EXHIBIT B-2
RECEIVABLES PURCHASE AGREEMENT
Dated as of May 14, 2004
among
COLUMBIA OF OHIO RECEIVABLES CORPORATION,
as the Seller,
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BEETHOVEN FUNDING CORPORATION,
as the Purchaser,
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DRESDNER BANK AG, NEW YORK BRANCH,
as the Agent,
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and
COLUMBIA GAS OF OHIO, INC.,
as the Servicer
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS.........................................................1
SECTION 1.01 Certain Defined Terms.........................................1
SECTION 1.02 Other Terms..................................................19
ARTICLE II AMOUNTS AND TERMS OF THE PURCHASES................................20
SECTION 2.01 Purchase Facility............................................20
SECTION 2.02 Making Purchases.............................................20
SECTION 2.03 Receivable Interest Computation..............................21
SECTION 2.04 Settlement Procedures........................................21
SECTION 2.05 Payment of Servicer Fee......................................23
SECTION 2.06 Payments and Computations, Etc...............................24
SECTION 2.07 Dividing or Combining Receivable Interests...................24
SECTION 2.08 Increased Costs..............................................24
SECTION 2.09 Taxes........................................................25
SECTION 2.10 Security Interest............................................27
ARTICLE III CONDITIONS OF PURCHASES..........................................27
SECTION 3.01 Conditions Precedent to Initial Purchase.....................27
SECTION 3.02 Conditions Precedent to All Purchases and Reinvestments......28
ARTICLE IV REPRESENTATIONS AND WARRANTIES....................................29
SECTION 4.01 Representations and Warranties of the Seller.................29
SECTION 4.02 Representations and Warranties of the Servicer...............32
ARTICLE V COVENANTS..........................................................33
SECTION 5.01 Covenants of the Seller......................................33
SECTION 5.02 Agreed Upon Procedures.......................................41
ARTICLE VI ADMINISTRATION AND COLLECTION OF RECEIVABLES......................42
SECTION 6.01 Designation of Servicer......................................42
SECTION 6.02 Duties of Servicer...........................................42
SECTION 6.03 Certain Rights of the Agent..................................43
SECTION 6.04 Rights and Remedies..........................................45
SECTION 6.05 Covenants of the Servicer....................................45
SECTION 6.06 Indemnities by the Servicer..................................46
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ARTICLE VII EVENTS OF TERMINATION............................................47
SECTION 7.01 Events of Termination........................................47
ARTICLE VIII THE AGENT.......................................................50
SECTION 8.01 Authorization and Action.....................................50
SECTION 8.02 Agent's Reliance, Etc........................................50
SECTION 8.03 Delegation of Duties.........................................50
SECTION 8.04 Notice of Events of Termination; Action by Agent.............50
SECTION 8.05 Non-Reliance on Agent and Other Parties......................51
SECTION 8.06 Successor Agent..............................................51
ARTICLE IX INDEMNIFICATION...................................................52
SECTION 9.01 Indemnities by the Seller....................................52
ARTICLE X MISCELLANEOUS......................................................54
SECTION 10.01 No Waiver; Amendments, Etc..................................54
SECTION 10.02 Notices, Etc................................................54
SECTION 10.03 Assignability...............................................55
SECTION 10.04 Costs and Expenses..........................................57
SECTION 10.05 No Proceedings..............................................57
SECTION 10.06 Liquidity Asset Purchase Agreement..........................57
SECTION 10.07 Confidentiality.............................................57
SECTION 10.08 GOVERNING LAW...............................................58
SECTION 10.09 Execution in Counterparts...................................58
SECTION 10.10 Integration; Binding Effect; Survival of Termination........58
SECTION 10.11 Consent to Jurisdiction.....................................59
SECTION 10.12 WAIVER OF JURY TRIAL........................................59
SECTION 10.13 Limitation of Liability.....................................59
SECTION 10.14 Intent of the Parties.......................................59
SECTION 10.15 Release Upon Termination....................................60
SCHEDULES
SCHEDULE I Commitments
SCHEDULE II Lock-Boxes and Blocked Accounts
ANNEXES
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ANNEX A - Form of Assignment and Acceptance
ANNEX B - Form of Blocked Account Agreement
ANNEX C - Forms of Contracts
ANNEX D - Credit and Collection Policy
ANNEX E - Form of Monthly Report
ii
ANNEX F - Forms of Termination Agreements
ANNEX G - Additional Representations and Warranties of Seller
ANNEX H - Miscellaneous Receivables
iii
RECEIVABLES PURCHASE AGREEMENT
Dated as of May 14, 2004
THIS RECEIVABLES PURCHASE AGREEMENT (this "Agreement") is entered into as
of May 14, 2004 by and among (i) COLUMBIA OF OHIO RECEIVABLES CORPORATION, a
Delaware corporation, as Seller, (ii) BEETHOVEN FUNDING CORPORATION, a Delaware
corporation, as the Purchaser, (iii) DRESDNER BANK AG, NEW YORK BRANCH, as Agent
for the Purchaser, and (iv) COLUMBIA GAS OF OHIO, INC., an Ohio corporation, as
Servicer.
PRELIMINARY STATEMENTS. The Seller has acquired, and may continue to
acquire, Receivables from the Originator, 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 Purchaser has agreed to purchase such Receivable Interests
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 Purchaser that are the subject of this Agreement
or any other Transaction Document with all or any portion of the assets and
liabilities of 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 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 Settlement Period, an interest
rate per annum obtained by dividing (i) the Eurodollar Rate for such Settlement
Period by (ii) a percentage equal to 100% minus the Eurodollar Rate Reserve
Percentage for such Settlement 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 Dresdner, in its capacity as contractual representative for
the Purchaser hereunder, and any successor thereto in such capacity appointed
pursuant to Article VIII.
"Agent's Account" means account number 000 995 068 000 of the Agent
maintained at the office of Xxxxxxxx Xxxx XX, Xxx Xxxx, Xxx Xxxx, XXX Number:
000-000-000, Account Name: Loan Administration, New York Branch, Further Credit
to: BFC/CGO, or such other account as the Agent shall designate in writing to
the Seller and the Servicer from time to time.
"Applicable Margin" means, on any date, a percentage rate per annum equal
to the highest Margin set forth below based on the Debt Ratings of CEG on such
date:
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DEBT RATINGS MARGIN
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At least A- by S&P or .45%
at least A3 by Xxxxx'x
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At least BBB+ by S&P or .55%
at least Baa1 by Xxxxx'x
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At least BBB by S&P or .70%
at least Baa2 by Xxxxx'x
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At least BBB- by S&P or 1.00%
at least Baa3 by Xxxxx'x
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Any other Debt Rating or Unrated 2.0%
by either S&P or Xxxxx'x
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provided, however, that if the debt of CEG is split-rated, the Applicable Margin
shall be determined on the basis of the higher of the two Debt Ratings then
applicable; provided further, that if either such Debt Rating is withdrawn or
lower than BBB- or Baa3, the Applicable Margin shall instead be determined on
the basis of the lower of the two Debt Ratings then applicable.
"Assignee Rate" means, for any Settlement Period for any Receivable
Interest, an interest rate per annum equal to the sum of the Applicable Margin
plus the Adjusted Eurodollar Rate for such Settlement Period; provided, however,
that in case of:
(i) any Settlement Period on or prior to the first day of which the
Purchaser shall have notified the Agent that the introduction of or any
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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 Purchaser to fund such Receivable Interest at the
Assignee Rate set forth above (and the Purchaser shall not have
subsequently notified the Agent that such circumstances no longer exist);
(ii) any Settlement Period of less than one month;
(iii) any Settlement 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 Settlement Period, that the
related Receivable Interest will not be funded by the issuance of
commercial paper;
(iv) any Settlement Period for a Receivable Interest the Capital of
which allocated to the Purchaser is less than $500,000; or
(v) any Settlement Period for which the Seller chooses the Base Rate
as the Assignee Rate by written notice to the Agent;
the Assignee Rate for such Settlement Period shall be an interest rate per annum
equal to the Base Rate in effect from time to time during such Settlement
Period; and provided further, that at all times following the occurrence and
during the continuation of an Event of Termination or an Incipient Event of
Termination, the Assignee Rate shall be an interest rate per annum equal to the
Base Rate in effect from time to time plus 2%.
"Assignment and Acceptance" means an assignment and acceptance agreement
entered into by the 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 A hereto.
"Balanced Payment Plan" means a balanced or levelized payment plan of the
Originator made available to an Obligor.
"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 Dresdner in New York, New
York, from time to time as Dresdner's base rate; and (b) the Federal Funds Rate
plus 0.50%.
"Beethoven" means Beethoven Funding Corporation, a Delaware corporation.
"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.
"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.
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"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.
"Capital" means, with respect to any Receivable Interest, the original
amount paid to the Seller for such Receivable Interest at the time of its
purchase by the 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 the Purchaser from distributions
made pursuant to Section 2.04 on account of such Capital held by the 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
the Purchaser.
"CEG" means Columbia Energy Group, a Delaware corporation.
"CEG Entity" means, individually, and "CEG Entities" means, collectively,
CEG and each of its Affiliates.
"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(d), 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.
"Columbia Gas of Ohio" means Columbia Gas of Ohio, Inc., an Ohio
corporation.
"Commitment" means, on any date of determination (a) with respect to
Beethoven, the amount set forth on Schedule I as of such date and (b) with
respect to any other Purchaser that has entered into an Assignment and
Acceptance, the amount set forth therein as such Purchaser's Commitment, in each
case as such amount may be reduced or increased by any Assignment and Acceptance
entered into among such 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 pursuant
to the terms of this Agreement below the amount of the aggregate Commitments of
all Purchasers shall reduce (or terminate) each Purchaser's Commitment ratably
in accordance with their respective Commitments.
"Concentration Limit" means, for any Obligor on any date, either (i) the
highest Concentration Percentage set forth below based on the Short-Term Debt
Ratings of such Obligor on such date or (ii) such higher percentage (a "Special
Concentration Percentage"), if any, as is otherwise agreed to by the Seller and
the Agent and designated by the Agent in a writing delivered to the Seller, in
each case multiplied by the Net Receivables Pool Balance on such date; provided,
that in the case of an Obligor and its Affiliates, the Concentration Limit shall
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be calculated as if such Obligor and such Affiliates were a single Obligor;
provided, further, that the Agent shall have received written confirmation from
each of S&P and Xxxxx'x that the ratings of the commercial paper notes issued by
the Purchaser would not, as a result of any Special Concentration Percentage, be
reduced or withdrawn; and provided further, that the Agent may reduce or cancel
any Special Concentration Percentage upon three (3) Business Days' notice to the
Seller.
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SHORT-TERM DEBT RATINGS CONCENTRATION PERCENTAGE
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At least A-1+ by S&P and 10.0%
at least P-1 by Xxxxx'x
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At least A-1 by S&P and 8.0%
at least P-1 by Xxxxx'x
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At least A-2 by S&P and 4.0%
at least P-2 by Xxxxx'x
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At least A-3 by S&P and 2.0%
at least P-3 by Xxxxx'x
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Any other Short-Term Debt Rating 1.0%
or Unrated by either S&P or Xxxxx'x
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"Consolidated Subsidiary" means at any date, any Subsidiary the accounts of
which are consolidated with those of NiSource in its consolidated financial
statements as of such date.
"Contract" means each of the tariffs pursuant to which the Originator shall
provide natural gas, natural gas power or natural gas transport services or
other energy products, merchandise, goods or services to customers from time to
time and pursuant to which rates payable by such Customers are set, in one of
the forms set forth in Annex C.
"CP Rate" means, for any Settlement Period for any Receivable Interest, to
the extent the Purchaser funds such Receivable Interest for such Settlement
Period by issuing commercial paper, the per annum rate equivalent to the
weighted average of the per annum rates paid or payable by the 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 Purchaser that are
allocated, in whole or in part, by the Agent (on behalf of the Purchaser) to
fund the purchase or maintenance of such Receivable Interest during such
Settlement Period as determined by the Agent (on behalf of the Purchaser) and
reported to the Seller, which rates shall reflect and give effect to the
commissions of placement 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 Purchaser); provided, however,
that if any component of such rate is a discount rate, in calculating the "CP
Rate" for such Settlement Period the Agent shall for such component use the rate
resulting from converting such discount rate to an interest bearing equivalent
rate per annum.
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"Credit and Collection Policy" means those receivables credit and
collection policies and practices of the Originator in effect on the date of
this Agreement and described in Annex D hereto, as modified in compliance with
this Agreement.
"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" means, for any Person, 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 Pool Receivables that became Defaulted Receivables or, without
duplication, Diluted Receivables during such month by (ii) the aggregate
Outstanding Balance of all Pool Receivables generated during the 4th calendar
month immediately preceding such calendar month.
"Defaulted Receivable" means any Receivable, without duplication, (i) as to
which any payment, or part thereof, remains unpaid for 120 or more days from the
original invoice date thereof, or (ii) which consistent with the Credit and
Collection Policy, has been written off the Seller's books as uncollectible.
"Deferred Purchase Price" has the meaning specified in the Sale Agreement.
"Delinquency 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 Pool Receivables that were Delinquent Receivables on such day by
(ii) the aggregate Outstanding Balance of all Pool Receivables on such day.
"Delinquent Receivable" means a Receivable that is not a Defaulted
Receivable and as to which any payment, or part thereof, remains unpaid for 90
or more days from the original invoice date thereof.
"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 thirty (30) 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 failure by any Transaction Party
to provide any services or otherwise to perform under any related Contract,
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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.
"Dresdner" means Dresdner Bank AG, New York Branch.
"Dynamic Loss Reserve Percentage" means, on any date, the product of (i)
the Stress Factor, (ii) the Loss Horizon, and (iii) the highest Three-Month
Default Ratio during the twelve calendar month period then most recently ended.
"Eligible Assignee" means, (i) Dresdner or any of its Affiliates, (ii) any
Person managed by Dresdner or any of its Affiliates and rated at least A-1 by
S&P and P-1 by Xxxxx'x, or (iii) any financial or other institution providing
liquidity to the Purchaser pursuant to a Liquidity Asset Purchase Agreement.
"Eligible Receivable" means, at any time, a Receivable that satisfies all
of the following criteria:
(a) such Receivable arose from the sale of goods or the 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 a Designated Obligor, and (iii) is not a CEG Entity;
(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);
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(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 in existence as of the origination thereof;
(i) either (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 therefor (or such later date as the Agent may agree in
writing), or, (ii) if such Receivable arises under an Extended Payment
Agreement, such agreement requires that the full payment of such Receivable
be made within 180 days of the date of such agreement; provided, however,
that the Outstanding Balance of such Receivable, when added to the
aggregate Outstanding Balance of all Eligible Receivables arising under
Extended Payment Agreements, may not exceed 5% of the Net Receivable Pool
Balance;
(j) such Receivable is owned by the Seller free and clear of any
Adverse Claim (except as created in favor of the Agent and the Purchaser
hereunder);
(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 Purchaser to exercise their rights under this Agreement,
including, without limitation, their right to review invoices delivered
pursuant to such Contract;
(l) such Receivable is not a Defaulted Receivable and the Obligor
thereof is not the Obligor of Defaulted Receivables in an aggregate amount
of 10% or more of the aggregate Outstanding Balance of all Receivables of
such Obligor;
(o) such Receivable is not a Miscellaneous Receivable.
(p) the Obligor of such Receivable is not in bankruptcy,
reorganization, insolvency or similar proceedings;
(q) such Receivable has not been extended, rewritten or otherwise
modified from the original terms thereof except in accordance with the
Credit and Collection Policy;
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(r) 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; and
(s) 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 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 Settlement 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 (2) Business
Days prior to the commencement of such Settlement Period, as the rate for Dollar
deposits with a maturity comparable to such Settlement 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 Settlement Period are offered by the principal
London office of Dresdner Bank AG, London Branch, in immediately available funds
in the London interbank market at approximately 11:00 A.M., London time, two (2)
Business Days prior to the commencement of such Settlement Period, as determined
by the Agent.
"Eurodollar Rate Reserve Percentage" means, for any Settlement Period in
respect of which Yield is computed by reference to the Eurodollar Rate, the
reserve percentage applicable two (2) Business Days before the first day of such
Settlement 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 Settlement 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 Settlement Period.
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"Event of Termination" has the meaning specified in Section 7.01.
"Existing Receivables Facility" means the Receivables Purchase Agreement
dated as of October 25, 1999 among Columbia Accounts Receivable Corporation, as
the seller, Asset Securitization Capital Company, LLC (successor to Asset
Securitization Cooperative Corporation), as the conduit purchaser, the committed
purchasers party thereto, and Canadian Imperial Bank of Commerce, as
administrative agent, as amended, restated, supplemented or otherwise modified
from time to time, together with the other agreements referred to therein.
"Extended Payment Agreement" means an agreement identified by the Servicer
pursuant to the Credit and Collection Policy as a "Basic Extended Payment
Agreement", an "Equal Extended Payment Agreement", a "One-Third Extended Payment
Agreement" or a "One-Sixth Extended Payment Agreement".
"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
"Fee Letter" means that certain Fee Letter dated as of May 14, 2004 among
the Seller, the Purchaser and the Agent, as amended, restated, supplemented or
otherwise modified from time to time.
"Fees" means each of the Program Fee and Liquidity Fee.
"Financial Officer" of any Person means, the chief financial officer,
principal accounting officer, treasurer or assistant treasurer of such Person.
"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 the giving of
notice or the lapse of time, or both, would constitute an Event of Termination.
"Indemnified Amounts" has the meaning specified in Section 9.01.
10
"Indemnified Party" has the meaning specified in Section 9.01.
"Investor Rate" means, for any Settlement Period for any Receivable
Interest held by the Purchaser: (a) to the extent the Purchaser funds such
Receivable Interest for such Settlement Period by issuing commercial paper, the
CP Rate; and (b) to the extent the Purchaser funds such Receivable Interest for
such Settlement Period other than by issuing commercial paper, a rate equal to
the Assignee Rate.
"Involuntary Bankruptcy Event" means the occurrence of an event that, but
for the giving of notice or the lapse of time, or both, would constitute an
Event of Termination of the type described in Section 7.01(f).
"IRC" means the Internal Revenue Code of 1986.
"Liquidation Day" means, for any Receivable Interest, (i) each day during a
Settlement 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 Termination Date.
"Liquidation Fee" means, for (i) any Settlement Period during which a
reduction of Capital is made for any reason (x) on a Settlement Date, if the
Agent shall have received less than three (3) Business Days' notice of such
reduction and the amount of such reduction is greater than $25,000,000 or (y) in
any amount on any day other than a Settlement Date or (ii) any Settlement 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
Settlement 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 Settlement Period) which would have accrued during such
Settlement 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 Settlement Period had such reductions
remained as Capital, exceeds (B) the income, if any, received by the Purchaser
from the investment of the proceeds of such reductions of Capital.
"Liquidation Period" means the period commencing on the Termination Date
and ending on 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 Asset Purchase Agreement" means any secondary market agreement,
liquidity asset purchase agreement or other liquidity agreement entered into by
the Purchaser to the extent relating to the sale or transfer of interests in, or
other financing of, Receivable Interests.
"Liquidity Fee" has the meaning set forth in the Fee Letter.
"Liquidity Termination Date" means the date that the commitment to the
Purchaser under the Liquidity Asset Purchase Agreement related to this Agreement
is terminated.
11
"Lock-Box" means each locked post office box to which Obligors remit
Collections.
"Lock-Box Event" means (i) the withdrawal of CEG's Debt Rating by either
S&P or Moody's, or (ii) the downgrade of CEG's Debt Rating below (x) BBB- by S&P
or (y) Baa3 by Moody's.
"Loss Horizon" means 2.50.
"Loss-to-Liquidation Ratio" means a ratio (expressed as a percentage)
computed as of the last day of each calendar month by dividing (i) the aggregate
Outstanding Balance of all Pool Receivables that were written off during such
calendar month by (ii) the aggregate amount of Collections received during such
calendar month.
"Loss Reserve" means, on any date, an amount equal to:
AC x LRP/(1-LRP)
where:
AC = the aggregate Capital of all Receivable Interests at the close of
business of the Servicer on such date
LRP = the Loss Reserve Percentage on such date
"Loss Reserve Percentage" means, on any date, the greater of (i) the
Dynamic Loss Reserve Percentage, and (ii) 10%.
"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) the 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.
"Miscellaneous Receivable" means a Receivable of the type listed on Annex H
or of such other type as provided in a written notice from the Seller to the
Agent.
"Monthly Report" means a report in substantially the form of, and
containing the information described in, Annex E, 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 the 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 aggregate amount by which the Outstanding Balance of Eligible Receivables of
12
each Obligor (treating each Obligor and its Affiliates as if they were a single
Obligor) exceeds the Concentration Limit for such Obligor.
"NiSource" means NiSource Inc., a Delaware corporation.
"Non-Defaulted Receivable" means any Receivable that is not a Defaulted
Receivable.
"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 Columbia Gas of Ohio.
"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(b).
"Outstanding Balance" means, for any Receivable, the unpaid principal
amount thereof, it being acknowledged and agreed that the current amount
invoiced to an Obligor may not reflect the Outstanding Balance of the Receivable
from such Obligor because (a) such invoiced amount may not cover all of the
goods or services provided to such Obligor, and (b) in the case of an Obligor
under a Balanced Payment Plan, such invoiced amount may constitute, in whole or
in part, a xxxx for goods or services not yet provided by the Originator.
"Percent of Income Plan" means a Public Utility Commission of Ohio approved
payment plan under which low income utility customers pay a percentage of their
income toward their utility bills.
"Performance Guaranty" means that certain Performance Guaranty dated as of
May 14, 2004 executed by CEG in favor of the Agent, for the benefit of the Agent
and the Purchaser, as amended, restated, supplemented or otherwise modified from
time to time.
"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 the Originator pursuant to the Sale Agreement.
"Portfolio Turnover" means, for any calendar month, a number of days
obtained by multiplying (i) a fraction, the numerator of which is equal to the
aggregate Outstanding Balance of all Pool Balance as of the last day of such
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calendar month and the denominator of which is equal to the aggregate amount of
Collections of Pool Receivables received during such month, times (ii) 30.
"Program Fee" has the meaning set forth in the Fee Letter.
"Program Limit" means, on any date of determination prior to the
Termination Date, the amount of the Commitment of the Purchaser hereunder plus,
(i) $75,000,000 during the period commencing on January 1 and ending on May 31
of each calendar year, or (ii) $25,000,000 during any other period, 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.
"Purchaser" means Beethoven and each Eligible Assignee that shall become a
party to this Agreement pursuant to Section 10.03.
"Receivable" means the indebtedness and other obligations of any Obligor to
pay for natural gas, natural gas power or natural gas transport service or other
energy products, merchandise, goods or services provided by the Originator under
a Contract, whether billed or unbilled, including 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 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. The
term "Receivable" shall not include any indebtedness or other obligation of any
Person created under a Percent of Income Plan.
"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
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Each Receivable Interest shall be determined from time to time pursuant to the
provisions of Section 2.03. Notwithstanding the foregoing, during the
Liquidation Period, (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.
"Retail Service Payments" means amounts paid by Obligors in respect of
retail services performed by Persons other than the Originator but which are
billed on invoices generated by the Originator.
"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.
15
"Sale Agreement" means the Receivables Sale Agreement of even date herewith
between the Seller and the Originator, as amended, restated, supplemented or
otherwise modified from time to time in accordance with the terms hereof and
thereof.
"Scheduled Commitment Termination Date" means May 13, 2005, unless, prior
to such date (or the date so extended pursuant to this clause), upon the
Seller's request, made not more than 60 nor less than 45 days prior to the then
Scheduled Commitment Termination Date, the 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. The 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 the Purchaser to respond
to the Seller's request for such extension shall be deemed a denial of such
request by the 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 the 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).
"Seller's Account" means account number 100 897 3928 of the Seller
maintained at the office of PNC Bank, ABA # 043 000 096, or such other account
as the Seller shall designate in writing to the Agent from time to time.
"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.
"Servicer Fee Rate" means the rate per annum determined in accordance with
Section 2.05.
"Settlement Date" means, for any Receivable Interest, (i) the 15th day of
each calendar month (or if such day is not a Business Day, the next succeeding
Business Day), and (ii) each other day specified by the Agent from time to time.
16
"Settlement Period" means, with respect to any Settlement Date for any
Receivable Interest, each successive period commencing on the immediately
preceding Settlement Date and ending on such Settlement Date; provided, however,
that in the case of the initial Settlement Period for any Receivable Interest,
such Settlement Period shall commence on the day of the purchase of such
Receivable Interest.
"Short-Term Debt Rating" means, for any Person, the rating by S&P or
Moody's of such Person's short-term public senior unsecured non-credit-enhanced
debt.
"Stress Factor" means 2.0.
"Subsidiary" means, with respect to any Person, 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 such Person, or one or more Subsidiaries,
or by such Person 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(a).
"Termination Agreements" means the agreements providing for the termination
of an Existing Receivables Facility in the forms attached hereto as Annex F.
"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) the
Liquidity Termination Date.
"Three-Month Default Ratio" means, as of the last day of any calendar
month, the average of the Default Ratios for such month and the two (2)
immediately preceding calendar months.
"Three-Month Delinquency Ratio" means, as of the last day of any calendar
month, the average of the Delinquency Ratios for such month and the two (2)
immediately preceding calendar months.
"Three-Month Loss-to-Liquidation Ratio" means, as of the last day of any
calendar month, the average of the Loss-to-Liquidation Ratios for such month and
the two (2) immediately preceding calendar months.
"Total Reserves" means, for any Receivable Interest on any date, an amount
equal to:
(YR + LR) x (C / AC)
where:
YR = the Yield Reserve at the time of computation
17
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 Fee
Letter, the Performance Guaranty, the Blocked Account Agreements, the
Termination Agreements, each Monthly Report, the certificate 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, CEG or the
Servicer.
"UCC" means the Uniform Commercial Code as from time to time in effect in
the specified jurisdiction.
"Yield" means, for any Receivable Interest for any Settlement Period:
(IR x C x ED)/360 + LF
where:
IR = the Investor Rate for such Receivable Interest for such
Settlement Period
C = the Capital of such Receivable Interest during such Settlement
Period
ED = the actual number of days elapsed during such Settlement Period
LF = the Liquidation Fee, if any, for such Receivable Interest for
such Settlement 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 Reserve" means, on any date, an amount equal to
AC x YRP/(1-YRP)
18
where:
AC = the aggregate Capital of all Receivable Interests at the close of
business of the Servicer on such date
YRP = the Yield Reserve Percentage on such date
"Yield Reserve Percentage" means, on any date, a percentage equal to
(BR+SFR)/360 x 1.5 x PT
where:
BR = the Base Rate in effect on such date, expressed as a rate per
annum
SFR = the Servicer Fee Rate in effect on such date, expressed as a rate
per annum
PT = the Portfolio Turnover, expressed as a number of days, calculated
as of the end of calendar month most recently ended
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. Except as otherwise specified herein
or as the context may otherwise require: (i) the words "herein", "hereof" and
"hereunder" and other words of similar import refer to this Agreement as a whole
and not to any particular article, section or other subdivision; (ii) the word
"including" and correlative words shall be deemed to be followed by the phrase
"without limitation" unless actually followed by such phrase or a phrase of like
import; (iii) the word "or" is used inclusively herein (for example, the phrase
"A or B" means "A or B or both", not "either A or B but not both"); (iv)
references to a Person are references to such Person's successors and assigns;
(v) references to an agreement or other document are to it as amended,
supplemented, restated and otherwise modified from time to time and to any
successor document; and (vi) references to a statute, regulation or other
government rule are to it as amended from time to time and, as applicable, are
to corresponding provisions of successor governmental rules.
19
ARTICLE II
AMOUNTS AND TERMS OF THE PURCHASES
SECTION 2.01 Purchase Facility. (a) On the terms and conditions hereinafter
set forth, the Purchaser shall purchase Receivable Interests from the Seller
from time to time during the period from the date hereof to the Termination
Date; provided, however, that (i) under no circumstances shall the 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 Purchaser 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 Purchaser's
Commitment.
(b) If the Seller determines that the facility provided for in this
Agreement exceeds its funding needs, the Seller may, upon at least sixty (60)
days' notice to the Agent, (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
Commitment to zero or, from time to time, reduce in part the unused portion of
the Commitment; provided that each partial reduction of the Program Limit or the
Commitment shall be in the amount of at least $1,000,000 or an integral multiple
thereof.
(c) Until the Termination Date, the Collections attributable to each
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 Purchaser shall be made on at least three (3) 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), and (ii) the date of such purchase
(which shall be a Business Day). If, after giving effect to such purchase, the
aggregate outstanding Capital of all Receivable Interests would exceed the
Purchaser's Commitment, the 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.
(b) On the date of each such purchase of a Receivable Interest, the
Purchaser shall, upon satisfaction of the applicable conditions set forth in
Article III, make available to the Seller, in the Seller's Account in same day
funds, an aggregate amount equal to the initial Capital of such Receivable
Interest.
(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, 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.
20
(d) Notwithstanding the foregoing, the 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 Purchaser.
(e) Notwithstanding the foregoing, the Purchaser shall not be obligated to
make purchases under this Section 2.02 at any time in an amount which would
exceed the Purchaser's Commitment less the aggregate amount of Capital of the
Receivable Interests held by the Purchaser (whether or not any portion thereof
has been assigned by the Purchaser under a Liquidity Asset Purchase Agreement).
SECTION 2.03 Receivable Interest Computation. Each Receivable Interest
shall be initially computed on its date of purchase. Thereafter until the
Termination Date, each such Receivable Interest shall be automatically
recomputed (or deemed to be recomputed) on each day other than a Liquidation
Day. During the Liquidation Period, each Receivable Interest shall be calculated
as set forth in the last sentence of the definition of "Receivable Interest" and
such Receivable Interest as so calculated shall remain constant. Each Receivable
Interest shall be reduced to 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) On each Deposit Date, the Servicer shall apply all Collections
deposited in any Blocked Account 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 Purchaser and the Agent an
amount equal to the aggregate Yield, Fees and Servicer Fee (to the extent
payable by the Purchaser under Section 2.05) accrued through such day for
all Receivable Interests and not previously set aside, such amount to be
allocated among the Purchaser 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
100%, set aside and hold in trust for the Purchaser 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, reinvest with the Seller on behalf of the Purchaser the
21
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, set aside and hold in trust for
the Purchaser 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 Termination Date, 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), 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, the Servicer shall deposit or cause to
be deposited into the Agent's Account all Collections set aside for the
Purchaser (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) On each Settlement Date, the Agent shall distribute the funds deposited
into the Agent's Account pursuant to this Section 2.04 as follows:
(i) first, pro rata to the Purchaser and the Agent in payment of all
accrued Yield and Fees then due and payable to each of them;
(ii) second, if such distribution occurs on a Liquidation Day, to the
Purchaser in payment of Capital (x) until the sum of the Receivables
Interests has been reduced to 100% (if such distribution occurs prior to
the Termination Date), or (y) until the Capital of all Receivable Interests
has been reduced to zero (if such distribution occurs on or after to the
Termination Date);
(iii) third, pro rata to the Purchaser and the Agent in payment of all
other Seller Obligations payable to the Purchaser and the Agent until such
Seller Obligations have been reduced to zero; and
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(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 Purchaser pursuant to Section 2.05.
After the Capital, Yield, Fees and Servicer Fee with respect to each
Receivable Interest held by the Purchaser, and all other Seller Obligations held
by or owing to the Purchaser, 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.
(d) 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 the 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
the 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.
(e) No later than one Business Day prior to the end of each Settlement
Period, the Agent shall furnish the Seller with an invoice setting forth the
amount of the accrued and unpaid Yield and Fees for such Settlement Period.
SECTION 2.05 Payment of Servicer Fee. The Servicer shall be entitled to
receive a fee (the "Servicer Fee") equal to 0.25% per annum multiplied by the
average daily aggregate Outstanding Balance of all Pool Receivable Interests,
payable in arrears on each Settlement Date out of Collections available for such
purpose pursuant to Section 2.04. Upon three (3) 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 the Purchaser shall be equal to the Servicer Fee Rate multiplied by the
average daily Capital of each Receivable Interest owned by the Purchaser,
payable on each Settlement Date for such Receivable Interest. Notwithstanding
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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 Purchaser shall have
any liability for the deficiency.
SECTION 2.06 Payments and Computations, Etc. (a) All amounts to be paid by
the Seller or the Servicer to the Agent or the 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.
(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 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.
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 (3) Business
Days prior to the last day of any Settlement Period in the case of the Seller
giving notice, or up to the last day of such Settlement 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 Settlement Periods ending on
such last day into a single Receivable Interest having Capital equal to the
aggregate of the Capital of such Receivable Interests.
SECTION 2.08 Increased Costs. (a) If (i) an Accounting Based Consolidation
Event shall have occurred, or (ii) the Agent, the Purchaser or any other Person
(including any bank or other financial institution providing liquidity or credit
support to the Purchaser in connection with the 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) otherwise
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
24
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
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.
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(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 (30) 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.
(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
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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 owned and existing or hereafter acquired or arising, all Related
Security and Collections with respect thereto and all Lock-Boxes and all Blocked
Accounts and funds on deposit therein, (C) 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 (D) 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 each Transaction Document to which it is a party 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
27
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
and each Lock-Box.
(g) Favorable opinions of Xxxxxx Xxxxxx LLP, Xxxxxxx & Xxxxxx LLP and
Xxxxxx Xxxx & Priest LLP, counsel for the Seller, the Servicer, the Originator
and CEG, 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) An executed copy of the Sale Agreement.
(i) An executed copy of the Performance Guaranty.
(j) A copy of the by-laws of each Transaction Party, certified by the
Secretary or Assistant Secretary of such Transaction Party.
(k) A copy of the certificate or articles of incorporation of each
Transaction Party, certified as of a recent date by the Secretary of State or
other appropriate official of the State of incorporation 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.
(l) The opening pro forma balance sheet of the Seller referred to in
Section 4.01(e).
(m) Executed copies of the Termination Agreements relating to the Existing
Receivables Facilities.
SECTION 3.02 Conditions Precedent to All Purchases and Reinvestments. Each
purchase (including the initial purchase) and each reinvestment hereunder shall
be subject to the further conditions precedent that:
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(a) the Servicer shall have delivered to the Agent 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 (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;
(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
(iii) the Originator 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 Delaware, 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 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.
29
(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.
(e) The opening pro forma balance sheet of the Seller as of April 30, 2004,
giving effect to the initial purchase to be made under this Agreement, a copy of
which has been furnished to the Agent, 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 Purchaser hereunder). The Purchaser has 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 the Originator 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 Purchaser in connection with this Agreement is or will be accurate in
30
all material respects as of its date or (except as otherwise disclosed to the
Agent or the Purchaser, 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 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).
(k) The names and addresses of all the Blocked Account Banks together with
the number of the Lock-Boxes and the account numbers of the Blocked Accounts of
the Seller at or maintained by such Blocked Account Banks are as specified in
Schedule II hereto, as such Schedule II 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.
(n) The Seller was formed on May 4, 2004 and the Seller did not engage in
any business activities prior to the date of this Agreement. The Seller has no
Subsidiaries. Columbia Gas of Ohio 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, Purchase Price Credits (as defined in the Sale
Agreement), 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
31
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 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 100%
except to the extent that Collections set aside and held for the benefit of the
Purchaser pursuant to Section 2.04(b)(iii) would cause the sum of the Receivable
Interests to be less than or equal to 100% if such funds were applied to the
reduction of Capital.
(t) Each of the representations and warranties set forth on Annex G are
true and correct.
SECTION 4.02 Representations and Warranties of the Servicer. Columbia Gas
of Ohio, 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 Ohio, 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).
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(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, 2003, and the related statements of income and retained earnings of the
Servicer and its Subsidiaries as of and for the fiscal year then ended, copies
of which have been furnished to the Agent, 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 applied. Since December 31, 2003, 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 100%
except to the extent that Collections set aside and held for the benefit of the
Purchaser pursuant to Section 2.04(b)(iii) would cause the sum of the Receivable
Interests to be less than or equal to 100% if such funds were applied to the
reduction of Capital.
(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.
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.
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(b) Offices, Records and Books of Account. The Seller will keep its
principal place of business 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 thirty (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).
(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 Lock-Box 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 and Lock-Boxes; 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 II 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 II) and with
respect to each new Lock-Box or Blocked Account, a fully executed Blocked
Account Agreement.
(h) Deposits to Lock-Boxes and Blocked Accounts. The Seller will cause all
Obligors to be instructed to remit all their payments in respect of Receivables
to one of the Lock-Boxes or Blocked Accounts or to one of certain intermediaries
(e.g., Western Union) that have been instructed to remit payments to one of the
Blocked Accounts. If the Seller shall receive any Collections directly, the
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Seller shall promptly (and in any event within one (1) Business Day) cause such
Collections to be deposited into a Blocked Account. From and after the
occurrence of a Lock-Box Event, the Seller will not permit any funds to be
deposited into any Blocked Account other than Collections of Receivables,
proceeds of accounts receivable generated under any Percent of Income Plan,
Retail Services Payments, 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 purchased under this Agreement or security interest
granted pursuant to this Agreement, or to enable the Purchaser 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 Delaware 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 the following:
(i) as soon as available and in any event within 90 days after the end
of each fiscal year of Columbia Gas of Ohio, a consolidated balance sheet
of Columbia Gas of Ohio and its Subsidiaries as of the end of such fiscal
year and the related consolidated statements of income, cash flows and
changes in common stockholders' equity for such fiscal year, setting forth
35
in each case in comparative form the figures for the previous fiscal year,
certified by a Financial Officer of Columbia Gas of Ohio as having been
prepared in conformity with generally accepted accounting principles
consistently applied;
(ii) as soon as available and in any event within 45 days after the
end of each of the first three (3) quarters of each fiscal year of Columbia
Gas of Ohio, a consolidated balance sheet of Columbia Gas of Ohio and its
Subsidiaries, as of the end of such quarter and the related consolidated
statement of income for such quarter and for the portion of Columbia Gas of
Ohio's fiscal year ended at the end of such quarter, and the related
consolidated statement of cash flows for the portion of Columbia Gas of
Ohio'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 Columbia Gas of Ohio's previous fiscal year, (B)
for the consolidated statement of income, the figures for the corresponding
quarter and the corresponding portion of Columbia Gas of Ohio's previous
fiscal year and (C) for the consolidated statement of cash flows, the
figures for the corresponding portion of Columbia Gas of Ohio'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;
(iii) as soon as (and if) available and in any event within 90 days
after the end of each fiscal year of NiSource, a Form 10-K for NiSource
which will include an audited consolidated balance sheet of NiSource 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;
(iv) as soon as (and if) available and in any event within 45 days
after the end of each of the first three (3) quarters of each fiscal year
of NiSource , a Form 10-Q for NiSource which will include a consolidated
balance sheet of NiSource and 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 NiSource's fiscal year ended at the end of
such quarter, and the related consolidated statement of cash flows for the
portion of NiSource'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 NiSource's previous fiscal year, (B)
for the consolidated statement of income, the figures for the corresponding
quarter and the corresponding portion of NiSource's previous fiscal year
and (C) for the consolidated statement of cash flows, the figures for the
36
corresponding portion of NiSource'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;
(v) as soon as available and in any event within 90 days after the end
of the fourth fiscal quarter of each fiscal year of the Seller and, within
45 days after the end of each of the first three (3) 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;
(vi) as soon as possible and in any event within five (5) 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;
(vii) promptly after the sending or filing thereof, copies of all
reports that NiSource 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;
(viii) 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 (5) 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 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;
(ix) at least thirty (30) 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;
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(x) promptly and in any event within five (5) Business Days after the
Seller obtains knowledge thereof, notice of any "Event of Termination" or
"Facility Termination Date" under the Sale Agreement;
(xi) as soon as possible and in any event no later than the day of
occurrence thereof, notice that the Originator has stopped selling to the
Seller, pursuant to the Sale Agreement, all newly arising Receivables;
(xii) at the time of the delivery of the financial statements provided
for in clause (v) of this paragraph, a certificate of a Financial Officer
of the Seller 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;
(xiii) promptly after receipt thereof, copies of all notices received
by the Seller from the Originator under the Sale Agreement;
(xiv) 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);
(xv) promptly after the occurrence thereof any event or condition that
has had, or could reasonably be expected to have, a Material Adverse
Effect; and
(xvi) such other information respecting the Receivables or the
condition or operations, financial or otherwise, of any Transaction Party
as the Agent 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
(5) 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 (3) 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
38
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.
(ix) 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 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
39
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. 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 Purchaser 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 equity interests of the Seller, or return any
capital to its equity holders as such, or purchase, retire, defease, redeem or
otherwise acquire for value or make any payment in respect of any equity of the
Seller or any warrants, rights or options to acquire any equity of the Seller,
now or hereafter outstanding; provided, however, that the Seller may declare and
pay cash dividends out of Collections available for such purpose pursuant to 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.
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(q) Certificate 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 certificate of incorporation as in
effect on the date hereof or (ii) any other provision of its certificate 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 7.5% of the Outstanding Balance of all Non-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 or
the Purchaser.
(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 the Originator 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 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
41
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 no
Event of Termination has occurred, (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, (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 NiSource's financial statements, and (iii) the Agent will
give the Seller three (3) Business Days' prior notice of any examination
conducted pursuant to clause (B) above.
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, Columbia Gas of Ohio is hereby designated as, and
hereby agrees to perform the duties and obligations of, the Servicer pursuant to
the terms hereof. Columbia Gas of Ohio 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 Columbia Gas of Ohio or any
successor Servicer, on such terms and conditions as the Agent and such successor
Servicer shall agree, provided, that such successor Servicer shall administer
the Receivables in accordance with the applicable rules and regulations of the
Public Utilities Commission of Ohio. 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 (including the applicable rules and
regulations of the Public Utilities Commission of Ohio), with reasonable care
and diligence, and in accordance with the Credit and Collection Policy. The
Seller, the 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 Purchaser and the Agent. Following the
occurrence and during the 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.
(b) The Servicer shall administer the Collections in accordance with
Section 2.04. If so instructed by the Agent 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
42
required to be set aside for the Agent or the 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, Columbia
Gas of Ohio, 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 the
Purchaser or the Agent a party to any litigation involving the Transaction
Documents or the Receivables without the Purchaser's or the Agent's prior
written consent.
(d) The Servicer shall hold in trust for the Seller, the Agent and the
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 (2) 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
proceeds of accounts receivable generated under any Percent of Income Plan,
Retail Services Payments, or prepayments made under any Balanced Payment Plan.
(f) The Servicer shall, from time to time at the request of the Agent
following the occurrence and during the continuation of any Event of
Termination, furnish to the Agent (promptly after any such request) a
calculation of the amounts set aside for the Purchaser and the Agent pursuant to
Section 2.04.
(g) On or prior to the 15th day of each calendar month and, following the
occurrence of an Event of Termination, at such other times and covering such
other periods as the Agent may request, the Servicer shall prepare and forward
to the Agent 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
43
them, instructing them to make payment in the manner requested by the Agent. At
any time during the Liquidation Period or after a Lock-Box Event, the Agent may
have each Blocked Account and Lock-Box transferred into the name of the Agent
and/or assume exclusive control of the Blocked Accounts and Lock-Boxes, 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 Columbia
Gas of Ohio:
(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, Columbia Gas of Ohio 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 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,
44
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 Purchaser 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 (3) 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) Columbia Gas of Ohio 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 Purchaser 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 or the Purchaser 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.
(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
45
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. The Servicer shall perform and comply with all
covenants required to be performed or observed by it pursuant to this 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 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,
Columbia Gas of Ohio 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;
(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;
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(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 or the
Purchaser with respect to any Receivable or the value of any Receivable;
(vii) if Columbia Gas of Ohio has been terminated by the Agent as the
Servicer prior to the occurrence of a Servicer Default, any Servicer Fees
or other costs and expenses payable to any replacement Servicer, to the
extent in excess of the Servicer Fees payable to Columbia Gas of Ohio 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.
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 (3) 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; 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
47
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 (10) Business Days
after the first date on which the Seller receives written notice thereof from
the Agent; or
(d) (i) NiSource or any Transaction Party shall default beyond any
applicable period of grace in any payment of principal or interest on any
indebtedness for any borrowed money for which NiSource or such Transaction Party
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 NiSource or any Transaction Party
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
(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) NiSource or 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 NiSource or 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 NiSource 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
48
(g) As of the last day of any calendar month, (i) the Default Ratio shall
exceed 12.50% or (ii) the Three-Month Default Ratio shall exceed 7.50%; or
(h) As of the last day of any calendar month, (i) the Delinquency Ratio
shall exceed 15.00% or (ii) the Three-Month Delinquency Ratio shall exceed
12.50%; or
(i) As of the last day of any calendar month, (i) the Loss-to Liquidation
Ratio shall exceed 10.00% or (ii) the Three-Month Loss-to-Liquidation Ratio
shall exceed 7.50%; or
(j) As of the last day of any calendar month, the Portfolio Turnover is
greater than or equal to 45 days; or
(k) The sum of the Receivable Interests shall exceed 100% except to the
extent that Collections set aside and held for the benefit of the Purchaser
pursuant to Section 2.04(b)(iii) would cause the sum of the Receivable Interests
to be less than or equal to 100% if such funds were applied to the reduction of
Capital;
(l) There shall have occurred or shall exist any event or condition which
has had or will have a Material Adverse Effect;
(m) An "Event of Termination" shall occur under the Sale Agreement, or the
Sale Agreement or the Performance Guaranty shall cease to be in full force and
effect or any Transaction Party shall so state in writing; or
(n) Columbia Gas of Ohio shall cease to own, directly or indirectly, all of
the outstanding capital stock of the Seller, free and clear of any Adverse
Claim; or
(o) 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 (5) 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
(p) One or more judgments or decrees shall be entered against NiSource or
any Transaction Party involving in the aggregate a liability (not paid 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
thirty (30) days from the entry thereof;
then, and in any such event, 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
Columbia Gas of Ohio (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
Purchaser 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
49
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. The 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 or the Purchaser.
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 Purchaser
(whether written or oral) and shall not be responsible to the 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 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 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 8.04 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
50
has received notice from the 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
Purchaser. 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 Purchaser (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 Purchaser.
SECTION 8.05 Non-Reliance on Agent and Other Parties. The 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. The Purchaser represents and warrants
to the Agent that, independently and without reliance upon the Agent 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 the Purchaser, the Agent shall not have
any duty or responsibility to provide the 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 8.06 Successor Agent. The Agent may, upon at least thirty (30)
days' notice to the Seller, the Servicer and the Purchaser, resign as Agent.
Except as provided below, such resignation shall not become effective until a
successor Agent is appointed by the Purchaser and has accepted such appointment.
If no successor Agent shall have been so appointed by the Purchaser within
thirty (30) days after the departing Agent's giving of notice of resignation,
the departing Agent may, on behalf of the Purchaser, 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 Purchaser within sixty (60) days after the
departing Agent's giving of notice of resignation, the departing Agent may, on
behalf of the Purchaser, 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 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.
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ARTICLE IX
INDEMNIFICATION
SECTION 9.01 Indemnities by the Seller. Without limiting any other rights
that the Agent, the Purchaser, the Affected Persons or any of their respective
Affiliates, officers, directors and employees (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 Purchaser 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 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;
52
(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.
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ARTICLE X
MISCELLANEOUS
SECTION 10.01 No Waiver; Amendments, Etc. No failure on the part of the
Purchaser 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, 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 the Purchaser in addition to the Agent:
(a) change (directly or indirectly) the definitions of Eligible Receivable,
Lock-Box Event, Delinquent Receivable, Delinquency Ratio, Default Ratio,
Defaulted Receivable, Loss-to-Liquidation Ratio, Net Receivables Pool Balance,
Loss Reserve, Yield Reserve or Total Reserves contained in this Agreement, or
increase the then existing 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 Purchaser 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 or waive any of the provisions of Section 2.04(c);
(g) waive the representations and warranties set forth on Annex G and
referred to in Section 4.01(t);
(h) consent to any waiver of the representations and warranties set forth
on Annex A to the Sale Agreement;
and provided, further, that no amendment, waiver or consent shall increase the
Commitment of the Purchaser unless in writing and signed by the Purchaser.
SECTION 10.02 Notices, Etc. All notices and other communications hereunder
shall, unless otherwise stated herein, be in writing (which shall include
54
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 Purchaser's rights
and obligations hereunder (including ownership of each Receivable Interest)
shall be assignable by the Purchaser and its successors and permitted assigns as
set forth in paragraphs (b) and (c) below. The Purchaser shall notify the Agent
and the Seller of any such assignment. The Purchaser may, in connection with any
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 10.07(b).
(b) Assignment by Purchaser to Liquidity Providers. The Purchaser may
assign all or a portion of its Receivable Interests or interests therein owned
by it at any time, without the consent of the Seller, to any Person pursuant to
the terms of a Liquidity Asset Purchase Agreement.
(c) Other Assignments by Purchaser. The Purchaser may assign all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitment and any Receivable Interests or
interests therein owned by it) to (x) without the consent of the Seller, any
Eligible Assignee or (y) with the consent of the Seller, any other Person (such
consent not to be unreasonably withheld or delayed); 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 Purchaser's Commitment, and
(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.
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 have been assigned to it pursuant to such
Assignment and Acceptance, have the rights and obligations of a Purchaser
thereunder and (y) the assigning Purchaser shall, to the extent that rights and
obligations have been assigned by it pursuant to such Assignment and Acceptance,
55
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 Purchaser's rights and obligations under this
Agreement, such Purchaser shall cease to be a party hereto). In addition, the
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 or the Agent.
(d) 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 Purchasers, the Commitment of each Purchaser and the
aggregate outstanding Capital of the Receivable Interest or interests therein
owned by each 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 and the Purchasers may treat each
Person whose name is recorded in the Register as a Purchaser under this
Agreement for all purposes of this Agreement. The Register shall be available
for inspection by the Seller and the Purchaser at any reasonable time and from
time to time upon reasonable prior notice.
(e) Procedure. Upon its receipt of an Assignment and Acceptance executed by
a Purchaser and an Eligible Assignee, 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.
(f) Participations. The 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 and the interests in the Receivable Interests owned by it); provided,
however, that
(i) the Purchaser's obligations under this Agreement (including,
without limitation, its Commitment to the Seller hereunder) shall remain
unchanged, and
(ii) the Purchaser shall remain solely responsible to the other
parties to this Agreement for the performance of such obligations.
The Agent, the Seller and the Servicer shall have the right to continue to
deal solely and directly with such Purchaser in connection with such Purchaser's
rights and obligations under this Agreement.
(g) 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).
56
(h) 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 Liquidity Asset Purchase Agreement and
the Transaction Documents, including, without limitation, the reasonable fees
and out-of-pocket expenses of counsel for the Agent, the Purchaser and their
respective Affiliates with respect thereto and with respect to advising the
Agent, the Purchaser 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 Purchaser 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,
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 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 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 Liquidity Asset Purchase Agreement. The Purchaser and the
Agent each agree that, prior to the Termination Date, without the consent of the
Seller (such consent not to be unreasonably withheld or delayed), (a) it will
not permit the termination of the commitment to the Purchaser under the
Liquidity Asset Purchase Agreement except in accordance with the terms and
conditions thereof and (b) it will not consent to any amendment to Section 2.03
of the Liquidity Asset Purchase Agreement which would make the conditions to
funding under such agreement more restrictive.
SECTION 10.07 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.
(b) The Purchaser and the Agent each 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 the
57
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 10.08 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 AND THE PURCHASER 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 10.09 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 10.10 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 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,
(including, without limitation, those representations and warranties set forth
58
on Annex G) and the provisions of Sections 2.08, 2.09, 6.06, 9.01, 10.04, 10.05
and 10.07 shall survive any termination of this Agreement.
SECTION 10.11 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
10.11 shall affect the right of the Purchaser or the Agent to serve legal
process in any other manner permitted by law.
SECTION 10.12 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 10.13 Limitation of Liability. No claim may be made by any
Transaction Party or any other Person against the Purchaser, the Agent or their
respective 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 Purchaser, 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
59
for the benefit of the Purchaser 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, Columbia Gas of
Ohio, the Agent and the Purchaser 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 Purchaser in the Receivables, Related Security, the Blocked
Accounts and the Lock-Boxes (including, without limitation, UCC-3 termination
statement and notices terminating the Blocked Account Agreements).
[Remainder of page intentionally left blank]
60
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: COLUMBIA OF OHIO RECEIVABLES CORPORATION
By: /s/ Xxxxxxx X. Xxx
------------------
Name: Xxxxxxx X. Xxx
Title: Assistant Treasurer
000 Xxxxx Xxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
Attention: Xxxxxxx X. Xxx
Facsimile: (000) 000-0000
SERVICER: COLUMBIA GAS OF OHIO, INC.
By: /s/ Xxxxxxx X. Xxx
------------------
Name: Xxxxxxx X. Xxx
Title: Assistant Treasurer
000 Xxxxx Xxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
Attention: Xxxxxxx X. Xxx
Facsimile: (000) 000-0000
Signature Page to Receivables Purchase Agreement
AGENT: DRESDNER BANK AG, NEW YORK BRANCH,
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Director
By: /s/ Xxxx Xxxxx
--------------
Name: Xxxx Xxxxx
Title: Vice President
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Asset Backed Finance
Facsimile No.: (000) 000-0000
Confirmation No.: (000) 000-00000
PURCHASER: BEETHOVEN FUNDING CORPORATION
By: /s/ Xxxxxxx X. Xxxx
-------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President
x/x Xxxxxxxx Xxxx XX, Xxx Xxxx Xxxxxx
0000 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000
Attention: Asset Backed Finance
Facsimile No.: (000) 000-0000
Confirmation No.: (000) 000-00000
c/o Global Securitization Services, LLC
00 Xxxx 00xx Xxxxxx, Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx
Facsimile No.: (000) 000-0000
Confirmation No.: (000) 000-0000
Signature Page to Receivables Purchase Agreement
Schedule I
Commitment of Beethoven Funding Corporation
-------------------------------------------
During each calendar year and prior to the Termination Date:
From January 1 through May 31: $225,000,000
From June 1 through June 30: $150,000,000
From July 1 through October 31: $ 50,000,000
From November 1 through December 31: $150,000,000
SCHEDULE II
Lock Boxes and Blocked Accounts
-------------------------------
--------------------------------------------------------------------------------
Bank Deposit Account and Related Lock-Box
--------------------------------------------------------------------------------
Bank Xxx, XX 0000000
X.X. Xxx 0000000
Xxxxxxxxxx, XX 00000-0000
--------------------------------------------------------------------------------
National City Bank 801830493
--------------------------------------------------------------------------------
PNC Bank 1010935197
1008985232
--------------------------------------------------------------------------------
ANNEX A
Form of Assignment and Acceptance
---------------------------------
(attached)
ANNEX B
Form of Blocked Account Agreement
---------------------------------
(attached)
ANNEX C
Forms of Contracts
------------------
(attached)
ANNEX D
Credit and Collection Policy
----------------------------
(attached)
ANNEX E
Form of Monthly Report
----------------------
(attached)
ANNEX F
Forms of Termination Agreements
-------------------------------
(attached)
ANNEX G
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 and Lock-Boxes in
favor of the Agent, for the benefit of the Purchaser, 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 and
Lock-Boxes, free and clear of any Adverse Claim, claim or encumbrance of
any Person.
4. The Seller has caused or will have caused, within ten (10) 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 and Lock-Boxes granted to the
Agent, for the benefit of the Purchaser, hereunder.
5. Other than the security interest granted to the Agent, for the benefit of
the Purchaser, 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 or Lock-Boxes. 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 or Lock-Boxes other than any financing statement
relating to the security interest granted to the Agent, for the benefit of
the Purchaser, hereunder or that has been terminated. The Seller is not
aware of any judgment or tax lien filings against the Seller.
ANNEX H
Miscellaneous Receivables
-------------------------
Customer Premise Work
Appliance & Accessory Sales
Appliance Loans
o Residential Fuel Conversion Loans
o Water Tank Loans
o Gas Light, Log, Grill, Patio Light and Home & Garden Show Receivables
o Sandwich Conversion Receivable
Notes Receivable
o Promissory Notes - Officers & Employees
Employee Receivables
Other General Accounts Receivable
o Miscellaneous
o Other
o Marketing Research
o Agreements Related to Gathering Companies
o Cooperative Contracted Work
o CHOICE(R) Customer Billing Fee
Assistance Program Receivables
o Home Energy Assistance Program
o Senior Citizen Discount
District Reimbursable Xxxxxxxx
Interest and Dividends Receivable
Rents Receivable
Generic Payment Plan Receivables
