Exhibit C(17)
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CONSERVATION BOND PURCHASE AGREEMENT
Dated as of October 11, 1996
Among
PORTLAND GENERAL ELECTRIC COMPANY
as the Seller
ASSET SECURITIZATION COOPERATIVE CORPORATION
as the Purchaser
CANADIAN IMPERIAL BANK OF COMMERCE
as Servicing Agent for the Purchaser
and
PORTLAND GENERAL ELECTRIC COMPANY
as Collection Agent
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TABLE OF CONTENTS
Section Page
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms................................1
SECTION 1.02. Other Terms..........................................5
SECTION 1.03. Computation of Time Periods..........................5
ARTICLE II
PURCHASE AND SALE OF CONSERVATION BOND
SECTION 2.01. Purchase and Sale of the Conservation Bond...........5
SECTION 2.02. Purchase Price.......................................6
SECTION 2.03. Closing..............................................6
ARTICLE III
COLLECTION AGENT AND ADMINISTRATION
SECTION 3.01. Appointment of Collection Agent; Acceptance of
Appointment..........................................6
SECTION 3.02. Duties of Collection Agent...........................6
SECTION 3.03. Collection of Allocated Conservation Amounts and
Related Matters......................................7
SECTION 3.04. Rate Revision........................................8
ARTICLE IV
THE SERVICING AGENT
SECTION 4.01. Appointment of Servicing Agent.......................9
SECTION 4.02. Replacement of Servicing Agent.......................9
ARTICLE V
PAYMENTS AND SECURITY INTEREST
SECTION 5.01. Payments of Principal and Interest..................10
SECTION 5.02. Security Interest in the Conservation Investment
Assets..............................................10
ARTICLE VI
CONDITIONS PRECEDENT
SECTION 6.01. Conditions Precedent to the Purchase................12
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
SECTION 7.01. Representations and Warranties of the Seller........13
SECTION 7.02. Representations and Warranties of the Collection
Agent...............................................15
ARTICLE VIII
COVENANTS
SECTION 8.01. Affirmative Covenants of the Seller.................17
SECTION 8.02. Reporting Requirements of the Seller................18
SECTION 8.03. Negative Covenants of the Seller....................19
SECTION 8.04. Affirmative Covenants of the Collection Agent.......19
SECTION 8.05. Reporting Requirements of the Collection Agent......21
SECTION 8.06. Negative Covenants of the Collection Aqent..........22
ARTICLE IX
EVENTS OF DEFAULT
SECTION 9.01. Events of Default of Seller.........................22
SECTION 9.02. Events of Default of Collection Agent...............23
ARTICLE X
INDEMNIFICATION
SECTION 10.01. Indemnification by Seller...........................25
SECTION 10.02. Notices to Seller...................................26
SECTION 10.03. Indemnification by Colleciton Agent.................26
SECTION 10.04. Notices to Collection Agent.........................27
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Amendments, Etc.....................................27
SECTION 11.02. Notices, Etc........................................27
SECTION 11.03. Payments Net of Taxes...............................28
SECTION 11.04. No Waiver: Remedies.................................28
SECTION 11.05. Binding Effect: Assignability.......................28
SECTION 11.06. Governing Law.......................................28
SECTION 11.07. No Proceedings......................................29
SECTION 11.08. Execution in Counterparts...........................29
SECTION 11.09. Limited Recourse....................................29
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CONSERVATION BOND PURCHASE AGREEMENT
PORTLAND GENERAL ELECTRIC COMPANY, (the "Seller"), ASSET
SECURITIZATION COOPERATIVE CORPORATION (the "Purchaser"), CANADIAN IMPERIAL BANK
OF COMMERCE, acting through certain offices in the United States of America
("CIBC"), as agent (the "Servicing Agent") for the Purchaser, and PORTLAND
GENERAL ELECTRIC COMPANY, solely as collection agent ("Collection Agent"), agree
as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms. The following terms shall have
the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
"Adverse Claim" means any mortgage, pledge, security interest,
hypothecation, assignment, deposit arrangement, encumbrance, lien
(consensual, statutory or other), charge, security arrangement, negative
pledge or any other encumbrance or other right or claim in, of or on any
Person's assets or properties in favor of any other Person, of any kind or
nature whatsoever.
"Affiliate" means any Person directly or indirectly controlling,
controlled by, or under direct or indirect common control with, another
Person or a subsidiary of such other Person.
"Agreement" means this Conservation Bond Purchase Agreement, as the
same may from time to time be amended, restated, supplemented or otherwise
modified.
"Allocated Conservation Amount Advance" has the meaning assigned in
Section 3.03(b).
"Allocated Conservation Amounts" means that amount of each payment
made by or on behalf of the Customers allocated to the payment of the
Conservation Bond pursuant to the Tariff.
"Balancing Account" has the meaning assigned to such term in Section
3.03(b).
"Bondable Conservation Investment Amount" means $80,730,501 the
unamortized balance of amounts invested by the Seller in the Bondable
Conservation Investments as reflected on the books of the Seller as of the
Closing Date.
"Bondable Conservation Investments" means the investments and
expenditures of the Seller which have been designated by the Commission
pursuant to the Bondable Conservation Investments Order as meeting the
requirements of "bondable conservation investments" as set forth in the
Statute.
"Bondable Conservation Investments Application" means the Application,
as amended, attached hereto as Exhibit A filed with the Commission seeking
the approval of the Bondable Conservation Investments Order.
"Bondable Conservation Investments Order" means that certain Order
(No. 96-258) of the Commission attached hereto as Exhibit B, declaring
certain conservation program expenditures to be Bondable Conservation
Investments.
"Business Day" means any day on which banks are not authorized or
required to close in New York City or Portland, Oregon.
"Closing" has the meaning assigned to that term in Section 2.03.
"Closing Date" has the meaning assigned to such term in Section 2.03.
"Collateral" has the meaning assigned to such term in Section 5.02(a).
"Collection Agent" means Portland General Electric Company solely in
its capacity as the collection agent with respect to Allocated Conservation
Amounts under this Agreement and any successor thereto.
"Collection Agent's Event of Default" has the meaning assigned to such
term in Section 9.02.
"Collection Date" means the earliest Business Day on which the
principal amount of the Conservation Bond shall have been paid in full
together with all accrued and unpaid interest thereon and all other amounts
due to the Purchaser hereunder.
"Commission" means the Public Utility Commission of Oregon or any
successor governmental agency which has regulatory authority over rates
chargeable to Customers in connection with the provision and distribution
of electric energy and other services to such Customers.
"Conservation Bond" means the "Conservation Bond" issued and sold by
the Seller hereunder and approved by the Commission pursuant to the
Financing Order.
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"Conservation Investment Assets" has the meaning assigned to such term
in Section 757.455 of the Statute with respect to Allocated Conservation
Amounts collectable or collected in accordance with the Tariff and any
Revised Tariff.
"Credit and Collection Policy" means the credit and collection
policies and practices of the Seller or Collection Agent, as the case may
be, relating to the collection of amounts due from Customers, in effect
from time to time.
"Credit Facilities" means each of the committed loan facilities, lines
of credit, letters of credit and other forms of credit enhancement
available to the Purchaser which are not Liquidity Facilities.
"Customer" means each retail customer of Portland General Electric
Company or its successors or assigns obligated pursuant to the Tariff or
the Revised Tariff, as the case may be, to pay Allocated Conservation
Amounts to Portland General Electric Company or its successors or assigns
or any other Person who owes or may be liable for such Allocated
Conservation Amounts.
"DMS Financing Adjustment Account " means that account established
pursuant to the Tariff for the recording of collections of Allocated
Conservation Amounts from Customers under the Tariff.
"ERISA" means the U.S. Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute.
"Financing Application" means the Application, as amended, attached
hereto as Exhibit C filed with the Commission seeking the approval of the
Financing Order.
"Financing Order" means that certain Order No. 96-263 of the
Commission substantially-in the form attached hereto as Exhibit D,
approving, among other things, the issuance of the Conservation Bond.
"Fixed Rate" means a fixed rate of interest equal to 6.91 per annum.
"General Tariffs" means the schedules of rates in effect from time to
time, that the Commission has authorized the Seller to charge to Customers
in connection with the provision and distribution of energy and other
services to such Customers.
"Liquidity Facilities" means each of the committed loan facilities,
lines of credit and other financial
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accommodations available to the Purchaser to support the liquidity of the
Purchaser's commercial paper notes and medium term notes.
"Monthly Report" means a monthly report delivered by the Collection
Agent to the Servicing Agent in substantially the form of Exhibit E hereto.
"Moody's." means ▇▇▇▇▇'▇ Investors Service, Inc. and any successor
thereto.
"Over Collection Loan" has the meaning assigned in Section 3.03(b).
"Person" means any corporation, natural person, firm, joint venture,
partnership, limited liability company, trust, unincorporated organization,
enterprise, government or any department or agency of any government.
"Principal Amount" has the meaning assigned to that term in Section
2.01.
"Purchase" means the purchase of the Conservation Bond by the
Purchaser from the Seller pursuant to this Agreement.
"Purchase Price" has the meaning assigned to that term in Section
2.02.
"Rate Revision" means each revision to the Rates with respect to which
(a) in the case where immediately prior to any such revision the Tariff was
in effect, a Revised Tariff shall take effect or (b) in the case where
immediately prior to any such revision a Revised Tariff was in effect, a
subsequent Revised Tariff shall take effect.
"Rates" means the prices in effect from time to time that the Seller
is authorized to charge Customers from the initial effective date of the
Tariff through the date when all Allocated Conservation Amounts due
pursuant to the Tariff or any Revised Tariff have been collected.
"Revised Tariff" means any schedule to the General Tariffs, in
replacement of the Tariff (or any Revised Tariff then in effect),
allocating revenues to the payment of the Conservation Bond, and put into
effect from time to time by approval of the Commission, such that the Rates
will, taking into account the Balancing Account, generate Allocated
Conservation Amounts sufficient to meet the Scheduled Payment Amounts.
"S&P" means Standard and Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, or any successor thereto.
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"Scheduled Payment Amount" means for each Settlement Period, an amount
equal to $933,609.
"Securities Act" means the Securities Act of 1933, as amended.
"Seller's Event of Default" has the meaning assigned to such term in
Section 9.01.
"Settlement Date" means the eleventh day of each calendar month, or,
if such eleventh day is not a Business Day, the immediately succeeding
Business Day.
"Settlement Period" means the period from a Settlement Date to the
immediately next succeeding Settlement Date.
"Statute" means ORS 757.005 through ORS 757.460.
"Tariff" means Schedule 107 to the General Tariffs, as in effect from
time to time.
"UCC" means the Uniform Commercial Code as from time to time in effect
in the State of Oregon.
SECTION 1.02. Other Terms. All accounting terms not specifically
defined herein shall be construed in accordance with generally accepted
accounting principles. All terms used in Article 9 of the UCC in the State of
Oregon, and not specifically defined herein, are used herein as defined in such
Article 9. The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement; and Section, Schedule and
Exhibit references contained in this Agreement are references to Sections,
Schedules and Exhibits in or to this Agreement unless otherwise specified; and
the term "including" means "including without limitation".
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 mean "to but excluding."
ARTICLE II
PURCHASE AND SALE OF CONSERVATION BOND
SECTION 2.01. Purchase and Sale of the Conservation Bond. On the terms
and subject to the conditions set forth in this Agreement, and in reliance on
the covenants, representations, warranties and agreements herein set forth, the
Seller hereby agrees to sell to the Purchaser, and the Purchaser hereby agrees
to purchase from the Seller, at the Closing, a
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Conservation Bond having a principal amount equal to the Bondable Conservation
Investment Amount ("Principal Amount").
SECTION 2.02. Purchase Price. The Conservation Bond is to be purchased
at a price equal to 100% of the Principal Amount thereof (the "Purchase Price").
The Purchase Price shall be paid by the Purchaser to the Seller on the Closing
Date in accordance with Section 2.03.
SECTION 2.03. Closing. The closing (the "Closing") of the Purchase
shall take place at the offices of Sidley & Austin, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, on October 11, 1996, or, if the conditions to closing set forth
in Article VI of this Agreement shall not have been satisfied or waived by such
date, as soon as practicable after such conditions have been satisfied or
waived, or at such other time, date and place as the parties shall agree upon
(the date of the Closing being referred to herein as the "Closing Date"). No
later than 4:00 P.M. (New York time) on the Closing Date (or, if the conditions
precedent to closing have not been satisfied or waived by 4:00 P.M., at such
later time on the Closing Date as such conditions have been satisfied or
waived), the Purchaser shall pay to the Seller the Purchase Price as described
in Section 2.02 by wire transfer of immediately available funds to a bank
account designated by the Seller in writing to the Servicing Agent. On the
Closing Date, the Conservation Bond shall be issued and delivered to the
Purchaser.
ARTICLE III
COLLECTION AGENT AND ADMINISTRATION
SECTION 3.01. Appointment of Collection Agent; Acceptance of
Appointment. The Purchaser hereby appoints the Seller as Collection Agent, and
hereby agrees not to revoke such appointment except in accordance with the
express terms hereof. The Seller hereby accepts the foregoing appointment as
Collection Agent pursuant to the terms hereof.
SECTION 3.02. Duties of Collection Agent. The Collection Agent shall
manage, service, administer and make collections of the Allocated Conservation
Amounts, to the extent expressly required by the terms of this Agreement, with
reasonable care, using that degree of skill and attention that the Collection
Agent exercises with respect to collections that the Collection Agent makes for
itself. The duties of the Collection Agent shall include billing, collecting and
posting of all payments; responding to inquiries by Customers or by the
Commission, federal, local or other state governmental authorities with respect
to the Conservation Bond, the Bondable Conservation Investment, and the
Conservation Investment Assets; investigating delinquencies; accounting for
collections; furnishing statements to the Servicing Agent and Purchaser, and
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taking action in connection with the revisions to Rates to the extent expressly
set forth in Section 3.04. The Collection Agent shall follow its customary
standards, policies and procedures in performing its duties as Collection Agent.
Without limiting the generality of the foregoing, the Collection Agent shall be,
and is hereby, authorized and empowered on behalf of itself, the Servicing Agent
and the Purchaser, or any of them, to execute and deliver any and all
instruments, documents or notices, make any filing, and take any position in
proceedings of any kind with any governmental authorities (including with the
Commission), in each case in respect of the Conservation Bond, the Bondable
Conservation Investment and the Conservation Investment Assets, including any
Rate Revision. The Servicing Agent shall furnish the Collection Agent with such
documents as have been prepared by the Collection Agent for execution by the
Purchaser or the Servicing Agent and as are reasonably necessary or appropriate
to enable the Collection Agent to carry out its duties hereunder.
SECTION 3.03. Collection of Allocated Conservation Amounts and Related
Matters.
(a) The Collection Agent shall use all reasonable efforts to collect
all Allocated Conservation Amounts as and when the same shall become due, and
shall follow such collection procedures as it follows with respect to amounts
that it collects for itself pursuant to the General Tariffs. The Collection
Agent shall not change the amount of or reschedule the due date of any scheduled
payment of any Allocated Conservation Amount, except as contemplated by this
Agreement or as required by law or court order; provided, however, that the
Collection Agent may take such action to the extent that such action would be in
accordance with customary practices of the Collection Agent with respect to
amounts that it collects for itself pursuant to the General Tariffs.
(b) Pursuant to and in accordance with the Tariff, or any Revised
Tariff, the Collection Agent shall maintain a DSM Financing Adjustment Account
("Balancing Account"), and shall record all Allocated Conservation Amounts
collected by the Collection Agent during the period commencing with the initial
effective date of the Tariff and ending when all Allocated Conservation Amounts
due pursuant to the Tariff have been collected, each Allocated Conservation
Amount Advance and each Over Collection Loan and, taking into account the
payment of the Scheduled Payment Amounts and amounts of accrued interest, the
balance of the Balancing Account on a monthly basis. Pursuant to the Tariff, the
Scheduled Payment Amount is due and payable for each Settlement Period
regardless of the amount of Allocated Conservation Amounts actually collected
during such Settlement Period. Therefore, in the event that the balance of the
Balancing Account for any Settlement Period is insufficient to pay the Scheduled
Payment Amount for the applicable Settlement Period, the Collection Agent shall
advance such additional amount ("Allocated Conservation Amount Advance") as is
necessary to pay
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the full Scheduled Payment Amount, as provided in Section 5.01, which Allocated
Conservation Amount Advance shall bear interest in accordance with and at the
rate specified in the Tariff or any Revised Tariff until repaid, including
repayment in the form of an Over Collection Loan. Notwithstanding the foregoing,
the obligation of Collection Agent to make Allocated Conservation Amount
Advances is expressly limited to amounts of revenue that have been collected or
are collectable pursuant to the Tariff or any Revised Tariff by Collection Agent
from Conservation Investment Assets. In the event that the balance of the
Balancing Account for any Settlement Period is greater than the Scheduled
Payment Amount to be paid to the Servicing Agent for such Settlement Period, the
Collection Agent may use some or all of such excess amount ("Over Collection
Loan") in the ordinary course of its business without limitation, which Over
Collection Loan shall bear interest in accordance with and at the rate specified
in the Tariff or any Revised Tariff until repaid to the Balancing Account or
offset against an Allocated Conservation Amount Advance.
(c) Any Allocated Conservation Amount Advance shall be used
exclusively to pay the Scheduled Payment Amount, and shall be repaid, including
interest thereon, exclusively from Allocated Conservation Amounts. Any Over
Collection Loan shall be made exclusively from Allocated Conservation Amounts,
and the repayment thereof, including interest thereon, shall be used exclusively
to pay Scheduled Payment Amounts.
SECTION 3.04. Rate Revision.
(a) So long as the Conservation Bond is outstanding, the Collection
Agent shall, pursuant to the Tariff, on or before October 1 of each year
following the initial effective date of the Tariff, file any Revised Tariff with
the Commission as is reasonably necessary to adjust the Rates ("Rate Revision")
to provide that the Allocated Conservation Amounts shall be sufficient to
collect the Scheduled Payment Amount and to repay to the Collection Agent any
Allocated Conservation Amount Advances, plus interest at the rate provided in
the Revised Tariff. In addition, the Collection Agent may file a Revised Tariff
with the Commission at any time the Collection Agent deems prudent and will file
a Revised Tariff with the Commission to adjust the Rates whenever Scheduled
Payment Amounts are due and remain unpaid or if the average balance in the
Balancing Account exceeds or is less than twenty percent (20%) of the annualized
Scheduled Payment Amount. Rate Revisions shall remain in effect until the
earlier of (i) the next Rate Revision and (ii) the date when all Allocated
Conservation Amounts due pursuant to the Tariff have been collected.
(b) In connection with each such filing of a Revised Tariff, the
Collection Agent shall in the effort to provide that the Allocated Conservation
Amounts shall be sufficient to collect and to repay the amounts referred to in
Section 3.04(a), above,
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promptly: (i) calculate the relevant Rate Revision, (ii) make an appropriate
filing with the Commission, (iii) take all reasonable actions, and make all
reasonable efforts in order to effectuate the Revised Tariff and related Rate
Revision, and (iv) send to the Servicing Agent copies of all notices and
documents that, in the Collection Agent's reasonable judgment, are material with
respect thereto.
(c) It is expressly agreed and acknowledged by the Purchaser that (i)
in connection with any Revised Tariff or Rate Revision, the Collection Agent is
acting solely in its capacity as collection agent hereunder, (ii) the Collection
Agent is not responsible in any manner for, and shall have no liability
whatsoever as a result of any action, decision, ruling or other determination
made or not made, or any delay (other than any delay resulting from the failure
of the Collection Agent to file the applications required by Section 3.04(b)(ii)
in a timely manner), by the Commission in any way related to the Revised Tariff
or Rate Revision (it being acknowledged by the Seller that the foregoing is not
intended to, and shall not, relieve the Seller of liability for any
misrepresentation under Section 7.01(b) or in connection with any Rate Revision
or any Revised Tariff or any adjustments to either thereof), and (iii) the
Collection Agent shall, except in cases of its gross negligence, have no
liability whatsoever relating to the calculation of the Rate Revision or the
Revised Tariff and any adjustments thereto (including as a result of any
inaccuracy of any of the assumptions made in such calculation). The Collection
Agent hereby acknowledges that the terms of this Section 3.04(c) are not
intended to, and shall not, relieve the Collection Agent of liability for any
misrepresentation by the Collection Agent under Section 7.02 or the breach by
the Collection Agent of its other agreements under this Agreement.
ARTICLE IV
THE SERVICING AGENT
SECTION 4.01. Appointment of Servicing Agent. The Purchaser has
appointed Canadian Imperial Bank of Commerce as its Servicing Agent. The
Servicing Agent is responsible for administering and enforcing this Agreement on
behalf of the Purchaser and fulfilling all other duties expressly assigned to it
in this Agreement. The Purchaser has granted the Servicing Agent the authority
to take all actions necessary to assure compliance by the Seller and the
Collection Agent with the terms of this Agreement and to take all actions
required or permitted to be performed by the Purchaser under this Agreement.
SECTION 4.02. Replacement of Servicing Agent. The Purchaser may, at
any time in its discretion, remove a Servicing Agent and appoint a new Servicing
Agent, which shall have the duties described in Section 4.01.
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ARTICLE V
PAYMENTS AND SECURITY INTEREST
SECTION 5.01. Payments of Principal and Interest.
(a) The Principal Amount of the Conservation Bond, together with
interest thereon at the Fixed Rate shall be payable in 120 monthly installments
each equal to the Scheduled Payment Amount. [On each Settlement Date, commencing
with the Settlement Date occurring on November 11, 1996, the Collection Agent
shall on behalf of Seller and solely out of: (i) Allocated Conservation Amounts
relating to the immediately preceding Settlement Period, (ii) any repayments,
including interest, of any Over Collection Loan or (iii) any required Allocated
Conservation Amount Advance, pay to the Servicing Agent, for the account of the
Purchaser, an amount equal to the Scheduled Payment Amount.] Notwithstanding any
other provisions of this Agreement or the Conservation Bond neither Collection
Agent nor Seller have any obligation to pay the Principal Amount and interest
thereon from sources other than set forth as items (i), (ii), and (iii), above.
(b) All amounts to be paid by the Collection Agent hereunder shall be
paid in accordance with the terms hereof no later than 3 P.M. (New York City
time) on the day when due in lawful money of the United States of America in
same day funds to the Purchaser's account maintained at Bankers Trust Company,
New York, New York, ABA #▇▇▇-▇▇▇-▇▇▇, for the account of Asset Securitization
Cooperative Corporation, Account No. ▇▇-▇▇▇-▇▇▇. The amount of interest payable
for any period will be computed on the basis of a 360-day year of twelve 30-day
months and, for any period shorter than a full calendar month, on the basis of
the actual number of days elapsed in such period. No adjustment shall be made in
the calculation of interest in the event any such 30-day period ends on a day
that is not a Business Day. To the extent that the Collection Agent fails to pay
when due to the Purchaser any amount payable hereunder, interest shall be due
and payable on such unpaid amount, for each day until paid in full, at the rate
of one percent (1.0%) in excess of the rate of interest per annum published on
such day (or, if not then published, on the most recently preceding day) in The
Wall Street Journal, as the "Prime Rate". Changes in the rate payable hereunder
shall be effective on each date on which a change in the "Prime Rate" is
published.
SECTION 5.02. Security Interest in the Conservation Investment Assets.
(a) As security for the payment of the Principal Amount and interest
thereon under the Conservation Bond, the Seller hereby grants to the Purchaser,
subject to the provisions of Section 757.460 of the Statute, a security interest
in the Conservation Investment Assets (and, in addition, to the extent permitted
by the consistent with the Section 757.460 of the Statute,
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all of the Seller's right, title and interest in and to, and to receive,
payments pursuant to the Tariff and any Revised Tariff and all of the Seller's
right to have the principal and interest due on the Conservation Bond recovered
through Rates pursuant to and in accordance with the Statute) and all proceeds
thereof (the "Collateral"). As contemplated by Section 757.460 of the Statute,
the foregoing security interest in the Conservation Investment Assets shall be a
continuously perfected security interest in all revenues and proceeds arising
with respect to the Bondable Conservation Investments, whether or not those
revenues have accrued; provided, that any foreclosure or other enforcement of
such security interest shall be in a manner authorized by Section 757.460 of the
Statute.
(b) Until the Collection Date, the Seller agrees that from time to
time, at its expense, it will promptly execute and deliver all instruments and
documents and take all action that the Servicing Agent may from time to time
reasonably request in order to perfect, evidence and protect the validity,
enforceability, perfection and first priority of the Purchaser's security
interest in the Collateral and to enable the Purchaser and/or the Servicing
Agent acting on behalf of the Purchaser to exercise or enforce any of the
Purchaser's rights hereunder. Without limiting the generality of the foregoing,
the Seller will upon the request of the Servicing Agent, execute and file such
financing or continuation statements or amendments thereto or assignments
thereof as may be reasonably requested by the Servicing Agent.
(c) To the fullest extent permitted by applicable law, the Servicing
Agent shall be permitted to sign and file continuation statements and amendments
thereto and assignments thereof without the Seller's signature. Carbon,
photographic or other reproduction of this Agreement or any financing statement
shall be sufficient as a financing statement.
(d) In the event the Seller shall change its name, identity or
corporate structure (within the meaning of Section 9402(7) of any applicable
enactment of the UCC) or shall relocate its chief executive office or any office
where the material records relating to the Conservation Investment Assets are
kept, the Seller (1) shall give the Servicing Agent at least thirty (30) days'
prior written notice thereof and (2) shall promptly execute and deliver all
financing statements, instruments and other documents requested by the Servicing
Agent in connection with such change or relocation and (3) shall take all action
that the Servicing Agent may reasonably request with respect to the filing,
recording and confirmation thereof.
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ARTICLE VI
CONDITIONS PRECEDENT
SECTION 6.01. Conditions Precedent to the Purchase. The following
conditions must be satisfied on or before the Closing:
(a) Membership in the Purchaser. The Seller will have joined the
Purchaser as a member by delivering to the Purchaser an executed Membership
Agreement in the form of Exhibit F, together with the sum of $10,000 as an
investment in the Purchaser. Such investment will be refunded by the Purchaser
to the Seller when the Conservation Bond is paid in full.
(b) Absence of Liens. The Servicing Agent will have received evidence
acceptable to it (which may include Uniform Commercial Code search reports) that
the Conservation Investment Assets are free and clear of any Adverse Claim.
(c) Financing Statements. The Servicing Agent will have received
acknowledgment copies of UCC-1 financing statements, and all other documents
reasonably requested by the Servicing Agent, to evidence the perfection of the
Purchaser's security interest in the Conservation Investment Assets.
(d) Seller Resolutions. The Servicing Agent will have received a
certificate of the Seller's secretary or assistant secretary attesting to:
(i) the resolutions of the Board of Directors of the Seller
authorizing the execution by the Seller of this Agreement;
(ii) the names and signatures of the officers of the Seller authorized
to execute this Agreement; and
(iii) the completeness and correctness of the articles of
incorporation and by-laws of the Seller attached to said certificate.
(e) Legal Opinion of Counsel to the Seller. The Servicing Agent will
have received an opinion from counsel to the Seller, substantially in the form
attached hereto as Exhibit G.
(f) Good Standing Certificate. The Servicing Agent will have received
a certificate of recent date issued by the Secretary of State of the State of
Oregon, as to the legal existence and good standing of the Seller.
(g) Representations and Covenants. On and as of the date of the
Purchase (i) the representations of the Seller in Article VII shall be true and
correct with the same effect as if
12
made on such date and (ii) the Seller shall be in compliance with the covenants
set forth in this Agreement. The Seller, by accepting the proceeds of such
Purchase, shall be deemed to have certified as to the truth and accuracy of each
of the matters described in the foregoing clauses (i) and (ii), both before and
after giving effect to the Purchase.
(h) Regulatory Approvals. The Servicing Agent shall have received
copies of each of the following:
(i) the Bondable Conservation Investment Application, together
with the Exhibits and Attachments accompanying such Application;
(ii) the Bondable Conservation Investments Order;
(iii) the Financing Application, together with the Exhibits and
Attachments accompanying such Application;
(iv) the Financing Order; and
(v) the Tariff.
(i) Other Documents. The Servicing Agent and the Purchaser will have
received all other documents that either of them have reasonably requested from
the Seller.
(j) Structuring Fee. The Seller shall have paid a structuring fee to
the Servicing Agent in the amount of $50,000.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
SECTION 7.01. Representations and Warranties of the Seller. The Seller
hereby represents and warrants to the Purchaser and the Servicing Agent that as
of the date hereof and the Closing Date:
(a) The Seller is a corporation duly organized and validly existing in
good standing under the laws of the State of Oregon and has full corporate
power, authority and legal right to own its properties and conduct its business
as such properties are presently owned and such business is presently conducted,
and to execute, deliver and perform its obligations under this Agreement and the
Conservation Bond.
(b) The execution, delivery and performance by the Seller of this
Agreement, and the transactions contemplated hereby, are within the Seller's
corporate powers, have been duly authorized by all necessary corporate action,
do not contravene (i) the Seller's charter or by-laws, (ii) any law, rule or
regu-
13
lation applicable to the Seller, (iii) any contractual restriction contained
in any material indenture, loan or credit agreement, lease, mortgage, security
agreement, bond, note, or other agreement or instrument binding on or, to the
best of Seller's knowledge, affecting the Seller or its property or (iv) any
order, writ, judgment, award, injunction or decree binding on or, to the best of
Seller's knowledge, affecting the Seller or its property, and do not result in
or require the creation of any Adverse Claim upon or with respect to any of its
properties (other than in favor of the Purchaser as contemplated hereunder).
This Agreement has been duly executed and delivered on behalf of the Seller.
(c) There are no proceedings or investigations, pending or, to the
best knowledge of the Seller, threatened against the Seller before any court,
regulatory body, administrative agency, or other tribunal or governmental
instrumentality (i) asserting the invalidity of this Agreement or the
Conservation Bond, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement, (iii) seeking any determination or
ruling as to the validity or enforceability of this Agreement or the
Conservation Bond, or (iv) except as disclosed in the Seller's Annual Report on
Form 10-K for the year ended December 31, 1995 or Quarterly Reports on Form 10-Q
for the quarters ended March 31, 1996 and June 30, 1996, seeking any
determination or ruling that would materially and adversely affect the
performance by the Seller of its obligations under this Agreement or the
Conservation Bond.
(d) All approvals, authorizations, consents, orders or other actions
of any Person or of any governmental body or official required in connection
with the execution and delivery of this Agreement by the Seller, the performance
by the Seller of the transactions contemplated by this Agreement and the
fulfillment of the terms hereof to be fulfilled by the Seller, have, or will at
Closing will have been obtained.
(e) This Agreement constitutes a legal, valid and binding obligation
of the Seller enforceable against the Seller in accordance with its terms,
except (i) as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect affecting the enforcement of creditors' rights and (ii) as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity).
(f) No proceeds of the Purchase hereunder will be used by the Seller
(i) for buying or carrying Margin Stock, as defined in Regulation U of the Board
of Governors of the Federal Reserve System from time to time or (ii) to acquire
any security in any transaction that is subject to Section 13 or 14 of the
Securities Exchange Act of 1934, as amended.
14
(g) No certificate, exhibit attached hereto, document or financial
statement prepared by the Seller and-required to be furnished on or before the
Closing Date by the Seller to the Servicing Agent or the Purchaser in connection
with this Agreement or the Conservation Bond is or shall be inaccurate in any
material respect, or contains or shall contain any material misstatement of
fact, or omits or shall omit to state a material fact or any fact necessary to
make the statements contained therein not misleading, in each case, as of the
date it is or shall be dated.
(h) The Conservation Bond has been duly and validly authorized by the
Seller, and, when executed and delivered in accordance with the terms hereof and
delivered to and paid for by the Purchaser in accordance with this Agreement,
will be duly and validly issued and outstanding, and will comply with and be
entitled to the benefits of the Bondable Conservation Investments Order and the
Financing Order.
(i) The Seller is not required to register as an "investment company"
nor is the Seller controlled by an "investment company" within the Investment
Company Act of 1940, as amended.
(j) The balance sheets of the Seller and its consolidated subsidiaries
as at June 30, 1996, and the related statements of income and retained earnings
of the Seller and its consolidated subsidiaries for the fiscal year ended
December 31, 1995, copies of which have been furnished to the Servicing Agent,
fairly present the financial condition of the Seller and its consolidated
subsidiaries as at such dates and the results of the operations of the Seller
and its consolidated subsidiaries for the periods ended on such dates all in
accordance with generally accepted accounting principles consistently applied,
and since June 30, 1996, there has been no material adverse change in such
condition or operations.
(k) The sale of the Conservation Bond pursuant to the terms of this
Agreement will not require the registration of such Conservation Bond under the
Securities Act.
(l) The Conservation Investment Assets are free and clear of any
Adverse Claim except in favor of the Purchaser as provided in this Agreement.
(m) The chief place of business and chief executive office of the
Seller are located at the address of the Seller referred to on the signature
page of this Agreement and the location of the offices where the Seller keeps
all of its records concerning the Bondable Conservation Investments and the
Conservation Investment Assets is at the same address.
SECTION 7.02. Representations and Warranties of the Collection Agent.
The Collection Agent hereby represents and
15
warrants to the Purchaser and the Servicing Agent that as of the date hereof and
the Closing Date:
(a) The Collection Agent is a corporation duly organized and validly
existing in good standing under the laws of the State of Oregon and has full
corporate power, authority and legal right to own its properties and conduct its
business as such properties are presently owned and such business is presently
conducted, and to execute, deliver and perform its obligations under this
Agreement.
(b) The execution, delivery and performance by the Collection Agent of
this Agreement, and the transactions contemplated hereby, are within the
Collection Agent's corporate powers, have been duly authorized by all necessary
corporate action, do not contravene (i) the Collection Agent's charter or
by-laws, (ii) any law, rule or regulation applicable to the Collection Agent,
(iii) any contractual restriction contained in any material indenture, loan or
credit agreement, lease, mortgage, security agreement, bond, note, or other
agreement or instrument binding on or, to the best of Collection Agent's
knowledge, affecting the Collection Agent or its property or (iv) any order,
writ, judgment, award, injunction or decree binding on or, to the best of
Collection Agent's knowledge, affecting the Collection Agent or its property,
and do not result in or require the creation of any Adverse Claim upon or with
respect to any of its properties (other than as may be contemplated hereunder).
This Agreement has been duly executed and delivered on behalf of the Collection
Agent.
(c) There are no proceedings or investigations, pending or, to the
best knowledge of the Collection Agent, threatened against the Collection Agent
before any court, regulatory body, administrative agency, or other tribunal or
governmental instrumentality (i) asserting the invalidity of this Agreement,
(ii) seeking to prevent the consummation of any of the transactions contemplated
by this Agreement, or (iii) seeking any determination or ruling as to the
validity or enforceability of this Agreement, or (iv) except as disclosed in the
Collection Agent's Annual Report on Form 10-K for the year ended December 31,
1995 or Quarterly Reports on Form 10-Q for the quarters ended March 31, 1996 and
June 30, 1996, seeking any determination or ruling that could materially and
adversely affect the performance by the Collection Agent of its obligations
under this Agreement.
(d) All approvals, authorizations, consents, orders or other actions
of any Person or of any governmental body or official required in connection
with the execution and delivery of this Agreement by the Collection Agent, the
performance by the Collection Agent of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof to be fulfilled by the
Collection Agent, have, or will at Closing have been obtained.
16
(e) This Agreement constitutes a legal, valid and binding obligation
of the Collection Agent enforceable against the Collection Agent in accordance
with its terms, except (i) as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect affecting the enforcement of creditors' rights, and (ii) as
such enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity).
(f) No certificate, document or financial statement prepared by the
Collection Agent and required to be furnished on or before the Closing Date by
the Collection Agent to the Servicing Agent or the Purchaser in connection with
this Agreement is or shall be inaccurate in any material respect, or contains or
shall contain any material misstatement of fact, or omits or shall omit to state
a material fact or any fact necessary to make the statements contained therein
not misleading, in each case, as of the date it is or shall be dated.
(g) The chief place of business and chief executive office of the
Collection Agent are located at the address of the Collection Agent referred to
on the signature page of this Agreement and the location of the offices-where
the Collection Agent keeps all of its records concerning the Bondable
Conservation Investments and the Conservation Investment Assets is at the same
address.
ARTICLE VIII
COVENANTS
SECTION 8.01. Affirmative Covenants of the Seller. From the date
hereof until the Collection Date, unless the Servicing Agent shall otherwise
consent in writing, the Seller will:
(a) Comply in all material respects with all applicable laws, rules,
regulations and orders (including all material provisions of ERISA) with respect
to it, its business and properties, including the Bondable Conservation
Investments and the Conservation Investment Assets if failure to comply would
materially adversely affect its ability to perform its obligations under this
Agreement or the Conservation Bond or the collectibility of the Conservation
Investment Assets.
(b) Preserve and maintain its corporate existence, in the jurisdiction
of its incorporation, and qualify and remain qualified in good standing as a
foreign corporation in each jurisdiction where the failure to be so qualified
could materially adversely affect its ability to perform its obligations under
this Agreement or the Conservation Bond or the collectibility of the
Conservation Investment Assets. Nothing herein shall prevent the merger,
consolidation or sale of all or
17
substantially all of the assets and business of the Seller, provided that any
corporation or other entity (i) into which the Seller may be merged or
consolidated, (ii) which may result from any merger, conversion or consolidation
to which the Seller shall be a party and in which the Seller is not the
surviving entity, or (iii) which may succeed to all or substantially all of the
business of the Seller, shall execute an agreement of assumption to perform
every obligation of the Seller hereunder in which event such corporation or
entity shall be the successor to the Seller hereunder without the execution or
filing of any document or any further act by any of the parties to this
Agreement. The Seller shall give prompt notice of any such merger, consolidation
or sale to the Purchaser and the Servicing Agent.
(c) At any reasonable time, permit the Purchaser or its agents or
representatives, at their expense, to visit its offices in order to examine its
books of account and other records and files relating to the Conservation
Investment Assets (including, without limitation, computer tapes and disks) and
to discuss with its officers and employees its business, finances and accounts
with respect thereto.
(d) At its expense timely and fully perform and comply with all terms
and provisions required to be observed by it under the Financing Order, the
Tariff and any Revised Tariff, including, without limitation, making all
necessary filings required of it in connection with Rate Revisions and other
changes in Rates to the extent permitted or required pursuant to the Financing
Order, provided, that any such Rate Revisions or other change to Rates shall not
modify the Scheduled Payment Amount of the Conservation Bond.
SECTION 8.02. Reporting Requirements of the Seller. From the date
hereof until the Collection Date, the Seller will, or will cause any other
applicable Person to, unless the Servicing Agent shall otherwise consent in
writing, furnish to the Servicing Agent:
(a) promptly following the sending or filing thereof, copies of
reports filed on Form 10-K, Form 10-Q and Form 8-K with the Securities and
Exchange Commission;
(b) as soon as available and in any event within 120 days after the
end of each fiscal year of the Seller, a copy of audited financial statements
for such year certified by a nationally recognized public accounting firm for
the Seller and its consolidated subsidiaries, which financial statements may be
those included in the Seller's Form 10-K filed with the Securities and Exchange
Commission;
(c) as soon as an officer of the Seller has actual knowledge thereof,
notice of each Seller's Event of Default or
18
event that with the giving of notice or lapse of time or both would constitute a
Seller's Event of Default;
(d) promptly, following the filing or obtaining thereof, notice of any
amendment, waiver or modification of, or supplement to, any application filed
with or order obtained from the Commission in connection with the transactions
contemplated by this Agreement;
(e) promptly following the making thereof, notice of any material
changes to the Credit and Collection Policy;
(f) promptly following the filing thereof, copies of any Applications
or other filings filed by Seller with the Commission seeking any changes or
amendments to the Financing Order, the Tariff or any Revised Tariff and,
promptly following receipt thereof, copies of any order granted by the
Commission as a result of any such application or filing; and
(g) promptly, from time to time, such other information, documents,
records, opinions or reports respecting the Conservation Investment Assets or
the conditions or operations, financial or otherwise, of the Seller or the
performance by the Seller of its obligations under this Agreement, as the
Servicing Agent may from time to time reasonably request in connection with the
Purchaser's interests under or contemplated by this Agreement or the
Conservation Bond.
SECTION 8.03. Negative Covenants of the Seller. From the date hereof
until the Collection Date, unless the Servicing Agent shall otherwise consent in
writing, the Seller shall not:
(a) Except as provided herein, sell, assign (by operation of law or
otherwise) or otherwise dispose of, or create or suffer to exist any Adverse
Claim upon or with respect to any of the Conservation Investment Assets.
(b) Amend or otherwise modify the terms of the Financing Order or seek
any adjustments to the Tariff, except as expressly provided for in this
Agreement.
(c) Except as otherwise required by the Commission or applicable law,
make any material change to the Credit and Collection Policy which would impair
the Seller's ability to perform its obligations under this Agreement or the
Conservation Bond.
SECTION 8.04. Affirmative Covenants of the Collection Agent. From the
date hereof until the Collection Date, unless the Servicing Agent shall
otherwise consent in writing, the Collection Agent will:
(a) Comply in all material respects with all applicable laws, rules,
regulations and orders (including all
19
material provisions of ERISA) with respect to it, its business and properties,
including the Bondable Conservation Investments and the Conservation Investment
Assets if failure to comply would materially adversely affect its ability to
perform its obligations under this Agreement or the collectibility of the
Conservation Investment Assets.
(b) Preserve and maintain its corporate existence, in the jurisdiction
of its incorporation, and qualify and remain qualified in good standing as a
foreign corporation in each jurisdiction where the failure to be so qualified
could materially adversely affect its ability to perform its obligations under
this Agreement or the collectibility of the Conservation Investment Assets.
Nothing herein shall prevent the merger, consolidation or sale of all or
substantially all of the assets and business of the Collection Agent, provided
that any corporation or other entity (i) into which the Collection Agent may be
merged or consolidated, (ii) which may result from any merger, conversion or
consolidation to which the Collection Agent shall be a party and in which the
Collection Agent is not the surviving entity, or (iii) which may succeed to all
or substantially all of the business of the Collection Agent, shall execute an
agreement of assumption to perform every obligation of the Collection Agent
hereunder in which event such corporation or entity shall be the successor to
the Collection Agent hereunder without the execution or filing of any document
or any further act by any of the parties to this Agreement. The Collection Agent
shall give prompt notice of any such merger, consolidation or sale to the
Purchaser and the Servicing Agent.
(c) At any reasonable time, permit the Purchaser or its agents or
representatives, at their expense, to visit its offices in order to examine its
books of account and other records and files relating to the Allocated
Conservation Amounts (including, without limitation, computer tapes and disks)
and to discuss with its officers and employees its performance under this
Agreement.
(d) At its expense timely and fully perform and comply with all terms
and provisions, if any, required to be observed by it under the Financing Order,
the Tariff and any Revised Tariff, including, without limitation, making all
necessary filings for Rate Revisions and other changes in Rates to the extent
permitted or required pursuant to the Financing Order, provided, that any such
Rate Revisions or other change to Rates shall not modify the Scheduled Payment
Amount of the Conservation Bond.
(e) Maintain and implement administrative and operating procedures,
and keep and maintain all records and other information, reasonably necessary or
advisable for the collection of the Allocated Conservation Amounts.
(f) Comply in all material respects with the Credit and Collection
Policy as in effect from time to time, if failure
20
to do so would adversely affect the collection of the Collection Agent's
Allocated Conservation Amounts.
(g) If, at any time, the collection Agent's long-term senior secured
debt is rated less than BBB by S&P or less than Baa2 by ▇▇▇▇▇'▇, upon the
request of the Servicing Agent establish and maintain for the benefit of the
Purchaser, a segregated account with a financial institution acceptable to the
Servicing Agent into which the Collection Agent shall (subject, as applicable,
to the limitation in Section 3.03(b) on Collection Agent's obligation to make
Allocated Conservation Amount Advances and the limitation in Section 5.01 on
Collection Agent's and Seller's obligations to pay the Principal Amount and
interest thereon) deposit, within one Business Day of receipt or, as applicable,
funds otherwise becoming available, the pro rata daily portion of the Scheduled
Payment Amount.
SECTION 8.05. Reporting Requirements of the Collection Agent. From the
date hereof until the Collection Date, the Collection Agent will, or will cause
any other applicable Person to, unless the Servicing Agent shall otherwise
consent in writing or unless Seller furnishes them, furnish to the Servicing
Agent:
(a) promptly following the sending or filing thereof, copies of
reports filed on Form 10-K, Form 10-Q and Form 8-K with the Securities and
Exchange Commission;
(b) as soon as available and in any event within 120 days after the
end of each fiscal year of the Collection Agent, a copy of audited financial
statements for such year certified by a nationally recognized public accounting
firm for the Collection Agent and its consolidated subsidiaries, which financial
statements may be included in the Collection Agent's Form 10-K filed with the
Securities and Exchange Commission;
(c) as soon as an officer of the Collection Agent has actual knowledge
thereof, notice of each Event of Default or event that with the giving of notice
or lapse of time or both would constitute an Event of Default;
(d) promptly, following the filing or obtaining thereof, notice of any
amendment, waiver or modification of, or supplement to, any application filed
with or order obtained from the Commission in connection with the transactions
contemplated by this Agreement;
(e) promptly, from, time to time, such other information, documents,
records, opinions or reports respecting the Allocated Conservation Amounts or
the conditions or operations, financial or otherwise, of the Collection Agent or
the performance by the Collection Agent of its obligations under this Agreement,
as the Servicing Agent may from time to time reasonably request in connection
with the Purchaser's interests under or contemplated by this Agreement; and
21
(f) prior to the 15th day of each month commencing with November, 1996
(or, if such 15th day is not a Business Day, the next succeeding Business Day),
a duly completed Monthly Report.
SECTION 8.06. Negative Covenants of the Collection Aqent. From the
date hereof until the Collection Date, unless the Servicing Agent shall
otherwise consent in writing, the Collection Agent shall not:
(a) Except as provided herein, sell, assign (by operation of law or
otherwise) or otherwise dispose of, or create or suffer to exist any Adverse
Claim upon or with respect to any of the Conservation Investment Assets.
(b) Amend or otherwise modify the terms of the Financing Order or seek
any adjustments to the Tariff, except as expressly provided for in this
Agreement.
(c) Except as otherwise required by the Commission or applicable law,
make any material change to the Credit and Collection Policy which would impair
the Collection Agent's ability to perform its obligations under this Agreement.
ARTICLE IX
EVENTS OF DEFAULT
SECTION 9.01. Events of Default of Seller. If any of the following
events (each a "Seller's Event of Default") shall occur and be continuing:
(i) any failure by the Seller to make any payment required to be made
by Seller hereunder and the continuance of such failure for a period of one
Business Day;
(ii) any representation or warranty made by the Seller hereunder or in
any certificate delivered by Seller to the Servicing Agent in connection
with this Agreement, shall prove to have been false or incorrect in any
material respect when made and shall remain false or incorrect for fifteen
Business. Days after the earlier of the date on which an officer of the
Seller has actual knowledge of such false or incorrect representation or
warranty and the date on which written notice of such false or incorrect
representation or warranty has been given to the Seller requiring the same
to be remedied, by the Purchaser or the Servicing Agent;
(iii) any failure on the part of the Seller to perform or observe any
term, covenant or agreement in this Agreement on its part to be performed
or observed which continues
22
unremedied for ten Business Days after the earlier of the date on which an
officer of the Seller has actual knowledge of such failure and the date on
which written notice of such failure has been given to the Seller requiring
the same to be remedied, by the Purchaser or the Servicing Agent;
(iv) there shall occur (a) a filing of a decree or order for relief by
a court having jurisdiction in the premises in respect of the Seller or any
substantial part of its property in an involuntary case under any
applicable federal or state bankruptcy, insolvency or other similar law now
or hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for the Seller or for
any substantial part of its property, or ordering the winding-up or
liquidation of the Seller's affairs, and such decree or order shall remain
unstayed and in effect for a period of 60 consecutive days; or (b) the
commencement by the Seller of a voluntary case under any applicable federal
or state bankruptcy, insolvency or other similar law now or hereafter in
effect, or the consent by the Seller to the entry of an order for relief in
an involuntary case under any such law, or the consent by the Seller to the
appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for the Seller or for
any substantial part of its property, or the making by the Seller of any
general assignment for the benefit of creditors, or the failure by the
Seller generally to pay its debts as such debts become due, or the taking
of action by Seller in furtherance of any of the foregoing;
then, so long as such Seller's Event of Default shall not have been remedied and
following three Business Days' notice from the Purchaser or the Servicing Agent,
the Purchaser shall have the right to (A) appoint a third-party entity, which
will be a financial institution or a nationally recognized accounting or
consulting firm, to oversee the collection and distribution of the revenue
relating to Conservation Investment Assets and/or (B) require the Collection
Agent to establish a segregated account as described in Section 8.04(g), such
rights, and the right to indemnification by Seller pursuant to Section 10.01
hereof, being the sole rights and remedies in case of a Seller Event of Default
under Section 9.01(ii), above. In addition, in case of Seller's Events of
Default under Sections 9.01(i), (iii), or (iv), above, the Purchaser shall have
all rights and remedies provided under the Statute and other applicable law,
which rights shall be cumulative.
SECTION 9.02. Events of Default of Collection Agent. If any of the
following events (each a "Collection Agent Event of Default") shall occur and be
continuing:
(i) any failure by the Collection Agent to make any payment required
to be made by Collection Agent hereunder
23
and the continuance of such failure for a period of one Business Day;
(ii) any representation or warranty made by the Collection Agent
hereunder or in any certificate delivered by Collection Agent to the
Servicing Agent in connection with this Agreement, shall prove to have been
false or incorrect in any material respect when made and shall remain false
or incorrect for fifteen Business Days after the earlier of the date on
which an officer of the Collection Agent has actual knowledge of such false
or incorrect representation or warranty and the date on which written
notice of such false or incorrect representation or warranty has been given
to the Seller requiring the same to be remedied, by the Purchaser or the
Servicing Agent;
(iii) failure on the part of the Collection Agent to perform or
observe any other term, covenant or agreement in this Agreement on its part
to be performed or observed which continues unremedied for ten Business
Days after the earlier of the date on which an officer of the Collection
Agent has actual knowledge of such failure and the date on which written
notice of such failure has been given to the Collection Agent requiring the
same to be remedied, by the Purchaser or the Servicing Agent;
(iv) the Collection Agent's long-term secured debt shall be rated less
than BBB- by S&P or less than Baa3 by ▇▇▇▇▇'▇; or
(v) the three-month average of the ratio of the Collection Agent's
write-offs of receivables as a percentage of collection of receivables
shall exceed 3.0%;
(vi) there shall occur (a) a filing of a decree or order for relief by
a court having jurisdiction in the premises in respect of the Collection
Agent or any substantial part of its property in an involuntary case under
any applicable federal or state bankruptcy, insolvency or other similar law
now or hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for the Collection
Agent or for any substantial part of its property, or ordering the
winding-up or liquidation of the Collection Agent's affairs, and such
decree or order shall remain unstayed and in effect for a period of 60
consecutive days; or (b) the commencement by the Collection Agent of a
voluntary case under any applicable federal or state bankruptcy, insolvency
or other similar law now or hereafter in effect, or the consent by the
Collection Agent to the entry of an order for relief in an involuntary case
under any such law, or the consent by the Collection Agent to the
appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or
24
similar official for the Collection Agent or for any substantial part of
its property, or the making by the Collection Agent of any general
assignment for the benefit of creditors, or the failure by the Collection
Agent generally to pay its debts as such debts become due, or the taking of
action by Collection Agent in furtherance of any of the foregoing; or
(vii) the Collection Agent shall fail to pay any principal of or
premium or interest on any indebtedness for borrowed money having a
principal amount of $50,000,000 or greater, when the same becomes due and
payable (whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise) and such failure shall continue after the applicable
grace period, if any, specified in the agreement or instrument relating to
such indebtedness; or any other default under any agreement or instrument
relating to any such indebtedness of the Collection Agent or any other
event, shall occur and shall continue after the applicable grace period, if
any, specified in such agreement or instrument if the effect of such
default or event is to accelerate the maturity of such indebtedness;
then, so long as such Collection Agent Event of Default shall not have been
remedied and following three Business Days' notice from the Purchaser or the
Servicing Agent, the Purchaser shall have the right to (A) appoint a third-party
entity, which will be a financial institution or nationally recognized
accounting or consulting firm, to oversee the collection or distribution of
Allocated Conservation Amounts and/or (B) require the Collection Agent to
establish a segregated account as described in Section 8.04(g), such rights
being the sole rights and remedies in case of a Collection Agent Event of
Default under Sections 9.02(iv), (v) and (vii), above, and such rights and the
right to indemnification by Collection Agent pursuant to Section 10.03 hereof
being the sole rights and remedies in case of a Collection Agent Event of
Default under Section 9.02(ii), above. In addition Purchaser shall: (1) in case
of Collection Agent Events of Default set forth in Sections 9.02(i), (iii) and
(vi) have all rights and remedies provided under the Statute and all other
applicable law, which rights shall be cumulative.
ARTICLE X
INDEMNIFICATION
SECTION 10.01. Indemnification by Seller. The Seller shall be liable
in accordance herewith only to the extent of the obligations specifically
undertaken by the Seller in such capacity under this Agreement and shall have no
other obligations or liabilities hereunder Without limiting (except as provided
in this Agreement) any other rights which the Purchaser, the Servicing Agent and
their respective officers, directors,
25
employees, and agents may have hereunder, under the Statute or under applicable
law, the Seller hereby agrees to indemnify such parties and hold them harmless
from and against any and all damages, losses, claims, liabilities and related
costs and expenses (including attorneys' fees and disbursements), except for any
such damages, losses, claims or liabilities resulting from the gross negligence
or wilful misconduct of the Purchaser, the Servicing Agent and their respective
officers, directors, employees and agents, asserted against and incurred by any
of them as the sole and direct result of Seller's material breach of its
representations and warranties set forth in Section 7.01 or its covenants and
agreements as set forth in this Agreement.
SECTION 10.02. Notices to Seller. The Purchaser agrees to notify the
Seller upon its knowledge of a claim for which it intends to seek
indemnification under Section 10.01 from the Seller. The Seller agrees to assist
the parties indemnified under Section 10.01, to the extent reasonably requested
by them, in any action, suit or proceeding brought by or against them in
connection with the indemnification granted herein; provided, however, that to
the extent Seller shall be obligated to expend its own funds with respect to
such assistance, such expenditure shall be credited against any indemnification
obligation hereunder.
SECTION 10.03. Indemnification by Collection Agent. The Collection
Agent shall be liable in accordance herewith only to the extent of the
obligations specifically undertaken by the Collection Agent in such capacity
under this Agreement and shall have no other obligations or liabilities
hereunder. Without limiting (except as provided in this Agreement) any other
rights which the Purchaser, the Servicing Agent and their respective officers,
directors, employees, and agents may have hereunder, under the Statute or under
applicable law, the Collection Agent hereby agrees to indemnify such parties and
hold them harmless from and against any and all damages, losses, claims,
liabilities and related costs and expenses (including attorneys' fees and
disbursements) that may be asserted against and incurred by such parties as the
sole and direct result of Collection Agent's material breach of its
representations and warranties set forth in Section 7.02 or its covenants and
agreements as set forth in .this Agreement; provided, however, that the
Collection Agent shall not be liable for any portion of any such amount
resulting from the wilful misfeasance, bad faith or gross negligence of the
Purchaser or the Servicing Agent or any loss occasioned by any action or
omission in respect of which the Collection Agent has received instructions from
the Purchaser or Servicing Agent or by the failure of the Purchaser or the
Servicing Agent or their respective agents or designees to return any document
to the Collection Agent or any delay in doing so. In addition, if the Purchaser
becomes obligated to compensate the lenders under any of its Liquidity
Facilities or Credit Facilities for a reduction in the rate of return on their
capital due to a change in law or regulation, as more specifically provided in
the documents
26
relating to such Facilities, then the Collection Agent shall, subject to the
condition set forth below, reimburse the Purchaser for the amount of any such
compensation. Collection Agent's obligation to reimburse the Purchaser is
expressly conditioned upon the Purchaser having used its reasonable efforts to
reduce or eliminate its obligation to compensate such lenders.
SECTION 10.04. Notices to Collection Agent. The Purchaser agrees to
notify the Collection Agent upon its knowledge of a claim for which it intends
to seek indemnification under Section 10.03 from the Collection Agent. The
Collection Agent agrees to assist the parties indemnified under Section 10.03,
to the extent reasonably requested by them, in any action, suit or proceeding
brought by or against them in connection with the indemnification granted
herein; provided, however, that to the extent Collection Agent shall be
obligated to expend its own funds with respect to such assistance, such
expenditure shall be credited against any indemnification obligation hereunder.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Amendments, Etc. No amendment or waiver of, or consent
to departure from, any provision of this Agreement shall be effective unless it
is in writing and signed by the parties hereto and then such amendment, waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which it was given.
SECTION 11.02. Notices, Etc. All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be in writing
(including telecopier, telegraphic, telex or cable communication) and sent, as
to each party hereto, at its address set forth under its name on the signature
pages hereto, 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 when sent.
SECTION 11.03. Payments Net of Taxes. All payments by the Collection
Agent payable under this Agreement and the Conservation Bond shall, subject to
the provisions hereof, be made free and clear of, and without deduction for, any
present or future income, stamp or other taxes, fees, duties, withholdings or
other charges imposed by any taxing authority. If, after the Closing Date, and
after Purchaser has taken reasonable actions to avoid, eliminate, or reduce such
requirement, any law or regulation of any governmental authority requires that
the Collection Agent make any withholding or deduction from any payment by the
Collection Agent, then the Collection Agent will, subject to the provisions
hereof:
27
(a) pay to the relevant authority the full amount required to be
withheld or deducted;
(b) promptly forward to the Purchaser an official receipt or other
satisfactory documentation evidencing such payment to such authority; and
(c) pay to the Purchaser any additional amounts necessary to ensure
that the net amount actually received by the Purchaser will equal the full
amount it would have received had no such withholding or deduction been
required.
Notwithstanding the foregoing Collection Agent's obligation under Section
11.03(c) is conditioned upon Purchaser using its reasonable best efforts to
promptly obtain refunds or credits with respect to all taxes, fees, duties,
withholdings or other charges paid by Collection Agent pursuant to the foregoing
and Purchaser promptly paying such refunds and credits to Collection Agent.
SECTION 11.04. No Waiver: Remedies. No failure on the part of any
parties hereto 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 11.05. Binding Effect: Assignability. (a) This Agreement shall
be binding upon and inure to the benefit of the Seller, the Collection Agent,
the Purchaser, the Servicing Agent and their respective successors and assigns,
except that the Seller and the Collection Agent shall not have the right to
assign any interest herein without the prior written consent of the Purchaser.
The Purchaser may assign any of its rights or obligations hereunder to any
Person; provided that in the case of any such assignment proposed to be made
prior to the occurrence of a Seller's Event of Default or a Collection Agent's
Event of Default, the consent of the Seller and the Collection Agent (which
consent shall not be unreasonably withheld) shall be required and provided
further, that no such assignment may be made if as a result thereof there is a
material increase in the cost or liability or potential cost or liability to
Seller or the Collection Agent.
(b) This Agreement shall create and constitute the continuing
obligation of the parties hereto in accordance with its terms, and shall remain
in full force and effect until the Collection Date; provided, however, that
rights and remedies of the Purchaser under Article X and the provisions of
Section 11.07 shall survive any termination of this Agreement.
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SECTION 11.06. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Oregon.
SECTION 11.07. No Proceedings. The Seller, the Collection Agent and
the Servicing Agent each hereby agrees that it will not institute against the
Purchaser any bankruptcy, reorganization, insolvency or similar proceeding until
the date which is one hundred twenty-three days since the last day on which any
commercial paper notes or medium term notes issued by the Purchaser shall have
matured.
SECTION 11.08. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the same
agreement.
SECTION 11.09. Limited Recourse. Recourse for the payment of the
Conservation Bond shall be limited to the Collateral, and no recourse shall be
had directly or indirectly for the payment of the Conservation Bond or any part
thereof or any indebtedness represented thereby, against Seller, Collection
Agent, their Affiliates or any of their respective officers, directors,
employees or agents, provided, however, that the foregoing shall not limit the
recourse of the Purchaser and the Servicing Agent with respect to the
indemnification provisions set forth in Article X of this Agreement.
[remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of this 11th
day of October, 1996.
Seller: PORTLAND GENERAL ELECTRIC COMPANY.
By /s/ [illegible]
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Title: Assistant Treasurer
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▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: 503/464-2200
Purchaser: ASSET SECURITIZATION COOPERATIVE
CORPORATION
By
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Vice President
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: President
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Servicing Agent: CANADIAN IMPERIAL BANK OF
COMMERCE, as Servicing Agent
By
------------------------------------
Authorized Signatory
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Asset Securitization
Group
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
30
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of this 11th
day of October, 1996.
Seller: PORTLAND GENERAL ELECTRIC COMPANY.
By
------------------------------------
Title: Assistant Treasurer
▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: 503/464-2200
Purchaser: ASSET SECURITIZATION COOPERATIVE
CORPORATION
By /s/ [illegible]
------------------------------------
Vice President
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: President
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Servicing Agent: CANADIAN IMPERIAL BANK OF
COMMERCE, as Servicing Agent
By /s/ [illegible]
------------------------------------
Authorized Signatory
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Asset Securitization
Group
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
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Collection Agent: PORTLAND GENERAL ELECTRIC COMPANY.
By /s/ [illegible]
------------------------------------
Assistant Treasurer
▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: 503/464-2200