bank Purchasers and their
respective Affiliates as to their rights and remedies under this Agreement. In
addition, the Seller agrees to pay on demand all costs and expenses (including
reasonable counsel fees and expenses), of the Agent, the Conduit Purchaser, the
Bank Purchasers and their respective Affiliates, incurred in connection with the
enforcement of this Agreement and the Transaction Documents.
SECTION 10.05 No Proceedings. Each of the Seller, the Agent,
the Servicer, the Conduit Purchase, each Bank Purchaser, each assignee of a
Receivable Interest or any interest therein and each Person which enters into a
commitment to purchase Receivable Interests or interests therein hereby agrees
that it will not institute against the Conduit Purchaser any proceeding of the
type referred to in Section 7.01(f) so long as any commercial paper, promissory
notes or other senior indebtedness issued by the Conduit Purchaser shall be
outstanding or there shall not have elapsed one year plus one day since the last
day on which any such commercial paper, promissory notes or other senior
indebtedness shall have been outstanding.
SECTION 10.06 Confidentiality. (a) The Seller and the Servicer
each agrees to maintain the confidentiality of the Transaction Documents in
communications with third parties and otherwise; provided that the Transaction
Documents may be disclosed (i) to the legal counsel and auditors of the Seller
and the Servicer if they agree to hold it confidential, and (ii) to the extent
required by applicable law or regulation or by any court, regulatory body or
agency having jurisdiction over such party; and provided, further, that if the
Seller requests the Bank Purchasers to extend the "Scheduled Commitment
Termination Date" in accordance with the definition of such term and part or all
of the Bank Purchasers decline to grant such extension,
-63-
then the Seller may disclose this Agreement to other financial institutions for
purposes of securing a replacement bank or receivables purchase facility.
(b) Each Purchaser and the Agent agrees to maintain the
confidentiality of all proprietary information with respect to the Seller, the
Servicer or the Receivables furnished or delivered to it pursuant to this
Agreement; provided, that such information may be disclosed (i) to such party's
legal counsel and auditors if they agree to hold such information confidential,
(ii) to such party's assignees and participants and potential assignees and
participants and their respective counsel if they agree to hold it confidential,
(iii) to the rating agencies and the providers of credit enhancement or
liquidity for each Conduit Purchaser, and (iv) to the extent required by
applicable law or regulation or by any court, regulatory body or agency having
jurisdiction over such party; and provided, further, that such party shall have
no obligation of confidentiality in respect of any information which may be
generally available to the public or becomes available to the public through no
fault of such party.
(c) Notwithstanding any other provision herein, each
party hereto (and each of their employees, representatives or other agents) may
disclose to any and all persons, without limitation of any kind, the U.S. tax
treatment and U.S. tax structure of the Transaction Documents and all materials
of any kind (including opinions or other tax analyses) that are provided to such
party relating to such U.S. tax treatment and U.S. tax structure, other than any
information for which nondisclosure is reasonably necessary in order to comply
with applicable securities laws.
SECTION 10.07 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
(INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK BUT OTHERWISE WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES) EXCEPT TO THE
EXTENT THAT THE PERFECTION AND THE EFFECT OF PERFECTION OR NON-PERFECTION OF THE
INTERESTS OF THE AGENT, THE CONDUIT PURCHASER AND THE BANK PURCHASERS IN THE
RECEIVABLES AND ANY OTHER COLLATERAL DESCRIBED IN SECTION 2.10 ARE GOVERNED BY
THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.
SECTION 10.08 Execution in Counterparts. This Agreement may be
executed in any number of counterparts, each of which when so executed shall be
deemed to be an original and all of which when taken together shall constitute
one and the same agreement.
SECTION 10.09 Integration; Binding Effect; Survival of
Termination. This Agreement and the other Transaction Documents executed by the
parties hereto on the date hereof 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. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and permitted assigns
(including any trustee in bankruptcy). 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
-64-
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. 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 the
later of (i) the Termination Date and (ii) the date on which no Capital of or
Yield on any Receivable Interest shall be outstanding and all Fees and other
Seller Obligations are paid in full; provided, however, that rights and remedies
with respect to any breach of any representation and warranty made by the Seller
pursuant to Article IV, and the provisions of Sections 2.08, 2.09, 6.06, 9.01,
10.04, 10.05 and 10.06 shall survive any termination of this Agreement.
SECTION 10.10 Consent to Jurisdiction. (a) Each party hereto
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.
(b) Each of the Seller and the Servicer 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 10.02.
Nothing in this Section 10.10 shall affect the right of the Conduit Purchaser,
any Bank Purchaser or the Agent to serve legal process in any other manner
permitted by law.
SECTION 10.11 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, 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 OR ANY OTHER TRANSACTION DOCUMENT.
SECTION 10.12 Ratable Payments. If any Bank Purchaser, whether
by setoff or otherwise, has payment made to it with respect to any Seller
Obligations in a greater proportion than that received by any other Bank
Purchaser entitled to receive a ratable share of such Seller Obligations, such
Bank Purchaser agrees, promptly upon demand, to purchase for cash without
recourse or warranty a portion of such Seller Obligations held by the other Bank
Purchasers so that after such purchase each Bank Purchaser will hold its ratable
proportion of such Seller Obligations; provided that if all or any portion of
such excess amount is thereafter recovered from such Bank Purchaser, such
purchase shall be rescinded and the purchase price restored to the extent of
such recovery, but without interest.
SECTION 10.13 Limitation of Liability. No claim may be made by
any Transaction Party or any other Person against any Purchaser, the Agent or
their respective
-65-
Affiliates, directors, officers, employees, attorneys or agents (each a
"Purchaser Party") 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 other Transaction Document, or any act, omission or event occurring in
connection herewith or therewith, except with respect to any claim arising out
of the willful misconduct or gross negligence of such Purchaser Party; and each
of the Seller and the Servicer 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 10.14 Intent of the Parties. (a) It is the intention
of the parties hereto that each purchase of Receivable Interests shall convey to
the Agent for the benefit of the applicable Purchasers, to the extent of such
Receivable Interests, an undivided interest in the Receivables and the Related
Security and Collections in respect thereof and that such transaction shall
constitute a purchase and sale and not a secured loan for all purposes other
than for United States federal, state and local income tax purposes. If,
notwithstanding such intention, the conveyance of the Receivable Interests from
the Seller shall ever be recharacterized as a secured loan and not a sale, it is
the intention of the parties hereto that this Agreement shall constitute a
security agreement under applicable law, and that the Seller shall be deemed to
have granted to the Agent for the benefit of the Purchasers a duly perfected
first priority security interest in all of the Seller's right, title and
interest in, to and under the Receivables and Related Security and Collections
in respect thereof, free and clear of Adverse Claims.
(b) The Seller has structured the Transaction Documents
with the intention that the Receivable Interests and the obligations of the
Seller hereunder will be treated under United States federal, and applicable
state, local and foreign tax law as debt (the "Intended Tax Treatment"). The
Seller, NIPSCO, the Agent, the Conduit Purchaser and the Bank Purchasers agree
to file no tax return, or take any action, inconsistent with the Intended Tax
Treatment. Each assignee and each participant acquiring an interest in a
Receivable Interest, by its acceptance of such assignment or participation,
agrees to comply with the immediately preceding sentence.
SECTION 10.15 Release Upon Termination. On the date following
the Termination Date on which all outstanding Capital and Yield is reduced to
zero and all other Seller Obligations are paid in full, the Agent shall, at the
expense of the Seller, promptly deliver any document or agreement reasonably
requested by the Seller to evidence the termination of the interests of the
Agent and the Purchasers in the Receivables, Related Security, the Blocked
Accounts and the Cash Collateral Account, if any (including, without limitation,
UCC-3 termination statement and notices terminating the Blocked Account
Agreements and the Cash Collateral Agreement, if any).
[Remainder of page intentionally left blank]
-66-
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
SELLER: NIPSCO RECEIVABLES CORPORATION
By: /s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: Vice President and Treasure
000 X. 00xx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Treasurer
Facsimile: (000) 000-0000
SERVICER: NORTHERN INDIANA PUBLIC SERVICE COMPANY
By: /s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: Vice President and Treasurer
000 X. 00xx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Treasurer
Facsimile: (000) 000-0000
AGENT: CITICORP NORTH AMERICA, INC., as Agent
By: /s/ Xxxxxx Xxxxxx
Name: Xxxxxx Xxxxxx
Title: Vice President
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Global Securitization
Facsimile No. 000-000-0000
Signature Page to Receivables Purchase Agreement
CONDUIT
PURCHASER: CAFCO, LLC
By: Citicorp North America, Inc.,
as Attorney-in-Fact
By: /s/ Xxxxxx Xxxxxx
Name: Xxxxxx
Title:
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Global Securitization
Facsimile No. 000-000-0000
BANK PURCHASERS: CITIBANK, N.A.
By: /s/ Xxxxxx Xxxxxx
Attorney-in-Fact
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention:
Facsimile No.
Signature Page to Receivables Purchase Agreement
DANSKE BANK A/S, CAYMAN ISLANDS BRANCH
By: /s/ Petri Luukkanen
Name: Petri Luukkanen
Title: Assistant General Manager
By: /s/ Xxxx X X'Xxxxx
Name: Xxxx X. X'Xxxxx
Title: Assistant General Manager
000 Xxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxx
Facsimile No. 000-000-0000
Signature Page to Receivables Purchase Agreement
ANNEX H
Additional Representations and Warranties of the Seller
1. This Agreement creates a valid and continuing security interest (as
defined in the applicable UCC) in the Receivables, the Related Security
and Collections with respect thereto and the Blocked Accounts in favor
of the Agent, for the benefit of the Purchasers, which security
interest is prior to all other Adverse Claims, and is enforceable as
such against the creditors of and purchasers from the Seller.
2. The Receivables constitute "accounts" within the meaning of the
applicable UCC.
3. The Seller owns and has good title to the Receivables, the Related
Security and Collections with respect thereto and the Blocked Accounts,
free and clear of any Adverse Claim, claim or encumbrance of any
Person.
4. The Seller has caused or will have caused, within ten days, the filing
of all appropriate financing statements in the proper filing office in
the appropriate jurisdictions under applicable law in order to perfect
the security interest in the Receivables, the Related Security and
Collections with respect thereto and the Blocked Accounts granted to
the Agent, for the benefit of the Purchasers, hereunder.
5. Other than the security interest granted to the Agent, for the benefit
of the Purchasers, pursuant to this Agreement, the Seller has not
pledged, assigned, sold, granted a security interest in, or otherwise
conveyed any of the Receivables, the Related Security and Collections
with respect thereto or the Blocked Accounts. The Seller has not
authorized the filing of and is not aware of any financing statements
against the Seller that include a description of collateral covering
the Receivables, the Related Security and Collections with respect
thereto or the Blocked Accounts other than any financing statement
relating to the security interest granted to the Agent, for the benefit
of the Purchasers, hereunder or that has been terminated. The Seller is
not aware of any judgment or tax lien filings against the Seller.
