LOAN AND SERVICING AGREEMENT dated as of December 20, 2005 among PSE FUNDING, INC., as Borrower PUGET SOUND ENERGY, INC., as Servicer THE COMMERCIAL PAPER CONDUITS FROM TIME TO TIME PARTY HERETO AS CONDUIT LENDERS, THE FINANCIAL INSTITUTIONS FROM TIME...
Exhibit
10.2
Execution
Copy
dated
as
of December 20, 2005
among
PSE
FUNDING, INC.,
as
Borrower
PUGET
SOUND ENERGY, INC.,
as
Servicer
THE
COMMERCIAL PAPER CONDUITS FROM TIME TO TIME
PARTY
HERETO AS CONDUIT LENDERS,
THE
FINANCIAL INSTITUTIONS FROM TIME TO TIME
PARTY
HERETO AS COMMITTED LENDERS,
THE
FINANCIAL INSTITUTIONS FROM TIME TO TIME
PARTY
HERETO AS MANAGING AGENTS,
and
JPMORGAN
CHASE BANK, N.A.
as
Program Agent
TABLE
OF
CONTENTS
ARTICLE
I
DEFINITIONS
SECTION
1.01. Certain Defined Terms
SECTION
1.02. Other Terms and Constructions
SECTION
1.03. Computation of Time Periods
ARTICLE
II AMOUNTS AND TERMS OF THE LOANS
SECTION
2.01. The Loans.
SECTION
2.02. Borrowing Procedures.
SECTION
2.03. Tranches.
SECTION
2.04. Interest and Fees
SECTION
2.05. Optional Prepayments
SECTION
2.06. Application of Collections Prior to Termination Date.
SECTION
2.07. Application of Collections After Termination Date.
SECTION
2.08. Deemed Collections
SECTION
2.09. Payments and Computations, Etc
SECTION
2.10. Interest Protection.
SECTION
2.11. Increased Capital.
SECTION
2.12. Funding Losses
SECTION
2.13. Taxes
SECTION
2.14. Security Interest
SECTION
2.15. Evidence of Debt
SECTION
2.16. Interest on Cash Secured Advances
SECTION
2.17. Repayment of Cash Secured Advances
SECTION
2.18. Use of Proceeds; Security Interest in Collateral Advance
Account.
SECTION
2.19. Establishment of Collateral Advance Account.
ARTICLE
III CONDITIONS OF EFFECTIVENESS AND LOANS
SECTION
3.01. Conditions Precedent to Effectiveness and Initial Borrowing.
SECTION
3.02. Conditions Precedent to All Borrowings and Releases
ARTICLE
IV REPRESENTATIONS AND WARRANTIES
SECTION
4.01. Representations and Warranties of The Borrower Parties
SECTION
4.02. Financial Institution Representations and Warranties
ARTICLE
V
GENERAL COVENANTS
SECTION
5.01. Affirmative Covenants of The Borrower Parties
SECTION
5.02. Negative Covenants of The Borrower Parties
ARTICLE
VI ADMINISTRATION OF RECEIVABLES
SECTION
6.01. Designation of Servicer.
SECTION
6.02. Duties of the Servicer.
SECTION
6.03. Rights of the Program Agent.
SECTION
6.04. Responsibilities of the Borrower
SECTION
6.05. Further Action Evidencing Program Agent’s Interest
SECTION
6.06. Collections
SECTION
6.07. Reports
SECTION
6.08. Servicer Fees
ARTICLE
VII EVENTS OF TERMINATION
SECTION
7.01. Events of Termination
ARTICLE
VIII INDEMNIFICATION
SECTION
8.01. Indemnities by The Borrower Parties
SECTION
8.02. Other Costs and Expenses
ARTICLE
IX THE AGENTS
SECTION
9.01. Authorization and Action
SECTION
9.02. Agents’ Reliance, Etc
SECTION
9.03. Agents and Affiliates
SECTION
9.04. Lender’s Loan Decision
SECTION
9.05. Delegation of Duties
SECTION
9.06. Indemnification
SECTION
9.07. Successor Agents
ARTICLE
X
MISCELLANEOUS
SECTION
10.01. Amendments, Etc.
SECTION
10.02. Notices, Etc
SECTION
10.03. Assignability.
SECTION
10.04. Additional Lender Groups
SECTION
10.05. Consent to Jurisdiction.
SECTION
10.06. WAIVER OF JURY TRIAL
SECTION
10.07. Right of Setoff
SECTION
10.08. Ratable Payments
SECTION
10.09. Limitation of Liability.
SECTION
10.10. Taxes
SECTION
10.11. No Proceedings
SECTION
10.12. Confidentiality.
SECTION
10.13. No Waiver; Remedies
SECTION
10.14. GOVERNING LAW
SECTION
10.15. Execution in Counterparts
SECTION
10.16. Integration; Binding Effect; Survival of Termination
EXHIBITS
AND SCHEDULES
|
EXHIBIT
A
|
Credit
and Collection Policy
|
|
EXHIBIT
B
|
Form
of Borrowing Request
|
|
EXHIBIT
C-1
|
Form
of Monthly Report
|
|
EXHIBIT
C-2
|
Form
of Weekly Report
|
|
EXHIBIT
C-3
|
Form
of Daily Report
|
|
EXHIBIT
D
|
Form
of Blocked Account Agreement
|
|
EXHIBIT
E
|
List
of Offices of Borrower where Records are Kept
|
|
EXHIBIT
F
|
List
of Alternate Payment Locations; Deposit Account Banks,
Deposit
Accounts and Lock-Boxes
|
|
EXHIBIT
G
|
List
of Closing Documents
|
|
EXHIBIT
H
|
Form
of Assignment and Acceptance
|
|
EXHIBIT
I
|
Form
of Joinder Agreement
|
|
EXHIBIT
J
|
Form
of Prepayment Notice
|
|
EXHIBIT
K
|
Form
of Lock-Box Transfer Notice
|
|
EXHIBIT
L
|
Form
of Compliance Certificate
|
|
SCHEDULE
I
|
Lender
Groups
|
|
SCHEDULE
II
|
Notice
Addresses
|
|
SCHEDULE
III
|
Special
Concentration Limits
|
|
SCHEDULE
IV
|
Concentration
Percentages
|
|
SCHEDULE
V
|
Approved
Sub-servicers
|
This
LOAN
AND SERVICING AGREEMENT dated as of December 20, 2005 is among PSE FUNDING,
INC., a Washington corporation (the “Borrower”), PUGET SOUND ENERGY, INC., a
Washington corporation (“PSE” and as initial Servicer) (the Servicer together
with Borrower, the “Borrower Parties” and each a “Borrower Party”), THE
COMMERCIAL PAPER CONDUITS FROM TIME TO TIME PARTY HERETO (each individually,
a
“Conduit Lender”), THE FINANCIAL INSTITUTIONS FROM TIME TO TIME PARTY HERETO
(each individually, a “Committed Lender”; and collectively with the Conduit
Lenders, the “Lenders”), THE ENTITIES FROM TIME TO TIME PARTY HERETO AS MANAGING
AGENTS and their permitted successors and assigns (each individually, a
“Managing Agent”), and JPMORGAN CHASE BANK, N.A. (“JPMorgan”), as the Program
Agent for the Lenders and the Managing Agents. Capitalized terms used herein
shall have the meanings specified in Section
1.01.
PRELIMINARY
STATEMENTS
WHEREAS,
the Borrower may from time to time purchase Receivables from Originator pursuant
to the Receivables Sale Agreement;
WHEREAS,
to fund its purchases under the Receivables Sale Agreement, the Borrower may
from time to time request Loans from the Lenders on the terms and conditions
of
this Agreement;
WHEREAS,
the Conduit Lenders may, in their sole discretion, make Loans so requested
from
time to time, and if a Conduit Lender in any Lender Group elects not to make
any
such Loan, the Committed Lenders in such Lender Group have agreed that they
shall make such Loan, in each case subject to the terms and conditions of this
Agreement;
NOW
THEREFORE, in consideration of the premises, the mutual covenants and agreements
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each party agrees as
follows:
ARTICLE
I
DEFINITIONS
SECTION
1.01. Certain
Defined Terms.
As used
in this Agreement, the following terms shall have the following
meanings:
“Adjusted
LIBO Rate”
means,
for any Tranche Period, an interest rate per annum obtained by dividing (i)
the
LIBO Rate for such Tranche Period by (ii) a percentage equal to 100% minus
the
LIBO Rate Reserve Percentage for such Tranche Period.
“Administrative
Fee”
has
the
meaning set forth in the Fee Letter.
“Adverse
Claim”
means
any lien (statutory or other), mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance or preference, priority or other pledge and
security agreement or preferential arrangement of any kind or nature whatsoever
(including,
without limitation,
the
interest of a vendor or lessor under any conditional sale, Capitalized Lease
or
other title retention agreement).
“Affected
Party”
means
any Lender, the Program Agent, any Managing Agent, any Liquidity Provider,
any
insurance company, bank or other funding entity providing liquidity, credit
enhancement or back-up purchase support or facilities to any Conduit Lender
and,
with respect to each of the foregoing, the parent company that controls such
Person.
“Affiliate”
means,
with respect to any Person, any other Person that directly or indirectly
controls or is controlled by or is under common control with such specified
Person.
“Aggregate
Commitment”
means,
at any time, the sum of the Commitments then in effect. The initial Aggregate
Commitment as of the Effective Date is $200,000,000.
“Aggregate
Principal Balance”
means,
at any time, the aggregate outstanding principal balance of the Loans hereunder
at such time.
“Agreement”
means
this Loan and Servicing Agreement, as amended, restated, supplemented or
otherwise modified from time to time.
“Alternate
Payment Location”
means
each location listed on Exhibit
F
where
Obligors are permitted to make payments in respect of the Receivables, as
amended from time to time in accordance herewith.
“Alternative
Rate”
for
any
Tranche during any Tranche Period means an interest rate per annum equal to
the
sum of the Applicable Margin plus
the
Adjusted LIBO Rate for such Tranche Period; provided,
however,
that in
case of:
(a) any
Tranche Period with respect to which the Adjusted LIBO Rate is not available
pursuant to Section
2.03,
(b) any
Tranche Period of less than one month,
(c) any
Tranche Period as to which the applicable Lender does not receive a request,
by
no later than 1:00 P.M. (New York City time) on the second Business Day
preceding the first day of such Tranche Period, that the related Tranche be
funded at the Adjusted LIBO Rate,
(d) any
Tranche Period for a Tranche, the Principal Balance of which is less than
$500,000, or
(e) any
Tranche Period for which the Borrower elects to fund the related Tranche at
the
Base Rate,
the
Alternative Rate for such Tranche Period shall be an interest rate per annum
equal to the Base Rate in effect from time to time during such Tranche
Period.
“Applicable
Margin”
has
the
meaning set forth in the Fee Letter.
“Approved
Sub-servicer”
means
each Person (i) appointed by the Servicer pursuant to Section
6.01
to
perform certain of the obligations of the Servicer hereunder, (ii) approved
by
the Borrower, the Servicer, the Program Agent and the Managing Agents and (iii)
identified on Schedule
V
hereto,
as such Schedule
V
may be
amended from time to time with the consent of the Borrower, the Servicer, the
Program Agent and the Managing Agents.
“Asset
Purchase Agreement”
means
any asset purchase or other agreements pursuant to which a Conduit Lender may
from time to time assign part or all of the Loans made by such Conduit Lender
to
a Liquidity Provider, as amended, restated, supplemented or otherwise modified
from time to time.
“Assignment
and Acceptance”
means
an agreement substantially in the form set forth as Exhibit
H
hereto
pursuant to which a new Conduit Lender or Committed Lender becomes party to
this
Agreement.
“Authorized
Officer”
means,
with respect to any Person, its president, corporate controller, treasurer,
assistant treasurer or chief financial officer.
“Bankruptcy
Code”
means
Title 11 of the United States Code, 11 U.S.C. Section 101 et
seq.,
as
amended from time to time, or any successor thereto.
“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 Prime Rate,
and
(B) the Federal Funds Rate plus 0.50%.
“Base
Rate Tranche”
has
the
meaning specified in Section
2.03(b).
“Billed
Receivable”
means
any Receivable which is not an Unbilled Receivable.
“Blocked
Account Agreement”
means
an agreement with respect to a Deposit Account at a Deposit Account Bank, in
substantially the form of Exhibit
D
or such
other form as may be acceptable to the Program Agent and the Servicer, in their
discretion, among the Borrower, Rainier, the Originator, the Program Agent
and
such Deposit Account Bank.
“Borrower”
means
PSE Funding, Inc., a Washington corporation, in its capacity as Borrower
hereunder, together with its successors and permitted assigns.
“Borrower
Obligations”
means
all present and future indebtedness and other liabilities and obligations
(howsoever created or evidenced, whether direct or indirect, absolute or
contingent, or due or to become due) of the Borrower to the Secured Parties
arising under this Agreement or any other Facility Document or the transactions
contemplated hereby or thereby, and shall include, without limitation, the
repayment of the Aggregate Principal Balance and the payment of Interest,
interest and principal on any Cash Secured Advances, Fees and all other amounts
due or to become due from the Borrower under the Facility Documents (whether
in
respect of fees, expenses, indemnifications, breakage costs, increased costs
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).
“Borrower
Party”
has
the
meaning set forth in the preamble hereto.
“Borrowing”
means
a
borrowing of Loans under this Agreement.
“Borrowing
Base”
means,
at any time, an amount equal to (a) the product of (i) the Borrowing Base
Percentage in effect at such time and (ii) the Net Receivables Pool Balance
at
such time minus
(b) the
Required Reserves at such time.
“Borrowing
Base Deficiency”
means,
at any time, the excess, if any, of (i) the Aggregate Principal Balance over
(ii) the Borrowing Base.
“Borrowing
Base Percentage”
means:
(i) during
any ▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇ or Level 5 Ratings Period, 100%;
(ii) during
any ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, (▇) for the Monthly Periods of October through
February, 100%, (b) for the Monthly Periods of April and May, 87% and (c) for
the Monthly Periods of March and June through September, 95%; and
(iii) during
any Level 3 Ratings Period or any ▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, (▇) for the Monthly
Periods of November through March, 100%, (b) for the Monthly Periods of May
and
June, 96.75% and (c) for the Monthly Periods of April and July through October,
98%.
“Borrowing
Date”
has
the
meaning specified in Section
2.02(a)(i).
“Borrowing
Request”
has
the
meaning specified in Section
2.02(a)(i).
“Business
Day”
means
any day other than a Saturday, Sunday or public holiday or the equivalent for
banks in ▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ and, if the term
“Business Day” is used in connection with the LIBO Rate, any day on which
dealings are carried on in the London interbank market.
“Capitalized
Lease”
of
a
Person means any lease of Property by such Person as lessee which would be
capitalized on a balance sheet of such Person prepared in accordance with
GAAP.
“Capitalized
Lease Obligations”
of
a
Person means the amount of the obligations of such Person under Capitalized
Leases which would be shown as a liability on a balance sheet of such Person
prepared in accordance with GAAP.
“Cash
Collateral”
has
the
meaning specified in Section
2.18(b).
“Cash
Secured Advance”
means,
in respect of any Term-Out Lender, without duplication, the aggregate amount
of
the proceeds (a) of (i) the advance, if any, made by such Lender pursuant to
Section
2.01(d)
and (ii)
such Lender’s Pro Rata Share of any applications of Collections of Receivables
during the Term Period for its related Lender Group to reduce the Principal
Balance in respect of any Loan made by such Lender hereunder and (b) on deposit
at such time in the Collateral Advance Account (including any such proceeds
invested by the Program Agent, at such time in Permitted Investments pursuant
to
Section
2.19(a),
it
being understood that the amount of such Lender’s Cash Secured Advance shall be
decreased by such Lender’s Pro Rata Share of the funds paid from time to time
from the Collateral Advance Account to the Borrower in connection with a Loan
made from time to time during the Term Period for its related Lender
Group).
“Cash
Secured Advance Commencement Date”
means,
with respect to any Lender Group, the Commitment Termination Date for such
Lender Group (without giving effect to the proviso within the definition of
Commitment Termination Date), provided
that the
Cash Secured Advance Commencement Date shall occur if, but only if, (i) the
Termination Date shall not have occurred on or prior to such date, (ii) no
Event
of Termination exists on such date and no Incipient Event of Termination related
to an Event of Termination described in Sections
7.01(d)
or
7.01(i)
exists
on such date, and (iii) the Borrower has delivered a notice to the Managing
Agent, for such Lender Group at least five (5) Business Days prior to such
Commitment Date that the Cash Secured Advance Date should occur.
“Change
in Control”
means
(i) the acquisition by any Person, or two or more Persons acting in concert,
of
beneficial ownership (within the meaning of Rule 13d-3 of the Securities and
Exchange Commission under the Securities and Exchange Act of 1934) of 20% or
more (by number of votes) of the outstanding shares of voting stock of PSE
or
(ii) PSE ceases to own, directly or indirectly, 100% of the outstanding capital
stock of Borrower, free and clear of any Adverse Claim.
“CNAI”
means
Citicorp North America, Inc., a Delaware corporation.
“Collateral”
has
the
meaning set forth in Section
2.14.
“Collateral
Advance Account”
means
the collateral deposit account to be opened after the date hereof at an Eligible
Institution, in the name of the Program Agent, and under the control of the
Program Agent for the ratable benefit of the Term-Out Lenders, as specified
in
Section
2.19(a).
“Collateral
Advance Account Bank”
has
the
meaning specified in Section
2.19(a).
“Collateral
Advance Account Direction”
has
the
meaning specified in Section
2.19(b).
“Collection
Account”
means
the account, to be opened after the date hereof, in the name of the Program
Agent on behalf of the Lenders, for the purpose of receiving Collections, or
any
other account which may be designated by the Program Agent from time to time
upon written notice to the Servicer and the Borrower as specified in
Section
6.03(c).
“Collection
Notice”
means
a
notice in the form attached to a Blocked Account Agreement pursuant to which
the
Program Agent notifies the applicable Deposit Account Bank this it is taking
exclusive control of the applicable Deposit Account.
“Collections”
means,
with respect to any Receivable, any and all cash collections and other cash
proceeds of such Receivable, including, without limitation, all cash proceeds
of
Related Security with respect to such Receivable, all amounts collected as
fees
or charges for late payments with respect to such Receivable, all recoveries
with respect to each written off Receivable (net of amounts, if any, retained
by
any third party collection agent), and any amounts deemed to have been received
with respect to such Receivable pursuant to Section
2.08
hereof.
“Combined
Reserve”
means,
at any time, an amount equal to the product of (a) the Combined Reserve
Percentage at such time and (b) the Net Receivables Pool Balance at such
time.
“Combined
Reserve Percentage”
means,
at any time, the greater of (a) the sum of (i) the Dynamic Loss Reserve
Percentage at such time and (ii) the Dynamic Dilution Reserve Percentage at
such
time and (b) the sum of (i) the Loss Reserve Floor Percentage at such time
and
(ii) the Dilution Reserve Floor Percentage at such time.
“Commitment”
of
any
Committed Lender means the Dollar amount set forth on Schedule
I
hereto
or, in the case of a Committed Lender that becomes a party to this Agreement
pursuant to an Assignment and Acceptance or a Joinder Agreement the amount
set
forth therein as such Committed Lender’s “Commitment”, in each case as such
amount may be (i) reduced or increased by any Assignment and Acceptance entered
into by such Committed Lender and the other parties thereto in accordance with
the terms hereof and (ii) reduced pursuant to Section
2.01(b).
“Commitment
Termination Date”
has
the
meaning assigned to that term in Section
2.01(c);
provided that, if, and only if, there shall have occurred a Cash Secured Advance
Commencement Date, the Commitment Termination Date for the applicable Term-Out
Lenders shall mean the earliest of clauses (ii) through (iii) of the definition
of Termination Date.
“Committed
Lender”
means,
as to any Lender Group, each of the financial institutions listed on
Schedule
I
as a
“Committed Lender” for such Lender Group, together with its respective
successors and permitted assigns.
“Concentration
Limit”
means,
for any Obligor and its Affiliates, at any time, (a) the Normal Concentration
Limit or (b) such other higher percentages (each, a “Special
Concentration Limit”)
for
such Obligors and its Affiliates as are set forth on Schedule
III
or such
other Obligors and its Affiliates and percentages as may otherwise be consented
to by all of the Managing Agents in writing from time to time, which Special
Concentration Limit is subject to reduction or cancellation by any Managing
Agent upon five (5) days’ notice to the Borrower, the other Managing Agents, the
Program Agent and the Servicer.
“Conduit
Lenders”
means,
collectively, the Persons identified as “Conduit Lenders” on Schedule
I
and
their respective successors and permitted assigns.
“Conduit
Lending Limit”
means,
for any Conduit Lender, the maximum principal amount of the Loans which may
be
advanced by such Conduit Lender as set forth on Schedule
I
(or on
the signature pages to the Assignment and Acceptance or Joinder Agreement
pursuant to which such Conduit Lender became a party hereto), subject to
assignment pursuant to Section
10.03,
as such
amount may be modified from time to time by notice from the related Managing
Agent to the Borrower and the Program Agent.
“Consolidated
Indebtedness”
means
at any time all Indebtedness of PSE and its Subsidiaries calculated on a
consolidated basis as of such time.
“Contingent
Obligation”
of
a
Person means any agreement, undertaking or arrangement by which such Person
assumes, guarantees, endorses, contingently agrees to purchase or provide funds
for the payment of, or otherwise becomes or is contingently liable upon, the
obligation or liability of any other Person, or agrees to maintain the net
worth
or working capital or other financial condition of any other Person, or
otherwise assures any creditor of such other Person against loss, including,
without limitation,
any
comfort letter, operating agreement, take or pay contract, application for
a
letter of credit or the obligations of any such Person as general partner of
a
partnership with respect to the liabilities of the partnership.
“Contract”
means
an agreement, instrument or other writing, tariff or other arrangement,
including a purchase order or invoice, pursuant to or under which a Person
is
obligated to pay for goods purchased from, or services rendered by, the
Originator from time to time.
“CP
Costs”
means,
for each day, the sum of (i) discount or yield accrued on Pooled Commercial
Paper of any Conduit Lender administered by JPMorgan on such day, plus
(ii) any
and all accrued commissions in respect of placement agents and commercial paper
dealers, and issuing and paying agent fees incurred, in respect of Pooled
Commercial Paper of such Conduit Lender for such day, minus
(iii)
any accrual of income net of expenses received on such day from investment
of
collections received under all receivable purchase or financing facilities
funded substantially with Pooled Commercial Paper of such Conduit Lender,
minus
(iv) any
payment received on such day net of expenses in respect of Liquidation Fees
related to the prepayment of any purchaser interest of such Conduit Lender
pursuant to the terms of any receivable purchase or financing facilities funded
substantially with Pooled Commercial Paper; provided,
however,
that in
addition to the foregoing costs, if the Borrower shall request any additional
Borrowing by such Conduit Lender during any period of time determined by such
Conduit Lender’s Managing Agent in its sole discretion to result in an
incrementally higher CP Costs applicable to such additional Purchase, the
Tranche associated with any such additional Borrowing shall, during such period,
be deemed to be funded by such Conduit Lender in a special pool (which may
include capital associated with other receivable purchase facilities) for
purposes of determining such higher CP Costs applicable only to such special
pool and charged each day during such period against such Tranche.
“CP
Rate”
means:
(a) with
respect to any Conduit Lender for which CNAI is the Managing Agent, for any
Tranche Period for any Tranche, to the extent such Conduit Lender funds such
Tranche by issuing Promissory Notes, the per
annum
rate
equivalent to the weighted average cost (as reasonably determined by the related
Managing Agent, and which shall include (without duplication) the fees and
commissions of placement agents and dealers, incremental carrying costs incurred
with respect to Promissory Notes maturing on dates other than those on which
corresponding funds are received by such Conduit Lender, and other borrowings
by
such Conduit Lender) to the extent related to the issuance of Promissory Notes
that are allocated, in whole or in part, by such Conduit Lender or its related
Managing Agent to fund or maintain such Tranche during such Tranche Period;
provided,
however,
that if
any component of any such rate is a discount rate, in calculating the “CP Rate”
for such Tranche Period, the related Managing Agent shall for such component
use
the rate resulting from converting such discount rate to an interest bearing
equivalent rate per annum;
(b) with
respect to any Conduit Lender for which JPMorgan is the Managing Agent, for
any
Tranche Period for any Tranche, to the extent such Conduit Lender funds such
Tranche by issuing Promissory Notes, a per annum rate equal to a fraction,
expressed as a percentage, the numerator of which shall be equal to the sum
of
the CP Costs, determined on a pro rata basis, based upon the percentage share
that the dollar amount of such Tranche represents in relation to all assets
or
investments associated with any assets held by such Conduit Lender and funded
substantially with Pooled Commercial Paper, for each day during such Tranche
Period (or portion thereof), and the denominator of which is the weighted daily
average Principal Balance of such Tranche during such Tranche Period;
and
(c) for
any
Tranche Period for any Tranche funded by a Conduit Lender that becomes a party
to this Agreement pursuant to an Assignment and Acceptance or Joinder Agreement,
to the extent such Conduit Lender funds such Tranche by issuing Promissory
Notes, the “CP Rate” set forth in such Assignment and Acceptance or Joinder
Agreement, as applicable.
“Credit
and Collection Policy”
means,
with respect to any Receivable, the credit and collection policies and practices
attached as Exhibit
A
hereto
relating to such Receivable and the related Obligor as modified from time to
time in accordance with the terms of Section
5.02(c).
“Customer
Deposits”
means
any cash held by the Originator, Borrower or Servicer for the account of an
Obligor as security for, or for application to, the payment of the Receivables
of such Obligor.
“Customer
Deposit Overconcentration Amount”
means,
at any time, the amount by which (a) the aggregate Customer Deposits at such
time exceeds (b) the product of (i) the percentage set forth on Schedule IV
hereto under the heading “Customer Deposit Overconcentration Percentage”
applicable to the Ratings Period then in effect at such time and (ii) the
aggregate Customer Deposits at such time.
“Daily
Report”
means
a
report furnished by the Servicer to the Managing Agents on each Daily Reporting
Date pursuant to Section
6.07,
in
substantially the form of Exhibit
C-3.
“Daily
Reporting Period”
means
any period during which PSE’s Debt Rating shall be B or lower by S&P, or B2
or lower by ▇▇▇▇▇’▇.
“Days
Sales Outstanding Ratio”
means
at any time, the ratio (expressed as a percentage) computed by multiplying
(i)
the aggregate Outstanding Balance of all Receivables as of the close of business
on the last day of the prior Monthly Period divided by the aggregate amount
of
Collections received during such Monthly Period and (ii) 30.
“Debt
Rating”
means,
with respect to any Person at any time the issuer rating assigned by S&P for
such Person or the corporate credit rating assigned by ▇▇▇▇▇’▇ to such Person,
in each case without giving effect to any third party credit
enhancement.
“Default
Ratio”
means,
as of any Monthly Reporting Date and continuing to (but excluding) the next
succeeding Monthly Reporting Date, the fraction (expressed as a percentage)
determined as of the last day of the immediately preceding Monthly Period by
dividing (i) the aggregate Outstanding Balance of all Billed Receivables that
are Defaulted Receivables on such date by (ii) the aggregate Outstanding Balance
of all Receivables on such date.
“Defaulted
Receivable”
means
a
Receivable: (i) as to which any payment, or part thereof, remains unpaid for
ninety-one (91) or more days from the original due date thereof, (ii) as to
which the Obligor thereof is subject to an Event of Bankruptcy or (iii) which,
consistent with the Credit and Collection Policy, has been or should be written
off as uncollectible.
“Deposit
Account”
means
each depositary account, concentration account or other similar account into
which Collections are collected or deposited.
“Deposit
Account Bank”
means
a
financial institution at which a Deposit Account is maintained.
“Diluted
Receivable”
means
that portion, and only that portion, of any Receivable which is either (a)
reduced or canceled as a result of a Dilution Factor or (b) subject to any
specific dispute, offset, counterclaim or defense whatsoever.
“Dilution
Factor”
means
any of the following factors giving rise to dilution: (i) any defective,
rejected or returned merchandise or services, any cash discount, or any failure
by the Originator to deliver any merchandise or perform any services or
otherwise perform as required by the underlying Contract or invoice, (ii) any
change, allowance or cancellation of any terms of such Contract or invoice
or
any other adjustment by the Originator which reduces the amount payable by
the
Obligor on the related Receivable and (iii) any setoff in respect of any claim
by the Obligor thereof (whether such claim arises out of the same or a related
transaction or an unrelated transaction).
“Dilution
Horizon Factor”
means,
as of any date a ratio (expressed as a percentage), computed as of the last
day
of the most recently ended Monthly Period by dividing (i) the sum of (a) the
aggregate Original Balance of all Receivables generated during the two (2)
most
recently ended Monthly Periods plus
(b) the
aggregate Outstanding Balance of all Unbilled Receivables as of the last day
of
the most recently ended Monthly Period, by (ii) (a) the aggregate Outstanding
Balance of all Receivables other than Receivables as to which any payment,
or
part thereof, remains unpaid for sixty-one (61) or more days from the original
due date thereof minus
(b) the
aggregate amount of Unapplied Cash/Credit Memos as of the last day of the most
recently ended Monthly Period.
“Dilution
Ratio”
means,
as of any date, the ratio (expressed as a percentage) computed as of the last
day of the most recently ended Monthly Period by dividing (i) the portion of
all
Receivables which became Diluted Receivables during such Monthly Period by
(ii)
the aggregate Original Balance of all Receivables generated during the second
Monthly Period preceding the most recently ended Monthly Period.
“Dilution
Reserve Floor Percentage”
means,
at any time, the product of (a) the average of the Dilution Ratios for the
twelve (12) most recently ended Monthly Periods and (b) the Dilution Horizon
Factor at such time.
“Dilution
Volatility Ratio”
means,
as of any date, a ratio (expressed as a percentage) equal to the product of
(i)
the highest of the Two-Month Dilution Ratios calculated for each of the twelve
most recently ended Monthly Periods minus
the
average of the Dilution Ratios calculated for each of the twelve most recently
ended Monthly Periods, and (ii) the ratio calculated by dividing the highest
of
the Two-Month Dilution Ratios calculated for each of the twelve most recently
ended Monthly Periods by the average of the Dilution Ratios calculated for
each
of the twelve most recently ended Monthly Periods.
“Dollars”
and
“$”
each
mean the lawful currency of the United States of America.
“Dynamic
Dilution Reserve Percentage”
means,
as of any Monthly Reporting Date and continuing to (but excluding) the next
succeeding Monthly Reporting Date, a percentage, determined as of the last
day
of the immediately preceding Monthly Period, equal to the product of (a) the
sum
of (i) the product of (A) the Stress Factor and (B) the average of the Dilution
Ratios for the twelve (12) most recently ended Monthly Periods, plus
(ii) the
Dilution Volatility Ratio as of such day, and (b) the Dilution Horizon Factor
as
of such day.
“Dynamic
Loss Reserve Percentage”
means,
as of any Monthly Reporting Date and continuing to (but excluding) the next
succeeding Monthly Reporting Date, a percentage determined as of the last day
of
the immediately preceding Monthly Period equal to the product of (i) the Stress
Factor on such date, (ii) the Loss Horizon Ratio on such date and (iii) the
highest of the Three-Month Loss Ratios calculated for each of the twelve most
recently ended Monthly Periods.
“Effective
Date”
means
December 20, 2005.
“Eligible
Institution”
means
a
financial institution approved by the Managing Agents and the Program
Agent.
“Eligible
Receivable”
means,
at any time, a Receivable:
(a) that
is
not a Receivable (i) as to which any payment, or part thereof, remains unpaid
for sixty-one (61) or more days from the original due date thereof, (ii) as
to
which, to the actual knowledge of Borrower or the Servicer, the Obligor thereof
is subject to an Event of Bankruptcy or (iii) which, consistent with the Credit
and Collection Policy, has been or should be written off as
uncollectible,
(b) that,
if
a Billed Receivable, by its terms is due and payable within 30 days of the
original billing date therefor and has not had its payment terms
extended,
(c) that
is
an “account” or “general intangible” within the meaning of Section 9-102 of the
UCC of all applicable jurisdictions,
(d) that
is
denominated and payable only in Dollars in the United States or for which
payment is guaranteed in Dollars,
(e) the
Obligor of which maintains a service address in the United States,
(f) the
Obligor of which is not an Affiliate of any of the parties hereto or
Originator,
(g) which
does not arise under a Contract created pursuant to a public assistance program,
nor require payments based on a percentage of Obligor’s income,
(h) that
arises under a Contract that, together with such Receivable, is in full force
and effect and constitutes the legal, valid and binding obligation of the
related Obligor enforceable against such Obligor in accordance with its terms
subject to no offset, counterclaim or other defense, except as such enforcement
may be limited by applicable bankruptcy, insolvency or other similar laws
affecting creditors’ rights generally,
(i) that
arises under a Contract that (A) does not require the Obligor under such
Contract to consent to the transfer, sale or assignment of the rights and duties
of Originator or any of its assignees under such Contract and (B) does not
contain a confidentiality provision that purports to restrict the ability of
any
Secured Party to exercise its rights under this Agreement, including,
without limitation,
its
right to review the Contract,
(j) that
arises under a Contract that contains an obligation to pay a specified sum
of
money, contingent only upon the sale of goods or power or the provision of
services by Originator and not by and other Person (in whole or in
part),
(k) that,
together with the Contract related thereto, does not contravene any law, rule
or
regulation applicable thereto (including,
without limitation,
any
law, rule or regulation relating to truth in lending, fair credit billing,
fair
credit reporting, equal credit opportunity, fair debt collection practices
and
privacy) and with respect to which no part of the Contract related thereto
is in
violation of any such law, rule or regulation,
(l) that
satisfies in all material respects all applicable requirements of the Credit
and
Collection Policy,
(m) that
was
generated in the ordinary course of Originator’s business,
(n) that
is
not subject to any right of rescission, set-off, counterclaim, any other defense
(including defenses arising out of violations of usury laws) of the applicable
Obligor against Originator (it being understood that only a portion of a
Receivable equal to the amount of such partial rescission, set-off, counterclaim
or defense, if the amount of such partial rescission, set-off, counterclaim
or
defense can be quantified, shall be deemed not to be an Eligible Receivable)
or
any other Adverse Claim, and the Obligor thereon holds no right as against
Originator to cause Originator to repurchase the goods or merchandise the sale
of which shall have given rise to such Receivable (except with respect to sale
discounts effected pursuant to the Contract, or defective goods returned in
accordance with the terms of the Contract),
(o) as
to
which Originator has satisfied and fully performed all obligations on its part
with respect to such Receivable required to be fulfilled by it, and no further
action is required to be performed by any Person with respect thereto other
than
payment thereon by the applicable Obligor,
(p) all
right, title and interest to and in which has been validly transferred by
Originator directly to Borrower under and in accordance with the Receivables
Sale Agreement, and Borrower has good and marketable title thereto free and
clear of any Adverse Claim,
(q) that
is
an account receivable representing all or a part of the sales price of
merchandise sold or services rendered within the meaning of Section 3(c)(5)
of
the Investment Company Act of 1940, as amended
(r) that,
if
funded with the proceeds of Promissory Notes, would constitute a “current
transaction” within the meaning of Section 3(a)(3) of the Securities Act of
1933, as amended, and
(s) which,
if
an Unbilled Receivable, has remained unbilled for not more than 31 days since
the date of creation.
“ERISA”
means
the Employee Retirement Income Security Act of 1974, as amended or any successor
statute.
“ERISA
Affiliate”
means
(a) a corporation which is a member of a controlled group of corporations with
PSE within the meaning of Section 414(b) of the IRC, (b) a trade or business
(whether or not incorporated) which is under common control with PSE within
the
meaning of Section 414(c) of the IRC or Section 4001(b)(1) of ERISA, (c) a
member of an affiliated service group with PSE within the meaning of Section
414(m) of the IRC, or (d) an entity treated as under common control with PSE
by
reason of Section 414(o) of the IRC.
“ERISA
Plan”
means
any employee benefit plan (a) maintained by PSE or any ERISA Affiliate, or
to
which any of them contributes or is obligated to contribute, for its employees
and (b) covered by Title IV of ERISA or to which Section 412 of the IRC
applies.
“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.
“Event
of Bankruptcy”
means,
with respect to any Person:
(a) such
Person shall fail generally to pay its debts as they come due, or shall make
a
general assignment for the benefit of creditors; or any case or other proceeding
shall be instituted by such Person seeking to adjudicate it as bankrupt or
insolvent, or seeking liquidation, reorganization, debt arrangement,
dissolution, winding up, or composition or readjustment of debts of it or its
debts under the Federal Bankruptcy Code or any other law relating to bankruptcy,
insolvency, reorganization, winding up or composition or adjustment of debts,
or
seeking the entry of an order for relief or the appointment of a trustee,
receiver, custodian, liquidator, assignee, sequestrator or the like for such
Person or all or substantially all of its assets; or such Person shall take
any
corporate or limited liability company action to authorize any of such actions;
or
(b) a
case or
other proceeding shall be commenced, without the application or consent of
such
Person in any court seeking the liquidation, reorganization, debt arrangement,
dissolution, winding up, or composition or readjustment of debts of such Person,
the appointment of a trustee, receiver, custodian, liquidator, assignee,
sequestrator or the like for such Person or all or substantially all of its
assets, or any similar action with respect to such Person under the Federal
Bankruptcy Code or any other law relating to bankruptcy, insolvency,
reorganization, winding up or composition or adjustment of debts, and (A) such
case or proceeding shall continue undismissed, or unstayed and in effect, for
a
period of sixty (60) consecutive days or (B) an order for relief in respect
of
such Person shall be entered in such case or proceeding or a decree or order
granting such other requested relief shall be entered.
“Event
of Termination”
has
the
meaning set forth in Section
7.01.
“Excess
Interest”
means,
in respect of Cash Secured Advances at any time, the excess of (a) the aggregate
unpaid accrued interest on the Cash Secured Advances at such time over (b)
the
aggregate interest, dividends and any net investment gains received by the
applicable Managing Agent in respect of the Cash Collateral and available for
withdrawal from the Collateral Advance Account at such time.
“Excluded
Receivables”
means
all receivables of the Originator other than the Receivables.
“Face
Amount”
means
in relation to any Promissory Notes (a) if issued on a discount basis, the
face
amount stated therein and (b) if issued on an interest-bearing basis, the
principal amount stated therein plus the amount of all interest accrued or
to
accrue thereon on or prior to its stated maturity date.
“Facility
Documents”
means
collectively, this Agreement, the Receivables Sale Agreement, the Fee Letter,
each Blocked Account Agreement, each Lock-Box Transfer Notice and all other
agreements, documents and instruments delivered pursuant thereto or in
connection therewith.
“Facility
Limit”
means
$200,000,000, adjusted as necessary to give effect to the application of any
Joinder Agreement, any reduction pursuant to Section
2.01(b)
and any
change in the amount of any Lender Group Limit.
“Federal
Funds Rate”
means,
with respect to any Lender 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 immediately 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 applicable Managing Agent from three federal funds
brokers of recognized standing selected by it.
“Fee
Letter”
means
the Fee Letter dated as of the date hereof among the Managing Agents and the
Borrower, as the same may be amended, restated, supplemented or otherwise
modified from time to time.
“Fee
Payment Date”
means
the third (3rd)
Business Day of each Monthly Period.
“Fees”
means,
collectively, all Liquidity Fees, Program Fees, Administrative Fees and Other
Fees.
“Final
Collection Date”
means
the date on or following the Termination Date on which the Aggregate Principal
Balance has been reduced to zero and all other Borrower Obligations have been
paid in full.
“Finance
Charges”
means,
with respect to a Contract, any finance, interest, late payment charges or
similar charges owing by an Obligor pursuant to such Contract.
“GAAP”
means
generally accepted accounting principles in the United States of America as
in
effect from time to time.
“Governmental
Authority”
means
any national, state or local government (whether domestic or foreign), any
political subdivision thereof or any other governmental, quasi-governmental,
judicial, regulatory, public or statutory instrumentality, authority, body,
agency, bureau or entity (including any zoning authority, the Federal Energy
Regulatory Commission, the Comptroller of the Currency or the Federal Reserve
Board, any central bank or any comparable authority) or any arbitrator with
authority to bind a party to this Agreement at law.
“Governmental
Rule”
means
any law, rule, regulation, ordinance, order, code interpretation, treaty,
judgment, decree, directive, guidelines, policy or similar form of decision
of
any Governmental Authority.
“Government
Receivable”
means
any Receivable the Obligor of which is a Governmental Authority.
“Government
Receivable Overconcentration Amount”
means,
at any time, the aggregate, for all Obligors which are Governmental Authorities,
of the amounts by which the aggregate Outstanding Balance of all Eligible
Receivables of such Obligors at such time exceeds the product of (x) the
percentage set forth on Schedule IV hereto under the heading “Government
Receivables Overconcentration Percentage” applicable to the Ratings Period then
in effect at such time and (y) the aggregate Outstanding Balance of all
Receivables at such time.
“Incipient
Event of Termination”
means
any event which, with the giving of notice or lapse of time or both, would
constitute an Event of Termination.
“Indebtedness”
of
a
Person means such Person’s (i) obligations for borrowed money, (ii) obligations
representing the deferred purchase price of Property or services (other than
accounts payable arising in the ordinary course of such Person’s business
payable on terms customary in the trade), (iii) obligations, whether or not
assumed, secured by Adverse Claims or payable out of the proceeds or production
from Property now or hereafter owned or acquired by such Person, (iv)
obligations which are evidenced by notes, bankers’ acceptances, or other
instruments, (v) obligations to purchase accounts, securities or other Property
arising out of or in connection with the sale of the same or substantially
similar accounts, securities or Property, (vi) Capitalized Lease Obligations,
(vii) other obligations for borrowed money or other financial accommodation
which in accordance with GAAP would be shown as a liability on the consolidated
balance sheet of such Person, (viii) net liabilities under interest rate swap,
exchange or cap agreements, obligations or other liabilities with respect to
accounts or notes, (ix) sale and leaseback transactions which do not create
a
liability on the consolidated balance sheet of such Person, (x) obligations
in
connection with other transactions (excluding operating leases under GAAP)
which
are the functional equivalent, or take the place, of borrowing but which do
not
constitute a liability on the consolidated balance sheet of such Person, and
(xi) Contingent Obligations; provided,
that,
except for purposes of Section
7.01(c),
the
following shall not constitute “Indebtedness”: (a) obligations with respect to
Trust Preferred Securities that are not due and unpaid; (b) obligations arising
under Qualified Receivables Transactions, (c) obligations with respect to
preferred stock of such Person outstanding on the date hereof; and (d)
obligations with respect to preferred stock of such Person issued after the
date
hereof.
“Indemnified
Party”
has
the
meaning set forth in Section
8.01.
“Independent
Director”
shall
mean a member of the Board of Directors of Borrower who is not at such time,
and
has not been at any time during the preceding five (5) years, (A) a director,
officer, employee or affiliate of Borrower, Originator, or any of their
respective Subsidiaries or Affiliates (other than Rainier), or (B) the
beneficial owner (at the time of such individual’s appointment as an Independent
Director or at any time thereafter while serving as an Independent Director)
of
any of the outstanding common shares of Borrower, Originator, or any of their
respective Subsidiaries or Affiliates, having general voting
rights.
“Initial
Borrowing”
means
the first Borrowing made pursuant to this Agreement.
“Interest”
means,
for any Tranche and any Tranche Period, the sum for each day during such Tranche
Period of the following:
IR
x
PB/CB where:
|
where:
|
||
|
IR
|
=
|
the
Interest Rate for such Tranche for such day.
|
|
PB
|
=
|
the
Principal Balance of such Tranche on such day.
|
|
CB
|
=
|
(i)
in the case of a Tranche, the Interest Rate for which is based on
the Base
Rate, 365 and (ii) in the case of any other Tranche,
360.
|
“Interest
Payment Date”
means,
(i) with respect to any Tranche which accrues interest at the CP Rate, the
third
(3rd)
Business Day of the month immediately succeeding the related Tranche Period,
(ii) with respect to any Base Rate Tranche, the third (3rd)
Business Day of the month immediately succeeding the month in which the related
Tranche Period ends, and (iii) with respect to any LIBOR Tranche, the last
day
of the related Tranche Period and with respect to any such Tranche Period longer
than three (3) months, every three months after the first day of the Tranche
Period and on the last day of the related Tranche Period.
“Interest
Rate”
means,
with respect to any Tranche for any day (a) to the extent such Tranche is funded
on such day by a Conduit Lender through the issuance of Promissory Notes, the
CP
Rate and (ii) otherwise, the Alternative Rate; provided,
that at
all times following the occurrence and during the continuation of an Event
of
Termination, the Interest Rate for each Tranche on each day shall be an interest
rate per annum equal to the Base Rate in effect from time to time plus
2.00%.
“IRC”
means
the Internal Revenue Code of 1986, as amended from time to time, and any
successor statute.
“IRS”
means
the Internal Revenue Service of the United States of America.
“Joinder
Agreement”
means
a
joinder agreement substantially in the form set forth as Exhibit
I
hereto
pursuant to which a new Lender Group becomes party to this
Agreement.
“JPMorgan”
has
the
meaning set forth in the preamble.
“Law”
means
any law (including common law), constitution, statute, treaty, regulation,
rule,
tariff, ordinance, order, injunction, writ, decree or award of any Governmental
Authority.
“Lender”
means
any Conduit Lender or Committed Lender, as applicable, and “Lenders”
means,
collectively, the Conduit Lenders and the Committed Lenders.
“Lender
Group”
means
any Managing Agent and its related Conduit Lenders and Committed
Lenders.
“Lender
Group Limit”
means,
for any Lender Group, the amount set forth on Schedule
I
(or in
the Joinder Agreement pursuant to which such Lender Group became party hereto)
subject to assignment pursuant to Section
10.03,
as such
amount may be reduced in accordance with Section
2.01(b).
“Lender
Group Percentage”
means,
for any Lender Group, the percentage equivalent to a fraction (expressed out
to
five decimal places), the numerator of which is the aggregate Commitments of
all
Committed Lenders in such Lender Group and the denominator of which is the
Aggregate Commitment.
“Level
1 Ratings Period”
means
any period of time during which the Debt Rating of PSE is (i) BBB- or higher
by
S&P and (ii) Baa3 or higher by Moody’s.
“Level
2 Ratings Period”
means
any period of time, other than a Level 2A Ratings Period, a ▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇ Ratings Period, Level 4A Ratings Period or Level 5 Ratings
Period, during which the Debt Rating of PSE is below (i) BBB- by S&P or (ii)
Baa3 by Moody’s.
“Level
2A Ratings Period”
means
any period of time, during which the Debt Rating of PSE is (i) BB+ by S&P
and (ii) Ba1 by Moody’s.
“Level
3 Ratings Period”
means
any period of time, other than a ▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇ Ratings Period
or Level 5 Ratings Period, during which the Debt Rating of PSE is below (i)
BB+
by S&P or (ii) Ba1 by Moody’s.
“Level
4 Ratings Period”
means
any period of time, other than a Level 4A Ratings Period or Level 5 Ratings
Period, during which the Debt Rating of PSE is below (i) BB- by S&P or (ii)
Ba3 by Moody’s.
“Level
4A Ratings Period”
means
any period of time other than any other Ratings Period during which the Debt
Rating of PSE is (i) B or higher by S&P and (ii) B2 or higher by
Moody’s.
“Level
5 Ratings Period”
means
any period of time during which the Debt Rating of PSE is (a) below (i) B by
S&P or (ii) B2 by Moody’s, or (b) withdrawn by either S&P or
Moody’s.
“LIBO
Rate”
means,
for any Tranche for any Tranche Period, the rate determined by the related
Managing Agent by reference to the British Bankers’ Association Interest
Settlement Rate for deposits in Dollars, with a maturity comparable to such
Tranche Period, appearing on page 3750 of the Telerate Service (or any such
page
as may replace page 3750 on such service or any successor to or substitute
for
such service, providing rate quotations comparable to those currently provided
by such service, as determined by the related Managing Agent from time to time
for purposes of providing quotations of interest rates applicable to deposits
in
Dollars in the London interbank market) at approximately 11:00 a.m., London
time, on the second Business Day before the first day of such Tranche Period.
In
the event that such rate is not available at such time for any reason, then
the
“LIBO Rate” shall be the rate at which deposits in Dollars in a principal amount
of not less than $1,000,000 and for a maturity comparable to such Tranche Period
are offered by the related Reference Bank in immediately available funds in
the
London interbank market at approximately 11:00 a.m., London time, on the second
Business Day before (and for value on) the first day of such Tranche
Period.
“LIBO
Rate Reserve Percentage”
means,
for any Tranche Period in respect of which Interest is computed by reference
to
the LIBO Rate, the reserve percentage applicable two Business Days before the
first day of such Tranche 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 Tranche 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 Tranche
Period.
“LIBOR
Tranche”
has
the
meaning set forth in Section
2.03(b).
“Liquidation
Fee”
means
for any Tranche Period of any LIBOR Tranche held by a Lender (i) the amount,
if
any, by which the additional Interest which would have accrued during such
Tranche Period on the reductions of the Principal Balance of the LIBOR Tranche
relating to such Tranche Period had a reduction of the Principal Balance not
occurred, exceeds (ii) the income, if any, received by the Lender which holds
such LIBOR Tranche from the investment of the proceeds of such reductions of
Principal Balance. A certificate as to the amount of any Liquidation Fee
(including the computation of such amount) shall be submitted by the affected
Lender to the Borrower and shall be conclusive and binding for all purposes,
absent manifest error.
“Liquidity
Fee”
has
the
meaning set forth in the Fee Letter.
“Liquidity
Provider”
means
any of the financial institutions from time to time party to any Asset Purchase
Agreement or any liquidity loan agreement or similar arrangement with a Conduit
Lender.
“Loan”
means
a
loan made to the Borrower pursuant to Article
II.
“Lock-Box”
means
any post office box maintained by the Originator, the Servicer or a Deposit
Account Bank, in each case, for the purpose of receiving payments on Receivables
or other Collections.
“Lock-Box
Transfer Notice”
means
a
notice in substantially the form attached hereto as Exhibit
K.
“Loss
Horizon Ratio”
means,
as of any date, a ratio computed by dividing (i) the sum of (a) the aggregate
Original Balance of all Billed Receivables created by the Originator during
the
four most recently ended Monthly Periods and (b) the aggregate Outstanding
Balance of all Unbilled Receivables as of such day by (ii) the amount equal
to
(a) the Outstanding Balance of all Receivables other than Receivables as to
which any payment, or part thereof, remains unpaid for sixty-one (61) or more
days from the original due date thereof as of the last day of the most recently
ended Monthly Period minus
(b) the
aggregate Unapplied Cash/Credit Memos as of the last day of the most recently
ended Monthly Period.
“Loss
Ratio”
means,
as of any date, the ratio (expressed as a percentage) determined by dividing
(i)
the sum of (a) the aggregate Outstanding Balance of all Receivables that
remained unpaid at least 91 days, but not greater than 120 days from their
respective original due dates as of the most recently ended Monthly Period,
plus
(b) the
aggregate Outstanding Balance of all Receivables that were (or should have
been
in accordance with the Credit and Collection Policy) written off during such
Monthly Period but which remained unpaid less than 91 days from their respective
original due dates by (ii) the aggregate Outstanding Balance of all Billed
Receivables generated during the fourth Monthly Period prior to the most
recently ended Monthly Period.
“Loss
Reserve Floor Percentage”
means,
at any time, (a) during a ▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇ Ratings Period or
▇▇▇▇▇ ▇▇ Ratings Period, the product of (i) 4 and (ii) the Normal Concentration
Limit, and (b) during any other Ratings Period, the product of (i) 5 and (ii)
the Normal Concentration Limit.
“Majority
Committed Lenders”
means,
at any time, Committed Lenders whose Commitments together exceed fifty percent
(50%) of the Aggregate Commitment at such time.
“Majority
Managing Agents”
means,
at any time, Managing Agents whose Lender Group Limits together exceed fifty
percent (50%) of the Facility Limit at such time.
“Managing
Agent”
means,
as to any Conduit Lender or Committed Lender, the Person listed on Schedule
I
as the
“Managing Agent” for such Lenders, together with its respective successors and
permitted assigns.
“Material
Adverse Effect”
means
a
material adverse effect on (i) the financial condition, operations or prospects
of any Borrower Party and its Subsidiaries, (ii) the ability of any Borrower
Party to perform its obligations under this Agreement or any other Facility
Document, (iii) the legality, validity or enforceability of this Agreement
or
any other Facility Document, (iv) any Secured Party’s interest in the
Receivables generally or in any significant portion of the Receivables, the
Related Security or the Collections with respect thereto, or (v) the
collectibility of the Receivables generally or of any material portion of the
Receivables.
“Monthly
Period”
means
each calendar month.
“Monthly
Report”
means
a
report, in substantially the form of Exhibit
C-1,
furnished by the Servicer to the Managing Agents for the Lenders pursuant to
Section
6.07.
“Monthly
Reporting Date”
means
the fifteenth (15th)
day of
each Monthly Period (or, if such day is not a Business Day, the next succeeding
Business Day).
“Monthly
Reporting Period”
means
any period during which the PSE’s Debt Rating shall be BB+ or higher by S&P
and Ba1 or higher by Moody’s.
“Moody’s”
means
▇▇▇▇▇’▇ Investors Service, Inc., and its successors.
“Multiemployer
Plan”
means
any ERISA Plan that is a multiemployer plan (as defined in Section 4001(a)(3)
of
ERISA).
“Net
Worth”
means
PSE’s consolidated stockholders’ equity.
“Net
Receivables Pool Balance”
means
at any time, an amount equal to the Outstanding Balances of all Receivables
reduced,
without
duplication, by the sum of (i) the Outstanding Balance of all Receivables that
are not Eligible Receivables, (ii) the aggregate amount of Unapplied Cash/Credit
Memos at such time, (iii) the Obligor Overconcentration Amount at such time,
(iv) the Government Receivable Overconcentration Amount at such time, (v) the
Unbilled Receivables Overconcentration Amount at such time, (vi) the Customer
Deposit Overconcentration Amount at such time, (vii) the Taxes Overconcentration
Amount at such time, (viii) the credit balance portion of all Receivables
arising under an Obligor’s account which are subject to a balanced or levelized
payment plan of Originator at such time, (ix) the aggregate amount of Finance
Charges then due and owing with respect to all Eligible Receivables at such
time
and (x) the Unbilled Adjustment Factor for Ineligible Billed Receivables at
such
time.
“Normal
Concentration Limit”
means,
at any time with respect to any Obligor, 2.25% of the Net Receivables Pool
Balance.
“Obligor”
means
any Person obligated to make payments pursuant to a Contract.
“Obligor
Overconcentration Amount”
means,
at any time, the aggregate, for all Obligors, of the amounts by which the
aggregate Outstanding Balance of all Eligible Receivables of each such Obligor
and its Affiliates exceeds the product of (i) the applicable Concentration
Limit
for such Obligor at such time, and (ii) the Net Receivables Pool Balance at
such
time.
“Official
Body”
means
any Governmental Authority or any accounting board or authority (whether or
not
part of a government) which is responsible for the establishment or
interpretation of national or international accounting principles, in each
case
whether foreign or domestic.
“Original
Balance”
means,
with respect to any Receivable, the Outstanding Balance of such Receivable
on
the date it was originated.
“Originator”
means
Puget Sound Energy, Inc.
“Other
Fees”
means
amounts owed by the Borrower hereunder pursuant to Sections
2.10,
2.11,
2.12,
2.13,
8.01
and
10.10.
“Outstanding
Balance”
means,
with respect to a Receivable at any time, the then outstanding principal balance
thereof.
“Participant”
has
the
meaning specified in Section
10.03(f).
“Past
Due Ratio”
means
the ratio computed as of the most recently ended Monthly Period by dividing
(i)
the sum of (a) all Receivables which remained unpaid at least 61 days, but
not
greater than 90 days from their respective original due dates as of the most
recently ended Monthly Period plus
(b) the
aggregate Outstanding Balance of all Receivables that were (or should have
been
in accordance with the Credit and Collection Policy) written off during such
Monthly Period by (ii) the aggregate Original Balance of all Billed Receivables
generated during the third Monthly Period prior to the most recently ended
Monthly Period.
“PBGC”
means
the Pension Benefit Guaranty Corporation established pursuant to Subtitle A
of
Title IV of ERISA.
“Permitted
Investments”
shall
mean:
(a) direct
obligations of, or guaranteed as to the full and timely payment of principal
and
interest by, the United States or obligations of any agency or instrumentality
thereof, if such obligations are backed by the full faith and credit of the
United States;
(b) federal
funds, certificates of deposit, time deposits, bankers’ acceptances (which shall
each have an original maturity of not more than ninety (90) days and, in the
case of bankers’ acceptances, shall in no event have an original maturity of
more than 365 days) or demand deposits of any United States depository
institution or trust company organized under the laws of the United States
or
any state and subject to supervision and examination by federal and or state
banking authorities; provided,
that
the short-term obligations of such depository institution or trust company
are
rated in one of the two highest available rating categories by the Rating
Agencies on the date of acquisition thereof;
(c) commercial
paper (having original maturities of not more than thirty (30) days) of any
corporation incorporated under the laws of the United States or any state
thereof which is rated A-1 or better by S&P and P-1 by Moody’s on the date
of acquisition thereof;
(d) securities
of money market funds rated AA or better by S&P and Aa or better by Moody’s
on the date of acquisition thereof; or
(e) repurchase
obligations secured by an investment described in clause (a)
above
with a market value greater than the repurchase obligation, provided
that
such security is held by a third party custodian which has a rating for its
short-term, unsecured debt or commercial paper (other than such obligations
the
rating of which is based on the credit of a Person other than such custodian)
of
P-1 by Moody’s and at least A-1 by S&P on the date of acquisition
thereof.
“Person”
means
an individual, partnership, corporation (including a business trust), joint
stock company, limited liability company, trust, unincorporated association,
joint venture, Governmental Authority or other entity.
“Pooled
Commercial Paper”
means
Promissory Notes of a Conduit Lender subject to any particular pooling
arrangement by such Conduit Lender, but excluding Promissory Notes issued by
such Conduit Lender for a tenor and in an amount specifically requested by
any
Person in connection with any agreement effected by such Conduit
Lender.
“Prime
Rate”
means,
with respect to any Lender Group, the rate of interest announced publicly by
the
related Reference Bank from time to time as its prime or base rate (such rate
not necessarily being the lowest or best rate charged by such Reference
Bank).
“Principal
Balance”
means
with respect to any Tranche, the original principal amount of a Loan made
hereunder that has been allocated to such Tranche pursuant to Section
2.03(a),
as such
amount may be divided or combined in accordance therewith, in each case as
reduced from time to time by (i) payments made in accordance with Section
2.05
and (ii)
Collections received by the applicable Lender holding such Tranche from
distributions made pursuant to Section
2.06
or
Section
2.07,
as
applicable, that have been applied to reduce the Principal Balance of such
Tranche (or during the Term Period, deposited in the Collateral Advance
Account); provided, that if such Principal Balance 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 Principal Balance
shall be increased by the amount of such rescinded or returned distribution,
as
though it had not been received by such Lender.
“Program
Agent”
means
JPMorgan, in its capacity as agent for the Lenders, together with its successors
and permitted assigns.
“Program
Fee”
has
the
meaning set forth in the Fee Letter.
“Program
Fee Rate”
has
the
meaning set forth in the Fee Letter.
“Prohibited
Transaction”
means
any transaction set forth in Section 406 of ERISA or Section 4975 of the IRC
which is not exempt under Section 408 of ERISA or Section 4975(d) of the IRC
(or
any exemption issued thereunder).
“Promissory
Notes”
means
commercial paper promissory notes issued by a Conduit Lender.
“Property”
of
a
Person means any and all property, whether real, personal, tangible, intangible,
or mixed, of such Person, or other assets owned, leased or operated by such
Person.
“Pro
Rata Share”
means,
at any time for any Committed Lender in any Lender Group, (a) the Commitment
of
such Committed Lender at such time divided by
the sum
of the Commitments of all Committed Lenders in such Lender Group at such time
and (b) after the Commitments of all the Committed Lenders in such Lender Group
have been terminated, the outstanding principal amount of the Loans funded
by
such Committed Lender at such time divided by the outstanding principal amount
of the Loans funded by all the Committed Lenders in such Lender Group at such
time.
“PSE”
has
the
meaning set forth in the preamble hereto.
“Qualified
Receivables Transaction”
means
any transaction or series of transactions that may be entered into by PSE or
any
Subsidiary pursuant to which PSE or any Subsidiary may sell, convey, pledge
or
otherwise transfer to a newly-formed Subsidiary or other special purpose entity,
or any other Person, any accounts receivable (including chattel paper,
instruments and general intangibles) or notes receivable and the rights and
certain other property related thereto; provided
that the
Receivables Transaction Attributed Indebtedness incurred in all such
transactions or series of transactions does not exceed $200,000,000 at any
time
outstanding.
“Rainier”
means
Rainier Receivables, Inc., a Washington corporation.
“Rate
Type”
means
the Adjusted LIBO Rate, the Base Rate or the CP Rate.
“Rating
Agencies”
means
each of S&P and Moody’s or their respective successors.
“Ratings
Period”
means
each of a ▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇ Ratings Period, ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇ Ratings Period, ▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇ Ratings Period,
and Level 5 Ratings Period.
“Receivable”
means
all indebtedness and other obligations arising in connection with the sale
of
goods or the rendering of services by Originator and which are owed to
Originator (at the time it arises, and before giving effect to any transfer
or
conveyance thereof) or Borrower (after giving effect to transfers or conveyances
under the Receivables Sale Agreement) or in which Borrower or Originator has
a
security interest or other interest, including,
without limitation,
any
indebtedness, obligation or interest constituting an account, chattel paper,
instrument or general intangible, and which are identified on the books and
records of Originator or Borrower (including its accounting system) with the
account code “FERC 142 Account Receivable”, interest, finance charges, sales
taxes and other taxes with respect thereto, and including, with respect to
Unbilled Receivables existing on the Termination Date, 100% of the amount
thereafter invoiced to any related Obligor after the Termination Date, and
further includes, without limitation, the obligation to pay any Finance Charges
with respect thereto. Indebtedness and other rights and obligations arising
from
any one transaction, including,
without limitation,
indebtedness and other rights and obligations represented by an individual
invoice, shall constitute a Receivable separate from a Receivable consisting
of
the indebtedness and other rights and obligations arising from any other
transaction; provided,
that any
indebtedness, rights or obligations referred to in the immediately preceding
sentence shall be a Receivable regardless of whether the account debtor,
Originator or Borrower treats such indebtedness, rights or obligations as a
separate payment obligation.
“Receivables
Sale
Agreement”
means
that certain Receivables Sale Agreement dated as of the date hereof between
the
Originator and the Borrower, as amended, restated, supplemented or otherwise
modified from time to time.
“Receivables
Transaction Attributed Indebtedness”
means,
with respect to any Qualified Receivables Transaction on any date of
determination, the unrecovered purchase price on such date of all assets sold,
conveyed, pledged or otherwise transferred by PSE or any Subsidiary to the
third-party conduit entity or other receivables credit provider under such
Qualified Receivables Transaction.
“Records”
means
all Contracts and all other agreements, documents, instruments, books, records
and other information (including, without limitation, computer programs, tapes,
discs, punch cards, data processing software and related property and rights)
with respect to the Receivables, the related Obligors and the Related
Security.
“Reference
Bank”
means,
with respect to any Lender Group, the financial institution identified as the
Reference Bank for such Lender Group on Schedule
I
or such
other financial institution as shall be specified by the Managing Agent for
such
Lender Group in a written notice to the Borrower.
“Related
Entity”
means
the Originator and each of its Affiliates and their respective
successors.
“Related
Security”
means,
with respect to any Receivable:
(a) all
of
Borrower’s interest in the inventory and goods (including returned or
repossessed inventory or goods), if any, the sale, licensing, financing or
lease
of which by Originator gave rise to such Receivable, and all insurance contracts
with respect thereto,
(b) all
other
security interests or liens and property subject thereto from time to time,
if
any, purporting to secure payment of such Receivable, whether pursuant to the
Contract related to such Receivable or otherwise, together with all financing
statements and security agreements describing any collateral securing such
Receivable,
(c) all
guaranties, letters of credit, insurance, “supporting obligations” (within the
meaning of Section 9-102(a) of the UCC of all applicable jurisdictions) and
other agreements or arrangements of whatever character from time to time
supporting or securing payment of such Receivable whether pursuant to the
Contract related to such Receivable or otherwise,
(d) all
service contracts and other contracts and agreements associated with such
Receivable,
(e) all
Records related to such Receivable,
(f) all
of
Borrower’s right, title and interest in, to and under the Receivables Sale
Agreement with respect to such Receivable,
(g) all
of
Borrower’s right, title and interest in and to each Lock-Box, each Deposit
Account and the Collection Account, and any and all agreements related thereto,
and
(h) all
proceeds of any of the foregoing.
“Release”
has
the
meaning specified in Section
2.06(a)(v).
“Reportable
Event”
means
any of the events identified in section 4043(c) of ERISA for which the 30-day
notice requirement has not been waived by statute, regulation or
otherwise.
“Required
Reserves”
means,
at any time, the sum of the Yield and Servicer Fee Reserve and the Combined
Reserve at such time.
“Restricted
Junior Payment”
means
(i) any dividend or other distribution, direct or indirect, on account of any
shares of any class of capital stock of Borrower now or hereafter outstanding,
except a dividend payable solely in shares of that class of stock or in any
junior class of stock of Borrower, (ii) any redemption, retirement, sinking
fund
or similar payment, purchase or other acquisition for value, direct or indirect,
of any shares of any class of capital stock of Borrower now or hereafter
outstanding, (iii) any payment made to redeem, purchase, repurchase or retire,
or to obtain the surrender of, any outstanding warrants, options or other rights
to acquire shares of any class of capital stock of Borrower now or hereafter
outstanding, and (iv) any payment of management fees by Borrower (except for
reasonable management fees to the Originator or its Affiliates in reimbursement
of actual management services performed).
“S&P”
means
Standard & Poor’s Ratings Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies,
Inc., and its successors.
“Scheduled
Termination Date”
means
December 19, 2006, unless such date is extended pursuant to Section
2.01(c).
“Secured
Parties”
means,
collectively, the Lenders, each Managing Agent, the Program Agent and each
other
Indemnified Party.
“Servicer”
means
PSE, or such other Person(s) then authorized pursuant to Section
6.01
to
service, administer, ▇▇▇▇ and collect Receivables.
“Servicer
Fee”
has
the
meaning set forth in Section 6.08; provided,
that if
the Servicer is not PSE or an Affiliate of PSE, the Servicer Fee shall be an
amount equal to the market rate for servicing similar Receivables.
“Servicer
Fee Rate”
means
a
rate per annum equal to 0.25%.
“Servicer
Fee Reserve Percentage”
means,
at any time, for purposes of calculating the Yield and Servicer Fee Reserve,
an
amount equal to the product of (a) the Servicer Fee Rate and (b) the sum of
the
Three-Month Days Sales Outstanding Ratio plus
a
collection delay factor of 10 divided
by
360.
“Settlement
Date”
means
(i) during any Monthly Reporting Period, the second Business Day immediately
following each Monthly Reporting Date, (ii) during any Weekly Reporting Period,
the Business Day immediately following each day a Weekly Report is required
to
be delivered pursuant to Section
6.07,
(iii)
during any Daily Reporting Period, the Business Day immediately following each
day a Daily Report is required to be delivered pursuant to Section
6.07
and (iv)
(A) during any period when the conditions precedent set forth in Section
3.02
are not
satisfied and (B) on and after the occurrence of the Termination Date each
other
Business Day specified by the Program Agent (at the direction of any Managing
Agent, which, in the discretion of any Managing Agent, may be as frequently
as
daily) in a written notice to the Borrower and the Servicer.
“Significant
Subsidiary”
means
a
“significant subsidiary” (as defined in Regulation S-X of the Securities and
Exchange Commission as in effect on the date of this Agreement) of
PSE.
“Special
Concentration Limit”
has
the
meaning assigned to that term in the definition of “Concentration
Limit.”
“Springing
Lien Indentures”
means
(i) that certain Indenture of First Mortgage given by PSE (as successor to
Washington Natural Gas Company) to BNY Midwest Trust Company (as successor
to
▇▇▇▇▇▇ Trust and Savings Bank), as Trustee, dated as of April 1, 1957, as such
has been, and may further be, amended, restated, supplemented or otherwise
modified from time to time, which amendments, restatements, supplements and
modifications shall include, but not be limited to, all Supplemental Indentures
and Security Agreements related thereto and (ii) that certain First and
Refunding Mortgage given by PSE (as successor to Puget Sound Power & Light
Company) to U.S. Bank National Association (as successor to Old Colony Trust
Company of Boston), as Trustee, dated as of June 2, 1924, as such has been,
and
may further be, amended, restated, supplemented or otherwise modified from
time
to time, which amendments, restatements, supplements and modifications shall
include, but not be limited to, all Supplemental Indentures and Real Estate
Mortgages related thereto.
“Stress
Factor”
means
(i) during any ▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇ Ratings Period, or ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇▇, (▇▇) during any ▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇ Ratings
Period or Level 4A Ratings Period, 2.25 and (iii) during any Level 5 Ratings
Period, 2.50.
“Subsidiary”
of
a
Person means (i) any corporation more than 50% of the outstanding securities
having ordinary voting power of which shall at the time be owned or controlled,
directly or indirectly, by such Person or by one or more of its Subsidiaries
or
by such Person and one or more of its Subsidiaries, or (ii) any partnership,
limited liability company, association, joint venture or similar business
organization more than 50% of the ownership interests having ordinary voting
power of which shall at the time be so owned or controlled. Unless otherwise
expressly provided, all references herein to a “Subsidiary” shall mean a
Subsidiary of Borrower.
“Taxes
Overconcentration Amount”
means,
at any time, the amount by which the aggregate amount of taxes included in
the
Outstanding Balance of all Receivables exceeds the product of (i) the percentage
set forth on Schedule IV hereto under the heading “Taxes Overconcentration
Percentage” applicable to the Ratings Period then in effect at such time and
(ii) the aggregate amount of taxes included in the Outstanding Balance of all
Receivables at such time.
“Termination
Date”
means
the earliest to occur of (i) December 20, 2010, (ii) the declaration or
automatic occurrence of the Termination Date pursuant to Section
7.01,
and
(iii) that Business Day which the Borrower designates as the Termination Date
by
notice to the Program Agent at least five (5) Business Days prior to such
Business Day.
“Term-Out
Lender”
means
any Committed Lender which is a member of a Lender Group for which the Term
Period has commenced.
“Term
Period”
means,
for any Lender Group, the period commencing on the Cash Secured Advance
Commencement Date, if any, for such Lender Group and ending on the Termination
Date.
“Three-Month
Days Sales Outstanding Ratio”
means,
for any Monthly Period, the average of the Days Sales Outstanding Ratio for
such
Monthly Period and the two immediately preceding Monthly Periods.
“Three-Month
Loss Ratio”
means,
for any Monthly Period, the average of the Loss Ratios for such Monthly Period
and the two immediately preceding Monthly Periods.
“Total
Capitalization”
means,
at any time, the sum of the following for PSE and its Subsidiaries, determined
on a consolidated basis in accordance with GAAP (without duplication and
excluding minority interests in Subsidiaries):
(a) Net
Worth; plus
(b) the
aggregate obligations of PSE with respect to the Trust Preferred Securities;
plus
(c) the
aggregate obligations of PSE with respect to any preferred stock of PSE,
including any preferred stock subject to majority redemption, plus
(d) the
aggregate outstanding principal amount of all Consolidated
Indebtedness.
“Tranche”
has
the
meaning specified in Section
2.03(a).
“Tranche
Period”
means,
with respect to any Tranche:
(a) in
the
case of any Tranche in respect of which Interest is computed by reference to
the
CP Rate, (i) initially, the period commencing on (and including) the first
Borrowing Date and ending on (and including) the last day of the Monthly Period
in which such Borrowing Date occurs, and (ii) thereafter, each successive period
commencing on (but excluding) the last day of the immediately preceding Monthly
Period for such Tranche and ending on (and including) the last day of such
Monthly Period; and
(b) in
the
case of any Tranche in respect of which Interest is computed by reference to
the
Alternative Rate, each period from one to and including 30 days in the case
of a
Tranche funded at the Base Rate, or a period of one, two, three or six months
or
such other period as may be mutually agreeable to the applicable Managing Agent
and the Borrower in the case of a Tranche funded at the Adjusted LIBO Rate,
as
the Borrower shall select in a written notice to the Program Agent and the
Lenders not later than 1:00 P.M. (New York City time) on the second Business
Day
immediately before the first day of such Tranche Period, each such Tranche
Period for such Tranche to commence on the last day of the immediately preceding
Tranche Period for such Tranche (or if there is no such Tranche Period, on
the
applicable Borrowing Date thereof), except that if the Program Agent and the
Lenders shall not have received such notice before 1:00 P.M. on such second
Business Day, such Tranche Period shall be one day; provided,
however,
that:
(c) any
Tranche Period (other than of one day) which would otherwise end on a day which
is not a Business Day shall be extended to the next succeeding Business Day
(provided,
however,
that if
Interest in respect of such Tranche Period is computed by reference to the
Adjusted LIBO Rate, and such Tranche Period would otherwise end on a day which
is not a Business Day, and there is no subsequent Business Day in the same
calendar month as such day, such Tranche Period shall end on the next preceding
Business Day);
(d) in
the
case of any Tranche Period of one day, (A) if such Tranche Period is the initial
Tranche Period for a Tranche, such Tranche Period shall be the applicable
Borrowing Date; (B) any subsequently occurring Tranche Period which is one
day
shall, if the immediately preceding Tranche Period is more than one day, be
the
last day of such immediately preceding Tranche Period and, if the immediately
preceding Tranche Period is one day, be the day next following such immediately
preceding Tranche Period; and (C) if such Tranche Period occurs on a day
immediately preceding a day which is not a Business Day, such Tranche Period
shall be extended to the next succeeding Business Day;
(e) in
the
case of any Tranche Period for any Tranche which commences before the
Termination Date and would otherwise end on a date occurring after the
Termination Date, such Tranche Period shall end on the Termination Date and
the
duration of each Tranche Period which commences on or after the Termination
Date
shall be a period from and including the last day of the immediately preceding
Tranche Period (or, in the case of the initial Tranche Period immediately
following the Termination Date, from and including the Termination Date) to
but
excluding the next Interest Payment Date; and
(f) at
any
time when the Base Rate shall have been in effect for a Tranche Period of ten
consecutive Business Days, and the conditions set forth in clauses (a) and
(d)
of the definition of Alternative Rate do not exist, any Lender may, upon one
Business Day’s notice to the Borrower (with a copy to the Program Agent), select
as the next succeeding Tranche Period for such Tranche (and any subsequent
Tranche Periods designated by such Lender) a period of one month during which
Interest shall be computed by reference to the Adjusted LIBO Rate; provided,
however,
that
prior to such selection the Borrower may notify the applicable Lender that,
in
view of anticipated Collections and repayments, Interest should continue to
be
computed by reference to the Base Rate.
“Transaction
Parties”
means,
collectively, the Borrower, the Originator and (so long as it is PSE or an
Affiliate thereof) the Servicer.
“Two
Month Dilution Ratio”
means,
for any Monthly Period, the average of the Dilution Ratios for such Monthly
Period and the immediately preceding Monthly Period.
“UCC”
means
the Uniform Commercial Code as from time to time in effect in the applicable
jurisdiction.
“Unapplied
Cash/Credit Memos”
means,
as at any time, the sum of (i) the aggregate amount of Collections on hand
at
such time for payment on account of any Receivable, the Obligor of which has
not
been identified and (ii) the aggregate Outstanding Balance of all Receivables
in
respect of which any credit memo issued by the Originator or the Borrower is
outstanding at such time.
“Unbilled
Adjustment Factor for Ineligible Billed Receivables”
means,
at any time, the amount equal to the product of (i) the ratio calculated by
dividing (a) the Outstanding Balance of all Billed Receivables that are not
Eligible Receivables (excluding Receivables as to which any payment, or part
thereof, remains unpaid for sixty-one (61) or more days from the original due
date thereof) as of the end of the most recently ended Monthly Period by (b)
the
aggregate amount of outstanding Billed Receivables as of the end of the most
recently ended Monthly Period and (ii) the Outstanding Balance of Unbilled
Receivables as of the end of the most recently ended Monthly
Period.
“Unbilled
Receivable”
means
any Receivable for goods delivered or services performed for the related
Obligor, with respect to which no invoice has been submitted to such Obligor
for
payment of the amount thereof and which is accounted for on the Originator’s
books and records as “unbilled revenue” in accordance with its financial
accounting practices.
“Unbilled
Receivable Overconcentration Amount”
means,
at any time, the excess of (i) the aggregate Outstanding Balance of all Eligible
Receivables which are Unbilled Receivables at such time over (ii) the product
of
(a) the percentage set forth on Schedule IV hereto under the heading “Unbilled
Receivables Overconcentration Percentage” applicable to the Ratings Period then
in effect at such time and (b) the aggregate Outstanding Balance of all Unbilled
Receivables at such time.
“Weekly
Report”
means
a
report furnished by the Servicer to the Managing Agents on each Weekly Reporting
Date pursuant to Section
6.07,
in
substantially the form of Exhibit
C-2,
reflecting information for the seven (7) day period ending on the day
immediately preceding such Weekly Reporting Date.
“Weekly
Reporting Period”
means
any period during which PSE’s Debt Rating shall be lower than BB+ by S&P or
Ba1 by Moody’s, but higher than B by S&P and B2 by Moody’s.
“Yield
and Fee Reserve Percentage”
means,
on any date, a percentage equal to:
((1.5
x
LR) + AM + PF) x ((TDSO + CDF) / 360)
where:
|
LR
|
=
|
the
one-month LIBO Rate in effect on such date.
|
|
AM
|
=
|
the
Applicable Margin in effect on such date.
|
|
PF
|
=
|
the
Program Fee Rate in effect on such date.
|
|
TDSO
|
=
|
the
Three-Month Days Sales Outstanding Ratio for the most recently ended
Monthly Period.
|
|
CDF
|
=
|
a
collection delay factor of 10.
|
“Yield
and Servicer Fee Reserve”
means,
at any time, an amount equal to the sum of (a) the product of (i) the Yield
and
Fee Reserve Percentage at such time and (ii) the Aggregate Principal Balance
at
such time plus (b) the product of (i) the Servicer Fee Reserve Percentage at
such time and (ii) the aggregate Outstanding Balance of all Receivables at
such
time.
SECTION
1.02. Other
Terms and Constructions.
Under
this Agreement, all accounting terms not specifically defined herein shall
be
construed in accordance with GAAP as in effect in the United States, and all
accounting determinations made and all financial statements prepared hereunder
shall be made and prepared in accordance with GAAP. All terms used in Article
9
of the UCC in the State of New York, and not specifically defined herein, are
used herein as defined in such Article 9. The words “herein,” “hereof,” and
“hereunder” and other words of similar import refer to this Agreement as a
whole, including the exhibits and schedules hereto, as the same may from time
to
time be amended or supplemented and not to any particular section, subsection,
or clause contained in this Agreement, and all references to Sections, Exhibits
and Schedules shall mean, unless the context clearly indicates otherwise, the
Sections hereof and the Exhibits and Schedules attached hereto, the terms of
which Exhibits and Schedules are hereby incorporated into this Agreement. The
captions and section numbers appearing in this Agreement are inserted only
as a
matter of convenience and do not define, limit, construe or describe the scope
or intent of the provisions of this Agreement. Each of the definitions set
forth
in Section
1.01
hereof
shall be equally applicable to both the singular and plural forms of the defined
terms. Unless specifically stated otherwise, all references herein to any
agreements, documents or instruments shall be references to the same as amended,
restated, supplemented or otherwise modified from time to time.
SECTION
1.03. Computation
of Time Periods.
Unless
otherwise stated in this Agreement, in the computation of a period of time
from
a specified date to a later specified date, the word “from” means “from and
including” and the words “to” and “until” each means “to but
excluding.”
ARTICLE
II
AMOUNTS
AND TERMS OF THE LOANS
SECTION
2.01. The
Loans.
(a) On
the
terms and subject to the conditions hereof, on the Effective Date, and
thereafter from time to time prior to the Termination Date, each Conduit Lender
may in its sole discretion, and each Committed Lender shall, if the Conduit
Lender in its related Lender Group elects not to, make Loans to the Borrower
in
an amount, for each Lender Group, equal to its Lender Group Percentage of the
amount requested by the Borrower pursuant to Section
2.02;
provided
that no
Lender shall make any such Loan if, after giving effect to such
Loan:
(i) the
aggregate outstanding Principal Balance of the Tranches funded by such Lender
hereunder shall exceed its Conduit Lending Limit (in the case of a Conduit
Lender) or Commitment (in the case of a Committed Lender);
(ii) the
Aggregate Principal Balance shall exceed the Facility Limit; or
(iii) the
Aggregate Principal Balance shall exceed the Borrowing Base.
If
there
is more than one Committed Lender in a Lender Group, each such Committed Lender
shall lend its Pro Rata Share of such Lender Group’s Lender Group Percentage of
each requested Loan, to the extent such Loan is not made by the related Conduit
Lender. Each Borrowing shall be in a minimum principal amount equal to not
less
than $1,000,000 and in integral multiples of $100,000 in excess thereof. Subject
to the foregoing and to the limitations set forth in Section
2.05,
the
Borrower may borrow, prepay and reborrow the Loans hereunder.
(b) Reduction
of the Facility Limit.
The
Borrower may, from time to time upon at least five (5) Business Days’ prior
written notice to each Managing Agent, elect to reduce the Facility Limit in
whole or in part, provided
that
after giving effect to any such reduction and any principal payments on such
date, the Aggregate Principal Balance shall not exceed the Facility Limit.
Any
such reduction shall be in a minimum amount of $5,000,000 or an integral
multiple thereof. Any such reduction shall, (i) reduce each Lender Group Limit
(and the corresponding Conduit Lending Limit(s)) hereunder ratably in accordance
with their respective Lender Group Percentages and (ii) reduce each Committed
Lender’s Commitment ratably within its Lender Group in accordance with each
Committed Lender’s Pro Rata Share. Once the Facility Limit is reduced pursuant
to this Section
2.01(b)
it may
not subsequently be reinstated without the consent of each Committed
Lender.
(c) Extension
of Scheduled Termination Date.
The
Borrower may, no more frequently than once each year (commencing in the year
2006) by delivering written notice to the Managing Agents, request the Lenders
to extend the date set forth in the definition of “Scheduled Termination Date”
(the “Commitment
Termination Date”)
for an
additional 364 days past the then applicable Commitment Termination Date, with
such extension to become effective as of the date one or more Committed Lenders
having Commitments equal to 100% of the Facility Limit shall in their sole
discretion consent to such extension. Any such request shall be subject to
the
following conditions: (i) at no time will any Commitment of any Committed Lender
have a term of more than 364 days and, if any such request would result in
a
term of more than 364 days, such request shall be deemed to have been made
for
such number of days so that, after giving effect to such extension on the date
requested, such term will not exceed 364 days, (ii) none of the Lenders will
have any obligation to extend any Commitment, (iii) any such extension of the
Commitment Termination Date will be effective only upon the written agreement
of
at least one Committed Lender and the Borrower and (iv) any request for such
extension shall be made not more than sixty (60) nor less than forty-five (45)
days prior to the then current and applicable Commitment Termination Date.
The
Managing Agent for each applicable Committed Lender will respond to any such
request within thirty (30) days but in any event no earlier than thirty (30)
days prior to the then current Commitment Termination Date, provided,
that
any Managing Agent’s failure to respond within such period shall be deemed to be
a rejection of the requested extension.
(d) On
the
Cash Secured Advance Commencement Date, if any, for any Lender Group, each
Committed Lender in such Lender Group shall, and severally agrees to, make
an
advance to the Borrower in Dollars in an amount equal to the excess of (i)
such
Committed Lender’s Commitment over (ii) the unpaid Principal Balance of Loans
held by such Committed Lender on such date (including Loans purchased or to
be
purchased on such date pursuant to the Liquidity Agreement to which such
Committed Lender is a party), and such Committed Lender shall make such advance
by causing an amount equal to such advance to be deposited in same day funds
into the Collateral Advance Account.
SECTION
2.02. Borrowing
Procedures.
(a) Borrowing
Requests.
(i) The
Borrower shall request a Borrowing hereunder by submitting to each Managing
Agent a written notice, substantially in the form of Exhibit
B
(each, a
“Borrowing
Request”)
at
least two (2) Business Days prior to the date of the proposed Borrowing (each,
a
“Borrowing
Date”)
if the
Interest Rate thereon is to be calculated by reference to any LIBO Rate, at
least one (1) Business Day prior to the date of the proposed Borrowing Date
if
the Interest Rate thereon is to be calculated by reference to any CP Rate or
prior to 1:00 P.M. (New York City time) on the date of the proposed Borrowing
Date if the Interest Rate thereon is to be calculated by reference to the Base
Rate. Promptly after its receipt thereof, each Managing Agent shall promptly
forward a copy of each Borrowing Request to the Lenders in its Lender
Group.
(ii) Each
Borrowing Request shall: (A) specify (1) the amount of the requested Borrowing
(which shall not be less than $1,000,000 and in additional increments of
$100,000) and the allocation of such amount among the Lender Groups (which
shall
be proportional to the respective Conduit Lending Limits of the Conduit Lenders
in each Lender Group), (2) the Aggregate Principal Balance after giving effect
to such Borrowing, (3) the desired Borrowing Date, and (4) the account of the
Borrower to which the proceeds of such Borrowing are to be remitted, and (B)
certify that, after giving effect to the proposed Borrowing, no Borrowing Base
Deficiency would exist.
(b) Conduit
Lender Acceptance or Rejection.
If a
Conduit Lender shall receive a Borrowing Request, such Conduit Lender shall
instruct the related Managing Agent to accept or reject such request by no
later
than the close of business on the Business Day immediately following the date
of
the applicable Borrowing Request. If a Conduit Lender rejects a Borrowing
Request, the related Managing Agent shall promptly notify the Borrower and
the
related Committed Lenders of such rejection. If a Conduit Lender declines to
fund its portion of any Borrowing Request, the Borrower may cancel and rescind
such Borrowing Request in its entirety upon notice thereof received by the
Program Agent and each Managing Agent prior to the close of business on the
Business Day immediately prior to the proposed Borrowing Date. At no time will
a
Conduit Lender be obligated to make Loans hereunder regardless of any notice
given or not given pursuant to this Section.
(c) Committed
Lender’s Commitment.
(i) If
a
Conduit Lender rejects a Borrowing Request and the Borrower has not cancelled
such Borrowing Request in accordance with clause
(b)
above,
any Loan requested by the Borrower in such Borrowing Request that would
otherwise be made by such Conduit Lender shall be made by the related Committed
Lenders in its Lender Group on a pro
rata
basis in
accordance with their respective Pro Rata Shares of such Loan; provided,
however,
that
during the Term Period, if any, each Committed Lender in the applicable Lender
Group shall, at least two Business Days prior to the date of such Borrowing,
instruct the Program Agent, to wire (or otherwise transfer in immediately
available funds) on the date of such Borrowing to the Borrower at the account
specified by the Borrower such Committed Lenders’ Pro Rata Share of the amount
of the Borrowing to be made by its Lender Group out of the funds available
therefor in the Collateral Advance Account.
(ii) The
obligations of any Committed Lender to make Loans hereunder are several from
the
obligations of any other Committed Lenders (whether or not in the same Lender
Group). The failure of any Committed Lender to make Loans hereunder shall not
release the obligations of any other Committed Lender (whether or not in the
same Lender Group) to make Loans hereunder, but no Committed Lender shall be
responsible for the failure of any other Committed Lender to make any Loan
hereunder.
(iii) Notwithstanding
anything herein to the contrary, a Committed Lender shall not be obligated
to
fund any Loan at any time on or after the Termination Date or if, after giving
effect to such Loan, the aggregate outstanding Loans funded by such Committed
Lender hereunder would exceed an amount equal to (i) such Committed Lender’s
Commitment less
(ii)
such Committed Lender’s ratable share of the aggregate outstanding principal
balance of the Loans held by the Conduit Lender(s) in such Committed Lender’s
Lender Group.
(d) Disbursement
of Funds.
On each
Borrowing Date, each applicable Lender (other than the Lenders in a Term Period)
shall remit its share of the aggregate amount of the Loans requested by the
Borrower to the account of its related Managing Agent specified therefor to
such
Lender by 12:00 noon (New York City time) by wire transfer of same day funds
(or
during the Term Period for any Lender Group such funds will be so wired from
the
Collateral Advance Account by the applicable Managing Agent). Upon receipt
of
such funds, each Managing Agent shall remit such funds by wire transfer of
same
day funds to the account of the Borrower specified in the related Borrowing
Request by 1:00 p.m. (New York City time) to the extent it has received such
funds from the Lenders in its Lender Group no later than 12:00 noon (New York
City time). Upon any disbursement made from the Collateral Advance Account
to
fund a Borrowing, each Lender in a Term Period will be deemed to have paid
to
the Borrower such Lender’s Pro Rata Share of such Lender Group’s amount of the
Borrowing being made for all purposes of this Agreement.
SECTION
2.03. Tranches.
(a) Generally.
Each
Loan shall be allocated to one or more “Tranche Periods” as set forth in the
definition of such term. Any portion of a Loan having one Tranche Period and
one
Rate Type is referred to herein as a “Tranche”. The Borrower shall from time to
time select Tranche Periods and Rate Types with respect to Tranches funded
by
the Committed Lenders, subject to the provisions of this Agreement and provided
that no Event of Termination has occurred. At all times after the occurrence
of
an Event of Termination, each Committed Lender shall select the Tranche Periods
and Rate Types with respect to the Tranches it funds hereunder. Either the
Borrower or, following an Event of Termination, the applicable Lender, may,
upon
notice to the other party received at least three Business Days prior to the
last day of any Tranche Period in the case of the Borrower giving notice, or
up
to the last day of such Tranche Period in the case of the Lender giving notice,
either (i) divide any Tranche originating on such last day or having a Tranche
Period ending on such last day into two or more Tranches having an aggregate
Principal Balance equal to the Principal Balance of such divided Tranche, or
(ii) combine any two or more Tranches originating on such last day or having
Tranche Periods ending on such last day into a single Tranche having a Principal
Balance equal to the aggregate of the Principal Balance of such Tranches;
provided,
however,
that no
Tranche with respect to which Interest is determined by reference to the CP
Rate
may be combined with a Tranche with respect to which Interest is determined
by
reference to the Alternate Rate, and a Tranche held by one Lender may not be
combined with any Tranche held by any other Lender.
(b) Illegality.
Notwithstanding any other provision of this Agreement, if the adoption of or
any
change in any Law or in the interpretation or application thereof by any
relevant Governmental Authority shall make it unlawful for any Lender, in its
reasonable determination, to fund or maintain Tranches for which Interest is
calculated by reference to the LIBO Rate (each a “LIBOR
Tranche”)
as
contemplated by this Agreement or to obtain in the interbank Eurodollar market
the funds with which to make or maintain any such LIBOR Tranche, such Lender
shall promptly notify the Program Agent, its Managing Agent and the Borrower
thereof whereupon, until such Lender notifies the Borrower and the Program
Agent
that the circumstances giving rise to such suspension no longer exist (which
notice such Lender shall promptly give), (i) the obligation of such Lender
to
fund or maintain LIBOR Tranches shall forthwith be suspended and (ii) such
Lender’s then outstanding LIBOR Tranches, if any, shall be converted on the last
day of the Tranche Period for such Tranches or within such earlier period as
required by Law into Tranches that accrue Interest based on the Base Rate (each
a “Base
Rate Tranche”).
Before giving any notice to the Program Agent, its Managing Agent and the
Borrower pursuant to this clause
(b),
such
Lender shall designate a different office as its lending office if such
designation would avoid the need for giving such notice and would not, in the
judgment of such Lender, be otherwise disadvantageous to such
Lender.
(c) LIBO
Rate Inadequate; Inability to Determine LIBO Rate.
If
prior to the commencement of any Tranche Period for a LIBOR Tranche, either
(i)
the related Lender reasonably determines that the rate at which deposits of
Dollars are being offered to such Lender in the London interbank market does
not
accurately reflect the cost to such Lender of funding or maintaining LIBOR
Tranches for such Tranche Period or (ii) the related Lender is unable, after
reasonable attempts, to obtain Dollars in the London interbank market to fund
or
maintain such Tranche for such Tranche Period, then such Lender shall give
notice thereof to the Borrower, its Managing Agent and the Program Agent by
telephone or telecopy as promptly as practicable thereafter and, until such
Lender notifies the Borrower, its Managing Agent and the Program Agent that
the
circumstances giving rise to such suspension no longer exist (which notice
such
Lender shall promptly give), (A) the obligations of the such Lender to make
LIBOR Tranches or to continue or convert outstanding Tranches as or into LIBOR
Tranches shall be suspended, (B) each outstanding LIBOR Tranche funded by such
Lender shall be converted into a Base Rate Tranche on the last day of the
Tranche Period applicable thereto, and (C) if any Borrowing Request requests
a
LIBOR Tranche, the portion of such Borrowing to be funded by such Lender shall
be made as a Base Rate Tranche.
SECTION
2.04. Interest
and Fees.
On each
Interest Payment Date for a Tranche, the Borrower shall pay to each Lender
(or
its related Managing Agent) all accrued and unpaid Interest with respect to
such
Tranche. The Borrower shall pay to each Managing Agent the Liquidity Fees,
Administrative Fees and Program Fees in the amounts and on the dates set forth
in the Fee Letter. On or before the first Business Day after the end of each
Tranche Period in respect of which Interest is computed by reference to the
CP
Rate, the related Lender (or the related Managing Agent on behalf of such
Lender) shall furnish the Borrower with an invoice setting forth the amount
of
the accrued and unpaid Interest and the calculation thereof for such Tranche
Period. On or before the first Business Day after the end of each calendar
month
each Managing Agent shall furnish the Borrower with an invoice setting forth
the
amount of the accrued and unpaid Liquidity Fees, Administrative Fees and Program
Fees payable to the Lenders in such Managing Agent’s Lender Group. All payments
of Interest and fees shall be made out of Collections, the proceeds of Loans
or,
if the Program Agent consents, such other funds available to the
Borrower.
SECTION
2.05. Optional
Prepayments.
The
Borrower may, at its option, prepay on any Business Day all or any portion
of
any Loan upon prior written notice delivered to each Managing Agent not later
than 11:00 A.M. (New York City time) one (1) Business Day prior to the date
of
such payment. Each such notice shall be in the form attached as Exhibit
J
and
shall (i) specify the aggregate amount of the prepayment to be made on the
Loans
and the Loans to which such prepayment is to be applied and (ii) specify the
Business Day on which the Borrower will make such prepayment. Each such
prepayment shall be in a minimum principal amount equal to $1,000,000 and in
integral multiples of $100,000 in excess thereof and shall be made ratably
among
the Lenders based on the aggregate Principal Balance of the Tranches held by
each. At the request of any Managing Agent, each such prepayment of the Loans
to
the Lenders in such Managing Agent’s Lender Group must be accompanied by a
payment of all accrued and unpaid Interest on the amount prepaid and any other
amounts (including amounts payable under Section
2.12)
due
from the Borrower hereunder in respect of such prepayment. Any such prepayment
shall be made out of Collections.
SECTION
2.06. Application
of Collections Prior to Termination Date.
(a) On
each
Business Day prior to the Termination Date, the Servicer shall cause all
Collections received on such day to be applied in the following order and
priority:
(i) first,
if a
Borrowing Base Deficiency exists, or the Aggregate Principal Balance exceeds
the
Facility Limit, to the Managing Agents, on behalf of the applicable Lenders,
an
amount equal to such Borrowing Base Deficiency or the amount necessary to cause
the Aggregate Principal Balance to be less than or equal to the Facility Limit,
as applicable (such amount to be allocated among the Lenders ratably in
accordance with the outstanding principal balance of the Loans held by each);
provided,
however,
that
during the Term Period, if any, for any Lender Group, the Servicer shall instead
deposit such Lender Group’s ratable portion of such payment to the Collateral
Advance Account (resulting in a reduction of the Loans of the Term-Out Lenders
in such Lender Group and an increase in the Cash Secured Advances of such
Lenders) to be held for the purposes set forth in Section
2.18(a);
(ii) second,
in the
event that at least one Committed Lender has agreed to any extension of the
Commitment Termination Date pursuant to Section
2.01(c)
when
requested by the Borrower, and at least one Lender has not agreed to such
extension (each such Lender, other than any Term-Out Lender, a “Non-Renewing
Lender”),
then,
from and after the occurrence of the Commitment Termination Date for any
Non-Renewing Lender, to each such Non-Renewing Lender, in payment of the
outstanding principal balance of its Loans, in an amount equal to such
Non-Renewing Lender’s ratable share (in accordance with the respective
outstanding principal balance of the Loans made by each of the Lenders) of
the
balance of such Collections (such ratable share to be determined on each
Business Day, solely for the purposes of this clause
(ii),
based
upon the outstanding Loans of the Lenders immediately preceding such Commitment
Termination Date, until such Non-Renewing Lender’s outstanding Loans are reduced
to zero;
(iii) third,
if the
Managing Agent of a Conduit Lender has notified the Borrower and the Servicer
that such Conduit Lender shall not make any more Loans, to such Conduit Lender,
in reduction of its outstanding Loans, in an amount equal to such Conduit
Lender’s ratable share of the balance of such Collections (in accordance with
the outstanding principal balance of such Loans held by each Lender) until
the
principal balance of the Loans of such Conduit Lender is reduced to
zero;
(iv) fourth,
if any
Borrower Obligations (other than Interest, Liquidity Fees, Administrative Fees,
Program Fees, the Servicer Fee and Loans) are then due and payable by the
Borrower to any Secured Party, pay to each such Secured Party (ratably in
accordance with the amounts owing to each) the Borrower Obligations so due
and
payable; and
(v) fifth,
remit
any remaining Collections to the Borrower for application in accordance with
Section
2.06(c)
below
(any such remittance, a “Release”);
provided
that, if
the conditions precedent for such Release set forth in Section
3.02
are not
satisfied, the Servicer shall deposit such Collections into the Collection
Account for application on the next Business Day in accordance with this
Section
2.06
or
Section
2.07,
as
applicable.
(b) On
each
Interest Payment Date for a Tranche, the Servicer shall remit to the Managing
Agents, on behalf of the applicable Lenders, solely out of Collections or the
proceeds of Loans, the accrued and unpaid Interest in respect of such Tranche.
On each Fee Payment Date, the Servicer shall pay, solely out of Collections,
(i)
all accrued and unpaid Fees then due and payable to the Persons entitled
thereto, (ii) all Excess Interest, if any, accrued through the last day of
the
most recently ended Monthly Period in respect of all Cash Secured Advances
to
the applicable Managing Agents for the Term-Out Lenders, and (iii) to itself,
all accrued and unpaid Servicer Fees then due and payable.
(c) Any
Collections remitted to the Borrower pursuant to Section
2.06(a)(v)
shall be
applied by the Servicer, on behalf of the Borrower: (i) first,
if so
requested by the Borrower, to pay or prepay (or set aside for the payment or
prepayment of) Loans, (ii) second,
to pay
the purchase price for Receivables to be acquired by the Borrower from the
Originator on such day under the Receivables Sale Agreement, and (iii)
third,
in such
other manner as the Borrower may specify and that is not prohibited by the
terms
of the Facility Documents.
SECTION
2.07. Application
of Collections After Termination Date.
(a) On
the
Termination Date, the Servicer shall deposit to the Collection Account all
Collections held by it on such date (including amounts previously set aside
or
held by it pursuant to Section
2.06).
On
each Business Day thereafter, the Servicer shall deposit to the Collection
Account, within one (1) Business Day of its receipt thereof, all Collections
received by it that have not previously been deposited to the Collection
Account. The Servicer shall not make any withdrawals from the Collection Account
during such period except for the purpose of distributing such Collections
in
accordance with this Section
2.07.
(b) On
each
Settlement Date from and after the Termination Date, the Servicer shall apply
all Collections received since the prior Settlement Date, and all funds, if
any,
on deposit in the Collection Account that have not been previously applied
hereunder (including, without limitation, any investment earnings received
with
respect to such funds) in the following order of priority:
(i) first,
to the
Program Agent an amount equal to the Borrower Obligations (other than those
described in clause
(iii)
below)
owing to the Program Agent in respect of costs and expenses of the type
described in Section
10.10
incurred
by it in connection with the enforcement of any Facility Document or the
collection of any amounts due thereunder;
(ii) second,
to the
Servicer (if not PSE or an Affiliate of PSE) the accrued and unpaid Servicer
Fee
and, if not otherwise paid, at the direction of the Majority Managing Agents,
pay to each Approved Sub-servicer all amounts then due and payable pursuant
to
the contract between the Servicer and such Approved Sub-servicer;
(iii) third,
to the
Lender and the Managing Agents on a pro
rata basis,
an
amount equal to the aggregate accrued and unpaid Interest, Excess Interest
accrued through the last day of the most recently ended Monthly Period in
respect of all Cash Secured Advances, Liquidity Fees, Administrative Fees and
Program Fees;
(iv) fourth,
to the
Lenders an amount equal to the Aggregate Principal Balance (such amount to
be
allocated among the Lenders ratably in accordance with the outstanding principal
balance of the Loans held by each);
(v) fifth,
if any
Borrower Obligations (other than the amounts paid pursuant to clauses
(i)
through
(iv)
above)
are then due and payable by the Borrower to any Secured Party, to each such
Secured Party (ratably in accordance with the amounts owing to each) the
Borrower Obligations so due and payable;
(vi) sixth,
to the
Servicer (if PSE or an Affiliate of PSE) the accrued and unpaid Servicer Fee;
and
(vii) seventh,
on the
Final Collection Date, remit any remaining funds to the Borrower.
SECTION
2.08. Deemed
Collections.
If on
any day the Outstanding Balance of any Receivable is either reduced or canceled
as a result of a Dilution Factor, the Borrower shall be deemed to have received
on such day, an amount equal to the amount of such reduction, or in the case
of
a cancellation, the Outstanding Balance of such Diluted Receivable; provided,
that
such Deemed Collections may be applied to the purchase price paid to the
Originator for newly purchased Receivables to the extent permitted under the
Receivables Sale Agreement. If the Borrower is on any day deemed to have
received Collections pursuant to this Section
2.08
from and
after the Termination Date, on such day the Borrower shall pay an amount of
funds equal to such deemed Collections to the Servicer for allocation and
application in accordance with Section
2.07.
SECTION
2.09. Payments
and Computations, Etc.
All
amounts to be paid or deposited by the Borrower or the Servicer hereunder shall
be paid or deposited in accordance with the terms hereof no later than 1:00
p.m.
(New York City time) on the day when due in lawful money of the United States
of
America in immediately available funds to the account as the Program Agent
or
the relevant Managing Agents may designate prior to such payment from time
to
time in writing. The Borrower and the Servicer (only with respect to amounts
payable pursuant to Section
8.02)
shall,
to the extent permitted by law, pay to the Affected Party interest on all
amounts not paid or deposited or debited by such Person when due hereunder
at 2%
per annum above the Base Rate, payable on demand. All computations of interest
(including, without limitation, interest on Cash Secured Advances during the
Term Period) and all computations of Interest, Liquidity Fees, Administrative
Fees, Program Fees and Servicer Fees 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; provided,
that
all computations of Interest on Base Rate Tranches shall be made on the basis
of
a year of 365 days for the actual number of days (including the first but
excluding the last day) elapsed. In no event shall any provision of this
Agreement require the payment or permit the collection of Interest in excess
of
the maximum permitted by applicable law. In the event that any payment hereunder
(whether constituting a repayment of Loans or a payment of Interest or any
other
amount) is rescinded or must otherwise be returned for any reason, the amount
of
such payment shall be restored and such payment shall be considered not to
have
been made.
SECTION
2.10. Interest
Protection.
(a) If
due to
either: (i) the introduction of or any change (including, without limitation,
any change by way of imposition or increase of reserve requirements) in or
in
the interpretation by any Governmental Authority of any law or regulation (other
than laws or regulations relating to taxes) after the date hereof, (ii) the
compliance by any Affected Party with any directive or request from any central
bank or other Governmental Authority (whether or not having the force of law)
imposed after the date hereof, or (iii) or any change in any accounting
guideline by an accounting board or authority (whether or not part of a
government or instrumentality thereof) which is responsible for the
establishment of or interpretation of national or international accounting
principles (in each case whether foreign or domestic); (1) there shall be an
increase in the cost to such Affected Party of funding or maintaining any
Tranche which accrues Interest at the Adjusted LIBO Rate or the CP Rate
hereunder or of extending a commitment in respect thereof, or (2) such Affected
Party shall be required to make a payment calculated by reference to any Tranche
which accrues Interest at the Adjusted LIBO Rate or the CP Rate funded by it
or
Interest received by it, then the Borrower shall, from time to time, within
five
(5) days after demand by the related Managing Agent, pay such Managing Agent
for
the account of such Affected Party (as a third party beneficiary, in the case
of
any Affected Party other than one of the Lenders), that portion of such
increased costs incurred, amounts not received or required payment made or
to be
made, which such Managing Agent reasonably determines is attributable to funding
and maintaining, or extending a commitment to fund, any Tranche which accrues
Interest at the Adjusted LIBO Rate or the CP Rate hereunder or pursuant to
any
Asset Purchase Agreement or similar liquidity facility.
(b) Each
Managing Agent will promptly notify the Borrower and the Program Agent of any
event of which it has knowledge, occurring after the date hereof, which will
entitle any Affected Party in its Lender Group to compensation pursuant to
Section
2.10(a).
Each
Affected Party will designate a different lending office if such designation
will avoid the need for, or reduce the amount of, such compensation and will
not, in the judgment of such Affected Party, be otherwise disadvantageous to
it.
In determining the amount of such compensation, such Affected Party may use
any
reasonable averaging and attribution methods. The applicable Affected Party
(or
such party’s related Managing Agent) shall submit to the Borrower a certificate
describing such increased costs incurred, amounts not received or receivable
or
required payment made or to be made, which certificate shall be conclusive
in
the absence of manifest error.
(c) If
less
than all Lenders claim reimbursement from the Borrower pursuant to Section
2.10(a),
each
such Lender claiming reimbursement shall be obligated, at the request of the
Borrower, to assign all of its rights and obligations hereunder to (i) the
Lenders of its Lender Group hereunder that are willing to accept such rights
and
obligations or (ii) another financial institution nominated by the Borrower
which is reasonably acceptable to the other Lenders in such Lender Group and
is
willing to participate in this Agreement through the Scheduled Termination
Date
in place of such Lender; provided,
that
(x) the Lender claiming reimbursement receives payment in full, pursuant to
an
Assignment and Acceptance, of an amount equal to the aggregate outstanding
principal balance of all Loans and all other accrued an unpaid Borrower
Obligations owing to it and (ii) the replacement Committed Lender proposed
by
the Borrower otherwise satisfies the requirements of Section
10.03(b).
SECTION
2.11. Increased
Capital.
(a) If
(i)
the introduction of or any change in or in the interpretation by any Official
Body of any law or regulation, (ii) compliance by any Affected Party with any
directive or request from any central bank or other Official Body (whether
or
not having the force of law) or (iii) or any change in any accounting guideline
by an accounting board or authority (whether or not part of a government or
instrumentality thereof) which is responsible for the establishment of or
interpretation of national or international accounting principles (in each
case
whether foreign or domestic) imposed after the date hereof affects or would
affect the amount of capital required or expected to be maintained by such
Affected Party or such Affected Party reasonably determines that the amount
of
such capital is increased by or based upon the existence of any Lender’s
agreement to make or maintain Loans hereunder and other similar agreements
or
facilities and such event would have the effect of reducing the rate of return
on capital of such Affected Party by an amount deemed by such Affected Party
to
be material, then, within five (5) days after demand by such Affected Party
or
the related Managing Agent, the Borrower shall pay to such Affected Party (as
a
third party beneficiary, in the case of any Affected Party other than one of
the
Lenders) or the related Managing Agent for the account of such Affected Party
from time to time, as specified by such Affected Party or such Managing Agent,
additional amounts sufficient to compensate such Affected Party in light of
such
circumstances, to the extent that such Affected Party or such Managing Agent
on
behalf of such Affected Party reasonably determines such increase in capital
to
be attributable to the existence of the applicable Lender’s agreements
hereunder.
(b) Each
Managing Agent will promptly notify the Borrower and the Program Agent of any
event of which it has knowledge, occurring after the date hereof, which will
entitle any Lender or Affected Party in its Lender Group to compensation
pursuant to Section
2.11(a).
Each
Lender or Affected Party will designate a different lending office if such
designation will avoid the need for, or reduce the amount of, such compensation
and will not, in the judgment of such Lender or Affected Party, be otherwise
disadvantageous to it. In determining the amount of such compensation, such
Lender or Affected Party may use any reasonable averaging and attribution
methods. The applicable Lender or Affected Party (or such party’s related
Managing Agent) shall submit to the Borrower a certificate describing such
compensation, which certificate shall be conclusive in the absence of manifest
error.
(c) If
less
than all Lenders claim reimbursement from the Borrower pursuant to Section
2.11(a),
each
such Lender claiming reimbursement shall be obligated, at the request of the
Borrower, to assign all of its rights and obligations hereunder to (i) the
Lenders of its Lender Group hereunder that are willing to accept such rights
and
obligations or (ii) another financial institution nominated by the Borrower
which is reasonably acceptable to the other Lenders in such Lender Group and
is
willing to participate in this Agreement through the Scheduled Termination
Date
in place of such Lender; provided,
that
(x) the Lender claiming reimbursement receives payment in full, pursuant to
an
Assignment and Acceptance, of an amount equal to the aggregate outstanding
principal balance of all Loans and all other accrued an unpaid Borrower
Obligations owing to it and (ii) the replacement Committed Lender proposed
by
the Borrower otherwise satisfies the requirements of Section
10.03(b).
SECTION
2.12. Funding
Losses.
In the
event that any Liquidity Provider or any Lender shall incur any loss, expense
or
Liquidation Fees (including, without limitation, any loss or expense incurred
by
reason of the liquidation or reemployment of deposits or other funds acquired
by
such Liquidity Provider or Lender in order to fund or maintain any Loan or
interest therein) as a result of (i) any reduction of the Principal Balance
of
any LIBOR Tranche at any time or conversion of any Tranche to another Tranche
prior to the originally scheduled last day of the applicable Tranche Period
or
(ii) any Loan not being made in accordance with a request therefor under
Section
2.02,
then,
upon demand from the related Managing Agent to Borrower, Borrower shall pay
to
such Managing Agent for the account of such Liquidity Provider or Lender, the
amount of such loss, expense or Liquidation Fees. Such written notice shall,
in
the absence of manifest error, be conclusive and binding upon
Borrower.
SECTION
2.13. Taxes.
Except
to the extent required by applicable law, any and all payments and deposits
required to be made hereunder or under any instrument delivered hereunder by
the
Borrower hereunder 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 (except for net income
taxes that are imposed by the United States and franchise taxes, gross receipts
taxes imposed in lieu of income taxes, and net income taxes that are imposed
on
such Affected Party by the state or foreign jurisdiction under the laws of
which
such Affected Party is organized or any political subdivision thereof). If
the
Borrower or the Servicer shall be required by law to make any such deduction,
(i) the Borrower shall make an additional payment to such Affected Party, in
an
amount sufficient so that, after making all required deductions (including
deductions applicable to additional sums payable under this Section
2.13),
such
Affected Party receives an amount equal to the sum it would have received had
no
such deductions been made, (ii) the Borrower (or the Servicer, on its behalf)
shall make such deductions and (iii) the Borrower (or the Servicer, on its
behalf) shall pay the full amount deducted to the relevant taxation authority
or
other authority in accordance with applicable law.
(a) In
addition, the Borrower agrees to pay any present or future stamp or other
documentary taxes or any other excise or property taxes or similar levies which
arise from any payment made hereunder or under any instrument delivered
hereunder or from the execution, delivery or registration of, or otherwise
with
respect to, this Agreement or any instrument delivered hereunder.
(b) Each
Affected Party which is not organized under the laws of the United States or
any
State thereof shall, on or prior to the date that such Affected Party becomes
a
party to or obtains rights under this Agreement, and prior to any payment being
made by the Borrower to such Affected Party, deliver to the Borrower (i) two
duly completed and executed copies of the IRS Form W-8 BEN or W-8 ECI (or any
successor form) as applicable; and (ii) such other forms or certificates as
may
be required under the laws of any applicable jurisdiction (on or before the
date
that any such form expires or becomes obsolete), in order to permit the Borrower
to make payments to, and deposit funds to or for the account of, such Affected
Party hereunder and under the other Facility Documents without any deduction
or
withholding for or on account of any tax. Each such Affected Party shall submit
to the Borrower (with copies to the Program Agent) two updated, completed,
and
duly executed versions of: (i) all forms referred to in the previous sentence
upon the expiry of, or the occurrence of any event requiring a change in, the
most recent form previously delivered by it to the Borrower or the substitution
of such form; and (ii) such extensions or renewals thereof as may reasonably
be
requested by the Borrower.
(c) If
the
Borrower is required to pay additional amounts to or for the benefit of any
Affected Party pursuant to this Section as a result of a change of law or treaty
occurring after such Affected Party first became a party to this Agreement,
such
Affected Party will, at the Borrower’s request, change the jurisdiction of its
applicable lending office if, in the reasonable judgment of such Affected Party,
such change (i) will eliminate or reduce any such additional payment which
may
thereafter accrue and (ii) is not otherwise disadvantageous to such Affected
Party.
SECTION
2.14. Security
Interest.
As
security for the performance by the Borrower of all the terms, covenants and
agreements on the part of the Borrower to be performed under this Agreement
or
any other Facility Document, including the payment when due of all Borrower
Obligations, the Borrower hereby grants to the Program Agent, for the benefit
of
the Secured Parties, a security interest in all of the Borrower’s right, title
and interest in, to and under the following (collectively, the “Collateral”):
(a) all
Receivables, whether now owned and existing or hereafter acquired or arising,
together with all Related Security and Collections with respect
thereto;
(b) the
Collection Account, each Deposit Account, and each Lock-Box, including, without
limitation, (i) all Collections held therein and all certificates and
instruments, if any, from time to time representing or evidencing any of such
accounts or any Collections held therein, (ii) all investment property and
other
financial assets representing Collections or proceeds thereof held in, or
acquired with funds from, such accounts and all certificates and instruments
from time to time representing or evidencing such investment property and
financial assets, (iii) all notes, certificates of deposit and other instruments
from time to time hereafter delivered or transferred to, or otherwise possessed
by, the Program Agent in substitution for any of the then existing accounts
and
(iv) all interest, dividends, cash, instruments, financial assets, investment
property and other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any and all of such accounts,
in
each case, related to Receivables;
(c) all
rights and remedies of the Borrower under the Receivables Sale Agreement,
together with all financing statements filed by the Borrower against the
Originator in connection therewith; and
(d) to
the
extent not included in the foregoing, all proceeds of any and all of the
foregoing.
The
Borrower hereby authorizes the filing of financing statements, and continuation
statements and amendments thereto and assignments thereof, describing the
collateral covered thereby as “all of debtor’s personal property or assets” or
words to that effect, notwithstanding that such wording may be broader in scope
than the collateral described in this Section
2.14.
This
Agreement shall constitute a security agreement under applicable
law.
SECTION
2.15. Evidence
of Debt.
Each
Lender shall maintain an account or accounts evidencing the indebtedness of
the
Borrower to such Lender resulting from each Loan made by such Lender from time
to time, including the outstanding principal balance of such Loans and the
amount of Interest payable and paid to such Lender from time to time hereunder.
The entries made in such accounts of the Lenders shall be prima
facie
evidence
of the existence and amounts of the obligations recorded therein; provided,
however, that the failure of any Lender to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Loans in accordance with the terms of this Agreement.
SECTION
2.16. Interest
on Cash Secured Advances.
The
Borrower shall pay interest to each Term-Out Lender on the unpaid principal
amount of such Committed Lender’s Cash Secured Advance from the date of such
Cash Secured Advance until such principal amount shall be repaid in full, at
a
rate per annum equal at all times during each Tranche Period at the Interest
Rate for such Tranche Period, payable in arrears on each Interest Payment Date
for such Tranche Period and on the Termination Date for all Tranches related
to
such Cash Secured Advance. On each Interest Payment Date for each Tranche Period
after the Cash Secured Advance Commencement Date the Program Agent shall
disburse, on behalf of the Borrower, those dividends from or net investment
gains with respect to, the Cash Collateral which shall then be available to
be
withdrawn from the Collateral Advance Account, and the Program Agent shall
distribute such funds to the Term-Out Lenders, ratably according to the
respective outstanding principal amounts of their respective Cash Secured
Advances, for application to the payment of unpaid accrued interest on the
Cash
Secured Advances. Any remaining unpaid accrued interest on the Cash Secured
Advances shall be paid from the Collections of the Receivables pursuant to
Sections
2.06,
2.07
and
2.18(d).
SECTION
2.17. Repayment
of Cash Secured Advances.
The
Borrower shall repay to each Term-Out Lender the aggregate outstanding principal
amount of such Lender’s Cash Secured Advance on the Termination Date for all
Tranches related to such Cash Secured Advance.
SECTION
2.18. Use
of
Proceeds; Security Interest in Collateral Advance Account.
(a) The
Borrower hereby agrees that it shall use the proceeds of the Cash Secured
Advances solely to fund and maintain the Collateral Advance Account for the
purpose of funding Loans from time to time during the Term Period.
(b) The
Borrower hereby grants to the Program Agent, for the ratable benefit of the
Term-Out Lenders, a security interest in the following (collectively, the “Cash
Collateral”):
(i) the
Collateral Advance Account, all funds from time to time credited to the
Collateral Advance Account, all financial assets (including, without limitation,
Permitted Investments) from time to time acquired with any such funds or
otherwise credited to the Collateral Advance Account, all interest, dividends,
cash, instruments and other investment property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or
all
of such funds or such financial assets, and
(ii) all
proceeds of, collateral for, and supporting obligations relating to any and
all
of the Cash Collateral.
(c) The
grant
of a security interest by the Borrower to the Program Agent for the ratable
benefit of the Term-Out Lenders, pursuant to clause
(b)
above
secures the payment of the Borrower’s obligation to repay the Cash Secured
Advances, and to pay interest thereon, pursuant to Sections
2.16
and
2.17,
respectively.
(d) On
the
Termination Date for all Tranches if the Term Period has occurred, the Program
Agent, shall: (i) convert the Cash Collateral that does not constitute cash
into
cash proceeds and (ii) pay to each Term-Out Lender, ratably according to the
respective outstanding principal amounts of their respective Cash Secured
Advances, for application, first,
to the
repayment of the outstanding principal amounts of the Cash Secured Advances
and
second,
to the
payment of unpaid accrued interest on the Cash Secured Advances (to the extent
such funds are available therefor).
SECTION
2.19. Establishment
of Collateral Advance Account.
(a) Subsequent
to the date of this Agreement, the Servicer, for the benefit of the Term-Out
Lenders, upon the request of the Program Agent, shall establish and maintain
or
cause to be established and maintained in the name of the Program Agent, with
an
Eligible Institution, an account (such account being the “Collateral
Advance Account”
and
such institution holding such account being the “Collateral
Advance Account Bank”),
bearing a designation clearly indicating that the funds deposited therein are
held for the benefit of the Term-Out Lenders and entitled “JPMorgan Chase Bank,
N.A., as Program Agent -- Collateral Advance Account for the PSE Funding Loan
and Servicing Agreement.” The Collateral Advance Account shall be under the sole
dominion and control of the Program Agent for the benefit of the Committed
Lenders which have made Cash Secured Advances, and neither the Borrower, nor
any
Person claiming by, through or under the Borrower, shall have any right, title
or interest in, or any right to withdraw any amount from, the Collateral Advance
Account. At the time the Collateral Advance Account is established the Borrower
shall cause the Collateral Advance Account Bank to agree in writing that it
shall have no right of set-off or banker’s lien against, and no right to
otherwise deduct from, any funds held in the Collateral Advance Account for
any
amount owed to it by any Person. The tax identification number associated with
the Collateral Advance Account shall be that of the Borrower.
(b) At
the
time the Collateral Advance Account is established the Borrower shall cause
the
Collateral Advance Account Bank to agree in writing that it will comply with
(A)
all written instructions directing disposition of the funds in the Collateral
Advance Account, (B) all notifications and entitlement orders that it receives
directing it to transfer or redeem any financial asset in the Collateral Advance
Account, and (C) all other directions concerning the Collateral Advance Account,
including, without limitation, directions to distribute to the Program Agent,
proceeds of any such transfer or redemption or interest or dividends on property
in the Collateral Advance Account (any such instruction, notification or
direction referred to in clause (A),
(B)
or
(C)
above
being a “Collateral
Advance Account Direction”),
in
each case of clauses (A),
(B)
and
(C)
above
originated by the Program Agent, without further consent by the Borrower or
any
other Person. Except as specified in Section
2.19(c),
the
Collateral Advance Account Bank will comply with Collateral Advance Account
Directions and other directions concerning the Collateral Advance Account
originated by, and only by, the Program Agent.
(c) Funds
on
deposit in the Collateral Advance Account shall, at the written direction of
the
Borrower, be invested by the Program Agent, in Permitted Investments as
instructed by the Borrower in writing (which may be a standing instruction).
All
such Permitted Investments shall be held in the Collateral Advance Account
for
the benefit of the Program Agent, for the ratable benefit of the Committed
Lenders which have made Cash Secured Advances. Such funds shall be invested
in
Permitted Investments that will mature so that funds will be available in
amounts sufficient for the Program Agent, to make each distribution as and
when
required under the terms of this Agreement. All interest and other investment
earnings (net of losses and investment expenses) received on funds on deposit
in
the Collateral Advance Account, to the extent such investment income is not
needed for the ratable benefit of the Term-Out Lenders under the terms of this
Agreement, shall be added to the Collateral Advance Account.
ARTICLE
III
CONDITIONS
OF EFFECTIVENESS AND LOANS
SECTION
3.01. Conditions
Precedent to Effectiveness and Initial Borrowing.
As
conditions precedent to the effectiveness of this Agreement and the Initial
Borrowing, (i) the Managing Agents shall have received each of the documents,
instruments, legal opinions and other agreements listed on Exhibit
G,
together with all fees due and payable on the date hereof and on the Effective
Date, (ii) since September 30, 2005, no event has occurred which would have
a
Material Adverse Effect and (iii) each Lender shall have received all necessary
credit approvals in order to consummate the transactions contemplated by this
Agreement.
SECTION
3.02. Conditions
Precedent to All Borrowings and Releases.
Each
Borrowing (including, without limitation, the Initial Borrowing) made by the
Lenders to the Borrower and each Release, shall be subject to the further
conditions precedent that on the date of each Borrowing or Release, each of
the
following shall be true and correct both before and immediately after giving
effect to such Borrowing or Release, as applicable:
(a) (i)
with
respect to such Borrowing or Release, each Managing Agent shall have received
from the Servicer the Monthly Report, Weekly Report and Daily Report as
applicable, most recently required to be delivered pursuant to Section
6.07,
and
(ii) with respect to such Borrowing, each Managing Agent shall have received
such other approvals, opinions or documents as it may reasonably request if
such
Managing Agent reasonably believes there has been a change in law or
circumstance that affects the status or characteristics of the Receivables,
Related Security or Collections, any Borrower Party or the Program Agent’s first
priority perfected security interest in the Receivables, Related Security and
Collections.
(b) with
respect to such Borrowing, the representations and warranties contained in
Article
IV
shall be
correct in all material respects (except that the materiality standard in this
clause (b) shall not apply to any such representation or warranty that is
qualified by a materiality standard by its terms) on and as of such date as
though made on and as of such date unless such representation and warranties
by
their terms refer to an earlier date, in which case they shall be correct on
and
as of such earlier date;
(c) (i)
with
respect to such Borrowing, no event has occurred and is continuing, or would
result from such Borrowing which constitutes an Event of Termination or an
Incipient Event of Termination and (ii) with respect to such Release, no event
has occurred and is continuing, or would result from such Release which
constitutes an Event of Termination (other than an Event of Termination
described in Section 7.01(c));
(d) with
respect to such Borrowing or Release, the Termination Date has not
occurred;
(e) with
respect to such Borrowing or Release, no Borrowing Base Deficiency shall exist;
and
(f) only
with
respect to any such Borrowing requested to be made by a Conduit Lender, the
related Managing Agent shall not have delivered to the Borrower a notice stating
that such Conduit Lender shall not make any further Loans
hereunder.
Each
delivery of a Borrowing Request to the Program Agent, and the acceptance by
the
Borrower of the proceeds of any Borrowing or any Release, shall constitute
a
representation and warranty by the Borrower that, as of the date of such
Borrowing or Release, both before and after giving effect thereto and the
application of the proceeds thereof, each of the applicable statements set
forth
in clauses
(a)
through
(f)
above
are true and correct.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES
SECTION
4.01. Representations
and Warranties of The Borrower Parties.
Each
Borrower Party hereby represents and warrants to the Program Agent, each
Managing Agent and the Lenders, as to itself, as of the date hereof and as
of
the date of each Borrowing and the date of each Release as follows:
(a) Corporate
Existence and Power.
Such
Borrower Party is (a) a corporation duly organized, validly existing and in
good
standing under the laws of the jurisdiction of its incorporation; (b) has all
requisite corporate power, and has all material governmental licenses,
authorizations, consents and approvals, necessary to own its property and carry
on its business as now being conducted; and (c) is qualified to do business
in
all jurisdictions in which the nature of the business conducted by it makes
such
qualification necessary and where failure so to qualify could reasonably be
expected to have a Material Adverse Effect.
(b) Power
and Authority; Due Authorization, Execution and Delivery.
Such
Borrower Party has all necessary corporate power and authority to execute and
deliver this Agreement and each other Facility Document to which it is a party,
and to perform its obligations hereunder and thereunder and, in the case of
Borrower, to use the proceeds of Loans made hereunder. The execution and
delivery by such Borrower Party of this Agreement and each other Facility
Document to which it is a party, and the performance of its obligations
hereunder and thereunder and, in the case of Borrower, the use of the proceeds
of Loans made hereunder have been duly authorized by all necessary corporate
action on the part of such Borrower Party; and this Agreement and each other
Facility Document to which such Borrower Party is a party has been duly and
validly executed and delivered by such Borrower Party.
(c) No
Conflict.
None of
the execution and delivery by such Borrower Party of this Agreement and each
other Facility Document to which it is a party, nor the performance of its
obligations hereunder and thereunder will conflict with or result in a breach
of, or a default under, or require any consent under, (i) its certificate or
articles of incorporation or by-laws, (ii) any law, rule or regulation
applicable to it, (iii) any agreement or instrument to which it is a party
or by
which it or any of its property is bound or subject, or (iv) any order, writ,
judgment, injunction or decree of any court or governmental authority or agency
binding on or affecting it or its property, and will not result in or require
the creation or imposition of any Adverse Claim upon any of the revenues or
assets of such Borrower Party or its Subsidiaries (except as created hereunder);
and no transaction contemplated hereby requires compliance with any bulk sales
act or similar law.
(d) Governmental
Authorization.
Other
than the filing of the financing statements required hereunder and the notice
to
the Washington Utilities and Transportation Commission (which Servicer has
filed), no authorizations, approvals or consents of, and no notices to, or
filings or registrations with, any governmental authority or regulatory
authority or agency (other than informational filings) are necessary for the
execution and delivery by such Borrower Party of this Agreement and each other
Facility Document to which it is a party and the performance of its obligations
hereunder and thereunder or for the validity or enforceability hereof or
thereof.
(e) Actions,
Suits.
There
are not, in any court or before any arbitrator of any kind or before or by
any
governmental body, any actions, suits or proceedings pending or, to such
Borrower Party’s knowledge, threatened against or affecting such Borrower Party
or any of its respective businesses or properties (i) except for actions, suits
or proceedings (A) that exist as of the date of this Agreement and are disclosed
in PSE’s Annual Report on Form 10-K for the year ended December 31, 2004, PSE’s
Quarterly Reports on Form 10-Q for the quarters ended March 31, 2005, June
30,
2005 or September 30, 2005, or (B) which, singly or in the aggregate, could
not
reasonably be expected to have a Material Adverse Effect or (ii) which affect
in
any adverse manner the binding nature, validity or enforceability of any
Facility Document. Such Borrower Party is not in default with respect to any
order of any court, arbitrator or governmental body, which default could
reasonably be expected to have a Material Adverse Effect.
(f) Binding
Effect.
This
Agreement and each other Facility Document to which such Borrower Party is
a
party constitute the legal, valid and binding obligations of such Borrower
Party
enforceable against such Borrower Party in accordance with their respective
terms, except as such enforcement may be limited by applicable bankruptcy,
insolvency, reorganization or other similar laws relating to or limiting
creditors’ rights generally and by general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law).
(g) Accuracy
of Information.
No
information, exhibit or report furnished by such Borrower Party or any of its
Affiliates to the Program Agent, any Managing Agent or the Lenders in connection
with the negotiation of, or compliance with, this Agreement (including any
Monthly Report, Weekly Report or Daily Report) or any of the other Facility
Documents contained any material misstatement of fact or omitted to state a
material fact or any fact necessary to make the statements contained therein
not
misleading.
(h) Use
of
Proceeds.
Such
Borrower Party is not engaged principally, or as one of its important
activities, in the business of extending credit for the purpose, whether
immediate, incidental or ultimate, of buying or carrying margin stock, as
defined in Regulation U promulgated by the Board of Governors of the Federal
Reserve System from time to time, and no part of the proceeds of any Loan will
be used to buy or carry any margin stock.
(i) Good
Title.
Borrower is the legal and beneficial owner of the Receivables and Related
Security with respect thereto, free and clear of any Adverse Claim, except
as
created by the Facility Documents. There have been duly filed all financing
statements or other similar instruments or documents necessary under the UCC
(or
any comparable law) of all appropriate jurisdictions to perfect Borrower’s
ownership interest in each Receivable, its Collections and the Related
Security.
(j) Perfection.
This
Agreement, together with the filing of the financing statements contemplated
hereby, is effective to, and shall, upon each purchase hereunder, transfer
to
the Program Agent for the benefit of the Lenders (and the Program Agent for
the
benefit of the Lenders shall acquire from Borrower) a valid and perfected first
priority undivided percentage security interest in each Receivable existing
or
hereafter arising and in the Related Security and Collections with respect
thereto, free and clear of any Adverse Claim, except as created by the Facility
Documents. There have been duly filed all financing statements or other similar
instruments or documents necessary under the UCC (or any comparable law) of
all
appropriate jurisdictions to perfect the Program Agent’s (on behalf of the
Lenders) security interest in the Receivables, the Related Security and the
Collections.
(k) Jurisdiction
of Organization; Places of Business and Locations of Records.
The
jurisdiction of organization, principal places of business and chief executive
office of such Borrower Party and the offices where it keeps all of its Records
are located at the address(es) listed on Exhibit
E
or such
other locations of which the Program Agent has been notified in accordance
with
Section
5.02(a)
in
jurisdictions where all action required by Section
5.01(h)
has been
taken and completed. Such Borrower Party’s organizational number assigned to it
by its jurisdiction of organization and such Borrower Party’s Federal Employer
Identification Number are correctly set forth on Exhibit E. Such Borrower Party
has not, within a period of one year prior to the date hereof, (i) changed
the
location of its principal place of business or chief executive office or its
organizational structure, (ii) changed its legal name, (iii) changed its
“location” (within the meaning of Section 9-307 of the UCC as in effect in all
applicable jurisdictions), or (iv) become a “new debtor” (as defined in Section
9-102(a)(56) of the UCC as in effect in all applicable jurisdictions) with
respect to a currently effective security agreement previously entered into
by
any other Person. Such Borrower Party has not changed its jurisdiction of
organization. Borrower is a Washington corporation and is a “registered
organization” (within the meaning of Section 9-102 of the UCC as in effect in
the State of Washington).
(l) Collections.
The
conditions and requirements set forth in Section
5.01(j)
and
Section
6.06
have at
all times been satisfied and duly performed. The names and addresses of all
Deposit Account Banks, together with the account numbers of the Deposit Accounts
at each Deposit Account Bank and the post office box number of each Lock-Box,
are listed on Exhibit F. Borrower has not granted any Person, other than the
Program Agent as contemplated by this Agreement, dominion and control or
“control” (within the meaning of Section 9-104 of the UCC of all applicable
jurisdictions) of any Lock-Box or Deposit Account, or the right to take dominion
and control or “control” (within the meaning of Section 9-104 of the UCC of all
applicable jurisdictions) of any such Lock-Box or Deposit Account at a future
time or upon the occurrence of a future event. On and after the date which
is 60
days after the date hereof, each Borrower Party has taken all steps necessary
to
ensure that the Program Agent has “control” (within the meaning of Section 9-104
of the UCC of all applicable jurisdictions) over all Deposit Accounts. Such
Borrower Party has the ability to identify, within one Business Day of receipt
or deposit, all amounts that are received in any Lock-Box or deposited to any
Deposit Account as constituting Collections or non-Collections. Except for
proceeds of Excluded Receivables (which shall be electronically swept or
otherwise transferred out of such Deposit Account within one (1) Business Day
of
being deposited therein in accordance with Section
5.01(j)),
no
funds other than the proceeds of Receivables are deposited to any Deposit
Account. All Alternate Payment Locations are listed on Exhibit
F.
(m) Material
Adverse Effect.
(i) The
Servicer represents and warrants that, as of the date of this Agreement, since
December 31, 2004, no event has occurred that would have a material adverse
effect on the financial condition or operations of the Servicer and its
Subsidiaries, (ii) the Servicer represents and warrants that since December
31,
2004, no event has occurred that would have a material adverse effect on the
ability of the Servicer to perform its obligations under this Agreement or
any
other Facility Document to which it is a party, and (iii) Borrower represents
and warrants that since December 31, 2004, no event has occurred that would
have
a material adverse effect on (A) the financial condition or operations of
Borrower, (B) the ability of Borrower to perform its obligations under the
Facility Documents, or (C) the collectibility of the Receivables generally
or
any material portion of the Receivables.
(n) Names.
In the
past five (5) years, Borrower has not used any corporate or other names, trade
names or assumed names other than the name in which it has executed this
Agreement.
(o) Ownership
of Borrower.
Originator owns, directly or indirectly, 100% of the issued and outstanding
capital stock of Borrower, free and clear of any Adverse Claim. Such capital
stock is validly issued, fully paid and nonassessable, and there are no options,
warrants or other rights to acquire securities of Borrower.
(p) PUHCA;
Investment Company Act.
The
Borrower is a wholly-owned Subsidiary of Puget Energy, Inc. and all of the
common (or voting) stock of PSE is owned by Puget Energy, Inc. Puget Energy,
Inc. is a public utility holding company under the Public Utility Holding
Company Act of 1935, as amended (“PUHCA”), which is exempt from regulation under
PUHCA and the Securities and Exchange Commission’s (“SEC”) rules thereunder
(except for regulation under Section 9(a)(2) of PUHCA) pursuant to Section
3(a)(1) and SEC Rule 2 under PUHCA. Such Borrower Party is not, and after giving
effect to the transactions contemplated hereby, will not be required to register
as, an “investment company” within the meaning of the Investment Company Act of
1940, as amended, or any successor statute.
(q) Compliance
with Law.
Such
Borrower Party has complied in all material respects with all applicable
statutes, rules, regulations, orders and restrictions of any domestic or foreign
government or any instrumentality or agency thereof having jurisdiction over
the
conduct of its businesses or the ownership of its property, except for any
failure to comply with any of the foregoing that could not reasonably be
expected to have a Material Adverse Effect. Each Receivable, together with
the
Contract related thereto, does not contravene any laws, rules or regulations
applicable thereto (including,
without limitation,
laws,
rules and regulations relating to truth in lending, fair credit billing, fair
credit reporting, equal credit opportunity, fair debt collection practices
or
privacy), and no part of such Contract is in violation of any such law, rule
or
regulation.
(r) Compliance
with Credit and Collection Policy.
Such
Borrower Party has complied in all material respects with the Credit and
Collection Policy with regard to each Receivable and the related Contract,
and
has not made any change to such Credit and Collection Policy, except as
permitted under Section
5.02(c)
and as
to which each Managing Agent has been notified, and if applicable, as to which
each Managing Agent has consented, in each case, in accordance with Section
5.01(a)(vii).
(s) Payments
to Originator.
With
respect to each Receivable transferred to Borrower under the Receivables Sale
Agreement, Borrower has given reasonably equivalent value to Originator in
consideration therefor and such transfer was not made for or on account of
an
antecedent debt. No transfer by Originator of any Receivable under the
applicable Receivables Sale Agreement is or may be voidable under any section
of
the Federal Bankruptcy Code.
(t) Enforceability
of Contracts.
Each
Contract with respect to each Receivable is effective to create, and has
created, a legal, valid and binding obligation of the related Obligor to pay
the
Outstanding Balance of the Receivable created thereunder and any accrued
interest thereon, enforceable against the Obligor in accordance with its terms,
except as such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws relating to or limiting creditors’ rights
generally and by general principles of equity (regardless of whether enforcement
is sought in a proceeding in equity or at law).
(u) Eligible
Receivables.
Each
Receivable included in the Net Receivables Pool Balance as an Eligible
Receivable on any date is an Eligible Receivable on such date.
(v) Borrowing
Base.
Borrower has determined that, immediately after giving effect to each Borrowing
hereunder, there is no Borrowing Base Deficiency.
(w) Accounting.
The
manner in which such Borrower Party accounts for the transactions contemplated
by the Receivables Sale Agreement does not jeopardize the true sale
analysis.
(x) Identification
of Receivables.
Each
Borrower Party identifies the receivables purchased (or purported to be
purchased) by Borrower under the Receivables Sale Agreement and which are
included in the Net Receivables Pool Balance on its books and records (including
any accounting system) with the account code “FERC 142 Account
Receivable.”
(y) Nature
of Receivables.
No
Receivable arises from the sale of minerals or the like, including oil and
gas,
at the wellhead or the minehead.
(z) ERISA.
PSE and
any other Person which is under common control (within the meaning of Section
414(b) or (c) of the IRC) with PSE have fulfilled their obligations (if any)
under the minimum funding standards of ERISA and the IRC for each ERISA Plan
in
compliance in all material respects with the currently applicable provisions
of
ERISA and the IRC and have not incurred any liability to the PBGC or an ERISA
Plan under Title IV of ERISA (other than liability for premiums due in the
ordinary course). Assuming that the credit extended hereby does not involve
the
assets of any employee benefit plan subject to ERISA or any plan subject to
Section 4975 of the IRC, neither the execution of this Agreement nor the
consummation of the transactions contemplated hereby will involve a Prohibited
Transaction.
(aa) Springing
Lien Indentures.
No
“default” or other event which, with the giving of notice or the passage of time
or both, would constitute a “default” has occurred under any Springing Lien
Indenture. No Adverse Claim has been created, and no event has occurred which,
with the giving of notice or the passage of time or both, would result in,
or
with the further action by a third party would result in, the creation of any
Adverse Claim, on the Receivables, Related Security or the Collections pursuant
to any Springing Lien Indenture or any other indenture, agreement, instrument
or
filing other than as contemplated by the Facility Documents.
SECTION
4.02. Financial
Institution Representations and Warranties.
Each
Committed Lender hereby represents and warrants to its Managing Agent and the
Conduit Lenders in its Lender Group that:
(a) Existence
and Power.
Such
Committed Lender is a corporation or a banking association duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation or organization, and has all corporate power to perform its
obligations hereunder.
(b) No
Conflict.
The
execution and delivery by such Committed Lender of this Agreement and the
performance of its obligations hereunder are within its corporate powers, have
been duly authorized by all necessary corporate action, do not contravene or
violate (i) its certificate or articles of incorporation or association or
by-laws, (ii) any law, rule or regulation applicable to it, (iii) any
restrictions under any agreement, contract or instrument to which it is a party
or any of its property is bound, or (iv) any order, writ, judgment, award,
injunction or decree binding on or affecting it or its property, and do not
result in the creation or imposition of any Adverse Claim on its assets. This
Agreement has been duly authorized, executed and delivered by such Committed
Lender.
(c) Governmental
Authorization.
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
and delivery by such Financial Institution of this Agreement and the performance
of its obligations hereunder.
(d) Binding
Effect.
This
Agreement constitutes the legal, valid and binding obligation of such Committed
Lender enforceable against such Committed Lender in accordance with its terms,
except as such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws relating to or limiting creditors’ rights
generally and by general principles of equity (regardless of whether such
enforcement is sought in a proceeding in equity or at law).
ARTICLE
V
GENERAL
COVENANTS
SECTION
5.01. Affirmative
Covenants of The Borrower Parties.
Until
the date on which the Borrower Obligations have been indefeasibly paid in full
and this Agreement terminates in accordance with its terms, each Borrower Party
hereby covenants, as to itself, as set forth below:
(a) Financial
Reporting.
Such
Borrower Party will maintain, for itself and each of its Subsidiaries, a system
of accounting established and administered in accordance with GAAP, and furnish
or cause to be furnished to each Managing Agent:
(i) Annual
Reporting.
As soon
as available and in any event within 120 days after the end of each fiscal
year
of PSE, (i) a copy of the Annual Report on Form 10-K (or any successor form)
for
PSE for such year, together with a copy of the accompanying report of PSE’s
independent certified public accounting firm; and (ii) a copy of the unaudited
balance sheet of Borrower as at the close of each such period and statements
of
income and retained earnings and a statement of cash flows for Borrower for
the
period from the beginning of such fiscal year to the end of such fiscal year,
all certified by its chief financial officer.
(ii) Quarterly
Reporting.
As soon
as available and in any event within 60 days after the close of each of the
first three quarterly accounting periods in each fiscal year of PSE, (i) a
copy
of the Quarterly Report on Form 10 Q (or any successor form) for PSE for such
quarter; and (ii) unaudited balance sheets of Borrower as at the close of each
such period and statements of income and retained earnings and a statement
of
cash flows for Borrower for the period from the beginning of such fiscal year
to
the end of such quarter, all certified by its chief financial
officer.
(iii) Compliance
Certificate.
Together with the financial statements required hereunder, a compliance
certificate in substantially the form of Exhibit
L
signed
by such Borrower Party’s Authorized Officer and dated the date of such annual
financial statement or such quarterly financial statement, as the case may
be.
(iv) [Reserved.]
(v) S.E.C.
Filings.
Promptly upon the filing thereof, copies of all annual, quarterly, monthly
or
other regular reports, and promptly upon the request of any Managing Agent,
copies of all registration statements, in each case, which Originator or any
of
its Subsidiaries files with the Securities and Exchange Commission.
(vi) Copies
of Notices.
Promptly upon its receipt of any notice, request for consent, financial
statements, certification, report or other communication under or in connection
with any Facility Document from any Person copies of the same.
(vii) Change
in Credit and Collection Policy.
At
least thirty (30) days prior to the effectiveness of any material change in
or
material amendment to the Credit and Collection Policy, a copy of the Credit
and
Collection Policy then in effect and a notice (A) indicating such change or
amendment, and (B) if such proposed change or amendment would be reasonably
likely to adversely affect the collectibility of the Receivables or decrease
the
credit quality of any newly created Receivables, requesting each Managing
Agent’s consent thereto.
(viii) Other
Information.
Promptly, from time to time, such other information, documents, records or
reports relating to the Receivables or the condition or operations, financial
or
otherwise, of such Borrower Party as any Managing Agent may from time to time
reasonably request in order to protect the interests of the Program Agent,
the
Managing Agents and the Lenders under or as contemplated by this
Agreement.
(b) Notices.
Such
Borrower Party will notify the Program Agent in writing of any of the following
promptly upon learning of the occurrence thereof, describing the same and,
if
applicable, the steps being taken with respect thereto:
(i) Events
of Termination or Incipient Events of Termination.
(A) The
occurrence of each Event of Termination, by a statement of an Authorized Officer
of such Borrower Party, and (B) the occurrence of each Incipient Event of
Termination, by a statement of an Authorized Officer of such Borrower
Party.
(ii) Judgment
and Proceedings.
(A)(1)
The entry of any judgment or decree against the Servicer or any of its
Subsidiaries if the aggregate amount of all judgments and decrees then
outstanding against the Servicer and its Subsidiaries exceeds $25,000,000,
(2)
the institution of any litigation, arbitration proceeding, investigation or
governmental proceeding against the Servicer which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect;
and
(3) any material development in any previously disclosed litigation, arbitration
proceeding, investigation or governmental proceeding; and (B) (1) the entry
of
any judgment or decree or the institution of any litigation, arbitration
proceeding, investigation or governmental proceeding against Borrower and (2)
any material adverse development in any previously disclosed litigation,
arbitration proceeding, investigation or governmental proceeding.
(iii) Material
Adverse Effect.
The
occurrence of any event or condition that has had, or could reasonably be
expected to have, a Material Adverse Effect.
(iv) Termination
Date.
The
occurrence of the “Termination Date” under and as defined in the Receivables
Sale Agreement.
(v) Defaults
Under Other Agreements.
The
occurrence of (A) any “default” or other event which, with the giving of notice
or the passage of time or both, would constitute a “default” under any Springing
Lien Indenture or any other material financing arrangement pursuant to which
the
Servicer is a debtor or an obligor, (B) the creation of any Adverse Claim on,
or
the occurrence of any event which, with the giving of notice or passage of
time
or both, would result in, or with further action by any third party would result
in, the creation of any Adverse Claim on the Receivables, the Related Security
or the Collections pursuant to any Springing Lien Indenture or any other
indenture, agreement, instrument or filing, (C) a default or an event of default
under any other financing arrangement in excess of $25,000,000 pursuant to
which
Servicer is a debtor or an obligor or (D) a default or an event of default
under
any other financing arrangement pursuant to which Borrower is a debtor or an
obligor.
(vi) Downgrade
of PSE.
Any
downgrade in the rating of any Indebtedness of PSE by S&P or by ▇▇▇▇▇’▇,
setting forth the Indebtedness affected and the nature of such
change.
(vii) Modification
of Springing Lien Indentures.
Any
amendment, restatement, supplement or modification, or any proposed amendment,
restatement, supplement or modification, of any provision of any Springing
Lien
Indenture which (A) is related to the accounts receivable exception to the
lien
or security interest granted thereunder or the circumstances under which such
exceptions will cease to exist or the events which could cause such exceptions
to cease to exist or (B) in any way could impair the Program Agent’s security
interest in the Receivables, Related Security and Collections or its rights
under the Facility Documents.
(c) Compliance
with Laws and Preservation of Corporate Existence.
(i) Such
Borrower Party will comply with the requirements of all applicable laws, rules,
regulations and governmental approvals, and all orders, writs, injunctions
and
decrees of any court or governmental authority or agency, if failure to comply
with such requirements could reasonably be expected to have a Material Adverse
Effect.
(ii) Such
Borrower Party (A) will preserve and maintain its corporate existence, rights,
franchises and privileges in the jurisdiction of its incorporation and (B)
will
qualify and remain qualified in good standing as a foreign corporation in each
jurisdiction where its business is conducted, except where the failure to so
qualify could not reasonably be expected to have a Material Adverse
Effect.
(d) Audits.
Such
Borrower Party will furnish to each Managing Agent from time to time such
information with respect to it and the Receivables as such Managing Agent may
reasonably request. Such Borrower Party will, from time to time during regular
business hours as requested by such Managing Agent upon reasonable notice and
at
the sole cost of such Borrower Party, permit such Managing Agent, or its agents
or representatives, (i) to examine and make copies of and abstracts from all
Records in the possession or under the control of such Person relating to the
Receivables and the Related Security, including,
without limitation,
the
related Contracts, and (ii) to visit the offices and properties of such Person
for the purpose of examining such materials described in clause (i) above,
and
to discuss matters relating to such Person’s financial condition or the
Receivables and the Related Security or any Person’s performance under any of
the Facility Documents or any Person’s performance under the Contracts and, in
each case, with any of the Authorized Officers of Borrower or the Servicer
having knowledge of such matters (the activities referred to in the preceding
clauses (i) and (ii), collectively, an “Audit”).
Notwithstanding the foregoing, (i) unless an Event of Termination shall have
occurred and be continuing or a Daily Reporting Period shall be in effect,
Borrower Parties shall not be responsible for the costs of more than (A) during
a Level 1 Ratings Period, one Audit performed during any consecutive 12-month
period and (B) during any other Ratings Period, two Audits performed during
any
consecutive 12-month period and (ii) the Borrower Parties agree that they will
cooperate with the Program Agent in connection with the performance of an Audit
to be completed within 60 days after the date hereof.
(e) Keeping
and Marking of Records and Books.
(i) The
Servicer will maintain and implement administrative and operating procedures
(including,
without limitation,
an
ability to recreate records evidencing Receivables in the event of the
destruction of the originals thereof), and keep and maintain all documents,
books, records and other information reasonably necessary or advisable for
the
collection of all Receivables (including,
without limitation,
records
adequate to permit the immediate identification of each new Receivable and
all
Collections of and adjustments to each existing Receivable). The Servicer will
give the Program Agent notice of any material change in the administrative
and
operating procedures referred to in the previous sentence.
(ii) Such
Borrower Party will (A) on or prior to the date hereof, ▇▇▇▇ its master data
processing records and other books and records relating to the Receivables
with
a legend, acceptable to the Managing Agents, describing the interests of the
Program Agent and the Secured Parties therein and (B) upon the request of the
any Managing Agent (x) ▇▇▇▇ each Contract with a legend describing the interests
of the Program Agent and the Secured Parties therein and (y) deliver to the
Program Agent all Contracts (including,
without limitation,
all
multiple originals of any such Contract) relating to the
Receivables.
(f) Compliance
with Contracts and Credit and Collection Policy.
Such
Borrower Party will timely (i) fully perform and comply with all provisions,
covenants and other promises required to be observed by it under the Contracts
related to the Receivables, and (ii) comply in all material respects with the
Credit and Collection Policy in regard to each Receivable and the related
Contract.
(g) Performance
and Enforcement of Receivables
Sale Agreement.
Borrower will, and will require Originator to, perform each of their respective
obligations and undertakings under and pursuant to the Receivables Sale
Agreement, will purchase Receivables thereunder in strict compliance with the
terms thereof and will vigorously enforce the rights and remedies accorded
to
Borrower under the Receivables Sale Agreement. Borrower will take all actions
to
perfect and enforce its rights and interests (and the rights and interests
of
the Program Agent and the Lenders as assignees of Borrower) under the
Receivables Sale Agreement, as any Managing 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 Receivables Sale Agreement.
(h) Ownership.
Borrower will take all necessary action to (i) vest legal and equitable title
to
the Receivables, the Related Security and the Collections purchased under the
Receivables Sale Agreement irrevocably in Borrower, free and clear of any
Adverse Claims other than Adverse Claims in favor of the Program Agent and
the
Secured Parties (including,
without limitation,
the
filing of all financing statements or other similar instruments or documents
necessary under the UCC (or any comparable law) of all appropriate jurisdictions
to perfect Borrower’s interest in such Receivables, Related Security and
Collections and such other action to perfect, protect or more fully evidence
the
interest of Borrower therein as the Program Agent or any Managing Agent may
reasonably request), and (ii) establish and maintain, in favor of the Program
Agent, for the benefit of the Secured Parties, a valid and perfected first
priority security interest in all Receivables, Related Security and Collections
to the full extent contemplated herein, free and clear of any Adverse Claims
other than Adverse Claims in favor of the Program Agent for the benefit of
the
Secured Parties (including,
without limitation,
the
filing of all financing statements or other similar instruments or documents
necessary under the UCC (or any comparable law) of all appropriate jurisdictions
to perfect the Program Agent’s (for the benefit of the Secured Parties) interest
in such Receivables, Related Security and Collections and such other action
to
perfect, protect or more fully evidence the interest of the Program Agent for
the benefit of the Secured Parties as the Program Agent or any Managing Agent
may reasonably request).
(i) Lenders’
Reliance.
Borrower acknowledges that the Lenders are entering into the transactions
contemplated by this Agreement in reliance upon Borrower’s identity as a legal
entity that is separate from each Related Entity. Therefore, from and after
the
date of execution and delivery of this Agreement, Borrower shall take all
reasonable steps, including,
without limitation,
all
steps that the Program Agent, any Managing Agent or any Lender may from time
to
time reasonably request, to maintain Borrower’s identity as a separate legal
entity and to make it manifest to third parties that Borrower is an entity
with
assets and liabilities distinct from those of each Related Entity and not just
a
division of any Related Entity. Without limiting the generality of the foregoing
and in addition to the other covenants set forth herein, Borrower
will:
(i) conduct
its own business in its own name and require that all full-time employees of
Borrower, if any, identify themselves as such and not as employees of any
Related Entity (including,
without limitation,
by
means of providing appropriate employees with business or identification cards
identifying such employees as Borrower’s employees);
(ii) compensate
all employees, consultants and agents directly, from Borrower’s own funds, for
services provided to Borrower by such employees, consultants and agents and,
to
the extent any employee, consultant or agent of Borrower is also an employee,
consultant or agent of any Related Entity, allocate the compensation of such
employee, consultant or agent between Borrower and such Related Entity, on
a
basis that reflects the services rendered to Borrower and such Related
Entity;
(iii) to
the
extent Borrower maintains a separate office for the operation of its business,
clearly identify its offices (by signage or otherwise) as its offices and,
if
such office is located in the offices of any Related Entity, Borrower shall
lease such office at a fair market rent;
(iv) have
a
separate telephone number, which will be answered only in its name and separate
stationery, invoices and checks in its own name;
(v) conduct
all transactions with each Related Entity and the Servicer and their respective
Affiliates (including,
without limitation,
any
delegation of its obligations hereunder as Servicer) strictly on an arm’s-length
basis, allocate all overhead expenses (including,
without limitation,
telephone and other utility charges) for items shared between Borrower and
any
Related Entity on the basis of actual use to the extent practicable and, to
the
extent such allocation is not practicable, on a basis reasonably related to
actual use;
(vi) at
all
times have a Board of Directors consisting of at least three members, at least
one member of which is an Independent Director;
(vii) observe
all corporate formalities as a distinct entity, and ensure that all corporate
actions relating to (A) the selection, maintenance or replacement of the
Independent Director, (B) the dissolution or liquidation of Borrower or (C)
the
initiation of, participation in, acquiescence in or consent to any bankruptcy,
insolvency, reorganization or similar proceeding involving Borrower, are duly
authorized by unanimous vote of its Board of Directors (including the
Independent Director);
(viii) maintain
Borrower’s books and records separate from those of each Related Entity and
otherwise readily identifiable as its own assets rather than assets of any
Related Entity;
(ix) prepare
its financial statements separately from those of each Related Entity and insure
that any consolidated financial statements of any Related Entity that include
Borrower, including any that are filed with the Securities and Exchange
Commission or any other governmental agency, have notes clearly stating that
Borrower is a separate corporate entity and that its assets will be available
first and foremost to satisfy the claims of the creditors of
Borrower;
(x) except
as
herein specifically otherwise provided, maintain the funds or other assets
of
Borrower separate from, and not commingled with, those of any Related Entity
and
only maintain bank accounts or other depository accounts to which Borrower
alone
(or the Servicer in the performance of its duties hereunder) is the account
party, and from which Borrower alone (or the Servicer in the performance of
its
duties hereunder or the Program Agent hereunder) has the power to make
withdrawals;
(xi) pay
all
of Borrower’s operating expenses from Borrower’s own assets (except for certain
payments by any Related Entity or other Persons pursuant to allocation
arrangements that comply with the requirements of this Section
5.01(i));
(xii) operate
its business and activities such that: it does not engage in any business or
activity of any kind, or enter into any transaction or indenture, mortgage,
instrument, agreement, contract, lease or other undertaking, other than the
transactions contemplated and authorized by this Agreement and the Receivables
Sale Agreement; and does not create, incur, guarantee, assume or suffer to
exist
any indebtedness or other liabilities, whether direct or contingent, other
than
(1) as a result of the endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business, (2)
the
incurrence of obligations under this Agreement, (3) the incurrence of
obligations, as expressly contemplated in the Receivables Sale Agreement, to
make payment to Originator thereunder for the purchase of Receivables under
the
Receivables Sale Agreement, and (4) the incurrence of operating expenses in
the
ordinary course of business of the type otherwise contemplated by this
Agreement;
(xiii) maintain
its corporate charter in conformity with this Agreement, such that it does
not
amend, restate, supplement or otherwise modify its Articles of Incorporation
or
By-Laws in any respect that would impair its ability to comply with the terms
or
provisions of any of the Facility Documents, including,
without limitation,
Section
5.01(i)
of this
Agreement;
(xiv) maintain
the effectiveness of, and continue to perform under the Receivables Sale
Agreement, such that it does not amend, restate, supplement, cancel, terminate
or otherwise modify the Receivables Sale Agreement, or give any consent, waiver,
directive or approval thereunder or waive any default, action, omission or
breach under the Receivables Sale Agreement or otherwise grant any indulgence
thereunder, without (in each case) the prior written consent of each Managing
Agent;
(xv) maintain
its corporate separateness such that it does not merge or consolidate with
or
into, or convey, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions, and except as otherwise contemplated
herein) all or substantially all of its assets (whether now owned or hereafter
acquired) to, or acquire all or substantially all of the assets of, any Person,
nor at any time create, have, acquire, maintain or hold any interest in any
Subsidiary.
(xvi) maintain
at all times the Required Capital Amount (as defined in the Receivables Sale
Agreement) and refrain from making any dividend, distribution, redemption of
capital stock or payment of any subordinated indebtedness which would cause
the
Required Capital Amount to cease to be so maintained; and
(xvii) take
such
other actions as are necessary on its part to ensure that the facts and
assumptions set forth in the opinion issued by ▇▇▇▇▇▇▇ Coie LLP, as counsel
for
Borrower, in connection with the closing or the Initial Borrowing under this
Agreement and relating to substantive consolidation issues, and in the
certificates accompanying such opinion, remain true and correct in all material
respects at all times.
(j) Collections.
Such
Borrower Party will instruct all Obligors to remit all Collections directly
to a
Lock-Box, an Alternate Payment Location or a Deposit Account. Such Borrower
Party will cause (1) all items from all Lock-Boxes and all items received from
all Alternate Payment Locations to be processed and deposited to a Deposit
Account within one (1) Business Day after such receipt or to be directly
deposited by a Deposit Account Bank into a Deposit Account, (2) all
non-Collection amounts deposited to any Deposit Account to be electronically
swept or otherwise transferred out of such Deposit Account within one (1)
Business Day of being deposited therein, and (3) each Lock-Box and Deposit
Account to be subject at all times on and after the date which is 60 days after
the date hereof to a Blocked Account Agreement that is in full force and effect.
In the event any payments relating to Receivables are remitted directly to
any
Borrower Party or any Affiliate of any Borrower Party, such Borrower Party
will
remit (or will cause all such payments to be remitted) directly to a Deposit
Account Bank and deposited into a Deposit Account within two (2) Business Days
following receipt thereof, and, at all times prior to such remittance, such
Borrower Party will itself hold or, if applicable, will cause such payments
to
be held in trust for the exclusive benefit of the Program Agent and the Secured
Parties. Borrower will maintain exclusive ownership, dominion and control and
“control” (within the meaning of Section 9-104 of the UCC of all applicable
jurisdictions), subject to the terms of this Agreement, of each Lock-Box and
Deposit Account and shall not grant the right to take dominion and control
or
“control” (within the meaning of Section 9-104 of the UCC of all applicable
jurisdictions) of any Lock-Box or Deposit Account at a future time or upon
the
occurrence of a future event to any Person, except to the Program Agent as
contemplated by this Agreement. With respect to each Deposit Account, each
Borrower Party shall take all steps necessary to ensure that the Program Agent
has “control” (within the meaning of Section 9-104 of the UCC of all applicable
jurisdictions) over each such Deposit Account on and after the date which is
60
days after the date hereof.
(k) Taxes.
Such
Borrower Party will file all tax returns and reports required by law to be
filed
by it and will promptly pay and discharge, before the same shall become
delinquent, all taxes, assessments and governmental charges or levies imposed
upon it or upon its property, except any such taxes, assessments, charges or
levies (i) that are being diligently contested in good faith by appropriate
proceedings or (ii) subject to the last sentence of this subsection (k), the
non-payment of which could not reasonably be expected to have a Material Adverse
Effect. Borrower will pay when due any taxes payable in connection with the
Receivables, exclusive of taxes on or measured by income or gross receipts
of
any Lender, any Managing Agent or the Program Agent.
(l) Insurance.
Such
Borrower Party will maintain with responsible insurance companies or through
PSE’s program of self-insurance, insurance against at least such risks and in at
least such amounts as is customarily maintained by similar businesses, or as
may
be required by any applicable law, rule or regulation, any governmental
approval, or any order, writ, injunction or decree of any court or governmental
authority or agency.
(m) Payment
to Originator.
With
respect to any Receivable purchased by Borrower from Originator, such sale
shall
be effected under, and in strict compliance with the terms of, the Receivables
Sale Agreement, including,
without limitation,
the
terms relating to the amount and timing of payments to be made to Originator
in
respect of the purchase price for such Receivable.
(n) Identification
of Receivables.
Such
Borrower Party shall at all times identify receivables purchased (or purported
to be purchased) by Borrower under the Receivables Sale Agreement and which
are
included the Net Receivables Pool Balance on its books and records (including
its accounting system) with the account code “FERC 142 Account
Receivable.”
(o) Frequency
of Billing.
Such
Borrower Party will prepare and mail invoices with respect to all Receivables
no
less frequently than monthly.
SECTION
5.02. Negative
Covenants of The Borrower Parties.
Until
the date on which the Borrower Obligations have been indefeasibly paid in full
and this Agreement terminates in accordance with its terms, each Borrower Party
hereby covenants, as to itself, that:
(a) Name
and Jurisdiction Change, Offices and Records.
Such
Borrower Party will not change its name, jurisdiction of organization, identity
or corporate structure (within the meaning of Sections 9-503 and/or 9-507 of
the
UCC of all applicable jurisdictions), become a “new debtor” (as defined in
Section 9-102(a)(56) of the UCC of all applicable jurisdictions) with respect
to
a currently effective security agreement previously entered into by any other
Person, change its “location” (within the meaning of Section 9-307 of the UCC of
all applicable jurisdictions) or relocate its chief executive office, principal
place of business or any office where Records are kept unless it shall have:
(i)
given the Program Agent at least forty-five (45) days’ prior written notice
thereof and (ii) delivered to the Program Agent all financing statements,
instruments and other documents requested by the Program Agent or any Managing
Agent in connection with such change, event or relocation.
(b) Change
in Payment Instructions to Obligors.
Except
as may be required by the Program Agent pursuant to Section
6.06,
such
Borrower Party will not add or terminate any bank as a Deposit Account Bank,
or
make any change in the instructions to Obligors regarding payments to be made
to
any Lock-Box or Deposit Account, unless the Program Agent shall have received,
at least ten (10) days before the proposed effective date therefor, (i) written
notice of such addition, termination or change and (ii) with respect to the
addition of a Deposit Account Bank or a Deposit Account or Lock-Box, an executed
Blocked Account Agreement and Lock-Box Transfer Notice, as applicable with
respect to the new Deposit Account or Lock-Box; provided,
however,
that the
Servicer may make changes in instructions to Obligors regarding payments if
such
new instructions require such Obligor to make payments to another existing
Deposit Account or Lock-Box.
(c) Modifications
to Contracts and Credit and Collection Policy.
Such
Borrower Party will not make any change to the Credit and Collection Policy
that
could adversely affect the collectibility of the Receivables or decrease the
credit quality of any newly created Receivables. Except as provided in
Section
6.02(d),
the
Servicer will not extend, amend or otherwise modify the terms of any Receivable
or any Contract related thereto other than in accordance with the Credit and
Collection Policy.
(d) Sales,
Liens.
Borrower will not sell, assign (by operation of law or otherwise) or otherwise
dispose of, or grant any option with respect to, or create or suffer to exist
any Adverse Claim upon (including,
without limitation,
the
filing of any financing statement) or with respect to, any Receivable, Related
Security or Collections, or upon or with respect to any Contract under which
any
Receivable arises, or any Lock-Box or Deposit Account, or assign any right
to
receive income with respect thereto (other than, in each case, the creation
of
the interests therein in favor of the Program Agent and the Secured Parties
provided for herein), and Borrower will defend the right, title and interest
of
the Program Agent and the Lenders in, to and under any of the foregoing
property, against all claims of third parties claiming through or under Borrower
or Originator. Borrower will not create or suffer to exist any mortgage, pledge,
security interest, encumbrance, lien, charge or other similar arrangement on
any
of its inventory.
(e) Borrowing
Base Deficiency.
At no
time prior to the Termination Date shall Borrower permit a Borrowing Base
Deficiency to exist for (i) at any time a Monthly Reporting Period is in effect,
two (2) Business Days, and (ii) at any time a Daily Reporting Period is in
effect, one (1) Business Day.
(f) Termination
Date Determination.
Borrower will not designate the Termination Date (as defined in the Receivables
Sale Agreement), or send any written notice to Originator in respect thereof,
without the prior written consent of each Managing Agent, except with respect
to
the occurrence of such Termination Date arising pursuant to Section 5.1(d)
of
the Receivables Sale Agreement.
(g) Restricted
Junior Payments.
From
and after the occurrence of any Event of Termination or Incipient Event of
Termination related to an Event of Termination described in Sections
7.01(d)
or
7.01(i),
Borrower will not make any Restricted Junior Payment if, after giving effect
thereto, Borrower would fail to meet its obligations set forth in Section
5.02(e).
(h) Collections.
Except
for proceeds of Excluded Receivables (which shall be electronically swept or
otherwise transferred out of such Deposit Account within one (1) Business Day
of
being deposited therein in accordance with Section
5.01(j)),
no
Borrower Party will deposit or otherwise credit, or cause or permit to be so
deposited or credited, to any Deposit Account cash or cash proceeds other than
Collections. Except as may be required by the Program Agent pursuant to the
last
sentence of Section
6.02(b),
no
Borrower Party will deposit or otherwise credit, or cause or permit to be so
deposited or credited, any Collections or proceeds thereof to any lock-box
account or to any other account not covered by a Blocked Account
Agreement.
ARTICLE
VI
ADMINISTRATION
OF RECEIVABLES
SECTION
6.01. Designation
of Servicer.
(a) The
servicing, administering and collection of the Receivables shall be conducted
by
the Person so designated from time to time in accordance with this Section
6.01.
Until
the Program Agent, with the consent or at the direction of the Managing Agents,
gives notice to the Borrower and the Servicer of the designation of a new
Servicer as provided in Section
6.01(b)
below,
PSE is hereby designated as, and hereby agrees to perform the duties and
obligations of, the Servicer pursuant to the terms hereof. The Borrower hereby
grants to Servicer an irrevocable power of attorney, with full power of
substitution, coupled with an interest, to take in the name of the Borrower
any
and all steps which are necessary or advisable to endorse, negotiate or
otherwise realize on any writing or other right of any kind in connection with
any Receivable or other Collateral.
(b) Upon
the
occurrence and during the continuation of any Event of Termination, the Program
Agent may, with the consent or shall at the direction of any Managing Agent,
upon written notice to the parties hereto designate as Servicer any Person
to
succeed PSE (or any successor Servicer) subject to the condition that any such
Person so designated shall agree to perform the duties and obligations of the
Servicer pursuant to the terms hereof. The Servicer shall not resign from the
obligations and duties hereby imposed on it except upon the reasonable
determination by the Servicer that (x) the performance of its duties hereunder
is no longer permissible under applicable law and (y) there is no reasonable
action which the Servicer could take to make the performance of its duties
hereunder permissible under applicable law.
(c) PSE
and
any other Servicer agrees that, upon its resignation or replacement as Servicer
pursuant to Section
6.01(b)
above,
it will cooperate with the Borrower, the Program Agent and the successor
Servicer in effecting the termination of its responsibilities and rights as
Servicer hereunder, including, without limitation, (i) assisting the successor
Servicer in enforcing all rights under the Receivables and Related Security,
(ii) transferring, promptly upon receipt, to the successor Servicer, any
Collections or other amounts related to the Receivables received by such
Servicer, (iii) transferring to the successor Servicer all Records held by
or
under the control of such Servicer and (iv) permitting the successor Servicer
to
have access to all tapes, discs, diskettes and related property containing
information concerning the Receivables and the Records and taking all actions
necessary in its control to permit the successor Servicer to use all computer
software that may facilitate the Servicer’s access to and use of such
information and acting as data processing agent for such successor Servicer
if
requested. Upon the resignation or replacement of PSE as Servicer, PSE shall
no
longer be entitled to the Servicer Fee accruing from and after the effective
date of such resignation or replacement.
(d) Without
the consent of each Managing Agent, the Servicer shall not be permitted to
delegate any of its duties or responsibilities as Servicer to any Person other
than (i) an Approved Sub-servicer and (ii) with respect to certain Defaulted
Receivables, outside collection agencies in accordance with its customary
practices.
(e) Notwithstanding
any such delegation pursuant to clause
(d)
above,
(i) the Servicer shall remain liable for the timely and complete performance
of
its duties and obligations pursuant to the terms hereof, (ii) the Servicer
shall
retain management information systems and sufficient servicing capability,
in
the reasonable judgment of the Program Agent and each Managing Agent, to perform
the servicing functions described herein, and (iii) any sub-servicing agreement
that may be entered into and any other transactions or services relating to
the
Receivables involving an Approved Sub-servicer shall be deemed to be between
such Approved Sub-servicer and the Servicer alone, and none of the Lenders,
the
Program Agent, the Managing Agents and the Liquidity Providers shall be deemed
parties thereto or shall have any obligations, duties or liabilities with
respect to any Approved Sub-servicer.
SECTION
6.02. Duties
of the Servicer.
(a) The
Servicer shall take or cause to be taken all such actions as it deems necessary
or advisable to collect each Receivable from time to time, all in accordance,
in
all material respects, with applicable laws, tariffs, rules, regulations and
the
Credit and Collection Policy. Each of the Borrower, each Lender, each Liquidity
Provider, each Managing Agent and the Program Agent hereby appoints as its
agent
the Servicer, from time to time designated pursuant to Section
6.01,
to
enforce its respective rights and interests in and under the Receivables and
the
Related Security. The Servicer (so long as it is PSE) will at all times apply
the same standards and follow the same procedures with respect to the decision
to commence litigation with respect to the Receivables, and in prosecuting
and
litigating with respect to Receivables, as it applies and follows with respect
to trade accounts receivable serviced by it which are not Receivables;
provided,
however,
that
from and after the Termination Date, the Servicer shall commence or settle
any
legal action to enforce collection of any Defaulted Receivable or to foreclose
upon or repossess any Related Security with respect thereto as directed by
the
Program Agent. In no event shall the Servicer be entitled to make the Program
Agent, any Managing Agent, any Lender or any Liquidity Provider a party to
any
litigation without such Person’s express prior written consent.
(b) The
Servicer shall apply all Collections to the Receivables owed by the applicable
Obligors in a timely manner in accordance with the business practices of the
Originator in existence as of the date hereof. In the event the Servicer
receives any Collections or other proceeds of the Collateral, it shall set
aside
and hold in trust for the Borrower and the Secured Parties such Collections
and
other proceeds for application and remittance in accordance with Section
2.06
or
2.07,
as
applicable, and it shall remit the same to the Collection Account to the extent
required hereunder. The Servicer shall, upon the request of any Managing Agent,
segregate, in a manner acceptable to such Managing Agent, all cash, checks
and
other instruments received by it from time to time constituting Collections
from
the general funds of the Servicer or Borrower prior to the remittance thereof
in
accordance with Article
II.
If the
Servicer shall be required to segregate Collections pursuant to the preceding
sentence, the Servicer shall segregate and deposit into the Collection Account
such allocable share of Collections of Receivables set aside for the Secured
Parties on the first Business Day following receipt by the Servicer of such
Collections, duly endorsed or with duly executed instruments of
transfer.
(c) The
Servicer shall, as soon as practicable following receipt, turn over to the
Person entitled thereto collections in respect of any receivable which is not
a
Receivable less, to the extent the Servicer performed any collection or
enforcement actions which it was authorized by such Person to perform, all
reasonable and appropriate out of pocket costs and expenses of such Servicer
incurred in collecting and enforcing such receivable.
(d) The
Servicer may, in accordance with the Credit and Collection Policy, extend the
maturity of any Receivable or adjust the Outstanding Balance of any Receivable
as the Servicer determines to be appropriate to maximize Collections thereof;
provided,
however,
that
such extension or adjustment shall not alter the status of such Receivable
as a
Defaulted Receivable or limit the rights of any Secured Party under this
Agreement. Notwithstanding anything to the contrary contained herein, during
the
existence of any Event of Termination, the Program Agent shall have the absolute
and unlimited right to direct the Servicer to commence or settle any legal
action with respect to any Receivable or to foreclose upon or repossess any
Related Security.
(e) The
Servicer shall hold in trust for Borrower and the Secured Parties all Records
that (i) evidence or relate to the Receivables, the related Contracts and
Related Security or (ii) are otherwise necessary or desirable to collect the
Receivables and shall, as soon as practicable upon demand of any Managing Agent
or the Program Agent, during the existence of any Event of Termination, deliver
or make available to the Program Agent all such Records, at a place selected
by
the Program Agent. The Servicer shall, as soon as practicable following receipt
thereof turn over to Borrower any cash collections or other cash proceeds
received with respect to Indebtedness not constituting Receivables. The Servicer
shall, from time to time at the request of any Lender, furnish to the Lenders
(promptly after any such request) a calculation of the amounts set aside for
the
Lenders pursuant to Article
II.
(f) Any
payment by an Obligor in respect of any indebtedness owed by it to Originator
or
Borrower shall, except as otherwise specified by such Obligor or otherwise
required by contract or law and unless otherwise instructed by the Program
Agent, be applied as a Collection of any Receivable of such Obligor (starting
with the oldest such Receivable) to the extent of any amounts then due and
payable thereunder before being applied to any other receivable or other
obligation of such Obligor.
SECTION
6.03. Rights
of the Program Agent.
(a) Following
the occurrence and during the continuation of any Event of Termination or an
Incipient Event of Termination related to an Event of Termination described
in
Sections
7.01(d)
or
7.01(i),
or
during any Daily Reporting Period, the Program Agent may with the consent of,
and shall at the direction of, any Managing Agent (i) exercise its right to
take
exclusive ownership and control of the Collection Account, Lock-Boxes and the
Deposit Accounts, and each of the Borrower and the Servicer hereby agrees to
take any further action necessary that the Program Agent may reasonably request
to effect such control, (ii) notify any or all of the Deposit Account Banks
to
remit all amounts deposited in the applicable Deposit Accounts to the Collection
Account or to any other account designated by the Program Agent and (iii)
deliver the Lock-Box Transfer Notices to the appropriate addressees thereof.
From and after the date the Program Agent exercises its right to take exclusive
control of the Collection Account, all withdrawals and distributions to be
made
from the Collection Account by the Servicer hereunder shall be made by the
Program Agent.
(b) The
Borrower hereby grants to the Program Agent an irrevocable power of attorney,
with full power of substitution, coupled with an interest, to take in the name
of the Borrower, following the occurrence and during the continuance of an
Event
of Termination or at any time after the Program Agent exercises its rights
under
Section
6.03(a),
any and
all steps which are necessary or advisable to endorse, negotiate or otherwise
realize on any writing or other right of any kind in connection with any
Receivable or other Collateral.
(c) At
any
time after the Effective Date, the Program Agent may, and upon the request
of
any Managing Agent shall, cause the Collection Account to be established at
an
Eligible Institution (the “Collection Account Bank”). The Borrower shall cause
the Collection Account Bank to agree in writing that the Program Agent shall
have exclusive dominion and control over the Collection Account and that the
Collection Account Bank will comply with instructions originated by the Program
Agent directing disposition of the funds in the Collection Account without
further consent by the Borrower; provided that until the Program Agent provides
such instructions to the Collection Account Bank (in accordance with
Section
6.03(a)),
the
Collection Account Bank shall be entitled to comply with instructions originated
by the Servicer directing disposition of the funds in the Collection Account
without further consent by the Borrower or the Program Agent.
SECTION
6.04. Responsibilities
of the Borrower.
Anything herein to the contrary notwithstanding, the Borrower shall (i) perform
all of its obligations with respect to the Receivables to the same extent as
if
a security interest in the Receivables had not been granted hereunder and the
exercise by the Program Agent of its rights hereunder shall not relieve Borrower
from such obligations and (ii) pay when due any taxes, including without
limitation, sales, excise and personal property taxes payable by it in
connection with the Receivables. None of the Program Agent, the Managing Agents,
the Lenders or the Liquidity Providers shall have any obligation or liability
with respect to any Receivables or other Collateral, nor shall any of them
be
obligated to perform any of the obligations of the Borrower
thereunder.
SECTION
6.05. Further
Action Evidencing Program Agent’s Interest.
Each of
the Borrower and the Servicer agrees that from time to time, at its expense,
it
will promptly execute and deliver all further instruments and documents, and
take all further action that any Managing Agent or the Program Agent may
reasonably request in order to perfect, protect or more fully evidence the
interest of the Program Agent or the Secured Parties granted hereunder or to
enable the Program Agent to exercise or enforce any of its or the Secured
Parties’ rights hereunder. Without limiting the generality of the foregoing,
each of the Borrower and the Servicer will (i) code its master data processing
records evidencing such Receivables to evidence that a security interest therein
has been granted to the Program Agent under this Agreement, and (ii) upon the
request of any Managing Agent or the Program Agent, file such financing
statements, continuation statements or amendments thereto or assignments
thereof, and execute and file such other instruments or notices, as may be
necessary or appropriate or as the Program Agent or any Managing Agent may
reasonably request. If after the occurrence and during the continuation of
any
Event of Termination, either the Borrower or the Servicer fails to perform
any
of its respective agreements or obligations under this Agreement, the Program
Agent may (but shall not be required to) itself perform, or cause performance
of, such agreement or obligation, and the reasonable out-of-pocket expenses
of
the Program Agent incurred in connection therewith shall be payable by the
Borrower or the Servicer, as applicable, upon the Program Agent’s demand
therefor.
SECTION
6.06. Collections.
In the
case of any remittances received in any Lock-Box or Deposit Account that shall
have been identified, to the satisfaction of the Servicer, to not constitute
Collections or other proceeds of the Receivables or the Related Security, the
Servicer shall promptly remit such items to the Person identified to it as
being
the owner of such remittances. From and after the date the Program Agent
delivers a Collection Notice to any Deposit Account Bank or a Lock-Box Transfer
Notice to any post office pursuant to Section
6.03,
the
Program Agent may request that the Servicer, and the Servicer thereupon promptly
shall instruct all Obligors with respect to the Receivables, to remit all
payments thereon to a new lock-box or depositary account specified by the
Program Agent and, at all times thereafter, Borrower and the Servicer shall
not
deposit or otherwise credit, and shall not permit any other Person to deposit
or
otherwise credit to such new lock-box, post office box or depositary account
any
cash or payment item other than Collections.
SECTION
6.07. Reports.
The
Servicer shall prepare and forward to each Managing Agent (i) (A) during a
Monthly Reporting Period, on each Monthly Reporting Date, a Monthly Report,
(B)
during a Weekly Reporting Period, on each Monthly Reporting Date, a Monthly
Report and on Tuesday of each calendar week (or if such day is not a Business
Day, on the next succeeding Business Day), a Weekly Report covering the period
from and including Monday of the preceding week to but excluding Monday of
such
week and (C) during a Daily Reporting Period, on each Monthly Reporting Date,
a
Monthly Report and on each Business Day (or such other schedule as may be
consented to by the Managing Agents), a Daily Report and (ii) at such times
as
any Managing Agent shall reasonably request, a listing by Obligor of all
Receivables together with an aging of Receivables.
SECTION
6.08. Servicer
Fees.
In
consideration of PSE’s agreement to act as Servicer hereunder, the Lenders
hereby agree that, so long as PSE shall continue to perform as Servicer
hereunder, Borrower shall pay over to PSE a fee (the “Servicer
Fee”)
on the
first calendar day of each month (or, if such day is not a Business Day, then
the next Business Day thereafter), in arrears for the immediately preceding
month, equal to 0.25% per annum of the average aggregate Outstanding Balance
of
all Receivables during such period, as compensation for its servicing
activities. Notwithstanding the foregoing, if the Servicer is replaced by the
Program Agent, the successor Servicer shall receive a servicing fee in an amount
agreed upon by the Program Agent and the successor Servicer which reflects
market rates for servicing similar portfolios of receivables.
ARTICLE
VII
EVENTS
OF
TERMINATION
SECTION
7.01. Events
of Termination.
If any
of the following events (each, an “Event
of Termination”)
shall
occur:
(a) Any
Borrower Party shall fail:
(i) (A)
to
make any payment or deposit required hereunder when due and, such failure
continues for two (2) Business Days, or (B) to perform or observe any term,
covenant or agreement set forth in Section
5.01(a)(vi)
through
(viii),
(b)(i)(A),
(c)(ii)(A),
(j),
(n)
or
(o)
or
Section
5.02,
and,
with respect to Servicer only, Section
6.06
and
Section
6.07;
(ii) to
perform or observe any term, covenant or agreement set forth in Section
5.01(b)(i)(B),
(d),
(g),
(h)
or
(i)
and such
failure shall continue for five (5) consecutive Business Days after the earlier
of (A) any Borrower Party obtains knowledge thereof or (B) the Program Agent
or
any Managing Agent delivers written notice thereof; or
(iii) to
perform or observe any other term, covenant or agreement hereunder (other than
as referred to in clauses (i) and (ii) of this subsection (a) and Section
7.01(e))
or any
other Facility Document and such failure shall continue for thirty (30)
consecutive days after the earlier of (A) any Borrower Party obtains knowledge
thereof or (B) the Program Agent or any Managing Agent delivers written notice
thereof.
(b) Any
representation, warranty, certification or statement made by any Borrower Party
in this Agreement, any other Facility Document or in any other document
delivered pursuant hereto or thereto shall prove to have been materially false
on the date as of which made or deemed made.
(c) Failure
of Borrower to pay any Indebtedness when due or the failure of any other
Borrower Party (or PSE at any time when PSE is not acting as Servicer) to pay
Indebtedness when due in excess of $25,000,000 in the aggregate; or the default
by any Borrower Party (or PSE at any time when PSE is not acting as Servicer)
in
the performance of any term, provision or condition contained in any agreement
under which any such Indebtedness was created or is governed, the effect of
which is to cause, or to permit the holder or holders of such Indebtedness
to
cause, such Indebtedness to become due prior to its stated maturity; or any
such
Indebtedness of any Borrower Party (or PSE at any time when PSE is not acting
as
Servicer) shall be declared to be due and payable or required to be prepaid
(other than by a regularly scheduled payment) prior to the date of maturity
thereof.
(d) (i)
Any
Borrower Party (or PSE at any time when PSE is not acting as Servicer) or any
of
its Significant Subsidiaries shall generally not pay its debts as such debts
become due or shall admit in writing its inability to pay its debts generally
or
shall make a general assignment for the benefit of creditors; or (ii) any
proceeding shall be instituted by any Borrower Party (or PSE at any time when
PSE is not acting as Servicer) or any of its Significant Subsidiaries seeking
to
adjudicate it bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief or composition
of it
or its debts under any law relating to bankruptcy, insolvency or reorganization
or relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee or other similar official for it or any
substantial part of its property; or (iii) any proceeding shall be instituted
against any Borrower Party (or PSE at any time when PSE is not acting as
Servicer) or any of its Significant Subsidiaries seeking to adjudicate it
bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or relief
of
debtors, or seeking the entry of an order for relief or the appointment of
a
receiver, trustee or other similar official for it or any substantial part
of
its property, and in the case of the Servicer, or PSE, such proceeding continues
undismissed or unstayed for a period of 60 consecutive days or (iv) any Borrower
Party (or PSE at any time when PSE is not acting as Servicer) or any of its
Significant Subsidiaries shall take any corporate action to authorize any of
the
actions set forth in clauses (i), (ii) or (iii) above in this subsection
(d).
(e) As
of the
close of business on any date, any Borrowing Base Deficiency shall exist (after
giving effect to any increases or reductions to the Aggregate Principal Balance
on such date) and such deficiency continues for (i) at any time a Monthly
Reporting Period is in effect, two (2) Business Days, and (ii) at any time
a
Daily or Weekly Reporting Period is in effect, one (1) Business
Day.
(f) As
of the
last day of any fiscal quarter of PSE, the aggregate outstanding principal
amount of all Consolidated Indebtedness exceeds 65% of Total Capitalization
as
of the last day of such fiscal quarter.
(g) As
at the
end of any calendar month:
(i) the
three
month average Dilution Ratio shall exceed 1.50%;
(ii) the
three
month average Past Due Ratio exceeds 4.50%;
(iii) the
three
month average Default Ratio shall exceed 7.00%; or
(iv) the
three
month average Days Sales Outstanding Ratio shall exceed 60 days.
(h) A
Change
of Control shall occur.
(i)
(i) One
or more final judgments for the payment of money shall be entered against
Borrower or (ii) one or more final judgments for the payment of money in an
amount in excess of $25,000,000, individually or in the aggregate, shall be
entered against the Servicer on claims not covered by insurance or as to which
the insurance carrier has denied its responsibility, and such judgment shall
continue unsatisfied and in effect for 60 days without a stay of execution
or
otherwise being appropriately contested in good faith.
(j) The
“Termination Date” under and as defined in the Receivables Sale Agreement shall
occur under the Receivables Sale Agreement or Originator shall for any reason
cease to transfer, or cease to have the legal capacity to transfer, or otherwise
be incapable of transferring Receivables to Borrower under the Receivables
Sale
Agreement, or Borrower shall for any reason cease to purchase, or cease to
have
the legal capacity to purchase, or otherwise be incapable of accepting
Receivables from Originator under the Receivables Sale Agreement.
(k) This
Agreement shall terminate in whole or in part (except in accordance with its
terms), or shall cease to be effective or to be the legally valid, binding
and
enforceable obligation of any Borrower Party, or any Obligor shall directly
or
indirectly contest in any manner such effectiveness, validity, binding nature
or
enforceability, or the Program Agent for the benefit of the Secured Parties
shall cease to have a valid and perfected first priority security interest
in
the Receivables, the Related Security and the Collections with respect thereto
and the Deposit Accounts.
(l) [Reserved.]
(m) If
PSE or
any ERISA Affiliate should establish, maintain, contribute to or become
obligated to contribute to any ERISA Plan and (i) a Reportable Event shall
have
occurred with respect to any ERISA Plan; or (ii) a trustee shall be appointed
by
a United States District Court to administer any ERISA Plan; or (iii) the PBGC
shall institute proceedings to terminate any ERISA Plan; or (iv) a complete
or
partial withdrawal by PSE or any ERISA Affiliate from any Multiemployer Plan
shall have occurred, or any Multiemployer Plan shall enter reorganization
status, become insolvent, or terminate (or notify PSE or any ERISA Affiliate
of
its intent to terminate) under Section 4041A of ERISA; or (v) any ERISA Plan
experiences an accumulated funding deficiency under Code Section 412(b); or
(vi)
PSE or any ERISA Affiliate incurs any liability for a Prohibited Transaction
under ERISA Section 502; provided
that any
of the events described in this Section
7.01(m)
shall
result in joint liability to PSE and all ERISA Affiliates in excess of
$25,000,000.
(n) Any
Transaction Party receives notice or becomes aware that a notice of federal
tax
lien has been filed against any Transaction Party unless such lien is released
or is otherwise being contested in good faith within thirty (30) days of the
filing thereof; provided that the thirty day period shall not be construed
to
apply to the occurrence of any event described in paragraph (k)
above.
(o) Any
event
which constitutes a “default” (after the expiration of any applicable cure
period) under any Springing Lien Indenture, shall have occurred.
then,
and
in any such event, the Program Agent shall, at the request, or may with the
consent, of any Managing Agent by notice to the Borrower, declare the
Termination Date to have occurred; provided,
however,
that,
in the case of any event described in subsection
(d)
above,
the Termination Date shall be deemed to have occurred automatically upon the
occurrence of such event. Upon any such declaration or automatic occurrence,
the
Program Agent and the Secured Parties shall have, in addition to all other
rights and remedies under this Agreement or otherwise but subject to the
following sentence and Section
10.09
hereof,
all other rights and remedies provided under the UCC of the applicable
jurisdiction and other applicable laws, which rights shall be cumulative. Upon
the declaration or automatic occurrence of the Termination Date in accordance
with this Section
7.01,
all
obligations hereunder shall be immediately due and payable and all Loans shall
be immediately due and payable.
ARTICLE
VIII
INDEMNIFICATION
SECTION
8.01. Indemnities
by The Borrower Parties.
Without
limiting any other rights that the Program Agent, any Managing Agent or any
Lender may have hereunder or under applicable law, (A) Borrower hereby agrees
to
indemnify (and pay upon demand to) the Program Agent, each Managing Agent and
each Lender and their respective Affiliates, successors, assigns, officers,
directors, agents and employees (each an “Indemnified
Party”)
from
and against any and all damages, losses, claims, taxes, liabilities, costs,
expenses and for all other amounts payable, including reasonable attorneys’ fees
(which attorneys may be employees of the Program Agent, such Managing Agent
or
such Lender) and disbursements (all of the foregoing being collectively referred
to as “Indemnified
Amounts”)
awarded
against or incurred by any of them arising out of or as a result of this
Agreement, any other Facility Document or the transactions contemplated by
any
Facility Document, or any Receivable, Contract or Related Security, or the
use
of the proceeds of any Borrowing hereunder, or the funding either directly
or
indirectly, by a Lender of a Borrowing or any Indemnified Party’s interest in
the Receivables, the Contract or any Related Security and (B) the Servicer
hereby agrees to indemnify (and pay upon demand to) each Indemnified Party
for
Indemnified Amounts awarded against or incurred by any of them arising out
of
the Servicer’s activities as Servicer hereunder or under any other Facility
Document excluding, however, in all of the foregoing instances under the
preceding clauses (A) and (B):
(a) Indemnified
Amounts to the extent a final judgment of a court of competent jurisdiction
holds that such Indemnified Amounts resulted from gross negligence or willful
misconduct on the part of the Indemnified Party seeking
indemnification;
(b) Indemnified
Amounts to the extent the same includes losses in respect of Receivables that
are uncollectible on account of the insolvency, bankruptcy or lack of
creditworthiness of the related Obligor; or
(c) taxes
imposed by the United States federal government or the jurisdiction in which
such Indemnified Party’s principal executive office is located, on or measured
by the overall net or gross income of such Indemnified Party
provided,
however,
that
nothing contained in this sentence shall limit the liability of any Borrower
Party or limit the recourse of the Indemnified Parties to any Borrower Party
for
amounts otherwise specifically provided to be paid by such Borrower Party under
the terms of this Agreement or any other Facility Document. Without limiting
the
generality of the foregoing indemnification, each Borrower Party shall indemnify
each Indemnified Party for Indemnified Amounts (including,
without limitation,
losses
in respect of uncollectible receivables, regardless of whether reimbursement
therefor would constitute recourse to Borrower or the Servicer) relating to
or
resulting from:
(i) any
representation or warranty made by any Borrower Party or Originator (or any
officers of any such Person) under or in connection with this Agreement, any
other Facility Document or any other information or report delivered by any
such
Person pursuant hereto or thereto, which shall have been false or incorrect
when
made or deemed made;
(ii) the
failure by Borrower, the Servicer or Originator to comply with any applicable
law, rule or regulation with respect to any Receivable or Contract related
thereto, or the nonconformity of any Receivable or Contract included therein
with any such applicable law, rule or regulation or any failure of Originator
to
keep or perform any of its obligations, express or implied, with respect to
any
Contract;
(iii) any
failure of Borrower, the Servicer or Originator to perform its duties, covenants
or other obligations in accordance with the provisions of this Agreement or
any
other Facility Document;
(iv) any
products liability, personal injury or damage suit, or other similar claim
arising out of or in connection with merchandise, insurance or services that
are
the subject of any Contract or any Receivable;
(v) any
dispute, claim, offset or defense (other than discharge in bankruptcy of the
Obligor) of the Obligor to the payment of any Receivable (including,
without limitation,
a
defense based on such Receivable or the related Contract not being a legal,
valid and binding obligation of such Obligor enforceable against it in
accordance with its terms), or any other claim resulting from the sale of the
merchandise or service related to such Receivable or the furnishing or failure
to furnish such merchandise or services;
(vi) the
commingling of Collections of Receivables at any time with other
funds;
(vii) any
investigation, litigation or proceeding related to or arising from this
Agreement or any other Facility Document, the transactions contemplated hereby
or thereby, the use of the proceeds of any Borrowing, the ownership of the
Loans, any lien under any Springing Lien Indenture or any other investigation,
litigation or proceeding relating to Borrower, the Servicer or Originator in
which any Indemnified Party becomes involved as a result of any of the
transactions contemplated hereby or by any other Facility Document;
(viii) any
inability to litigate any claim against any Obligor in respect of any Receivable
as a result of such Obligor being immune from civil and commercial law and
suit
on the grounds of sovereignty or otherwise from any legal action, suit or
proceeding;
(ix) any
Event
of Termination or Incipient Event of Termination described in Section
7.01(d);
(x) any
failure of Borrower to acquire and maintain legal and equitable title to, and
ownership of any Receivable and the Related Security and Collections with
respect thereto from Originator, free and clear of any Adverse Claim (other
than
as created hereunder); or any failure of Borrower to give reasonably equivalent
value to Originator under the Receivables Sale Agreement in consideration of
the
transfer by Originator of any Receivable, or any attempt by any Person to void
such transfer under statutory provisions or common law or equitable
action;
(xi) any
failure to vest and maintain vested in the Program Agent for the benefit of
the
Secured Parties, or to transfer to the Program Agent for the benefit of the
Secured Parties a first priority perfected security interest in the Receivables,
the Related Security and the Collections, free and clear of any Adverse Claim
(except as created by the Facility Documents);
(xii) the
failure to have filed, or any delay in filing, financing statements or other
similar instruments or documents under the UCC of any applicable jurisdiction
or
other applicable laws with respect to any Receivable, the Related Security
and
Collections with respect thereto, and the proceeds of any thereof, whether
at
the time of any Borrowing or at any subsequent time;
(xiii) any
action or omission by any Borrower Party which reduces or impairs the rights
of
the Program Agent or the Secured Parties with respect to any Collateral or
the
value of any Collateral;
(xiv) any
attempt by any Person to void the security interest in the Collateral granted
hereunder under statutory provisions or common law or equitable
action;
(xv) the
failure of any Receivable included in the calculation of the Net Receivables
Pool Balance as an Eligible Receivable to be an Eligible Receivable at the
time
so included; or
(xvi) the
failure of (i) any Deposit Account Bank to remit any amounts or items of payment
held in a Deposit Account or in a Lock-Box pursuant to the instructions of
the
Program Agent given in accordance with this Agreement, the applicable Blocked
Account Agreement or the other Facility Documents, whether by reason of the
exercise of setoff rights or otherwise, or (ii) any sub-servicer or any other
third party with a contractual relationship with the Borrower for the acceptance
or processing of Collections, to remit any Collections received by it to a
Lock-Box or a Deposit Account.
SECTION
8.02. Other
Costs and Expenses.
Borrower shall reimburse the Program Agent, each Managing Agent and each Lender
on demand for all reasonable costs and out-of-pocket expenses in connection
with
the preparation, negotiation, arrangement, execution, delivery, and
administration of this Agreement, the transactions contemplated hereby and
the
other documents to be delivered hereunder, including,
without limitation,
the
cost of any such Person’s auditors auditing the books, records and procedures of
Borrower (subject to the cost restrictions set forth in Section
5.01(d)
and
provided further that the Borrower shall not be required to reimburse the
Managing Agents more than $25,000 collectively for the costs of the first audit
performed after the Effective Date so long as no Event of Termination has
occurred and is continuing), reasonable fees and out-of-pocket expenses of
legal
counsel for each Lender, each Managing Agent and the Program Agent (which such
counsel may be employees of any of the Lenders, the Managing Agents or the
Program Agent) with respect thereto and with respect to advising the Lenders,
the Managing Agents and the Program Agent as to their respective rights and
remedies under this Agreement (provided that the Borrower shall not be required
to reimburse the Managing Agents more than $75,000 collectively for the fees
and
expenses of legal counsel for the preparation, negotiation, arrangement,
execution and delivery of this Agreement and the other documents to be delivered
hereunder on the Effective Date). Borrower shall reimburse the Program Agent,
any Managing Agent and any Lender on demand for any and all costs and expenses
of such Person, if any, including reasonable counsel fees and expenses in
connection with the enforcement of this Agreement and the other documents
delivered hereunder and in connection with any restructuring or workout of
this
Agreement or such documents, or the administration of this Agreement following
an Event of Termination.
ARTICLE
IX
THE
AGENTS
SECTION
9.01. Authorization
and Action.
Each
Lender hereby appoints and authorizes its related Managing Agent and the Program
Agent to take such action as agent on its behalf and to exercise such powers
under this Agreement as are delegated to such Managing Agent or the Program
Agent by the terms hereof, together with such powers as are reasonably
incidental thereto. The provisions of this Article
IX
are
solely for the benefit of the Managing Agents, the Program Agent and the
Lenders. The Borrower shall not have any rights as a third-party beneficiary
or
otherwise under any of the provisions hereof. In performing their functions
and
duties hereunder, the Managing Agents shall act solely as the agent for the
respective Conduit Lenders and the Committed Lenders in the related Lender
Group
and do not assume nor shall be deemed to have assumed any obligation or
relationship of trust or agency with or for the other Lenders, the Borrower,
the
Servicer, the Originator, any Affiliate thereof or any of their respective
successors and assigns. Each Managing Agent and each Lender authorizes the
Program Agent to (i) file each of the UCC financing or continuation statements
(and amendments thereto and assignments or terminations thereof) and (ii) to
execute the Blocked Account Agreements on behalf of the Lenders (the terms
of
which will be binding on the Lenders).
SECTION
9.02. Agents’
Reliance, Etc.
Neither
the Program Agent nor any Managing Agent nor any of their respective directors,
officers, agents or employees shall be liable for any action taken or omitted
to
be taken by it or such Managing Agent or the Program Agent under or in
connection with this Agreement, except for its or their own gross negligence
or
willful misconduct. Without limiting the generality of the foregoing, each
of
the Program Agent and the Managing Agents: (i) may consult with legal counsel
(including counsel for the Borrower, the Servicer or any other Affiliate of
PSE), independent 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; (ii) makes
no warranty or representation to any Lender and shall not be responsible to
any
Lender for any statements, warranties or representations made in or in
connection with this Agreement; (iii) 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 the Borrower, the Servicer or any
other Affiliate of PSE or to inspect the property (including the books and
records) of the Borrower, the Servicer or any other Affiliate of PSE; (iv)
shall
not be responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any
other
instrument or document furnished pursuant hereto, or for the perfection,
priority, condition, value or sufficiency of any collateral pledged in
connection herewith; and (v) 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 facsimile)
believed by it to be genuine and signed or sent by the proper party or
parties.
SECTION
9.03. Agents
and Affiliates.
Each
Managing Agent and the Program Agent and their respective Affiliates may engage
in any kind of business with the Borrower, PSE or any Obligor, any of their
respective Affiliates and any Person who may do business with or own securities
of Borrower, PSE or any Obligor or any of their respective Affiliates, all
as if
such Persons were not Managing Agents and/or Program Agent and without any
duty
to account therefor to any Lender.
SECTION
9.04. Lender’s
Loan Decision.
Each
Lender acknowledges that it has, independently and without reliance upon the
Program Agent, any Managing Agent, any of their respective Affiliates or any
other Lender, and based on such documents and information as it has deemed
appropriate, made its own evaluation and decision to enter into this Agreement
and, if it so determines, to make Loans hereunder. Each Lender also acknowledges
that it will, independently and without reliance upon the Program Agent, any
Managing Agent, any of their respective Affiliates, or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own decisions in taking or not taking action under
this Agreement.
SECTION
9.05. Delegation
of Duties.
The
Program Agent and each Managing Agent may each execute any of its duties under
this Agreement by or through agents or attorneys-in-fact and shall be entitled
to advice of counsel concerning all matters pertaining to such duties. Neither
the Program Agent nor any Managing Agent shall be responsible for the negligence
or misconduct of any agents or attorneys-in-fact selected by it with reasonable
care.
SECTION
9.06. Indemnification.
Each
Managing Agent severally agrees to indemnify the Program Agent (to the extent
not reimbursed by the Borrower, the Servicer, the Originator or PSE), ratably
according to its related Lender Group Percentage, from and against any and
all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever which may
be
imposed on, incurred by, or asserted against the Program Agent in any way
relating to or arising out of this Agreement or any action taken or omitted
by
the Program Agent under this Agreement; provided,
that
(i) no Managing Agent shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting or arising from the Program Agent’s gross
negligence or willful misconduct and (ii) no Managing Agent shall be liable
for
any amount in respect of any compromise or settlement of any of the foregoing
unless such compromise or settlement is approved by the Majority Managing
Agents. Without limitation of the generality of the foregoing, each Managing
Agent agrees to reimburse the Program Agent, ratably according to its related
Lender Group Percentage, promptly upon demand, for any reasonable out-of-pocket
expenses (including reasonable counsel fees) incurred by the Program Agent
in
connection with the administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Agreement;
provided,
that no
Managing Agent shall be responsible for the costs and expenses of the Program
Agent in defending itself against any claim alleging the gross negligence or
willful misconduct of the Program Agent to the extent such gross negligence
or
willful misconduct is determined by a court of competent jurisdiction in a
final
and non-appealable decision.
SECTION
9.07. Successor
Agents.
The
Program Agent and each Managing Agent may, upon five (5) days’ notice to the
Borrower, each Lender and each other party hereto, resign as Program Agent
or
Managing Agent, as applicable. If any such party shall resign as Program Agent
or Managing Agent under this Agreement, then, in the case of the Program Agent,
the Majority Committed Lenders and in the case of any Managing Agent, its
related Conduit Lenders, during such thirty-day period shall appoint a successor
agent, whereupon such successor agent shall succeed to the rights, powers and
duties of the Program Agent or applicable Managing Agent and references herein
to the Program Agent or such Managing Agent shall mean such successor agent,
effective upon its appointment; and such former Program Agent’s or Managing
Agent’s rights, powers and duties in such capacity shall be terminated, without
any other or further act or deed on the part of such former Program Agent or
Managing Agent or any of the parties to this Agreement. After any retiring
Program Agent’s or Managing Agent’s resignation hereunder as such agent, the
provisions of Article
VIII,
this
Article
IX
and
Section
10.09
shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Program Agent or a Managing Agent under this Agreement.
ARTICLE
X
MISCELLANEOUS
SECTION
10.01. Amendments,
Etc.
(a) No
waiver
of any provision of this Agreement nor consent to any departure by the Borrower
or the Servicer therefrom shall in any event be effective unless the same shall
be in writing and signed by the Program Agent and the Managing Agents and then
such waiver or consent shall be effective only in the specific instance and
for
the specific purpose for which given.
(b) No
amendment to this Agreement shall be effective unless the same shall be in
writing and signed by each of the Borrower, the Servicer, the Program Agent,
the
Managing Agents and the Majority Committed Lenders, provided,
however,
that,
without the written consent of all the Committed Lenders, no such amendment
shall (i) extend the Termination Date, (ii) extend the date of any payment
or
deposit of Collections by the Borrower or by the Servicer or the time of payment
of Interest, (iii) release the security interest in or transfer all or any
material portion of the Collateral, (iv) change the outstanding principal amount
of any of the Loans made by any Committed Lender hereunder other than as
provided herein, (v) change the amount of any Lender Group Limit other than
as
provided herein or increase the Facility Limit hereunder, (vi) increase the
Concentration Limit, (vii) amend, modify or waive any provision of the
definitions of “Borrowing Base”, “Eligible Receivables”, “Majority Committed
Lenders”, “Net Receivables Pool Balance” or “Required Reserves” or any of the
defined terms used in such definitions or this Section
10.01,
(viii)
consent to or permit the assignment or transfer by the Borrower or any of its
rights and obligations under this Agreement or of any of its right, title or
interest in or to the Receivables, (ix) amend or modify any provision of
Section
7.01
or
Section
10.03,
or (x)
amend or modify any defined term (or any defined term used directly or
indirectly in such defined term) used in clauses
(i)
through
(ix)
above in
a manner which would circumvent the intention of the restrictions set forth
in
such clauses.
SECTION
10.02. Notices,
Etc.
All
notices and other communications provided for hereunder shall, unless otherwise
stated herein, be in writing (including communication by facsimile copy) and
shall be personally delivered or sent by registered mail, return receipt
requested, or by courier or by facsimile, to each party hereto, at its address
set forth on Schedule
II
hereof
or at such other address as shall be designated by such party in a written
notice to the other parties hereto. All such notices and communications shall
be
effective, upon receipt, or in the case of overnight courier, two (2) days
after
being deposited with such courier, or, in the case of notice by facsimile,
when
electronic confirmation of receipt is obtained, in each case addressed as
aforesaid.
SECTION
10.03. Assignability.
(a) Any
Conduit Lender may, (i) with notice to the Borrower and the Servicer, and with
the consent of the Managing Agent for the Lender Group of which it is a member,
assign at any time all or any portion of its rights and obligations hereunder
and interests herein to (A) any other Lender, (B) any commercial paper conduit
managed by such Conduit Lender’s sponsor or administrator bank (C) any Affiliate
of such Conduit Lender’s sponsor bank or (D) any Liquidity Provider with respect
to such Conduit Lender and (ii) with the consent of the Borrower (such consent
not to be unreasonably withheld, delayed or conditioned) and the Managing Agent
for the Lender Group of which it is a member, assign at any time all or any
portion of its rights and obligations hereunder and interests herein to any
other Person not listed in clause (i) above; provided that the consent of the
Borrower shall not be required if an Event of Termination has occurred and
is
continuing. Any Managing Agent may, with notice to the Borrower and the
Servicer, and with the consent of the Lenders in its Lender Group, assign at
any
time all or any portion of its rights and obligations hereunder and interests
herein to any Lender or to any Affiliate of such Managing Agent or any
Lender.
(b) Any
Committed Lender may, with the consent of the Borrower (such consent not to
be
unreasonably withheld, delayed or conditioned) and with the consent of the
Managing Agent for the Lender Group of which it is a member, assign at any
time
all or any portion of its rights and obligations hereunder and interests herein
to any Person; provided,
however,
that
the consent of the Borrower shall not be required in connection with any
assignment by a Committed Lender (i) if an Event of Termination has occurred
and
is continuing or (ii) to any other Lender.
(c) With
respect to any assignment hereunder
(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 $10,000,000, and
(iii) the
parties to each such assignment shall execute and deliver to the Administrative
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 Lender thereunder and (y)
the
assigning Lender shall, to the extent that rights and obligations have been
assigned by it pursuant to such Assignment and Acceptance, relinquish such
rights and be released from such obligations under this Agreement (and, in
the
case of an Assignment and Acceptance covering all or the remaining portion
of an
assigning Lender’s rights and obligations under this Agreement, such Lender
shall cease to be a party hereto).
(d) At
all
times during which any Loan is outstanding, the Program Agent shall maintain
at
its address referred to in Section
10.02
of this
Agreement (or such other address of the Program Agent notified by the Program
Agent to the other parties hereto) a register as provided herein (the
“Register”).
The
Aggregate Principal Balance and any interests therein, and any Assignments
and
Acceptances of the Aggregate Principal Balance or any interest therein delivered
to and accepted by the Program Agent, shall be registered in the Register,
and
the Register shall serve as a record of ownership that identifies the owner
of
the Aggregate Principal Balances and any interest therein. Notwithstanding
any
other provision of this Agreement, no transfer of the Aggregate Principal
Balances or any interest therein shall be effective unless and until such
transfer has been recorded in the Register. The entries in the Register shall
be
conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Servicer, the Program Agent, the Managing Agents and the Lenders
may treat each Person whose name is recorded in the Register as a Lender, as
the
case may be, under this Agreement for all purposes of this Agreement. This
Section
10.03(d)
shall be
construed so that the Aggregate Principal Balance and any interest therein
is
maintained at all times in “registered form” within the meaning of Sections
163(f), 871(h) and 881(c) of the IRC, solely for the purposes of this
Section
10.03,
the
Program Agent will act as an agent of the Borrower. The Register shall be
available for inspection by the Borrower or any Managing Agent at any reasonable
time and from time to time upon reasonable prior notice.
(e) Upon
its
receipt of an Assignment and Acceptance, the Program 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 Borrower.
(f) Any
Lender may, without the consent of the Borrower, sell participations to one
or
more banks or other entities (each, a “Participant”)
in all
or a portion of its rights and obligations hereunder (including the outstanding
Loan); provided
that
following the sale of a participation under this Agreement (i) the obligations
of such Lender shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) the Borrower, the Program Agent, the Servicer and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender’s rights and obligations under this Agreement. Any agreement or
instrument pursuant to which such Lender sells such a participation shall
provide that the Participant shall not have any right to direct the enforcement
of this Agreement or the other Facility Documents or to approve any amendment,
modification or waiver of any provision of this Agreement or the other Facility
Documents; provided
that
such agreement or instrument may provide that such Lender will not, without
the
consent of the Participant, agree to any amendment, modification or waiver
that
(i) reduces the amount of principal or Interest that is payable on account
of
any Loan or delays any scheduled date for payment thereof or (ii) reduces any
fees payable by the Borrower to the Program Agent (to the extent relating to
payments to the Participant) or delays any scheduled date for payment of such
fees. The Borrower acknowledges and agrees that any Lender’s source of funds may
derive in part from its Participants. Accordingly, references in Sections
2.11
or 2.13
and the other terms and provisions of this Agreement and the other Facility
Documents to determinations, reserve and capital adequacy requirements,
expenses, increased costs, reduced receipts and the like as they pertain to
the
Lenders shall be deemed also to include those of its Participants; provided,
however,
that in
no event shall the Borrower be liable to any Participant under Sections
2.11
or
2.13
for an
amount in excess of that which would be payable to the applicable Lender under
such sections.
(g) Neither
the Borrower nor the Servicer may assign any of its rights or obligations
hereunder or any interest herein without the prior written consent of the
Program Agent and each Managing Agent.
(h) Notwithstanding
any other provision of this Agreement to the contrary, any Lender may at any
time pledge or grant a security interest in all or any portion of its rights
(including, without limitation, rights to payment of the principal balance
of
the Loans and Interest with respect thereto) hereunder to secure obligations
of
such Lender to a Federal Reserve Bank, without notice to or consent of the
Borrower or the Program Agent; provided, that no such pledge or grant of a
security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee or grantee for such Lender as a party
hereto.
SECTION
10.04. Additional
Lender Groups.
Upon
the Borrower’s request, an additional Lender Group may be added to this
Agreement at any time by the execution and delivery of a Joinder Agreement
by
the members of such proposed additional Lender Group, the Borrower, the
Servicer, PSE, the Program Agent and each of the Managing Agents, which
execution and delivery shall not be unreasonably refused by such parties. Upon
the effective date of such Joinder Agreement, (i) each Person specified therein
as a “Conduit Lender” shall become a party hereto as a Conduit Lender, entitled
to the rights and subject to the obligations of a Conduit Lender hereunder,
(ii)
each Person specified therein as a “Committed Lender” shall become a party
hereto as a Committed Lender, entitled to the rights and subject to the
obligations of a Committed Lender hereunder, (iii) each Person specified therein
as a “Managing Agent” shall become a party hereto as a Managing Agent, entitled
to the rights and subject to the obligations of a Managing Agent hereunder
and
(iv) the Facility Limit shall be increased by an amount equal to the aggregate
Commitments of the Committed Lenders party to such Joinder Agreement. On or
prior to the effective date of such Joinder Agreement, the Borrower and the
new
Managing Agent shall enter into an amendment to the Fee Letter for purposes
of
setting forth the fees payable to the members of such Lender Group in connection
with this Agreement.
SECTION
10.05. 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 Borrower 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
10.05
shall
affect the right of any Lender or the Administrative Agent to serve legal
process in any other manner permitted by law.
SECTION
10.06. 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 FACILITY
DOCUMENT.
SECTION
10.07. Right
of Setoff.
Each
Lender (including a Lender which has made Cash Secured Advances) is hereby
authorized (in addition to any other rights it may have) at any time after
the
occurrence of the Termination Date due to the occurrence of an Event of
Termination, or at any time that any Borrower Obligation hereunder is due and
payable, to set off, appropriate and apply (without presentment, demand, protest
or other notice which are hereby expressly waived) any deposits and any other
indebtedness held or owing by such Lender to, or for the account of, the
Borrower against the amount of the Borrower Obligations owing by the Borrower
to
such Person. Each Lender is hereby authorized (in addition to any other rights
it may have) at any time after the occurrence of the Termination Date due to
the
occurrence of an Event of Termination, or at any time that any payment
obligation of the Servicer hereunder is due and payable, to set off, appropriate
and apply (without presentment, demand, protest or other notice which are hereby
expressly waived) any deposits and any other indebtedness held or owing by
such
Lender to, or for the account of, the Servicer against the amount of such
obligations owing by the Servicer to such Person.
SECTION
10.08. Ratable
Payments.
If any
Lender, whether by setoff or otherwise, has payment made to it with respect
to
any Borrower Obligations or obligation of the Servicer in a greater proportion
than that received by any other Lender entitled to receive a ratable share
of
such amount, such Lender agrees, promptly upon demand, to purchase for cash
without recourse or warranty a portion of such Borrower Obligations or Servicer
obligation held by the other Lenders so that after such purchase each Lender
will hold its ratable proportion of such Borrower Obligations or Servicer
obligations, as applicable; provided
that if
all or any portion of such excess amount is thereafter recovered from such
Lender, such purchase shall be rescinded and the purchase price restored to
the
extent of such recovery, but without interest.
SECTION
10.09. Limitation
of Liability.
(a) Except
with respect to any claim arising out of the willful misconduct or gross
negligence of any Lender, any Managing Agent, the Program Agent or their
respective Affiliates, directors, officers, employees, attorneys or agents
(each
a “Lender Party”), no claim may be made by any Transaction Party or any other
Person against any Lender 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 Facility Document, or any act, omission or event
occurring in connection herewith or therewith; and each of the Borrower and
the
Servicer hereby waives, releases, and agrees not to ▇▇▇ upon any claim for
any
such damages, whether or not accrued and whether or not known or suspected
to
exist in its favor.
(b) Notwithstanding
anything to the contrary contained herein, the obligations of the Conduit
Lenders under this Agreement are solely the corporate obligations of each such
Conduit Lender and shall be payable only at such time as funds are actually
received by, or are available to, such Conduit Lender in excess of funds
necessary to pay in full all outstanding Promissory Notes issued by such Conduit
Lender and, to the extent funds are not available to pay such obligations,
the
claims relating thereto shall not constitute a claim against such Conduit
Lender. Each party hereto agrees that the payment of any claim (as defined
in
Section 101 of Title 11 of the Bankruptcy Code) of any such party shall be
subordinated to the payment in full of all Promissory Notes.
(c) No
recourse under any obligation, covenant or agreement of any Conduit Lender
contained in this Agreement shall be had against any incorporator, stockholder,
officer, director, member, manager, employee or agent of such Conduit Lender
or
any of its Affiliates (solely by virtue of such capacity) by the enforcement
of
any assessment or by any legal or equitable proceeding, by virtue of any statute
or otherwise; it being expressly agreed and understood that this Agreement
is
solely a corporate obligation of such Conduit Lender, and that no personal
liability whatever shall attach to or be incurred by any incorporator,
stockholder, officer, director, member, manager, employee or agent of any
Conduit Lender or any of its Affiliates (solely by virtue of such capacity)
or
any of them under or by reason of any of the obligations, covenants or
agreements of such Conduit Lender contained in this Agreement, or implied
therefrom, and that any and all personal liability for breaches by any Conduit
Lender of any of such obligations, covenants or agreements, either at common
law
or at equity, or by statute, rule or regulation, of every such incorporator,
stockholder, officer, director, member, manager, employee or agent is hereby
expressly waived as a condition of and in consideration for the execution of
this Agreement; provided
that the
foregoing shall not relieve any such Person from any liability it might
otherwise have as a result of fraudulent actions taken or fraudulent omissions
made by them.
SECTION
10.10. Taxes.
The
Borrower shall pay any and all stamp, sales, transfer and other taxes (including
income and franchise taxes) and fees (including, without limitation, UCC filing
fees and any penalties associated with the late payment of any UCC filing fees)
payable or determined to be payable in connection with the execution, delivery,
filing and recording of this Agreement or the other agreements and documents
to
be delivered hereunder (including any UCC financing statements) and agrees
to
indemnify the Program Agent, the Managing Agents, the Lenders and the Liquidity
Providers against any liabilities with respect to or resulting from any delay
by
the Borrower in paying or omission to pay such taxes and fees.
SECTION
10.11. No
Proceedings.
The
Borrower, the Servicer, each Lender, each Managing Agent and the Program Agent
each hereby agrees that it will not institute against any Conduit Lender any
proceeding of the type referred to in Section
7.01(d)
so long
as any Promissory Notes of such Conduit Lender shall be outstanding or there
shall not have elapsed one year plus
one day
since the last day on which any such Promissory Notes shall have been
outstanding.
SECTION
10.12. Confidentiality.
(a) By
accepting delivery of this Agreement, the Borrower agrees not to disclose to
any
person or entity the contents of the Fee Letter except (i) to its and its
affiliates’ officers, directors, employees, agents, accountants, legal counsel
and other representatives (collectively, the “Borrower
Representatives”)
who
have a need to know the Product Information for the purpose of assisting in
the
negotiation and completion of the Transaction and who agree to be bound by
the
provisions of this section applicable to the Borrower, (ii) in connection with
any legal or regulatory action or proceeding relating to this Agreement or
the
transactions contemplated hereby or the exercise of any remedies hereunder,
(iii) to extent required by applicable law, regulation, subpoena or other legal
process or (iv) to the extent requested by any governmental or regulatory
authority having jurisdiction over the Borrower, the Originator or any Borrower
Representative. The Borrower will be responsible for any failure of any Borrower
Representative to comply with the provisions of this clause (a).
(b) The
Program Agent, the Managing Agents and the Lenders will not disclose to any
person or entity the confidential or proprietary information of the Borrower
or
the Originator furnished to the Program Agent, the Managing Agents and the
Lenders in connection with the Transaction (the “Borrower
Information”),
except (i) to their respective and their Affiliates’ officers, directors,
employees, agents, accountants, legal counsel and other representatives
(collectively, the “Lender
Representatives”)
who
have a need to know the Borrower Information for the purpose of assisting in
the
negotiation and completion of the Transaction and who agree to be bound by
the
provisions in this section applicable to the Program Agent, the Managing Agents
and the Lenders, (ii) to each other, (iii) to any prospective or actual assignee
or participant of any of them who agree to be bound by the provisions of this
section, (iv) to the extent required by applicable law, regulation, subpoena
or
other legal process, (v) to the extent requested by any governmental or
regulatory authority having jurisdiction over the Program Agent, the Managing
Agents, the Lenders or any Lender Representative, (vi) to the Rating Agencies,
(vii) to any actual or potential subordinated investor in any Conduit Lender
that has signed a confidentiality agreement containing restrictions on
disclosure substantially similar to this Section or (vii) to liquidity
providers, credit enhancers, dealers and investors in respect of Promissory
Notes of any Conduit Lender in accordance with the customary practices of such
Lender for disclosures to credit enhancers, dealers or investors, as the case
may be or any entity organized for purposes of purchasing or making loans
secured by, financial assets for which any Managing Agent acts as Program Agent
and who agree to be bound by the provisions of this section. The Program Agent,
the Managing Agents and each Lender, as the case may be, will be responsible
for
any failure of any related Lender Representative to comply with the provisions
of this clause (b).
(c) Notwithstanding
any other provision herein, the Borrower (and its 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 this Agreement 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
10.13. No
Waiver; Remedies.
No
failure on the part of the Program Agent, any Managing Agent, any Lender or
any
Liquidity Provider to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise
of
any right hereunder preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are cumulative and
not
exclusive of any remedies provided by law.
SECTION
10.14. GOVERNING
LAW.
THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION
10.15. 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. Delivery of an executed counterpart
of a signature page to this Agreement by facsimile shall be effective as
delivery of a manually executed counterpart of this Agreement.
SECTION
10.16. Integration;
Binding Effect; Survival of Termination.
This
Agreement and the other Facility 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 Final Collection Date; provided,
however,
that
the provisions of 2.10,
2.11,
2.12
and
Article VIII, and the provisions of Sections
10.06,
10.09,
10.10,
10.11
and
10.12
shall
survive any termination of this Agreement.
IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed by their
respective officers thereunto duly authorized, as of the date first above
written.
|
PSE
FUNDING, INC.,
|
|
|
As
Borrower
|
|
|
By:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
|
|
|
Name:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
|
|
|
Title:
President and Treasurer
|
|
|
PUGET
SOUND ENERGY, INC.,
|
|
|
as
Servicer
|
|
|
By:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
|
|
|
Name:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
|
|
|
Title:
Vice President Finance and Treasurer
|
|
|
JPMORGAN
CHASE BANK, N.A.,
|
||
|
As
Program Agent, as a Managing Agent and as a Committed
Lender
|
||
|
By:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
|
||
|
Name:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
|
||
|
Title:
Vice President
|
||
|
JUPITER
SECURITIZATION CORPORATION
|
||
|
as
a Conduit Lender
|
||
|
By:
|
JPMorgan
Chase Bank, N.A.,
attorney-in-fact
|
|
|
By:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
|
||
|
Name:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
|
||
|
Title:
Vice President
|
||
|
CITICORP
NORTH AMERICA, INC.,
|
||
|
as
a Managing Agent
|
||
|
By:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
|
||
|
Name:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
|
||
|
Title:
Vice President
|
||
|
CAFCO,
LLC
|
||
|
as
a Conduit Lender
|
||
|
By:
|
Citicorp
North America, Inc.,
as
Attorney-in-Fact
|
|
|
By:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
|
||
|
Name:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
|
||
|
Title:
Vice President
|
||
|
CITIBANK,
NORTH AMERICA, INC.,
|
||
|
as
a Committed Lender
|
||
|
By:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
|
||
|
Name:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
|
||
|
Title:
Vice President
|
||
EXHIBIT
A
CREDIT
AND COLLECTION POLICY
Attached
EXHIBIT
B
FORM
OF
BORROWING REQUEST
[DATE]
|
To:
|
JPMorgan
Chase Bank, N.A., as a Managing Agent Citicorp North America, Inc.,
as a
Managing Agent From:
|
|||||||
|
From:
|
PSE
Funding, Inc. (the “Borrower”)
|
|||||||
|
Re:
|
Loan
and Servicing Agreement, dated as of December 20, 2005 among the
Borrower,
Puget Sound Energy, Inc., as Servicer, the Persons from time to
time party
thereto as Conduit Lenders, the financial institutions from time
to time
party thereto as Committed Lenders, the Persons from time to time
party
thereto as Managing Agents and JPMorgan Chase Bank, N.A., as Program
Agent
for the Conduit Lenders and the Committed Lenders (as amended,
restated,
supplemented or otherwise modified from time to time, the “Agreement”).
Capitalized terms used but not defined herein shall have the meanings
given to them in the Agreement.
|
|||||||
|
A.
|
(i)
|
Pursuant
to Section
2.02(a)
of
the Agreement, the undersigned hereby requests a Borrowing from
each
Lender Group in an aggregate amount equal to the following (which
shall be
at least $500,000, or integral multiples of $50,000 in excess
thereof):
|
$
|
|||||
|
Lender
Group
(identified
by related Managing Agent)
|
Dollar
Amount of Borrowing
|
|
|
JPMorgan
Chase Bank, N.A.
|
$_______________
|
|
|
Chicago
North America, Inc.
|
$_______________
|
|
|
Total
|
$_______________
|
|
|
(ii)
|
The
requested Borrowing Date is:
|
|||||||
|
(iii)
|
The
Aggregate Principal Balance under the Agreement after giving effect
to the
requested Borrowing under (i) above will equal:
|
$
|
||||||
|
(iv)
|
The
proceeds of the requested Borrowing are requested to be remitted
to the
following account of the Borrower:
|
|||||||
|
(v)
|
If
Conduit Lenders have declined to fund, the Borrower requests a
Loan based
on [LIBOR for a term of [___] months][the Base Rate].
|
|||||||
|
B.
|
As
of the date hereof and the Borrowing Date of such
Borrowing:
|
|||||||
|
(i)
|
The
representations and warranties contained in Article IV of the Agreement
are true and correct unless such representation and warranties
by their
terms refer to an earlier date, in which case they shall be correct
on and
as of such earlier date;
|
|||||||
|
(ii)
|
No
event has occurred and is continuing, or would result from the
Borrowing
requested hereunder, that constitutes an Event of Termination or
an
Incipient Event of Termination; and
|
|||||||
|
(iii)
|
After
giving effect to the requested Borrowing, no Borrowing Base Deficiency
shall exist.
|
|||||||
|
(iv)
|
All
other conditions precedent set forth in Section 3.02 of the Agreement
have
been satisfied.
|
|||||||
|
The
undersigned certifies that this Borrowing Request is correct in
all
material respects as of the date furnished.
|
||||||||
|
PSE
FUNDING, INC.
|
||||||||
|
By:
____________________________
|
||||||||
|
Name:
|
||||||||
|
Title:
|
|
|||||||
EXHIBIT
C-1
FORM
OF
MONTHLY REPORT
Attached
EXHIBIT
C-2
FORM
OF
WEEKLY REPORT
Attached
EXHIBIT
C-3
FORM
OF
DAILY REPORT
Attached
EXHIBIT
D
FORM
OF
BLOCKED ACCOUNT AGREEMENT
Attached
EXHIBIT
E
JURISDICTION
OF ORGANIZATION; PLACES OF BUSINESS AND LOCATIONS OF RECORDS
|
Jurisdiction
of Organization
|
· WA
|
|
Chief
Executive Office/Principal Place of Business
|
· ▇▇▇▇▇
▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
|
|
Location(s)
of Records
|
· ▇▇▇▇▇
▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
· ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
|
|
Organizational
Number
|
· ▇▇▇-▇▇▇-▇▇▇
|
|
Federal
Employer's Identification Number
|
· ▇▇-▇▇▇▇▇▇▇
|
|
Other
Names
|
· None
|
EXHIBIT
F
LIST
OF
ALTERNATE PAYMENT LOCATIONS; DEPOSIT ACCOUNTS; DEPOSIT ACCOUNT BANKS AND
LOCK-BOXES
|
Lock-Box
|
Related
Deposit Account
|
|
▇.▇.
▇▇▇ ▇▇. ▇▇▇▇▇ at the U.S. Post Office branch located at ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
|
Union
Bank of California Account no. ▇▇▇▇▇▇▇▇▇▇ for receipts from Payment
Processing
|
|
N/A
|
Union
Bank of California Account no. ▇▇▇▇▇▇▇▇▇▇ for receipts from ▇▇▇▇
Payment
Consolidator
|
|
N/A
|
Key
Bank Account no. 479681024614 for Government Electronic Receipts,
APS
Receipts, Business Office Deposits
|
|
N/A
|
Key
Bank Account no. 479681024655 for receipts from Customer Internet
Payments
|
|
N/A
|
Key
Bank Account no. 479681052383 for receipts from
Checkfree
|
|
N/A
|
Key
Bank Account no. 479681024663 for receipts from Customer Credit Card
Payments
|
|
N/A
|
Citibank
Account no. ▇▇▇▇▇▇▇▇ for receipts from Customer Direct
Debits
|
|
N/A/
|
U.S.
Bank Account no. 153501775586 for receipts from Port ▇▇▇▇▇▇▇▇ Business
Office.
|
List
of
Alternate Payment Locations
|
1.
Internet via PSE’s customer website found at: ▇▇▇▇://▇▇▇.▇▇▇.▇▇▇/▇▇▇▇▇▇▇/▇▇▇▇▇▇/▇▇▇▇▇.▇▇▇▇
|
|
2.
PSE Pay Station locations listed on PSE’s customer website found at:
▇▇▇▇://▇▇▇.▇▇▇.▇▇▇/▇▇▇▇▇▇▇/▇▇▇▇▇▇▇▇▇▇▇/▇▇▇▇▇▇▇▇▇▇▇.▇▇▇▇.
|
|
3.
Automatic Funds Transfer via a debit by PSE’s collection bank of the
Customer’s bank account and a credit to a Deposit
Account
|
|
4.
Credit card Payments via
Payment-by-Phone
|
EXHIBIT
G
LIST
OF
CLOSING DOCUMENTS
Attached
EXHIBIT
H
FORM
OF
ASSIGNMENT AND ACCEPTANCE
Dated
as
of [Date]
Reference
is made to the Loan and Servicing Agreement, dated as of December 20, 2005,
among PSE Funding, Inc., as Borrower, Puget Sound Energy, Inc., as Servicer,
the
Persons from time to time party thereto as Conduit Lenders, the financial
institutions from time to time party thereto as Committed Lenders, the Persons
from time to time party thereto as Managing Agents and JPMorgan Chase Bank,
N.A., as Program Agent for the Conduit Lenders and the Committed Lenders (as
amended, restated, supplemented or otherwise modified from time to time, the
“Agreement”).
Terms
defined in the Agreement are used herein with the same meaning.
[Assigning
Lender] (the “Assignor”),
[Assignee]
(the
“Assignee”)
and
[Assignor’s
Managing Agent],
in its
capacity as Managing Agent for the Lender Group which includes the Assignor
[and
the Assignee] (in such capacity, the “Managing
Agent”),
hereby agree as follows:
1. Purchase
and Sale of Interest.
The
Assignor hereby sells and assigns to the Assignee, and the Assignee hereby
purchases and assumes from the Assignor, an interest in and to all of the
Assignor’s rights and obligations under the Agreement as of the date hereof
(including, without limitation, its [Commitment] [Conduit Lending Limit] and
all
Loans, if any, or interests therein held by it) equal to the percentage (the
“Percentage”)
interest specified on the signature page hereto. After giving effect to such
sale and assignment, [the Assignee will be a [Committed] [Conduit] Lender in
the
Lender Group that includes [__________] as the Managing Agent and] the
Assignee’s [Commitment] [Conduit Lending Limit] will be as set forth in Section
2 of the signature page hereto. [As consideration for the sale and assignment
contemplated in this Section 1, the Assignee shall pay to the Assignor on the
Effective Date (as hereinafter defined) in immediately available funds an amount
equal to $[__________], representing the purchase price payable by the Assignee
for the interests in the transferred interest sold and assigned to the Assignee
under this Section 1.]1
2. Representations
and Disclaimers of Assignor.
The
Assignor:
(a) represents
and warrants that it is the legal and beneficial owner of the interest being
assigned by it hereunder and that such interest is free and clear of any adverse
claim;
(b) makes
no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with any
Facility Document or any other instrument or document furnished pursuant thereto
or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of any Facility Document or any other
instrument or document furnished pursuant thereto; and
(c) makes
no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Originator, the Borrower or the Servicer, or the
performance or observance by any such party of any of its respective obligations
under the Facility Documents or any other instrument or document furnished
pursuant thereto.
3. Representations
and Agreements of Assignee.
The
Assignee:
(a) confirms
that it has received a copy of the Agreement, together with copies of the most
recent financial statements delivered pursuant to Section
5.01(a)
of the
Agreement and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this Assignment
and
Acceptance;
(b) agrees
that it will, independently and without reliance upon the Program Agent, any
Managing Agent, the Assignor or any other Lender and based on such documents
and
information as it shall deem appropriate at the time, continue to make its
own
credit decisions in taking or not taking action under the
Agreement;
(c) [appoints
and authorizes the Program Agent and [__________], as its Managing Agent, to
take such action as agent on its behalf and to exercise such powers under the
Agreement and the other Facility Documents as are delegated to the Program
Agent
and such Managing Agent, respectively, by the terms thereof, together with
such
powers as are reasonably incidental thereto;]
(d) agrees
that it will perform in accordance with their terms all of the obligations
which
by the terms of the Agreement and this Assignment and Acceptance are required
to
be performed by it as a [Committed] [Conduit] Lender;
(e) specifies
as its address for notices the office set forth beneath its name on the
signature pages hereof; and
(f) represents
that this Assignment and Acceptance has been duly authorized, executed and
delivered by the Assignee pursuant to its [corporate] powers and constitutes
the
legal, valid and binding obligation of the Assignee.
4. Effectiveness
of Assignment.
Following the execution of this Assignment and Acceptance by the Assignor,
the
Managing Agent, [and] the Assignee, [the Borrower and the Servicer,] it will
be
delivered to the Program Agent for acceptance and recording by the Program
Agent. The effective date of this Assignment and Acceptance shall be the date
of
acceptance thereof by the Program Agent, unless otherwise specified in Section
3
of the signature page hereto (the “Effective
Date”).
5. Rights
of the Assignee.
Upon
such acceptance and recording by the Program Agent, as of the Effective Date,
[(i) the Assignee shall be a party to the Agreement and, to the extent provided
in this Assignment and Acceptance, have the rights and obligations of a
[Committed] [Conduit] Lender thereunder and hereunder and (ii)] the Assignor
shall, to the extent provided in this Assignment and Acceptance, relinquish
its
rights and be released from its obligations under the Agreement.
6. Payments.
Upon
such acceptance and recording by the Program Agent, from and after the Effective
Date, all payments under the Agreement in respect of the interest assigned
hereby (including, without limitation, all payments of fees with respect
thereto) shall be made to the Assignee or the Assignee’s Managing Agent, for the
benefit of the Assignee, in accordance with the Agreement. The Assignor and
Assignee shall make all appropriate adjustments in payments under the Agreement
for periods prior to the Effective Date directly between
themselves.
7. GOVERNING
LAW.
THIS
ASSIGNMENT AND ACCEPTANCE 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 LAWS BUT OTHERWISE WITHOUT REGARD TO CONFLICTS OF LAW
PRINCIPLES).
IN
WITNESS WHEREOF, the parties hereto have caused this Assignment and Acceptance
to be executed by their respective officers thereunto duly authorized, as of
the
date first above written.
Signature
Page to
Assignment
and Acceptance
Dated
as
of [Date]
|
Section
1.
|
|||||||||
|
Percentage:
|
________%
|
||||||||
|
Section
2.
|
|||||||||
|
Assignee’s
[Commitment] [Conduit Lending Limit] as of the
|
|||||||||
|
Effective
Date:
|
$_____________
|
||||||||
|
Principal
Balance of Loans
|
|||||||||
|
held
by Assignee as of the Effective Date:
|
$_____________
|
||||||||
|
Section
3.
|
|||||||||
|
Effective
Date:* *
|
_________,
200__
|
||||||||
|
[NAME
OF ASSIGNOR]
|
|||||||||
|
By:__________________________________
|
|||||||||
|
Name:
|
|||||||||
|
Title:
|
|||||||||
|
[NAME
OF ASSIGNEE]
|
|||||||||
|
By:___________________________________
|
|||||||||
|
Name:
|
|||||||||
|
Title:
|
|||||||||
|
Address
for Notices:
|
|||||||||
|
[Insert]
|
|||||||||
|
Accepted
this _____ day of
|
|||||||||
|
______________,
200__
|
|||||||||
|
JPMorgan
Chase Bank, N.A.,
|
|||||||||
|
As
Program Agent
|
|||||||||
|
By:
__________________________________
|
|||||||||
|
Name:
|
|||||||||
|
Title:
|
|||||||||
|
AGREED
TO THIS ____ DAY OF _______, 200___:
|
|||||||||
|
[NAME
OF MANAGING AGENT],
|
|||||||||
|
as
Managing Agent
|
|||||||||
|
By:___________________________________
|
|||||||||
|
Name:
|
|||||||||
|
Title:
|
|||||||||
|
PSE
FUNDING, INC.,
|
|||||||||
|
as
Borrower
|
|||||||||
|
By:___________________________________
|
|||||||||
|
Name:
|
|||||||||
|
Title:
|
|||||||||
|
PUGET
SOUND ENERGY INC.,
|
|||||||||
|
as
Servicer
|
|||||||||
|
By:___________________________________
|
|||||||||
|
Name:
|
|||||||||
|
Title:
|
|||||||||
EXHIBIT
I
FORM
OF
JOINDER AGREEMENT
Reference
is made to the Loan and Servicing Agreement, dated as of December 20, 2005,
among PSE Funding, Inc., as Borrower, Puget Sound Energy Inc., as Servicer,
the
Persons from time to time party thereto as Conduit Lenders, the financial
institutions from time to time party thereto as Committed Lenders, the Persons
from time to time party thereto as Managing Agents and JPMorgan Chase Bank,
N.A., as Program Agent for the Conduit Lenders and the Committed Lenders (as
amended, restated, supplemented or otherwise modified from time to time, the
“Agreement”).
To
the extent not defined herein, capitalized terms used herein have the meanings
assigned to such terms in the Agreement.
[New
Managing Agent]
(the
“New
Managing Agent”),
[New
Conduit Lender(s)]
(the
“New
Conduit Lender(s)”)
and
[New
Committed Lender(s)]
(the
“New
Committed Lender(s)”;
and
together with the New Managing Agent and New Conduit Lender(s), the
“New
Lender Group”)
agree
as follows:
1. By
execution and delivery of this Joinder Agreement and pursuant to Section
10.04
of the
Agreement, the New Lender Group elects to become a “Lender Group” under the
Agreement.
2. The
effective date (the “Effective
Date”)
of
this Joinder Agreement shall be the later of (i) the date on which a fully
executed copy of this Joinder Agreement is delivered to the Program Agent,
(ii)
the date of this Joinder Agreement [and (iii) the effective date of that certain
assignment agreement of even date herewith between the [New Committed Lender]
[New Conduit Lender] and [Name
of [Committed] [Conduit] Lender Assignor].
3. By
executing and delivering this Joinder Agreement, each of the New Managing Agent,
the New Conduit Lender(s) and the New Committed Lender(s) confirms to and agrees
with each other party to the Agreement that (i) it has received a copy of the
Agreement and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this Joinder
Agreement; (ii) it will, independently and without reliance upon the Program
Agent, any other Managing Agent, any other Lender or any of their respective
Affiliates, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking
or
not taking action under the Agreement or any documents or agreements to be
delivered thereunder; (iii) it appoints and authorizes the Program Agent to
take
such action as agent on its behalf and to exercise such powers pursuant to
Article
IX
of the
Agreement; (iv) it will perform in accordance with their terms all of the
obligations which by the terms of the Agreement and the documents or agreements
to be delivered thereunder are required to be performed by it as a Managing
Agent, a Conduit Lender, or a Committed Lender, respectively; (v) its address
for notices shall be the office set forth beneath its name on the signature
pages of this Joinder Agreement; (vi) the Lender Group Limit for the New Lender
Group shall be as set forth on the signature page hereto; and (vii) it is duly
authorized to enter into this Joinder Agreement.
4. On
the
Effective Date of this Joinder Agreement, each of the New Managing Agent, the
New Conduit Lender(s) and the New Committed Lender(s) shall join in and be
a
party to the Agreement and, to the extent provided in this Joinder Agreement,
shall have the rights and obligations of a Managing Agent, a Conduit Lender
and
a Committed Lender, respectively, under the Agreement. Schedule
I
to the
Agreement shall be amended to incorporate the information set forth on
Schedule
I
to this
Joinder Agreement and Schedule
II shall
be
amended to incorporate the notice addresses set forth on the signature pages
to
this Joinder Agreement.
5. This
Joinder Agreement may be executed by one or more of the parties on any number
of
separate counterparts, and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
6. THIS
JOINDER 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 LAWS BUT OTHERWISE WITHOUT REGARD TO CONFLICTS OF LAW
PRINCIPLES).
7. Each
of
the parties hereto hereby waives any right to have a jury participate in
resolving any dispute, whether sounding in contract, tort, or otherwise between
or among the parties hereto, or any of them, arising out of, connected with,
related to, or incidental to the relationship between them in connection with
this Joinder Agreement. Instead, any dispute resolved in court will be resolved
in a bench trial without a jury.
REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
IN
WITNESS WHEREOF, the parties hereto have caused this Joinder Agreement to be
executed by their respective officers thereunto duly authorized, as of this
[__]
day of [________], [20__].
The
“Lender Group Limit” for the New Lender Group is $[________].
|
NEW
CONDUIT LENDER(S)
|
|
|
[NAME(S)]
|
|
|
By:__________________________________
|
|
|
Name:
|
|
|
Title:
|
|
|
Address
or notices:
|
|
|
[Address]
|
|
|
NEW
MANAGING AGENT:
|
|
|
[NAME]
|
|
|
By:___________________________________
|
|
|
Name:
|
|
|
Title:
|
|
|
Address
for Notices:
|
|
|
[Address]
|
|
AGREED
TO THIS ____ DAY OF _______, 200___:
|
||||
|
JPMORGAN
CHASE BANK, N.A.,
|
||||
|
as
Program Agent
|
||||
|
By:___________________________________
|
||||
|
Name:
|
||||
|
Title:
|
||||
|
[EACH
MANAGING AGENT],
|
||||
|
as
a Managing Agent
|
||||
|
By:___________________________________
|
||||
|
Name:
|
||||
|
Title:
|
||||
|
PSE
FUNDING, INC.,
|
||||
|
as
Borrower
|
||||
|
By:___________________________________
|
||||
|
Name:
|
||||
|
Title:
|
||||
|
PUGET
SOUND ENERGY INC.,
|
||||
|
as
Servicer
|
||||
|
By:___________________________________
|
||||
|
Name:
|
||||
|
Title:
|
||||
SCHEDULE
I
|
Reference
Bank for New Lender Group:
|
|
|
Conduit
Lending Limit(s) for New Conduit Lender(s):
|
|
|
Commitment(s)
of New Committed Lender(s):
|
|
EXHIBIT
J
FORM
OF
PREPAYMENT NOTICE
[Date]
|
To:
|
JPMorgan
Chase Bank N.A., as Program Agent,
|
|||
|
JPMorgan
Chase Bank N.A., as a Managing Agent
|
||||
|
Citicorp
North America, Inc., as a Managing Agent
|
||||
|
From:
|
PSE
Funding, Inc. (the “Borrower”)
|
|||
|
Re:
|
Loan
and Servicing Agreement, dated as of December 20, 2005, among the
Borrower, Puget Sound Energy, Inc., as Servicer, the Persons from
time to
time party thereto as Conduit Lenders, the financial institutions
from
time to time party thereto as Committed Lenders, the Persons from
time to
time party thereto as Managing Agents and JPMorgan Chase Bank, N.A.,
as
Program Agent for the Conduit Lenders and the Committed Lenders (as
amended, restated, supplemented or otherwise modified from time to
time,
the “Agreement”). Terms defined in the Agreement are used herein with the
same meaning.
|
|||
|
Pursuant
to Section
2.05
of
the Agreement, the undersigned hereby notifies each Managing Agent
of its
intent to make certain prepayments (which shall be made ratably among
the
Lenders based on the aggregate outstanding Principal Balance of the
Loans
held by each) as outlined below. This notice must be received no
later
than 11:00 A.M. (New York City time) three (3) Business Days prior
to the
date of such payment.
|
||||
|
1.
|
The
aggregate amount (which shall be at least $2,000,000, or integral
multiples of $1,000,000 in excess thereof) of the prepayment is:
$_____________
|
|||
|
2.
|
The
Loans to which such prepayment is to be applied are as
follows:
|
|||
|
Lender
|
Borrowing
|
Principal
balance
(before
giving effect to
prepayment)`
|
Amount
of Prepayment
|
|
|
3.
|
The
Business Day upon which the undersigned shall make such prepayment
is:
______________.
|
|||
|
The
undersigned hereby certifies that this prepayment notice is correct
in all
material respects as of the date so furnished.
|
|
|
PSE
FUNDING, INC.
|
|
|
By:
_____________________________
|
|
|
Name:
|
|
|
Title:
|
|
EXHIBIT
K
FORM
OF
LOCK-BOX TRANSFER NOTICE
Attached
EXHIBIT
L
FORM
OF
COMPLIANCE CERTIFICATE
Attached
SCHEDULE
I
LENDER
GROUPS
|
JPMorgan
Chase Bank N.A. Lender Group
|
|
|
Managing
Agent:
|
JPMorgan
Chase Bank, N.A.
|
|
Conduit
Lender:
|
Jupiter
Securitization Corporation
|
|
Conduit
Lending Limit:
|
$100,000,000
|
|
Committed
Lender:
|
JPMorgan
Chase Bank, N.A.
|
|
Commitments:
|
$100,000,000
|
|
Reference
Bank:
|
JPMorgan
Chase Bank, N.A.
|
|
Citicorp
North America, Inc. Lender Group
|
|
|
Managing
Agent:
|
Citicorp
North America, Inc.
|
|
Conduit
Lender:
|
CAFCO,
LLC
|
|
Conduit
Lending Limit:
|
$100,000,000
|
|
Committed
Lender:
|
Citibank,
N.A.
|
|
Commitments:
|
$100,000,000
|
|
Reference
Bank:
|
Citibank,
N.A.
|
SCHEDULE
II
NOTICE
ADDRESSES
|
JPMorgan
Chase Bank, N.A.
|
|
|
1
Bank ▇▇▇ ▇▇▇▇▇
|
|
|
▇▇▇▇▇
▇▇▇-▇▇▇▇
|
|
|
▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
|
|
|
Attention:
Asset Backed Securities
|
|
|
Telephone:
(▇▇▇) ▇▇▇-▇▇▇▇
|
|
|
Facsimile
No.: (▇▇▇) ▇▇▇-▇▇▇▇
|
|
|
E-mail:
▇▇▇.▇▇▇▇▇▇▇▇.▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
|
|
|
Jupiter
Securitization Corporation
|
|
|
c/o
JPMorgan Chase Bank, N.A.
|
|
|
1
Bank ▇▇▇ ▇▇▇▇▇
|
|
|
▇▇▇▇▇
▇▇▇-▇▇▇▇
|
|
|
▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
|
|
|
Attention:
Asset Backed Securities
|
|
|
Telephone:
(▇▇▇) ▇▇▇-▇▇▇▇
|
|
|
Facsimile
No.: (▇▇▇) ▇▇▇-▇▇▇▇
|
|
|
E-mail:
▇▇▇.▇▇▇▇▇▇▇▇.▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
|
|
|
Citicorp
North America, Inc.
|
|
|
Citigroup
Global Securitized Markets
|
|
|
▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
|
|
|
▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
|
|
|
Attention:
Global Securitization
|
|
|
Facsimile
No.: (▇▇▇) ▇▇▇-▇▇▇▇
|
|
|
CAFCO,
LLC
|
|
|
▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
|
|
|
▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
|
|
|
Attention:
Global Securitization
|
|
|
Fax: (▇▇▇)
▇▇▇-▇▇▇▇
|
|
|
Citibank,
N.A.
|
|
|
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
|
|
|
▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
|
|
|
Attention:
Global Securitization
|
|
|
Fax: (▇▇▇)
▇▇▇-▇▇▇▇
|
|
|
PSE
Funding, Inc.
|
|
|
Address:
|
|
|
▇▇▇▇▇
▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇-▇▇▇
|
|
|
▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇-▇▇▇▇
|
|
|
Telephone:
(▇▇▇) ▇▇▇-▇▇▇▇
|
|
|
Facsimile
No.: (▇▇▇) ▇▇▇-▇▇▇▇
|
|
|
Mailing
Address for Notices:
|
|
|
▇.▇.
▇▇▇ ▇▇▇▇▇
|
|
|
▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇-▇▇▇▇
|
|
|
Attention:
▇▇▇▇ ▇▇▇▇, Assistant Treasurer
|
|
|
Puget
Sound Energy, Inc.
|
|
|
Address:
|
|
|
▇▇▇▇▇
▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇-▇▇▇
|
|
|
▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇-▇▇▇▇
|
|
|
Telephone:
(▇▇▇) ▇▇▇-▇▇▇▇
|
|
|
Facsimile
No.: (▇▇▇) ▇▇▇-▇▇▇▇
|
|
|
Mailing
Address for Notices:
|
|
|
▇.▇.
▇▇▇ ▇▇▇▇▇
|
|
|
▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇-▇▇▇▇
|
|
|
Attention:
▇▇▇▇ ▇▇▇▇, Assistant Treasurer
|
|
SCHEDULE
III
SPECIAL
CONCENTRATION LIMITS
None.
SCHEDULE
IV
CONCENTRATION
PERCENTAGES
|
Unbilled
Overconcentration Percentage
|
Customer
Deposit Overconcentration Percentage
|
Taxes
Overconcentration Percentage
|
Government
Receivables Overconcentration Percentage
|
|
|
Level
I
Ratings
Period
|
100.00%
|
100.00%
|
100.00%
|
5.0%
|
|
▇▇▇▇▇
▇
Ratings
Period
|
100.00%
|
100.00%
|
100.00%
|
5.0%
|
|
▇▇▇▇▇
▇▇
Ratings
Period
|
100.00%
|
75.0%
|
100.00%
|
5.0%
|
|
▇▇▇▇▇
▇
Ratings
Period
|
95.0%
|
50.0%
|
100.00%
|
5.0%
|
|
▇▇▇▇▇
▇
Ratings
Period
|
90.0%
|
0.0%
|
50.0%
|
0.0%
|
|
▇▇▇▇▇
▇▇
Ratings
Period
|
90.0%
|
0.0%
|
50.0%
|
0.0%
|
|
Level
5
Ratings
Period
|
70.0%
|
0.0%
|
0.0%
|
0.0%
|
SCHEDULE
V
LIST
OF
APPROVED SUB-SERVICERS
CheckFreePay
▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇.▇.
▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Checkfree
Corp.
▇▇▇▇
▇.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Bank
of
America Merchant Services
▇▇
▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇-▇▇▇▇