FIRST TIER RECEIVABLES SALE AGREEMENT dated as of August 31, 2006 between ANR PIPELINE COMPANY, as Originator and ANR FINANCE COMPANY, L.L.C., as Buyer
EXHIBIT
10.A
[EXECUTION
COPY]
FIRST
TIER
dated
as of
August 31, 2006
between
ANR
PIPELINE
COMPANY,
as
Originator
and
ANR
FINANCE
COMPANY, L.L.C.,
as
Buyer
Table
of
Contents
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Page
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ARTICLE
I AMOUNTS
AND TERMS
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1
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Section
1.1.
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Purchase
of
Receivables
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1
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Section
1.2.
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Payment
for
the Purchases
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2
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Section
1.3.
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Purchase
Price Credits and other Adjustments.
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4
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Section
1.4.
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Payments
and
Computations, Etc.
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5
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Section
1.5.
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Transfer
of
Records.
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5
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Section
1.6.
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Rights
under
Lock-Boxes and Blocked Accounts
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6
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Section
1.7
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Characterization
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6
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ARTICLE
II REPRESENTATIONS
AND WARRANTIES
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6
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Section
2.1.
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Representations
and Warranties of Originator
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6
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ARTICLE
III CONDITIONS
OF PURCHASE
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11
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Section
3.1.
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Conditions
Precedent to Initial Purchase
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11
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Section
3.2.
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Conditions
Precedent to Subsequent Purchases
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11
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ARTICLE
IV COVENANTS
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11
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Section
4.1.
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Affirmative
Covenants of Originator
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11
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Section
4.2.
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Negative
Covenants of Originator
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17
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ARTICLE
V TERMINATION
EVENTS
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19
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Section
5.1.
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Termination
Events
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19
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Section
5.2.
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Remedies
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21
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ARTICLE
VI INDEMNIFICATION
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21
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Section
6.1.
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Indemnities
by Originator
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21
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Section
6.2.
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Other
Costs
and Expenses
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23
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ARTICLE
VII MISCELLANEOUS
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23
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Section
7.1.
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Waivers
and
Amendments.
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23
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Section
7.2.
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Notices
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24
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Section
7.3.
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Protection
of
Ownership Interests of Buyer.
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24
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Section
7.4.
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Confidentiality.
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24
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Section
7.5.
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Bankruptcy
Petition.
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26
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Section
7.6.
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CHOICE
OF
LAW
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26
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Section
7.7.
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CONSENT
TO
JURISDICTION
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26
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Section
7.8.
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WAIVER
OF
JURY TRIAL
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26
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Section
7.9.
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Integration;
Binding Effect; Survival of Terms.
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27
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Section
7.10.
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Counterparts;
Severability; Section References
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27
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LIST
OF EXHIBITS
AND SCHEDULES
EXHIBIT
I Definitions
EXHIBIT
II Principal
Places Of
Business, Etc.
EXHIBIT
III Lock-Boxes;
Blocked
Accounts; Collection Banks
EXHIBIT
IV Form
of Compliance
Certificate
EXHIBIT
V Credit
and
Collection Policy
SCHEDULE A Documents
to be
Delivered to Buyer on or prior to the Purchase
SCHEDULE B Disclosure
Information Delivered
ANR
PIPELINE
COMPANY
FIRST
TIER
THIS
FIRST TIER
RECEIVABLES SALE AGREEMENT, dated as of August 31, 2006, is by and between
ANR PIPELINE COMPANY, a Delaware corporation (“Originator”),
and ANR FINANCE
COMPANY, L.L.C., a Delaware limited liability company (“Buyer”).
Unless defined
elsewhere herein, capitalized terms used in this Agreement shall have the
meanings assigned to such terms in, or as otherwise provided in, Exhibit I.
PRELIMINARY
STATEMENTS
Originator
now
owns, and from time to time hereafter will own, Receivables. Originator wishes
to sell and assign to Buyer, and Buyer wishes to purchase from Originator,
all
of Originator’s right, title and interest in and to such Receivables, together
with the Related Security and Collections with respect thereto. Originator
and
Buyer intend the transactions contemplated hereby to be true sales of the
Receivables from Originator to Buyer, providing Buyer with the full benefits
of
ownership of the Receivables, and Originator and Buyer do not intend these
transactions to be, or for any purpose to be characterized as, loans from Buyer
to Originator. Immediately following the purchase of Receivables from
Originator, (a) Buyer will sell and assign such Receivables, together with
the
Related Security and Collections with respect thereto, to ANR Funding Company,
L.L.C., a Delaware limited liability company (“Funding
LLC”)
pursuant to that
certain Second Tier Receivables Purchase Agreement dated as of August 31,
2006 (as the same may from time to time hereafter be amended, supplemented,
restated or otherwise modified, the “Second
Tier
Sale Agreement”)
between Buyer
and Funding LLC, and (b) Funding LLC will (i) issue undivided interests
(intended to constitute senior beneficial interests) in such Receivables and
the
associated Related Security and Collections pursuant to that certain Receivables
Purchase Agreement dated as of August 31, 2006 (as the same may from time
to time hereafter be amended, supplemented, restated or otherwise modified,
the
“Purchase
Agreement”)
among Funding
LLC, ANR Pipeline Company, as Servicer, the “Investors” and “Managing Agents”
from time to time party thereto and BNP Paribas, New York Branch, as Program
Agent (in such capacity, and including any successor agent appointed pursuant
to
the terms of the Purchase Agreement, the “Program
Agent”),
and (ii) issue
an undivided interest (intended to constitute a junior beneficial interest)
in
such Receivables and the associated Related Security and Collections to
Buyer.
ARTICLE
I
AMOUNTS
AND
TERMS
Section
1.1. Purchase
of
Receivables.
(a) Upon
the terms and
subject to the conditions hereof, Buyer hereby agrees to purchase, and
Originator hereby agrees to sell, all of Originator’s right, title and interest
in and to all of the Receivables (each such transaction, a “Purchase”).
On the date of
the initial Purchase from Originator, Buyer shall purchase, and Originator
shall
sell, transfer and convey, all of Originator’s right, title and interest in and
to all Receivables then outstanding, together with all Related Security relating
thereto and all Collections thereof. On each Business Day thereafter until
the
Termination Date, Buyer shall purchase, and Originator shall sell, transfer
and
convey, all of Originator’s right, title and interest in and to all Receivables
which were not previously purchased by Buyer hereunder, together in each case
with all Related Security relating thereto and all Collections thereof. Prior
to
making the initial Purchase hereunder, Buyer may request of Originator, and
Originator shall deliver, such approvals, opinions, information, reports or
documents as Buyer may reasonably request.
(b) It
is the intention
of the parties hereto that each Purchase of Receivables made hereunder shall
constitute a “sale of accounts” (as such term is used in Article 9 of the
UCC), which sales are absolute and irrevocable and shall provide Buyer with
the
full benefits of ownership of the Receivables. Except for the Purchase Price
Credits, Repurchase Prices and Special Adjustment Credits owed pursuant to
Section 1.3,
each sale of
Receivables hereunder is made without recourse to Originator; provided
that (i)
Originator shall be liable to Buyer for all representations, warranties and
covenants made by Originator pursuant to the terms of the Transaction Documents
to which Originator is a party, and (ii) such sale does not constitute and
is
not intended to result in an assumption by Buyer or any assignee thereof of
any
obligation of Originator or any other Person arising in connection with the
Receivables, the related Contracts, the Related Security or any other
obligations of Originator. In view of the intention of the parties hereto that
the Purchases of Receivables made hereunder shall constitute sales of such
Receivables rather than loans secured thereby, Originator agrees, on or prior
to
the Initial Cutoff Date and in accordance with Section 4.1(f)(ii),
to ▇▇▇▇ its
master data processing records relating to the Receivables with a legend
acceptable to Buyer and to the Program Agent (as Buyer’s assignee), evidencing
that Buyer has purchased such Receivables as provided in this Agreement and
to
note in its financial statements that the Receivables have been sold to Buyer.
Upon the request of Buyer or the Program Agent (as Buyer’s assignee), Originator
will execute and file such financing or continuation statements, or amendments
thereto or assignments thereof, and such other instruments or notices, as may
be
necessary or appropriate to perfect and maintain the perfection of Buyer’s
ownership interest in the Receivables and the Related Security and Collections
with respect thereto, or as Buyer or the Program Agent (as Buyer’s assignee) may
reasonably request.
Section
1.2. Payment
for the
Purchases.
(a) The
Purchase Price
for each Purchase of Receivables in existence on the close of business on the
Initial Cutoff Date shall be payable in full by Buyer to Originator on the
Initial Sale Date, and shall be paid to Originator in the following
manner:
(i) by
delivery of
immediately available funds, to the extent of funds made available to Buyer
in
connection with its subsequent sale of such Receivables to Funding LLC under
the
Second Tier Sale Agreement after the payment of its operating costs and any
amounts payable under the Second Tier Sale Agreement; and
(ii) the
balance, by
accepting a contribution to Buyer’s capital of Receivables having an aggregate
Purchase Price equal to the unpaid balance of the aggregate Purchase Prices
for
all Receivables in existence on the close of business on the Initial Cutoff
Date.
The
Purchase Price
for each Receivable coming into existence after the Initial Cutoff Date shall
be
due and owing in full by Buyer to Originator or its designee on the date each
such Receivable came into existence (except that Buyer may, with respect to
any
such Purchase Price, offset against such Purchase Price any amounts owed by
Originator to Buyer hereunder and which have become due but remain unpaid)
and
shall be paid to Originator in the manner provided in the following
paragraphs (b) and (c).
(b) With
respect to any
Receivables coming into existence after the Initial Cutoff Date, Buyer shall
pay
the Purchase Price therefor in the following manner:
(i) first,
by delivery of
immediately available funds on the Business Day on which purchase occurs to
the
extent of funds available to Buyer from its subsequent sale of the Receivables
to Funding LLC under the Second Tier Sale Agreement or other cash on
hand;
(ii) second,
on a deferred
basis in the manner provided in the following paragraph (c);
and
(iii) third,
to the extent not
paid pursuant to clause (i) or (ii) above and unless Buyer has declared the
Termination Date to have occurred pursuant to Section 5.2,
by accepting a
contribution to its capital of Receivables having a Purchase Price equal to
the
remaining unpaid balance of such Purchase Price.
(c) Although
the
Purchase Price for each Receivable purchased by Buyer pursuant to this Agreement
after the Initial Purchase Date shall be due and payable in full by Buyer to
Originator on the date such Receivable was so purchased, settlement of the
cash
portion of the Purchase Price between Buyer and Originator for purchases
occurring during any Monthly Period shall be deferred, to the extent Buyer
does
not have funds available from its subsequent sale of the Receivables to Funding
LLC under the Second Tier Sale Agreement or other cash on hand on such Business
Day and settled, with respect to all Receivables purchased by Buyer during
such
Monthly Period, on each subsequent Business Day on or prior to the next
following Monthly Settlement Date to the extent of funds available to Buyer
on
such Business Day from its subsequent sale of the Receivables to Funding LLC
under the Second Tier Sale Agreement, subject to any related Special Adjustment
Payments, or other cash on hand. Although settlement of the cash portion of
the
Purchase Price for Receivables shall be effected on a deferred basis as provided
herein, any capital contribution to Buyer pursuant to clause (iii)
of Section 1.2(b)
in connection with
the purchase thereof by Buyer shall be deemed to have occurred and shall be
effective as of the Business Day on which such purchase occurred.
(d) From
and after the
Termination Date, Originator shall not be obligated to (but may, at Originator’s
option) sell Receivables to Buyer or contribute Receivables to Buyer’s capital
pursuant to clause (iii)
of Section 1.2(b).
Section
1.3. Purchase
Price
Credits and other Adjustments.
(a) If
on any
day:
(i) the
Net Outstanding
Balance of a Receivable (other than the portion thereof constituting an
Additional Amount) is:
(A) reduced
as a result
of any defective or rejected goods or services, any discount or any adjustment
(including as a result of billing errors or rate adjustments) or otherwise
by
Originator (other than cash Collections on account of the Receivables),
or
(B) reduced
or canceled
as a result of a setoff in respect of any claim by any Person (whether such
claim arises out of the same or a related transaction or an unrelated
transaction), or
(ii) any
of the
representations and warranties set forth in Article II
are no longer true
with respect to any Receivable (unless such untrue representation or warranty
affects only any portion thereof constituting an Additional
Amount),
then,
in such
event, (x) unless Originator elects to repurchase such Receivable from Buyer
pursuant to clause (y) below and Buyer shall have reacquired such Receivable
from Funding LLC pursuant to Section 1.3(a)
of the Second Tier
Sale Agreement, Buyer shall be entitled to a credit (each, a “Purchase
Price
Credit”)
equal to (A) in
the case of clause (i) above, the amount of such reduction or cancellation,
or
(B) in the case of clause (ii) above, the Net Outstanding Balance of such
Receivable, or (y) if Originator elects to repurchase such Receivable from
Buyer
by delivering notice of such election to Buyer and its assigns, and Buyer shall
have reacquired such Receivable from Funding LLC pursuant to Section 1.3(a)
of the Second Tier
Sale Agreement, Originator shall repurchase such Receivable from Buyer, without
recourse, representation or warranty, for a repurchase price (each, a
“Repurchase
Price”)
equal to the Net
Outstanding Balance of such Receivable (without giving effect to any related
adjustment to such Net Outstanding Balance described in clause (i) above).
The
aggregate Purchase Price Credits and Repurchase Prices payable with respect
to
any day shall be due and payable within two Business Days after such day and
shall first
be applied as a
credit against the Purchase Price for the Receivables to be purchased by Buyer
on the date of the payment thereof up to the amount of the cash portion thereof
otherwise available to be paid to Originator in cash pursuant to clause (i)
or (ii)
of Section 1.2(b),
and second,
to the extent of
the balance thereof, paid in cash by Originator to Buyer on such
date.
(b) On
each day on
which there is a Special Adjustment Amount payable under the Purchase Agreement,
Buyer shall be entitled to a purchase price adjustment credit (each, a
“Special
Adjustment Credit”)
equal to the
amount of such Special Adjustment Amount, which shall be due and payable on
such
day and shall (i) first be applied as a credit against the Purchase Price for
the Receivables to be purchased by Buyer on the date of the payment thereof
up
to the amount of the cash portion thereof otherwise available to be paid to
Originator in cash pursuant to clause (i)
or (ii)
of Section 1.2(b),
after giving
effect to any reductions therein pursuant to Section 1.3(a)(i),
and (ii) second,
to the extent of the balance thereof, paid in cash by Originator to Buyer on
such date.
Section
1.4. Payments
and
Computations, Etc.
All amounts to be
paid or deposited by Buyer to Originator hereunder shall be paid or deposited
in
accordance with the terms hereof on the day when due in immediately available
funds to the account of Originator as is designated from time to time by
Originator or as otherwise directed by Originator. All amounts to be paid by
Originator to Buyer hereunder shall be paid in accordance with the terms hereof
on the day when due in immediately available funds for the account of Buyer
and
its assigns to the Collection Account maintained under the Purchase Agreement
or
as otherwise directed by Buyer with the consent of the Program Agent. In the
event that any payment owed by any Person hereunder becomes due on a day that
is
not a Business Day, then such payment shall be made on the next succeeding
Business Day. If any Person fails to pay any amount hereunder when due, such
Person agrees to pay, on demand, the Default Fee in respect thereof until paid
in full; provided
that such Default
Fee shall not at any time exceed the maximum rate permitted by applicable law.
All computations of interest payable hereunder shall be made on the basis of
a
year of 360 days for the actual number of days (including the first but
excluding the last day) elapsed.
Section
1.5. Transfer
of
Records.
(a) In
connection with
the Purchase of Receivables hereunder, Originator hereby sells, transfers,
assigns and otherwise conveys to Buyer all of Originator’s right and title to
and interest in the Records (to the extent assignable) relating to all
Receivables sold hereunder, without the need for any further documentation
in
connection with the Purchase. In connection with such transfer, Originator
hereby grants to each of Buyer, Funding LLC, the Program Agent and the Servicer
an irrevocable, nonexclusive license to use, without royalty or payment of
any
kind, all software used by Originator to account for the Receivables, to the
extent necessary to administer the Receivables, whether such software is owned
by Originator or is owned by others and used by Originator under license
agreements with respect thereto; provided
that should the
consent of any licensor of Originator to such grant of the license described
herein be required, Originator hereby agrees that upon the request of Buyer,
Funding LLC, the Program Agent or the Servicer, such license is subject to
obtaining such consent and at the reasonable request of Buyer or its assignees
(including the Program Agent) Originator will request the consent of such
third-party licensor and use commercially reasonable efforts to cooperate with
Buyer or its assignees (including the Program Agent) in obtaining such consent
(it being understood that Originator shall not be responsible for payment of
any
fee payable in connection with obtaining such consent). The license granted
hereby shall be irrevocable, and shall terminate on the date this Agreement,
the
Second Tier Sale Agreement and the Purchase Agreement terminate in accordance
with their terms.
(b) Originator
(i)
shall take such action reasonably requested by Buyer or the Program Agent (as
Buyer’s assignee), from time to time hereafter, that may be necessary or
appropriate to ensure that Buyer and its assigns under the Purchase Agreement
have an enforceable ownership interest in the Records (to the extent assignable)
relating to the Receivables purchased from Originator hereunder, and (ii) shall
use its reasonable efforts to ensure that the Program Agent and the Servicer
each has an enforceable right (whether by license or sublicense or otherwise)
to
use all of the computer software used to account for the Receivables and/or
to
recreate such Records.
Section
1.6. Rights
under
Lock-Boxes and Blocked Accounts.
In consideration
of Buyer’s purchase of Receivables hereunder, Originator hereby sells and
assigns to Buyer (and its assigns), all of Originator’s rights under, in and to
(but none of its obligations under) each Lock-Box and Blocked Account and all
agreements relating thereto.
Section
1.7. Characterization.
If,
notwithstanding the intention of the parties expressed in Section 1.1(b),
any sale or
contribution by Originator to Buyer of Receivables hereunder shall be
characterized as a secured loan and not a sale or such sale shall for any reason
be ineffective or unenforceable, then this Agreement shall be deemed to
constitute a security agreement under the UCC and other applicable law. For
this
purpose and without being in derogation of the parties’ intention that each sale
of Receivables hereunder shall constitute a true sale thereof, Originator hereby
grants to Buyer a duly perfected security interest in all of Originator’s right,
title and interest in, to and under all of the Receivables purchased or intended
to be purchased by Buyer hereunder now existing and hereafter arising, all
Collections, Related Security and (to the extent assignable) Records with
respect thereto, each Lock-Box and Blocked Account and all agreements related
thereto and all proceeds of the foregoing, which security interest shall be
prior to all other Adverse Claims thereto. After the occurrence of a Termination
Event, Buyer and its assigns shall have, in addition to the rights and remedies
which they may have under this Agreement, all other rights and remedies provided
to a secured creditor after default under the UCC and other applicable law,
which rights and remedies shall be cumulative.
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES
Section
2.1. Representations
and Warranties of Originator.
Originator hereby
represents and warrants to Buyer that:
(a) Corporate
Existence and Power.
It is a
corporation duly organized, validly existing and in good standing under the
laws
of its state of organization, and is duly qualified to do business and is in
good standing as a foreign entity, and has and holds all corporate power, and
all governmental licenses, authorizations, consents and approvals required
to
carry on its business in each jurisdiction in which its business is conducted
except where the failure to so qualify or so hold could not reasonably be
expected to have a Material Adverse Effect.
(b) Power
and
Authority; Due Authorization; Execution and Delivery.
The execution and
delivery by it of this Agreement and each other Transaction Document to which
it
is a party, the performance of its obligations hereunder and thereunder and
its
use of the proceeds of the Purchases made hereunder, are within its powers
and
authority, corporate or otherwise, and have been duly authorized by all
necessary action, corporate or otherwise, on its part. This Agreement and each
other Transaction Document to which it is a party have been duly executed and
delivered by it.
(c) No
Conflict.
The execution and
delivery by it of this Agreement and each other Transaction Document to which
it
is a party, and the performance of its obligations hereunder and thereunder
do
not contravene or violate (i) its certificate of incorporation or bylaws,
(ii) any law, rule or regulation applicable to it, including the Natural
Gas Act, as amended, and the rules and regulations of FERC thereunder,
(iii) any restrictions under any agreement, contract or instrument to which
it is a party or by which it 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 assets of it or its Subsidiaries (except as created hereunder) except,
in any case, where such contravention or violation could not reasonably be
expected to have a Material Adverse Effect; and no transaction contemplated
hereby requires compliance with any bulk sales act or similar law.
(d) Governmental
Authorization.
No authorization
or approval or other action by, and no notice to or filing with (except as
have
been given, made or obtained), any governmental authority or regulatory body
(including FERC) is required for the due execution and delivery by it of this
Agreement and each other Transaction Document to which it is a party and the
performance of its obligations hereunder and thereunder, except for the filing
of the financing statements required hereunder, which filings have been duly
made. Buyer does not, and will not during the term of this Agreement, engage
in
the transportation of natural gas in interstate commerce, or the sale in
interstate commerce of such gas for resale. No authorization or approval or
other action by, and no notice to or filing with FERC is required for the due
execution and delivery by Buyer of this Agreement and each other Transaction
Document to which it is a party and the performance of its obligations hereunder
and thereunder.
(e) Actions,
Suits.
There is no
litigation, action, suit or other legal or governmental proceeding pending,
or
to the best of its knowledge, threatened, against or affecting it, or any of
its
properties, in equity, or before or by any court, arbitrator or governmental
authority relating to the transactions under this Agreement which, in any such
case, could reasonably be expected to have a Material Adverse Effect, except
for
the proceedings described in Originator’s annual report on Form 10-K for the
year ended December 31, 2005 (“2005
Form
10-K”)
or its quarterly
report on Form 10-Q for the fiscal quarter ended June 30, 2006 (the
“2nd
Quarter 2006
10-Q”)
as filed with
the Securities and Exchange Commission.
(f) Binding
Effect.
This Agreement
and each other Transaction Document to which it is a party constitute its legal,
valid and binding obligations, enforceable against it 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.
All written
information heretofore furnished by it or any of its Affiliates to Buyer (or
its
assigns) (i) pursuant to any requirement of this Agreement or any of the other
Transaction Documents or (ii) listed or described on Schedule B hereto, is
or, when furnished will be, true and accurate in all material respects on the
date such information is stated or certified and does not and will not, when
furnished, contain any material misstatement of fact or omit to state a material
fact or any fact necessary to make the statements contained therein, when taken
as a whole, not misleading (it being recognized that any projections or
forecasts provided to Buyer or its assigns are based on estimates and
assumptions believed in good faith by Originator on the date hereof or (if
later) the date of delivery to be reasonable as of their date, and that actual
results during the periods covered by such projections or forecasts may differ
from projected or forecasted results).
(h) Use
of
Proceeds.
No proceeds of
the Purchases hereunder will be used (i) for a purpose that violates, or
would be inconsistent with, Regulation T, U or X promulgated by the Board of
Governors of the Federal Reserve System from time to time or (ii) to
acquire any security in any transaction which is subject to Section 12, 13
or 14 of the Securities Exchange Act of 1934, as amended.
(i) Good
Title.
As of the time
each Receivable created by it came into existence, it shall be the legal and
beneficial owner of each such Receivable and Related Security and Collections
with respect thereto, free and clear of any Adverse Claim, except as created
by
the Transaction Documents. There have been duly filed all financing statements
or other similar instruments or documents, if any, necessary under the UCC
of
all appropriate jurisdictions to perfect its 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 transfer to Buyer (and Buyer shall acquire from it) legal and
equitable title to, with the right to sell and encumber each Receivable existing
or hereafter arising, together with the Related Security and Collections with
respect thereto, free and clear of any Adverse Claim, except as created by
the
Transaction Documents. There have been duly filed all financing statements
or
other similar instruments or documents necessary under the UCC (or any
comparable law) of all appropriate jurisdictions to perfect Buyer’s ownership
interest in the Receivables, the Related Security and the
Collections.
(k) Places
of
Business etc.
Its principal
places of business, chief executive office, jurisdiction of incorporation or
formation and the principal offices where it keeps its Records are located
at
the address(es) and in the jurisdictions listed on Exhibit II
or such other
locations of which Buyer has been notified in accordance with Section 4.2(a)
in jurisdictions
where all action required by Section 4.2(a)
has been taken and
completed. Its Federal Employer Identification Number and the organizational
identification number from its jurisdiction of incorporation are correctly
set
forth on Exhibit II.
In the past five
years, it has not used any corporate names, trade names or assumed names other
than as listed on Exhibit II.
(l) Collections.
The names and
addresses of all Collection Banks in existence on the Closing Date, together
with the account numbers of the Blocked Accounts at each Collection Bank and
the
post office box number of each Lock-Box, are listed on Exhibit III.
(m) Financial
Statements; Material Adverse Effect.
(i) The
consolidated balance sheet of Originator and its consolidated subsidiaries
as at
December 31, 2005, and the related consolidated statements of income, changes
in
shareholders equity and cash flows for the fiscal year then ended, reported
on
by PricewaterhouseCoopers LLP, independent public accountants, copies of which
have been furnished to Buyer prior to the date hereof, present fairly, in all
material respects, the consolidated financial condition of Originator and its
consolidated subsidiaries as at such date and the consolidated results of the
operations of Originator and its consolidated subsidiaries for the period ended
on such date, all in accordance with GAAP. (ii) The consolidated balance
sheet of Originator and its consolidated subsidiaries as at June 30, 2006
and the related consolidated statements of income, changes in shareholders
equity and cash flows for the fiscal periods then ended, copies of which have
been furnished to Buyer on or prior to the date hereof, present fairly, in
all
material respects, the consolidated financial condition of Originator and its
consolidated subsidiaries as at such date and the consolidated results of the
operations of Originator and its consolidated subsidiaries for the periods
ended
on such date, all in accordance with GAAP, subject in the case of such unaudited
statements to normal year-end audit adjustments and reduced footnote disclosure.
(iii) Since June 30, 2006 no event has occurred that would reasonably
be expected to have a Material Adverse Effect.
(n) Ownership
of
Buyer.
Originator owns,
directly or indirectly, 100% of the issued and outstanding equity interests
of
Buyer, free and clear of any Adverse Claim. Such equity interests are validly
issued, fully paid and nonassessable, and there are no outstanding options,
warrants or other rights to acquire equity interests or securities of
Buyer.
(o) Not
an
Investment Company.
It is not an
“investment company” within the meaning of the Investment Company Act of 1940,
as amended, or any successor statute.
(p) Compliance
with
Law.
It and its
Subsidiaries have complied in all respects with all applicable laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or awards to which
it or they may be subject, except where the failure to so comply 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 the Natural Gas Act, the rules
and
regulations of FERC thereunder and laws, rules and regulations relating to
truth
in lending, fair credit billing, fair credit reporting, equal credit
opportunity, fair debt collection practices and privacy), and no part of such
Contract is in violation of any such law, rule or regulation, in each case
except where such contravention or violation could not reasonably be expected
to
have a material adverse effect on the collectibility of such Receivable (other
than Additional Amounts) or a Material Adverse Effect.
(q) Taxes.
It and its
Subsidiaries have duly filed all tax returns required to be filed by it, and
has
duly paid and discharged all taxes, assessments and governmental charges upon
it
or against its properties now due and payable, the failure to file or pay which,
as applicable, would have a Material Adverse Effect, unless and to the extent
only that the same are being contested in good faith and by appropriate
proceedings by it or such Subsidiary.
(r) ERISA.
No Plan
Termination Event has occurred or is reasonably expected to occur with respect
to any Plan which, with the giving of notice or lapse of time, or both, would
constitute a Termination Event. Each Plan has complied with the applicable
provisions of ERISA and the Internal Revenue Code of 1986 where the failure
to
so comply would reasonably be expected to result in a Material Adverse Effect.
Neither Originator nor any ERISA Affiliate has incurred, or is reasonably
expected to incur, any withdrawal liability (within the meaning given to such
term under Part 1 of Subtitle E of Title IV of ERISA) to any Multiemployer
Plan
which, when aggregated with all other amounts required to be paid to
Multiemployer Plans in connection with such withdrawal liability (as of the
date
of determination), would have a Material Adverse Effect. Neither Originator
nor
any ERISA Affiliate has received any notification that any Multiemployer Plan
is
in reorganization, insolvent or has been terminated, within the meaning of
Title
IV of ERISA, and no Multiemployer Plan is reasonably expected to be in
reorganization, to be insolvent or to be terminated within the meaning of Title
IV of ERISA the effect of which reorganization, insolvency or termination would
be the occurrence of a Termination Event.
(s) Environmental
Matters.
Except for
matters described in the 2005 Form 10-K or the 2nd
Quarter 2006 10-Q
and such other matters that, in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect, neither it nor any of its Subsidiaries
has failed to comply with any Environmental Law or to obtain, maintain or comply
with any permit, license or other approval required under any Environmental
Law,
is subject to any Environmental Liability, has received notice of any claim
with
respect to any Environmental Liability or knows of any basis for any
Environmental Liability.
(t) Insurance.
It has adequate
insurance for itself and its Subsidiaries and its and their properties from
financially sound and reputable insurance companies that are not affiliates
of
Originator in such amounts and covering such risks (with such types and amounts
of retained risk) as available on commercially reasonable economic terms and
are
customarily carried by companies engaged in similar businesses and owning
similar properties in localities where Originator and its Subsidiaries
operate.
(u) Compliance
with
Tariff and Credit and Collection Policy.
It has complied
in all material respects with the applicable Tariff and the applicable Credit
and Collection Policy with regard to each Receivable (excluding any Additional
Amounts, as to which no representation is made) originated by it and the related
Contract, and has not made any change to such Credit and Collection Policy
other
than as permitted under Section 4.2(c)
and in compliance
with the notification requirements in Section 4.1(b)(iii).
(v) Payments
to
Originator.
With respect to
each of the Receivables originated by it and transferred to Buyer hereunder,
the
Purchase Price received by it constitutes reasonably equivalent value in
consideration therefor and such transfer was not made for or on account of
an
antecedent debt. No transfer by it of any Receivable hereunder is or may be
voidable under any section of the Federal Bankruptcy Code or other statutory
provisions or common law or equitable action by any Person.
(w) Enforceability
of Contracts.
Each Contract
with respect to each Receivable originated by it 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 such 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); provided
that no
representation is made in this paragraph regarding Additional
Amounts.
(x) Eligible
Receivables.
Each Receivable
included in the Net Receivables Pool Balance as an Eligible Receivable on the
date it came into existence was an Eligible Receivable on such
date.
(y) Compliance
with
Representations.
On and as of the
date of each Purchase and on and as of each subsequent date each Receivable
created by it came into existence, it hereby represents and warrants that all
of
the other representations and warranties set forth in this Article II
are true and
correct on and as of each such date (and after giving effect to all Receivables
in existence on each such date) as though made on and as of each such
date.
ARTICLE
III
CONDITIONS
OF
PURCHASE
Section
3.1. Conditions
Precedent to Initial Purchase.
The initial
Purchase under this Agreement is subject to the conditions precedent that
(a) Buyer shall have received on or before the date of such purchase those
documents listed on Schedule A
and (b) all
of the conditions to the initial purchase under the Second Tier Sale Agreement
and the Purchase Agreement shall have been satisfied or waived in accordance
with the terms thereof.
Section
3.2. Conditions
Precedent to Subsequent Purchases.
Buyer’s
obligation to Purchase Receivables coming into existence after the Initial
Cutoff Date shall be subject to the further conditions precedent that
(a) the Amortization Date shall not have occurred; and (b) Buyer (or
its assigns) shall have received such other approvals, opinions or documents
as
it may reasonably request.
ARTICLE
IV
COVENANTS
Section
4.1. Affirmative
Covenants of Originator.
Until the date on
which this Agreement terminates in accordance with its terms, Originator hereby
covenants, as to itself, as set forth below:
(a) Financial
Reporting.
It will maintain,
for itself and each of its Subsidiaries, a system of accounting established
and
administered in accordance with GAAP, and furnish to Buyer (and its
assigns):
(i) Annual
Reporting.
Within 120 days
after the close of each of Originator’s fiscal years (or, if earlier, the date
on which Originator is required to file its Annual Report on Form 10-K with
the
Securities and Exchange Commission with respect to such fiscal year), the
audited consolidated balance sheet of Originator and its consolidated
subsidiaries as at the end of such fiscal year and the related audited
consolidated statements of income and cash flows for such fiscal year, certified
by Ernst & Young LLP, independent public accountants, or another firm
of independent public accountants acceptable to Buyer and the Program Agent,
as
fairly presenting, in all material respects, the financial condition of
Originator and its consolidated subsidiaries as at such date and the
consolidated results of the operations of Originator and its consolidated
subsidiaries for the fiscal year ended on such date, all in accordance with
GAAP.
(ii) Quarterly
Reporting.
Within 60 days
after the close of the first three (3) fiscal quarters of each of Originator’s
fiscal years (or, if earlier, the date on which Originator is required to file
its Quarterly Report on Form 10-Q with the Securities and Exchange Commission
with respect to such quarter), the consolidated balance sheet of Originator
and
its consolidated subsidiaries as at the end of such fiscal quarter and the
related audited consolidated statements of income and cash flows for such fiscal
year, certified by a Responsible Officer of Originator as fairly presenting,
in
all material respects, the financial condition of Originator and its
consolidated subsidiaries as at such date and the consolidated results of the
operations of Originator and its consolidated subsidiaries for the period and
portion of the fiscal year ended on such date, all in accordance with GAAP,
subject to normal year-end audit adjustments and reduced footnote
disclosure.
(iii) Compliance
Certificate.
Together with the
financial statements with respect to Originator required hereunder, a compliance
certificate in substantially the form of Exhibit IV
signed by
Originator’s Responsible Officer and dated the date of such annual financial
statement or such quarterly financial statement, as the case may
be.
The
electronic
posting of any financial statements, reports or other items required to be
furnished pursuant to the foregoing clauses (i)
or (ii)
of this
Section
4.1(a)
or clause
(i)
of Section 4.1(b)
at ▇▇▇.▇▇▇▇▇▇.▇▇▇
or another website
identified by notice to Buyer and the Program Agent and accessible by the public
shall constitute delivery for all purposes of this Section 4.1.
(b) Notices.
It will notify
Buyer (and its assigns) in writing of or, if applicable, provide Buyer (and
its
assigns) copies of the following:
(i) Certain
Governmental Filings.
(A) Promptly
after the sending or filing thereof, all publicly available reports that
Originator sends to any of its security holders and copies of all publicly
available reports and registration statements that Originator files with the
Securities and Exchange Commission or any national securities exchange other
than registration statements relating to employee benefit plans and to
registrations of securities for selling security holders, and (B) within 10
days
after sending or filing thereof, FERC Form No. 2: Annual Report of Major Natural
Gas Companies, sent or filed by Originator with FERC with respect to each of
its
fiscal years.
(ii) Change
in
Tariffs.
Promptly and in
any event at least thirty (30) days prior to the effectiveness thereof, (A)
any
order of FERC which provides for a material change in, or the suspension of,
the
rates or services of Originator (including any order which permits rates to
go
or continue in effect subject to refund), and (B) in the event of any other
material change in or material amendment to any Tariff affecting a material
portion of the Receivables, the applicable amended or changed portion of the
Tariff and a notice indicating such change or amendment.
(iii) 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 materially adversely affect the collectibility of the Receivables
(other than any portion thereof constituting an Additional Amount) originated
by
it or materially decrease the credit quality of any newly created Receivables
(other than Additional Amounts), requesting Buyer to obtain any consent thereto
required under the terms of the Second Tier Sale Agreement.
(iv) 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 Transaction
Document from any Person other than Buyer or the Program Agent, copies of the
same.
(v) Other
Information.
Promptly, from
time to time, such other information, documents, records or reports relating
to
the Receivables or its ability to perform its obligations under this Agreement
as Buyer (or its assigns) may from time to time reasonably request in order
to
protect the interests of Buyer (and its assigns) under or as contemplated by
this Agreement.
(c) It
will notify
Buyer (and its assigns) in writing of any of the following describing the same
and, if applicable, the steps being taken with respect thereto:
(i) Termination
Events or Potential Termination Events.
Promptly (and in
any case within two Business Days) upon a Responsible Officer’s actual knowledge
of each Termination Event and each Potential Termination Event, by a statement
of one of its Responsible Officers.
(ii) Litigation
and
Proceedings.
Promptly, notice
of all litigation and of all proceedings before any governmental authority
against or involving Originator or any of its Subsidiaries, except any
litigation or proceeding that in the reasonable judgment of Originator (taking
into account the availability of appeals) is not likely to have a Material
Adverse Effect.
(iii) Certain
ERISA
Events.
(A) Promptly and
in any event (x) within 30 days after Originator or any ERISA Affiliate knows
or
has reason to know that any Plan Termination Event described in clause (a)
of the definition of Plan Termination Event with respect to any Plan has
occurred that could reasonably be expected to have a Material Adverse Effect,
and (y) within 10 days after Originator or any ERISA Affiliate knows or has
reason to know that any other Plan Termination Event with respect to any Plan
has occurred, a statement of a Responsible Officer describing such Termination
Event and the action, if any, that Originator or such ERISA Affiliate proposes
to take with respect thereto; (B) promptly and in any event within five Business
Days after receipt thereof by Originator or any ERISA Affiliate, copies of
each
notice received by Originator or any ERISA Affiliate from the PBGC stating
its
intention to terminate any Plan or to have a trustee appointed to administer
any
Plan which termination could reasonably be expected to have a Material Adverse
Effect; (C) promptly and in any event within five Business Days after receipt
thereof by Originator or any ERISA Affiliate from the sponsor of a Multiemployer
Plan, a copy of each notice received by Originator or any ERISA Affiliate
concerning (w) the imposition of withdrawal liability (within the meaning given
to such term under Part 1 of Subtitle E of Title IV of ERISA) by a Multiemployer
Plan, (x) the determination that a Multiemployer Plan is, or is expected to
be,
in reorganization or insolvent within the meaning of Title IV of ERISA, (y)
the
termination of a Multiemployer Plan within the meaning of Title IV of ERISA,
or
(z) the amount of liability incurred, or expected to be incurred, by Originator
or any ERISA Affiliate in connection with any event described in clause (A),
(B), or (C) above, in each case if such event could reasonably be expected
to
have a Material Adverse Effect.
(iv) Material
Adverse
Effect.
The occurrence of
any event or condition that has, or could reasonably be expected to have, a
Material Adverse Effect.
(v) Defaults
Under
Other Agreements.
If any
Indebtedness of Originator or any of its Subsidiaries in excess of $25,000,000
shall have become due prior to its stated maturity, or any such Indebtedness
of
Originator or any of its Subsidiaries shall be declared to be due and payable
or
required to be prepaid, repurchased, redeemed or defeased (other than by a
regularly scheduled payment or a prepayment upon the sale of assets otherwise
permitted thereunder), prior to the date of maturity thereof, by reason of
a
payment default by Originator or any of its Subsidiaries or a default by
Originator or any of its Subsidiaries in the performance of any term, provision
or condition contained in any agreement under which any such Indebtedness was
created or is governed.
(d) Compliance
with
Laws and Preservation of Corporate Existence.
It will comply in
all respects with all applicable laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject, and will
obtain and maintain all applicable authorizations or approvals from governmental
authorities or regulatory bodies (including FERC), except where the failure
to
so comply or to obtain or maintain such authorization or approval could not
reasonably be expected to have a Material Adverse Effect. It will preserve
and
maintain its corporate existence, rights, franchises and privileges in the
jurisdiction of its organization, and qualify and remain qualified in good
standing as a foreign entity in each jurisdiction where its business is
conducted, except where the failure to so preserve and maintain or qualify
could
not reasonably be expected to have a Material Adverse Effect.
(e) Audits.
It will furnish
to Buyer and the Program Agent (as Buyer’s assignee) and their respective
representatives at all times, upon reasonable prior notice, reasonable full
access during regular business hours to all of its offices and Records
(wheresoever located, including any repository used to store any such Records),
as appropriate to verify its compliance with this Agreement, and permit Buyer
and the Program Agent (as Buyer’s assignee) and their representatives to examine
and audit the same, and make photocopies and/or computer tape or other digital
media replicas thereof, and it agrees to render to Buyer and the Program Agent
(as Buyer’s assignee) and their representatives, at its sole cost and expense,
such clerical and other assistance as may be reasonably requested with regard
thereto. Buyer and the Program Agent (as Buyer’s assignee) and their respective
representatives shall also have the right to discuss its affairs with its
officers and to verify under appropriate procedures the validity, amount,
quality, quantity, value and condition of, or any other matter relating to,
the
Receivables and the Related Security. Prior to the occurrence of a Termination
Event, the number and frequency of any such audits by the Program Agent (as
Buyer’s assignee) shall be limited to such number and frequency as shall be
reasonable in the exercise of the Program Agent’s reasonable commercial
judgment, but shall in no event exceed one such audit per year. Each such audit
shall be at the sole expense of Originator.
(f) Keeping
and
Marking of Records and Books.
(i) It
will maintain
and implement administrative and operating procedures (including 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 records adequate to permit the immediate identification
of each new Receivable and all Collections of and adjustments to each existing
Receivable). It will give Buyer (or its assigns) notice of any material change
in the administrative and operating procedures referred to in the previous
sentence.
(ii) It
will at all
times maintain an account in its master records indicating the aggregate amount
of Receivables (A) sold by it to the Buyer hereunder, (B) sold by the Buyer
to
Funding LLC under the Second Tier Sale Agreement, and (C) in which Funding
LLC
has issued undivided interests to or pledged to the Program Agent under the
Purchase Agreement.
(g) Compliance
with
Contracts and Credit and Collection Policy.
It will timely
and fully (i) perform and comply in all material respects with all
provisions, covenants and other promises required to be observed by it under
the
Contracts related to the Receivables to the extent a failure to comply would
adversely affect the collectibility of such Receivables, and (ii) comply in
all material respects with the Credit and Collection Policy in regard to each
Receivable and the related Contract. It will pay when due any taxes payable
in
connection with the Receivables, exclusive of taxes on or measured by income
or
gross receipts of Buyer and its assigns, unless and to the extent only that
the
same are being contested in good faith and by appropriate proceedings by
Originator.
(h) Ownership.
It will take all
necessary action to establish and maintain, irrevocably in Buyer, legal and
equitable title to the Receivables originated by it, and to the Related Security
and the Collections with respect to such Receivables, free and clear of any
Adverse Claims other than Adverse Claims in favor of Buyer (and its assigns)
(including the filing of all financing statements or other similar instruments
or documents necessary under the UCC of all appropriate jurisdictions to perfect
Buyer’s interest in such Receivables, Related Security and Collections and such
other action to perfect, protect or more fully evidence the interest of Buyer
as
Buyer (or its assigns) may reasonably request).
(i) Investors’
Reliance.
It acknowledges
that the Program Agent and the Investors are entering into the transactions
contemplated by the Purchase Agreement in reliance upon the identity of each
of
Buyer and Funding LLC as a legal entity that is separate from Originator and
any
of its other Affiliates. Therefore, from and after the date of execution and
delivery of this Agreement, it will take all reasonable steps including all
steps that Buyer, Funding LLC or any assignee of Buyer or Funding LLC may from
time to time reasonably request to maintain the identity of each of Buyer and
Funding LLC as a separate legal entity and to make it manifest to third parties
that each of Buyer and Funding LLC is an entity with assets and liabilities
distinct from those of Originator and any of its other Affiliates and not just
a
division of Originator or any such Affiliate. Without limiting the generality
of
the foregoing and in addition to the other covenants set forth herein, it (i)
will not hold itself out to third parties as liable for the debts of Buyer
or
Funding LLC nor purport to own the Receivables and other assets acquired by
Buyer or Funding LLC, (ii) will take all other actions necessary on its part
to
ensure that each of Buyer and Funding LLC is at all times in compliance with
the
covenants set forth in Section 4.1(j)
of the Second Tier
Sale Agreement or Section 7.1(j)
of the Purchase
Agreement, as applicable, and (iii) will cause all tax liabilities arising
in
connection with the transactions contemplated herein or otherwise to be
allocated between it, on the one hand, and each of Buyer and Funding LLC, on
the
other, on an arm’s-length basis and in a manner consistent with the procedures
set forth in U.S. Treasury Regulations §§1.1502-33(d) and 1.1552-1.
(j) Collections.
It will:
(i) (A)
At any time
that neither an Amortization Event nor a Collection Notice Event exists, direct
all Obligors to remit all Collections, and use reasonable commercial efforts
to
cause all Collections to be remitted by the applicable Obligor, directly to
either a Lock-Box or Blocked Account and (B) at any time either an Amortization
Event or a Collection Notice Event exists, direct Obligors to remit all
Collections, and use reasonable commercial efforts to cause all Collections
to
be remitted by the applicable Obligor, directly to either a Lock-Box or a
Blocked Account, and, at Buyer’s or Program Agent’s (as assignee of Buyer)
request, transfer the Collections processing function to a third-party
Collections processing company,
(ii) direct
the entity
holding each Lock-Box and otherwise use commercially reasonable efforts to,
and,
to the extent within its control cause, all proceeds from all Lock-Boxes to
be
deposited into a Blocked Account, and
(iii) cause
each Blocked
Account to be subject at all times to a control agreement or Blocked Account
Agreement that is in full force and effect. In the event any payments relating
to Receivables are remitted directly to it or any of its Affiliates, it will
use
commercially reasonable efforts to identify such payment as soon as practical
and will remit (or will cause all such payments to be remitted) directly to
a
Collection Bank and deposited into a Blocked Account within the earlier to
occur
of (A) ten days following receipt thereof and (B) two Business Days following
the identification thereof, and, at all times prior to such remittance, it
will
itself hold or, if applicable, will cause such payments to be held in trust
for
the exclusive benefit of Buyer and its assigns. It will transfer exclusive
ownership, dominion and control of each Lock-Box and Blocked Account to Buyer
(and its assigns) and, will not grant the right to take dominion and control
of
any Lock-Box or Blocked Account at a future time or upon the occurrence of
a
future event to any Person, except to Buyer (or its assigns) as contemplated
by
this Agreement, the Second Tier Sale Agreement and the Purchase
Agreement.
(k) Taxes.
It will file all
tax returns and reports required by law to be filed by it and promptly pay
all
taxes and governmental charges at any time owing, except any such taxes which
are not yet delinquent or are being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance with
GAAP
(if any) shall have been set aside on its books or where the failure to so
file
or pay could not reasonably be expected to have a Material Adverse
Effect.
(l) Insurance.
It will maintain
in effect, or cause to be maintained in effect, insurance for itself and its
Subsidiaries and its and their properties from financially sound and reputable
insurance companies in such amounts and covering such risks (with such types
and
amounts of retained risk) as are customarily carried by companies engaged in
similar businesses and owning similar properties in the same general areas
in
which Originator and its Subsidiaries operate and which is available on
commercially reasonable terms. It will pay or cause to be paid the premiums
therefor.
(m) Operation
of
Pipelines.
It will (i)
remain an open access transporter, to retain its blanket certificate under
Part
284 of Title 18 of the Code of Federal Regulations, and (ii) operate its
currently constituted transmission pipelines, as they may be expanded from
time
to time, in an efficient and business-like manner or to maintain all necessary
FERC and other governmental authorizations and approvals necessary to operate
its currently constituted transmission pipeline business, as it may be expanded
from time to time.
Section
4.2. Negative
Covenants of Originator.
Until the date on
which this Agreement terminates in accordance with its terms, Originator hereby
covenants that:
(a) Name
Change,
Offices and Records.
It will not (i)
change its name, identity or corporate structure (within the meaning of the
applicable enactment of the UCC) or relocate its chief executive office or
any
office where Records are kept unless it shall have: (A) given Buyer (or its
assigns) at least forty-five (45) days’ prior written notice thereof and
(B) delivered to Buyer (or its assigns) all financing statements,
instruments, legal opinions and other documents requested by Buyer (or its
assigns) in connection with such change or relocation, or (ii) change its
jurisdiction of incorporation or formation (within the meaning of the applicable
enactment of the UCC) unless Buyer (and its assigns) shall have received from
Originator, prior to such change, (A) those items described in clause (i)
hereof, and (B) if Buyer (or its assigns) shall so request, an opinion of
counsel, in form and substance reasonably satisfactory to such Person, as to
Originator’s valid existence and good standing and the perfection and priority
of Buyer’s ownership or security interest in the Receivables, the Related
Security and Collections. In accordance with Section 7.9(b),
the provisions of
this Agreement shall apply to any successors or assigns.
(b) Change
in
Payment Instructions to Obligors.
It will not add
or terminate any bank as a Collection Bank, or make any change in the
instructions to Obligors regarding payments to be made to any Lock-Box or
Blocked Account, unless Buyer (or its assigns) shall have received, at least
ten
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 Collection Bank or a Blocked Account or Lock-Box, an executed Blocked
Account Agreement with respect to the new Blocked Account or Lock-Box;
provided
that it may make
changes in instructions to Obligors regarding payments if such new instructions
require such Obligor to make payments to another existing Blocked
Account.
(c) Modifications
to
Contracts and Credit and Collection Policy.
It will not make
any change to the Credit and Collection Policy that could reasonably be expected
to materially adversely affect the collectibility of the Receivables (other
than
any portion thereof constituting an Additional Amount) or materially decrease
the credit quality of any newly created Receivables (other than Additional
Amounts). Except as otherwise permitted in its capacity as Servicer pursuant
to
Article VIII
of the Purchase
Agreement, it will not extend, amend or otherwise modify the terms of any
Receivable (other than any portion thereof constituting an Additional Amount)
or
any Contract related thereto other than in accordance with the Credit and
Collection Policy.
(d) Sales,
Liens.
It 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
(including the filing of any financing statement) upon 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 Blocked Account,
or assign any right to receive income with respect thereto (other than, in
each
case, the creation of the interests therein in favor of Buyer provided for
herein), and it will defend the right, title and interest of Buyer in, to and
under any of the foregoing property, against all claims of third parties
claiming through or under it.
(e) Accounting
for
Purchase.
It will not, and
will not permit any Affiliate to, account for or treat (whether in financial
statements or otherwise) the transactions contemplated hereby in any manner
other than the sale of the Receivables and the Related Security by it to Buyer
or in any other respect account for or treat the transactions contemplated
hereby in any manner other than as a sale of the Receivables and the Related
Security by it to Buyer except to the extent that such transactions are not
recognized on account of consolidated financial reporting in accordance with
GAAP.
(f) Mergers,
Acquisitions etc.
(i) Without
the prior
written consent of the Program Agent, as assignee of Buyer, not to be
unreasonably withheld, Originator will not merge into or consolidate with any
other Person if Originator would not be the surviving entity of such merger
or
consolidation.
(ii) Any
receivable
acquired by Originator in connection with a merger or consolidation or the
purchase, leasing or other acquisition (in one transaction or a series of
transactions) of all or substantially all of the assets of any other Person
(whether directly by purchase, lease or other acquisition of all or
substantially all of the assets of such Person or indirectly by purchase or
other acquisition of all or substantially all of the capital stock of such
other
Person) (any such transaction, a “Business
Combination”)
shall be
Excluded Receivables except as otherwise provided in the definition of “Excluded
Receivable” contained in Exhibit I
hereto.
ARTICLE
V
TERMINATION
EVENTS
Section
5.1. Termination
Events.
The occurrence of
any one or more of the following events shall constitute a Termination
Event:
(a) Originator
shall
fail (i) to make any payment or deposit required hereunder when due and
such failure continues for two Business Days, (ii) to perform or observe
any term, covenant or agreement contained in Section 4.1(b),
4.1(c)
or 4.1(h)-(j),
Section 4.2
(other than as
referred to in clause (i) of this subsection (a)
or Section 5.1(d)),
and such failure
shall continue for five consecutive Business Days after the earlier of receipt
of written notice thereof from Buyer (or its assignees) or Originator’s
Responsible Officer’s or other corporate officer’s actual knowledge thereof or
(iii) to perform or observe any term, covenant or agreement hereunder
(other than as referred to in clause (i) or (ii) of this subsection (a)
or Section 5.1(d))
and such failure
shall continue for twenty consecutive days after the earlier of receipt of
written notice thereof from Buyer (or its assignees) or Originator’s Responsible
Officer’s or other corporate officer’s actual knowledge thereof.
(b) Any
representation,
warranty, certification or statement made by Originator in this Agreement,
any
other Transaction Document or in any other document delivered pursuant hereto
or
thereto shall prove to have been (i) with respect to any representations
warranties, certifications or statements which contain a materiality qualifier,
incorrect in any respect when made or deemed made and (ii) with respect to
any representations, warranties, certifications or statements which do not
contain a materiality qualifier, incorrect in any material respect when made
or
deemed made; provided
that a Termination
Event shall be deemed not to have occurred under this clause (b) with
respect to a breach of a representation or warranty made or deemed made in
this
Agreement with respect to a Receivable if (x) Originator has accepted
reassignment of such Receivable and paid or credited the applicable Repurchase
Price in accordance with and by the date required by Section
1.3(a)
of this Agreement
or with respect to a breach of a representation or warranty made or deemed
made
in this Agreement with respect to a Receivable which breach affects only
Additional Amounts or (y) such representation is no longer incorrect, or
incorrect in any material respect, as the case may be, 30 days following receipt
by Originator of notice of such incorrect representation.
(c) (i)
Failure of
Originator or any of its Subsidiaries to pay any Indebtedness when due (after
giving effect to any grace period applicable thereto) in excess of $25,000,000;
or the default by Originator or any of its Subsidiaries in the performance
of
any term, provision or condition contained in any agreement under which any
such
Indebtedness was created or is governed, the effect of which is to cause, or
to
permit the holder or holders of such Indebtedness to cause, such Indebtedness
to
become due prior to its stated maturity; or any such Indebtedness of Originator
or any of its Subsidiaries shall be declared to be due and payable or required
to be prepaid, repurchased, redeemed or defeased (other than by a regularly
scheduled payment, a prepayment upon the sale of assets otherwise permitted
thereunder, a repayment required as a result of an issuance of debt or equity
otherwise permitted thereunder, or a repayment required as a result of any
failure to maintain a minimum collateral value), prior to the date of maturity
thereof, or (ii) any event of default shall occur under any agreement or
instrument relating to or evidencing any Indebtedness now or hereafter existing
of Originator or any of its Subsidiaries or any such Indebtedness shall be
declared to be due and payable or required to be prepaid, repurchased, redeemed
or defeased as the result of any change in control of Originator, if the effect
of such declaration, prepayment, repurchase, redemption or defeasance has or
could reasonably be expected to have a Material Adverse Effect.
(d) (i) Originator
or any of its 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 or against Originator or any of its
Subsidiaries seeking to adjudicate it bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief or composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry of
an
order for relief or the appointment of a receiver, trustee or other similar
official for it or any substantial part of its property, and such proceeding
is
not dismissed within 45 days, or (iii) Originator or its Subsidiaries shall
take any corporate action to authorize any of the actions set forth in the
foregoing clause (ii) of this Section 5.1(d).
(e) A
Change of Control
shall occur.
(f) One
or more
judgments, decrees, arbitration or binding mediation award(s) and/or
settlement(s) for the payment of money shall have been entered against
Originator or any of its Subsidiaries that could reasonably be expected to
have
a Material Adverse Effect, and either (i) within sixty (60) days from the
later of (A) the entry of any such judgment or decree or the date of any such
award or settlement (as applicable) and (B) the date any payment is
required to be made on or with respect to any such judgment, decree award or
settlement pursuant to the terms thereof, the same shall not have been paid,
discharged or vacated, or in the case of a judgment, decree or award, stayed
pending appeal, or shall not have been discharged or vacated within sixty (60)
days from the entry of a final order of affirmance on appeal or
(ii) enforcement proceedings shall be commenced by any creditor on any such
judgment, decree, award or settlement.
(g) (i)
Any Plan
Termination Event with respect to a Plan shall have occurred and, 30 days after
notice thereof shall have been given to Originator by Buyer or the Program
Agent
and its assignee, such Plan Termination Event shall still exist; or (ii)
Originator or any ERISA Affiliate shall have been notified by the sponsor of
a
Multiemployer Plan that it has incurred withdrawal liability (within the meaning
given to such term under Part 1 of Subtitle E of Title IV of ERISA) to such
Multiemployer Plan; or (iii) Originator or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that such Multiemployer Plan
is
in reorganization, or is insolvent or is being terminated, within the meaning
of
Title IV of ERISA; or (iv) any Person shall engage in a “prohibited transaction”
(as defined in Section 406 of ERISA or Section 4975 of the Internal Revenue
Code
of 1986) involving any Plan; and in each case in clauses (i) through (iv) above,
such event or condition, together with all other such events or conditions,
if
any, (x) has not been cured with 30 days following receipt of notice of such
event by Originator and (y) would result in an aggregate liability of Originator
or any ERISA Affiliate that would have a Material Adverse Effect.
Section
5.2. Remedies.
Upon the
occurrence and during the continuation of a Termination Event, Buyer may take
any of the following actions: (i) declare the Termination Date to have
occurred, whereupon the Termination Date shall forthwith occur, without demand,
protest or further notice of any kind, all of which are hereby expressly waived
by Originator; provided
that upon the
occurrence of a Termination Event described in Section 5.1(d),
or of an actual
or deemed entry of an order for relief with respect to Originator under the
Federal Bankruptcy Code, the Termination Date shall automatically occur, without
demand, protest or any notice of any kind, all of which are hereby expressly
waived by Originator and (ii) to the fullest extent permitted by applicable
law, declare that the Default Fee shall accrue with respect to any amounts
then
due and owing by Originator to Buyer (or is assigns). The aforementioned rights
and remedies shall be in addition to all other rights and remedies of Buyer
and
its assigns available under this Agreement or the other Transaction Documents,
by operation of law, at equity or otherwise, all of which are hereby expressly
preserved, including all rights and remedies provided under the UCC, all of
which rights shall be cumulative.
ARTICLE
VI
INDEMNIFICATION
Section
6.1. Indemnities
by
Originator.
Without limiting
any other rights that Buyer may have hereunder or under applicable law,
Originator hereby agrees to indemnify Buyer and its assigns and the officers,
directors, agents and employees of Buyer and its assigns (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 and
disbursements (all of the foregoing being collectively referred to as
“Indemnified
Amounts”)
awarded against
or incurred by any of them arising out of or as a result of this Agreement
or
the acquisition, either directly or indirectly, by Buyer or its assigns of
an
interest in the Receivables, excluding, however:
(i) Indemnified
Amounts
to the extent that such Indemnified Amounts resulted from gross negligence
or
willful misconduct on the part of the Indemnified Party seeking indemnification,
it being the intention of Originator to indemnify such Indemnified Party against
the consequences of its own negligence;
(ii) Indemnified
Amounts
to the extent the same includes losses in respect of Receivables that are solely
due to the credit risk of the Obligor and for which reimbursement would
constitute recourse to Originator for uncollectible Receivables;
(iii) taxes
imposed by
the jurisdiction in which such Indemnified Party’s principal executive office is
located, on or measured by the overall net income of such Indemnified Party
to
the extent that the computation of such taxes is consistent with the Intended
Characterization; provided,
however,
that nothing
contained in this sentence shall limit the liability of Originator or limit
the
recourse of Buyer or its assigns to Originator for amounts otherwise
specifically provided to be paid by Originator under the terms of this
Agreement; or
(iv) Indemnified
Amounts
relating to and affecting only Additional Amounts.
Without
limiting
the generality of the foregoing indemnification and, in the case of the
following clauses (D) through (M), in each case without limiting Originator’s
obligations under the following clauses (A), (B) or (C)), Originator shall
indemnify the Indemnified Parties for Indemnified Amounts relating to or
resulting from:
(A) any
representation
or warranty made by or on behalf of Originator (or any officers of any such
Person) in this Agreement, any other Transaction Document or any other
information or report delivered by such Person pursuant hereto or thereto,
which
shall have been false or incorrect when made or deemed made;
(B) the
failure by
Originator to comply with any applicable law, rule or regulation with respect
to
any Receivable or Contract related thereto, or the nonconformity of any
Receivable or Contract included therein with any such applicable law, rule
or
regulation or any failure of Originator to keep or perform any of its
obligations, express or implied, with respect to any Contract;
(C) any
failure of
Originator to perform its duties, covenants or other obligations in accordance
with the provisions of this Agreement or any other Transaction
Document;
(D) any
products
liability, environmental, 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;
(E) any
dispute, claim,
offset or defense (other than discharge in bankruptcy of the Obligor) of the
Obligor to the payment of any Receivable other than any portion thereof
constituting an Additional Amount (including 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 based on such
Obligor being immune from claims on the grounds on sovereign immunity or
otherwise immune or not subject to legal action, suit or proceeding), or any
other claim resulting from the sale of the merchandise or services related
to
such Receivable or the furnishing or failure to furnish such merchandise or
services;
(F) the
commingling by
or on behalf of Originator or any of its Affiliates of Collections of
Receivables at any time with other funds;
(G) any
investigation,
litigation or proceeding related to or arising from this Agreement or any other
Transaction Document, the transactions contemplated hereby, the use of the
proceeds of a Purchase, the ownership of the Receivables or any other
investigation, litigation or proceeding relating to Originator in which any
Indemnified Party becomes involved as a result of any of the transactions
contemplated hereby;
(H) any
Termination
Event described in Section 5.1(d)(iii)
with respect to
Buyer or Funding LLC;
(I) any
failure to vest
in Buyer, or to transfer to Buyer, legal and equitable title to, and ownership
of, the Receivables, the Related Security and the Collections, free and clear
of
any Adverse Claim (except as created by the Transaction Documents);
(J) 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 a
Purchase or at any subsequent time;
(K) any
action or
omission by Originator in contravention of this Agreement or any other
Transaction Document which reduces or impairs the rights of Buyer with respect
to any Receivable or the value of any such Receivable (other than any portion
thereof constituting an Additional Amount);
(L) any
avoidance or
attempt by Originator or any of its Affiliates to void the Purchase hereunder
under statutory provisions or common law or equitable action, and
(M) the
failure by
Originator or any Affiliate to pay when due any taxes, including sales, excise
or personal property taxes.
Section
6.2. Other
Costs and
Expenses.
Originator shall
pay to Buyer on demand all reasonable costs and out-of-pocket expenses in
connection with the preparation, execution and delivery of this Agreement,
the
transactions contemplated hereby and the other documents to be delivered
hereunder. Originator shall pay to Buyer and its assigns on demand any and
all
costs and expenses of Buyer, if any, including reasonable counsel fees and
expenses in connection with the enforcement of this Agreement and the other
documents delivered hereunder and in connection with any restructuring or
workout of this Agreement or such documents (including any amendments hereto
or
thereto).
ARTICLE
VII
MISCELLANEOUS
Section
7.1. Waivers
and
Amendments.
(a) No
failure or delay
on the part of Buyer (or its assigns) in exercising any power, right or remedy
under this Agreement shall operate as a waiver thereof, nor shall any single
or
partial exercise of any such power, right or remedy preclude any other further
exercise thereof or the exercise of any other power, right or remedy. The rights
and remedies herein provided shall be cumulative and nonexclusive of any rights
or remedies provided by law. Any waiver of this Agreement shall be effective
only in the specific instance and for the specific purpose for which
given.
(b) No
provision of
this Agreement may be amended, supplemented, modified or waived except in
writing signed by Originator and Buyer and, to the extent required under the
Purchase Agreement, the Program Agent and the Required Committed
Investors.
Section
7.2. Notices.
Except as
provided below, all communications and notices provided for hereunder shall
be
in writing (including bank wire, telecopy or electronic facsimile transmission
or similar writing) and shall be given to the other parties hereto at their
respective addresses or telecopy numbers set forth on the signature page hereto
or at such other address or telecopy number as such Person may hereafter specify
for the purpose of notice to each of the other parties hereto. Each such notice
or other communication shall be effective (i) if given by telecopy, upon
the receipt thereof, (ii) if given by mail, three Business Days after the
time such communication is deposited in the mail with first class postage
prepaid or (iii) if given by any other means, when received at the address
specified in this Section 7.2.
Section
7.3. Protection
of
Ownership Interests of Buyer.
(a) Originator
agrees
that from time to time, at its expense, it will promptly execute and deliver
all
instruments and documents, and take all actions, that may be necessary or
desirable, or that Buyer (or its assigns) may reasonably request, to perfect,
protect or more fully evidence the Investor Interests, or to enable Buyer (or
its assigns) to exercise and enforce their rights and remedies hereunder. At
any
time, Buyer (or its assigns) may, at Originator’s sole cost and expense, direct
Originator to notify the Obligors of Receivables of the ownership interests
of
Buyer under this Agreement and may also direct that payments of all amounts
due
or that become due under any or all Receivables be made directly to Buyer or
its
designee.
(b) If
Originator fails
to perform any of its obligations hereunder and such failure shall continue
for
five Business Days after notice from Buyer (or its assigns) of such failure,
Buyer (or its assigns) may (but shall not be required to) perform, or cause
performance of, such obligation, and Buyer’s (or such assigns’) costs and
expenses reasonably incurred in connection therewith shall be payable by
Originator as provided in Section 6.2.
Originator
irrevocably authorizes Buyer (and its assigns) at any time and from time to
time
in the sole discretion of Buyer (or its assigns), and appoints Buyer (and its
assigns) as its attorney(es)-in-fact, to act on its behalf (i) to file financing
statements necessary or desirable in Buyer’s (or its assigns’) sole discretion
to perfect and to maintain the perfection and priority of the interest of Buyer
in the Receivables and (ii) to file a carbon, photographic or other reproduction
of this Agreement or any financing statement with respect to the Receivables
as
a financing statement in such offices as Buyer (or its assigns) in their sole
discretion deem necessary or desirable to perfect and to maintain the perfection
and priority of Buyer’s interests in the Receivables. This appointment is
coupled with an interest and is irrevocable.
Section
7.4. Confidentiality.
(a) Originator
agrees
to exercise its best efforts to keep, and to cause any third party recipient
of
the information described in this Section 7.4(a)
to keep, any
information delivered or made available by Buyer (or its assigns) to it,
confidential from anyone other than Persons employed or retained by such party
who are or are expected to become engaged in evaluating, approving, structuring
or administering the transactions contemplated hereunder, the terms, conditions
and structure of this Agreement and the other Transaction Documents and any
other confidential proprietary information with respect to the Program Agent,
the Managing Agents, the Investors and their respective businesses obtained
by
or on behalf of Originator in connection with the structuring, negotiating
and
execution of the transactions contemplated herein; provided
that nothing shall
prevent Originator from disclosing such information (i) to any other party
to any Transaction Document for the purpose of administering or enforcing this
Agreement or any other Transaction Document, (ii) pursuant to subpoena or
upon the order of any court or administrative agency, (iii) upon the
request or demand of any governmental authority having jurisdiction over such
Person, (iv) if such information has been publicly disclosed without the
recipient’s violation of its confidentiality obligations, (v) to the extent
reasonably required in connection with any litigation to which such Person
or
such Person’s Affiliates may be a party, (vi) to the extent reasonably
required in connection with the exercise of any remedy hereunder, or
(vii) to such Person’s legal counsel, independent auditors and other
professional advisors and to such Person’s rating agencies. Unless prohibited
from doing so by applicable law, in the event that Originator is legally
requested or required to disclose any confidential information pursuant to
paragraph (ii), (iii), or (v) of this Section 7.4(a),
such Person shall
notify Buyer and the Program Agent of such request or requirement and will
use
reasonable efforts to minimize the disclosure of such information.
(b) Buyer
(and its
assigns) agrees to exercise its best efforts to keep, and to cause any third
party recipient of the information described in this Section 7.4(b)
to keep, any
information delivered or made available by Originator to it, confidential from
anyone other than Persons employed or retained by such party who are or are
expected to become engaged in evaluating, approving, structuring or
administering the transactions contemplated hereunder; provided
that nothing shall
prevent Buyer (or its assigns) from disclosing such information (i) to any
other party to any Transaction Document for the purpose of administering or
enforcing this Agreement or any other Transaction Document, (ii) pursuant
to subpoena or upon the order of any court or administrative agency,
(iii) upon the request or demand of any governmental authority having
jurisdiction over such Person, (iv) if such information has been publicly
disclosed without the recipient’s violation of its confidentiality obligations,
(v) to the extent reasonably required in connection with any litigation to
which such Person or such Person’s Affiliates may be a party, (vi) to the
extent reasonably required in connection with the exercise of any remedy
hereunder, (vii) to such Person’s legal counsel, independent auditors and
other professional advisors and to such Person’s rating agencies, or
(viii) to any actual or proposed participant or assignee of such Person
(each, a “Transferee”)
that has agreed
in writing to be bound by the provisions of this Section 7.4(b).
Unless prohibited
from doing so by applicable law, in the event that Buyer (or its assigns) is
legally requested or required to disclose any confidential information pursuant
to paragraph (ii), (iii), or (v) of this Section 7.4(b),
such Person shall
notify Originator of such request or requirement and will use reasonable efforts
to minimize the disclosure of such information.
(c) Notwithstanding
the
foregoing, Originator and Buyer (and its assigns) may disclose to any and all
other Persons, without limitation of any kind, the tax treatment and tax
structure of the transactions contemplated by this Agreement and the Transaction
Documents and all materials of any kind (including opinions or other tax
analyses) that are provided to them relating to such tax treatment and tax
structure.
Section
7.5. Bankruptcy
Petition.
(a) Originator
and
Buyer each hereby covenants and agrees that, prior to the date that is one
year
and one day after the payment in full of all outstanding senior Indebtedness
of
each Conduit Investor, it will not institute against, or join any other Person
in instituting against, such Conduit Investor any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other similar proceeding
under the laws of the United States or any state of the United States.
(b) Originator
hereby
covenants and agrees that, prior to the date that is one year and one day after
the payment in full of all outstanding Capital, Yield and all other amounts
due
to the Program Agent, any Managing Agent or any Investor under the Purchase
Agreement, it will not institute against, or join any other Person in
instituting against, Buyer any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or other similar proceeding under the
laws
of the United States or any state of the United States.
Section
7.6. CHOICE
OF
LAW.
THE SALE,
TRANSFER AND CONVEYANCE OF RECEIVABLES, TOGETHER WITH RELATED SECURITY AND
COLLECTIONS, UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS (WITHOUT REGARD TO CONFLICTS
OF
LAW PRINCIPLES), AND OTHERWISE THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING
SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BUT
OTHERWISE WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES).
Section
7.7. CONSENT
TO
JURISDICTION.
EACH PARTY TO
THIS AGREEMENT HEREBY IRREVOCABLY SUBMITS (A) FOR ITSELF AND ITS PROPERTY
IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND THE OTHER
TRANSACTION DOCUMENTS TO WHICH IT IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT
OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NONEXCLUSIVE GENERAL JURISDICTION
OF
THE COURTS OF THE STATE OF NEW YORK, THE COURTS OF THE UNITED STATES OF AMERICA
FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;
(B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH
COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE
OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR
PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR
CLAIM
THE SAME; (C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR
PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED
MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO SUCH
PERSON AT THE ADDRESS SPECIFIED PURSUANT TO SECTION 7.2
OR AT SUCH OTHER
ADDRESS OF WHICH THE PARTIES HERETO SHALL HAVE BEEN NOTIFIED PURSUANT THERETO;
(D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO ▇▇▇
IN
ANY OTHER JURISDICTION; AND (E) WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION
OR
PROCEEDING RELATING TO THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS ANY
SPECIAL, INDIRECT, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES.
Section
7.8. WAIVER
OF JURY
TRIAL.
EACH PARTY HERETO
HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY
OR
INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN
ANY
WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY DOCUMENT
EXECUTED BY ORIGINATOR PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP
ESTABLISHED HEREUNDER OR THEREUNDER.
Section
7.9. Integration;
Binding Effect; Survival of Terms.
(a) This
Agreement and
each Blocked Account Agreement and any other document executed in connection
herewith represent the final agreement among the parties and may not be
contradicted by evidence of prior, contemporaneous, or subsequent oral
agreements of the parties. There are no unwritten oral agreements among the
parties.
(b) 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). This Agreement shall create and constitute the continuing
obligations of the parties hereto in accordance with its terms and shall remain
in full force and effect until terminated in accordance with its terms;
provided,
however,
that the rights
and remedies with respect to (i) any breach of any representation and warranty
made by Originator pursuant to Article II,
(ii) the
indemnification and payment provisions of Article VI,
and Section 7.5
shall be
continuing and shall survive any termination of this Agreement.
Section
7.10. Counterparts;
Severability; Section References.
This Agreement
may be executed in any number of counterparts and by different parties hereto
in
separate counterparts, each of which when so executed shall be deemed to be
an
original and all of which when taken together shall constitute one and the
same
Agreement. Any provisions of this Agreement which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating
the
remaining provisions hereof, and any such prohibition or unenforceability in
any
jurisdiction shall not invalidate or render unenforceable such provision in
any
other jurisdiction. Unless otherwise expressly indicated, all references herein
to “Article,” “Section,” “Schedule” or “Exhibit” shall mean articles and
sections of, and schedules and exhibits to, this Agreement.
IN
WITNESS WHEREOF,
the parties hereto have caused this Agreement to be executed and delivered
by
their duly authorized officers as of the date hereof.
ANR
PIPELINE
COMPANY
By:
/s/
▇▇▇▇ ▇.
▇▇▇▇▇▇
Name:
▇▇▇▇ ▇. ▇▇▇▇▇▇
Title:
Vice President and Treasurer
Address: ANR
Pipeline Company
▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇
▇▇▇▇▇
Attention:
Treasurer
ANR
FINANCE COMPANY,
L.L.C.
By:
/s/
▇▇▇▇ ▇.
▇▇▇▇▇▇
Name:
▇▇▇▇ ▇. ▇▇▇▇▇▇
Title:
Vice President and Treasurer
Address: ANR
Finance
Company, L.L.C.
▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇
▇▇▇▇▇
Attention:
Treasurer
EXHIBIT
I
TO
FIRST
TIER
RECEIVABLES SALE AGREEMENT
DEFINITIONS
As
used in this
Agreement and the Exhibits, Schedules and Annexes hereto, capitalized terms
have
the meanings set forth in this Exhibit I
(such meanings to
be equally applicable to the singular and plural forms thereof). If a
capitalized term is used in this Agreement, or in any Exhibit, Schedule or
Annex
hereto, and not otherwise defined therein or in this Exhibit I,
such term shall
have the meaning assigned thereto in Exhibit I
to the Purchase
Agreement.
“Additional
Amounts”
means
all
indebtedness and other obligations owed by Obligors to Originator (prior to
giving effect to any transfer or conveyance under this Agreement) or to Buyer
(after giving effect to the transfers or conveyances under this Agreement)
arising from commodity, volumetric or usage or from transportation services
(other than transportation reservation) or storage services (other than storage
reservation), but excluding any such indebtedness of obligations owed to
Originator by any of its Affiliates from time to time.
“Agreement”
means
this First
Tier Receivables Sale Agreement, dated as of August 31, 2006, between
Originator and Buyer, as the same may be amended, restated or otherwise
modified.
“Business
Combination”
has
the meaning
set forth in Section 4.2(f).
“Business
Day”
means
any day on
which banks are not authorized or required to close in New York, New
York.
“Buyer”
has
the meaning
set forth in the preamble.
“Change
of
Control”
means
(a) El
Paso’s failure to own, directly or indirectly, 100% of the issued and
outstanding common stock of Originator, or (b) upon completion of, and pursuant
to, a transaction, or a series of transactions (which may include prior
acquisitions of capital stock of El Paso in the open market or otherwise),
involving a tender offer (i) a "person" (within the meaning of
Section 13(d) of the Securities Exchange Act of 1934) other than El Paso or
a Subsidiary of El Paso or any employee benefit plan maintained for employees
of
El Paso and/or any of its Subsidiaries or the trustee therefor, shall have
acquired direct or indirect ownership of and paid for in excess of 50% of the
outstanding capital stock of El Paso entitled to vote in elections for directors
of El Paso and (ii) at any time before the later of (A) six months after the
completion of such tender offer and (B) the next annual meeting of the
shareholders of El Paso following the completion of such tender offer more
than
half of members of the Board of Directors of El Paso consists of individuals
who
(x) were not members of the Board of Directors of El Paso before the completion
of such tender offer and (y) were not appointed, elected or nominated by the
Board of Directors of El Paso in office prior to the completion of such tender
offer (other than any such appointment, election or nomination required or
agreed to in connection with, or as a result of, the completion of such tender
offer).
“Collections”
means,
with
respect to any Receivable, all cash collections in respect of such Receivable,
including all yield, Finance Charges or other related amounts accruing in
respect thereof and all cash proceeds of Related Security with respect to such
Receivable.
“Credit
and
Collection Policy”
means
Originator’s credit and collection policies and practices relating to Contracts
and Receivables existing on the date hereof and summarized in Exhibit V,
as modified from
time to time in accordance with this Agreement.
“Default
Fee”
means
a per annum
rate of interest equal to the sum of (i) the Prime Rate, plus (ii) 2.0% per
annum.
“Discount
Factor”
means
a
percentage (initially 0.59%%) calculated to provide Buyer with a reasonable
return on its investment in the Receivables after taking account of (i) the
time
value of money based upon the anticipated dates of collection of the Receivables
and the cost to Buyer of financing its investment in the Receivables during
such
period and (ii) the risk of nonpayment by the Obligors. Originator and Buyer
may
agree from time to time to change the Discount Factor based on changes in one
or
more of the items affecting the calculation thereof, provided
that any change to
the Discount Factor shall take effect as of the commencement of a Monthly
Period, shall apply only prospectively and shall not affect the Purchase Price
payment in respect of a Purchase which occurred during any Monthly Period ending
prior to the Monthly Period during which Originator and Buyer agree to make
such
change.
“El
Paso”
means
El Paso
Corporation, a Delaware corporation, together with any successor thereto in
a
succession not constituting a Change of Control.
“Environmental
Laws”
means
all laws,
rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions,
notices or binding agreements issued, promulgated or entered into by any
federal, state, local or foreign or other governmental authority or regulatory
body regulating or imposing liability or standards of conduct concerning
protection of the environment, preservation or reclamation of natural resources,
the management, release or threatened release of any Hazardous Material or
to
health and safety matters.
“Environmental
Liability”
means
any
liability, contingent or otherwise (including any liability for damages, costs
of environmental remediation, fines, penalties or indemnities), of Originator
or
any of its Subsidiaries resulting from or based upon (a) violation of any
Environmental Law, (b) the generation, use, handling, transportation, storage,
treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous
Materials, (d) the release or threatened release of any Hazardous Materials
into
the environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
“ERISA”
means
the
Employee Retirement Income Security Act of 1974 and the regulations promulgated
and rulings issued from time to time thereunder.
“ERISA
Affiliate”
means
any Person
who is a member of Originator’s controlled group within the meaning of
Section 4001(a)(14)(A) of ERISA.
“Excluded
Receivable”
means
any
indebtedness and other obligations owed to Originator, to the extent such
indebtedness and other obligations arise from the business or assets of a Person
acquired by Originator in any Business Combination or from the business or
assets of a Person which has acquired Originator in any Business Combination
(other than the business and assets of such Person conducted and owned by
Originator prior to such Business Combination), until and unless (i) Originator
shall have provided the Buyer and the Program Agent (as Buyer’s assignee) with
notice of such Business Combination and requested that such indebtedness and
other obligations be eligible for inclusion as Receivables hereunder and under
the other Transaction Documents, and (ii) Buyer and the Program Agent shall
have
consented to such eligibility.
“Federal
Bankruptcy Code”
means
Title 11 of
the United States Code entitled “Bankruptcy”, as amended and any successor
statute thereto.
“Funding
LLC”
has
the meaning
set forth in the Preliminary Statements.
“Hazardous
Materials”
means
all
explosive or radioactive substances or wastes and all hazardous or toxic
substances, wastes or other pollutants, including petroleum or petroleum
distillates, asbestos or asbestos containing materials, polychlorinated
biphenyls, radon gas, infectious or medical wastes and all other substances
or
wastes of any nature, in each case above to the extent regulated pursuant to
any
Environmental Law.
“Initial
Cutoff
Date”
means
August 29, 2006.
“Initial
Sale
Date”
means
August 31, 2006.
“Intended
Characterization”
means,
for income
tax purposes, the characterization of the acquisition by the Investors of
Investor Interests under the Purchase Agreement as a loan or loans by the
Investors to Funding LLC secured by the Receivables, the Related Security and
the Collections.
“Material
Adverse Effect”
means
a material
adverse effect on (i) the financial condition of Originator, (ii) the ability
of
Originator to perform its obligations under this Agreement or any other
Transaction Document, (iii) the legality, validity or enforceability of this
Agreement or any other Transaction Document, (iv) Originator’s, Buyer’s, Funding
LLC’s, the Program Agent’s or any Investor’s interest in the Receivables
generally or in any significant portion of the Receivables, the Related Security
or Collections with respect thereto, or (v) the collectibility of the
Receivables generally or of any material portion of the
Receivables.
“Multiemployer
Plan”
means
a
“multiemployer plan” as defined in Section 4001(a)(3) of ERISA to which
Originator or an ERISA Affiliate is making or accruing an obligation to make
contributions, or has within any of the preceding five plan years made or
accrued an obligation to make contributions and in respect of which Originator
or an ERISA Affiliate has any liability (contingent or otherwise), such plan
being maintained pursuant to one or more collective bargaining
agreements.
“Multiple
Employer Plan”
means
a single
employer plan, as defined in Section 4001(a)(15) of ERISA, which (a) is
maintained for employees of Originator or an ERISA Affiliate and at least one
Person other than Originator and its ERISA Affiliates, or (b) was so maintained
and in respect of which Originator or an ERISA Affiliate could have liability
under Section 4064 or 4069 of ERISA in the event such plan has been or were
to be terminated.
“Original
Balance”
means,
with
respect to any Receivable, the Outstanding Balance of such Receivable on the
date it was purchased by Buyer.
“Originator”
has
the meaning
set forth in the preamble.
“PBGC”
means
the Pension
Benefit Guaranty Corporation referred to and defined in ERISA and any successor
entity performing similar functions.
“Pipeline
Company”
means
any of ANR
Pipeline Company, Colorado Interstate Gas Company, El Paso National Gas Company,
Southern Natural Gas Company and Tennessee Gas Pipeline Company.
“Plan”
means
a Single
Employer Plan or a Multiple Employer Plan.
“Plan
Termination Event”
means
(a) a
“reportable event,” as such term is described in Section 4043 of ERISA (other
than a “reportable event” not subject to the provision for 30-day notice to the
PBGC under PBGC Reg. § 4043), or an event described in Section 4062(e) of
ERISA, or (b) the withdrawal of Originator or any ERISA Affiliate from a
Multiple Employer Plan during a plan year in which it was a “substantial
employer,” as such term is defined in Section 4001(a)(2) of ERISA or the
incurrence of liability by Originator or any ERISA Affiliate under Section
4064
of ERISA upon the termination of a Multiple Employer Plan, or (c) the filing
of
a notice of intent to terminate a Plan or the treatment of a Plan amendment
as a
termination under Section 4041 of ERISA, or (d) the institution of proceedings
to terminate a Plan by the PBGC under Section 4042 of ERISA, or (e) the
conditions set forth in Section 302(f)(1)(A) and (B) of ERISA to the
creation of a lien upon property or rights to property of Originator or any
ERISA Affiliate for failure to make a required payment to a Plan are satisfied,
or (f) the adoption of an amendment to a Plan requiring the provision of
security to such Plan, pursuant to Section 307 of ERISA, or (g) the
occurrence of any other event or the existence of any other condition which
would reasonably be expected to result in the termination of, or the appointment
of a trustee to administer, any Plan under Section 4042 of
ERISA.
“Potential
Termination Event”
means
an event
which, with the passage of time or the giving of notice, or both, would
constitute a Termination Event.
“Prime
Rate”
means
a per annum
rate equal to the higher of (i) the “prime rate” announced by the Reference Bank
from time to time, changing when and as such rate changes or (ii) the Federal
Funds Effective Rate plus .50%.
“Program
Agent”
has
the meaning
set forth in the Preliminary Statements.
“Purchase”
means
a purchase
under this Agreement by Buyer from Originator of the Receivables, the Related
Security and the Collections related thereto, together with all related rights
in connection therewith as described in Section 1.1.
“Purchase
Agreement”
has
the meaning
set forth in the Preliminary Statements.
“Purchase
Price”
means,
with
respect to any Purchase from Originator on any date, the aggregate price to
be
paid to Originator for such Purchase in accordance with Section 1.2
for the
Receivables, Related Security and Collections being sold to Buyer on such date,
which price shall equal (i) the product of (x) the Original Balance of such
Receivables, multiplied by (y) one minus the Discount Factor then in effect,
minus (ii) any Purchase Price Credits, Repurchase Prices or Special Adjustment
Credits be credited against the Purchase Price otherwise payable in accordance
with Section 1.3.
“Purchase
Price
Credit”
has
the meaning
set forth in Section 1.3(a).
“Receivable”
means
(i) all
indebtedness and other obligations owed to Originator (at the time it arises,
and prior to giving effect to the transfers and conveyances under this
Agreement), including any indebtedness, obligation or interest constituting
an
account or payment intangible, to the extent such indebtedness and other
obligations arise in connection with reservation charges for the daily
transportation or storage of natural gas by Originator and without regard to
whether the applicable Obligor shall have been invoiced therefor and (ii) the
Additional Amounts, and includes the obligation to pay any Finance Charges
with
respect thereto; provided
that
the term
“Receivable” shall not include any such indebtedness or obligations that, prior
to such indebtedness or obligations being transferred and conveyed to Buyer
hereunder, (A) were owed to Originator by any of its Affiliates from time to
time, (B) Originator shall have notified Buyer and the Program Agent in writing
are not Eligible Receivables, or that is an Excluded Receivable. Indebtedness
and other rights and obligations arising from any one transaction, including
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 or
Originator treats such indebtedness, rights or obligations as a separate payment
obligation.
“Records”
means,
with
respect to any Receivable,
(i) all
Contracts; and
(ii) (in
each case
solely to the extent of the rights therein (if any) of the Originator or Buyer,
as applicable) all other documents, books, records and other information
(including computer programs, tapes, disks, punch cards, data processing
software and related property and rights) relating to such Receivable, any
Related Security therefor and the related Obligor.
“Related
Security”
means,
with
respect to any Receivable:
(i) all
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,
(ii) all
guaranties,
letters of credit, insurance and other agreements or arrangements of whatever
character from time to time supporting or securing payment of such Receivable
whether pursuant to the Contract related to such Receivable or
otherwise,
(iii) all
Records related
to such Receivable, and
(iv) all
proceeds of any
of the foregoing.
“Repurchase
Price”
has
the meaning
set forth in Section 1.3(a).
“2nd
Quarter 2006
10-Q”
has
the meaning
set forth in Section 2.1(e).
“Second
Tier
Sale Agreement”
has
the meaning
set forth in the Preliminary Statements.
“Single
Employer
Plan”
means
a single
employer plan, as defined in Section 4001(a)(15) of ERISA, that (a) is
maintained for employees of Originator or an ERISA Affiliate and no Person
other
than Originator and its ERISA Affiliates or (b) was so maintained and in respect
of which Originator or an ERISA Affiliate could have liability under
Section 4069 of ERISA in the event such plan has been or were to be
terminated.
“Special
Adjustment Credit”
has
the meaning
set forth in Section 1.3(b).
“Subsidiary”
of
a Person
means, as to any Person, a corporation, partnership or other entity of which
more than 50% of the outstanding shares of stock or other ownership interests
having ordinary voting power (other than stock or such other ownership interests
having such power only by reason of the happening of a contingency) to elect
directors or other managers of such corporation, partnership or other entity
are
at the time owned, directly or indirectly, through one or more Subsidiaries
of
such Person, by such Person.
“Tariff”
means
Originator’s FERC Gas Tariff as approved by FERC and as the same may be modified
from time to time in accordance with the rules and regulations of
FERC.
“Termination
Date”
means
the
earliest to occur of (i) the Amortization Date under the Purchase
Agreement, (ii) the Business Day immediately prior to the occurrence of a
Termination Event set forth in Section 5.1(d),
(iii) the
Business Day specified in a written notice from Buyer to Originator following
the occurrence and during the continuance of any other Termination Event, and
(iv) the date which is five Business Days after Buyer’s receipt of written
notice from Originator that Originator wishes to terminate the facility
evidenced by this Agreement.
“Termination
Event”
has
the meaning
set forth in Section 5.1.
“Transferee”
has
the meaning
set forth in Section 7.4.
“2005
Form
10-K”
has
the meaning
set forth in Section 2.1(e).
Additionally,
unless otherwise specified herein:
(a) All
accounting
terms not specifically defined herein shall be construed in accordance with
GAAP. All terms used in Article 9 of the UCC in the State of New York, and
not
specifically defined herein, are used herein as defined in such Article
9.
(b) The
definitions of
terms herein shall apply equally to the singular and plural forms of the terms
defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words “include,”
“includes”
and
“including”
shall
be deemed
to be followed by the phrase “without limitation.” The word “will”
shall
be
construed to have the same meaning and effect as the word “shall.”
Unless
the
context requires otherwise, (i) any definition of or reference to any agreement,
instrument or other document shall be construed as referring to such agreement,
instrument or other document as from time to time amended, restated,
supplemented or otherwise modified or replaced (subject to any restrictions
on
such amendments, supplements or modifications set forth herein or in any other
Transaction Document), (ii) any reference herein to any Person shall be
construed to include such Person’s successors and assigns, (iii) the words
“herein,”
“hereof”
and
“hereunder,”
and
words of
similar import when used in this Agreement shall be construed to refer to this
Agreement in its entirety and not to any particular provision thereof, (iv)
all
references in this Agreement to Articles, Sections, Exhibits and Schedules
shall
be construed to refer to Articles and Sections of, and Exhibits and Schedules
to, this Agreement in which such references appear, (v) any reference to any
law
shall include all statutory and regulatory provisions consolidating, amending,
replacing or interpreting such law and any reference to any law or regulation
shall, unless otherwise specified, refer to such law or regulation as amended,
modified or supplemented from time to time, and (vi) the words “asset”
and
“property”
shall
be
construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.