Exhibit 4.46
PURCHASE AND SALE AGREEMENT
DATED AS OF FEBRUARY 6, 2001
BETWEEN
LG&E RECEIVABLES LLC
AND
LOUISVILLE GAS AND ELECTRIC COMPANY
TABLE OF CONTENTS
PAGE
ARTICLE I AGREEMENT TO PURCHASE AND SELL..............................................................2
1.1 Agreement To Purchase and Sell......................................................................2
1.2 Timing of Purchases.................................................................................3
1.3 Consideration for Purchases.........................................................................3
1.4 Purchase and Sale Termination Date..................................................................3
1.5 Intention of the Parties............................................................................3
ARTICLE II CALCULATION OF PURCHASE PRICE...............................................................3
2.1 Calculation of Purchase Price.......................................................................3
ARTICLE III PAYMENT OF PURCHASE PRICE...................................................................4
3.1 Contribution of Receivables and Initial Purchase Price Payment.......................................4
3.2 Subsequent Purchase Price Payments..................................................................5
3.3 Settlement as to Specific Receivables and Dilution..................................................5
3.4 Reconveyance of Receivables.........................................................................7
ARTICLE IV CONDITIONS OF PURCHASES.....................................................................7
4.1 Conditions Precedent to Initial Purchase............................................................7
4.2 Certification as to Representations and Warranties..................................................9
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE ORIGINATOR............................................9
5.1 Organization and Good Standing......................................................................9
5.2 Due Qualification...................................................................................9
5.3 Power and Authority; Due Authorization..............................................................9
5.4 Valid Sale; Binding Obligations.....................................................................9
5.5 No Violation.......................................................................................10
5.6 Proceedings........................................................................................10
5.7 Bulk Sales Acts....................................................................................10
5.8 Government Approvals...............................................................................10
5.9 Financial Condition................................................................................10
5.10 Licenses, Contingent Liabilities, and Labor Controversies.........................................11
5.11 Margin Regulations................................................................................11
5.12 Quality of Title..................................................................................11
5.13 No Proceeds for Registered Securities..............................................................11
5.14 Accuracy of Information...........................................................................12
5.15 Offices12
5.16 Trade Names.......................................................................................12
5.17 Taxes 12
5.18 Compliance with Applicable Laws...................................................................12
5.19 Reliance on Separate Legal Identity...............................................................12
5.20 Utility Holding Company...........................................................................12
5.21 Payments to Originator............................................................................13
5.22 Investment Company................................................................................13
5.23 Financial Interests...............................................................................13
5.24 Obligation of Obligor. ...........................................................................13
5.25 Lock-Boxes.........................................................................................13
5.26 Credit and Collection Policy.......................................................................13
5.27 Transaction Documents..............................................................................14
ARTICLE VI COVENANTS OF THE ORIGINATOR ...............................................................14
6.1 Affirmative Covenants..............................................................................14
6.2 Reporting Requirements.............................................................................15
6.3 Negative Covenants.................................................................................16
6.4 Lock-Box Banks.....................................................................................17
6.5 Accounting for Purchases. ........................................................................17
6.6 Transaction Documents. ...........................................................................17
6.7 Substantive Consolidation..........................................................................18
ARTICLE VII ADDITIONAL RIGHTS AND OBLIGATIONS IN RESPECT OF THE RECEIVABLES............................19
7.1 Rights of the Company..............................................................................19
7.2 Responsibilities of the Originator.................................................................19
7.3 Further Action Evidencing Purchases................................................................20
7.4 Application of Collections.........................................................................21
ARTICLE VIII PURCHASE AND SALE TERMINATION EVENTS.......................................................21
8.1 Purchase and Sale Termination Events...............................................................21
8.2 Remedies...........................................................................................22
ARTICLE IX INDEMNIFICATION............................................................................22
9.1 Indemnities by the Originator......................................................................22
ARTICLE X MISCELLANEOUS..............................................................................25
10.1 Amendments, etc...................................................................................25
10.2 Notices, etc......................................................................................25
10.3 No Waiver; Cumulative Remedies....................................................................25
10.4 Binding Effect; Assignability.....................................................................26
10.5 Governing Law.....................................................................................26
10.6 Costs, Expenses and Taxes.........................................................................26
10.7 Waiver of Jury Trial..............................................................................26
10.8 Captions and Cross References; Incorporation by Reference.........................................27
10.9 Execution in Counterparts.........................................................................27
10.10 Acknowledgment and Agreement.....................................................................27
10.11 No Proceedings...................................................................................27
EXHIBIT A - Form of Purchase Report
EXHIBIT B - Form of Company Note
EXHIBIT C - Form of Originator Assignment Certificate
EXHIBIT D - Office Locations
EXHIBIT E - Trade Names
PURCHASE AND SALE AGREEMENT
THIS
PURCHASE AND SALE AGREEMENT (this "AGREEMENT"), dated as of
February 6, 2001, is between LOUISVILLE GAS AND ELECTRIC COMPANY, a Kentucky
corporation ("LGEC"), as the initial Servicer (in such capacity, the "Servicer")
and as the originator (in such capacity, the "Originator"), and LG&E RECEIVABLES
LLC, a Delaware limited liability company (the "Company").
DEFINITIONS
Unless otherwise indicated, certain terms that are capitalized and used
throughout this Agreement are defined in Exhibit I to the Receivables Purchase
Agreement of even date herewith (as the same may be amended, supplemented or
otherwise modified from time to time, the "Receivables Purchase Agreement")
among LGEC, the Company, Market Street Funding Corporation, PNC Bank, National
Association, Mellon Bank, N.A and Three Rivers Funding Corporation. All
references herein to months are to calendar months unless otherwise expressly
indicated.
BACKGROUND
1. The Company is a special purpose entity, all of the issued and
outstanding equity of which is owned by LGEC.
2. The Originator generates Receivables in the ordinary course of its
business.
3. The Originator, in order to finance its business, wishes to sell
Receivables to the Company, and the Company is willing, on the terms and subject
to the conditions set forth herein, to purchase Receivables from the Originator.
4. The Originator and the Company intend this transaction to be a true
sale of Receivables by the Originator to the Company providing the Company with
the full benefits of ownership of the Receivables and the Originator and the
Company do not intend the transactions hereunder to be, or for any purpose to
be, characterized as a loan from the Company to the Originator.
5. The Company intends to sell the Purchased Interest in the
Receivables pursuant to the Receivables Purchase Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties hereto agree as follows:
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ARTICLE I
AGREEMENT TO PURCHASE AND SELL
1.1 AGREEMENT TO PURCHASE AND SELL. On the terms and subject to the
conditions set forth in this Agreement (including ARTICLE IV), the Originator
agrees to sell to the Company, and the Company agrees to purchase from the
Originator, from time to time on or after the Closing Date, but before the
Purchase and Sale Termination Date, all of the Originator's right, title and
interest in and to:
(a) each Receivable of the Originator that existed and was
owing to the Originator as at the closing of the Originator's business
on December 31, 2000 (the "CUT-OFF DATE") other than Receivables
contributed pursuant to SECTION 3.1 (the "Contributed Receivables");
(b) each Receivable created by the Originator from and
including the Cut-off Date to and including the Purchase and Sale
Termination Date;
(c) all rights to, but not the obligations under, all Related
Security;
(d) all monies due or to become due with respect to any of
the foregoing;
(e) all books and records related to any of the foregoing;
and
(f) all collections and other proceeds of any of the foregoing
(as defined in the
New York UCC) that are or were received by the
Originator on or after Cut-off Date, including, without limitation, all
funds which either are received by the Originator, the Company or the
Servicer from or on behalf of the Obligors in payment of any amounts
owed (including, without limitation, invoice price, finance charges,
interest and all other charges) in respect of Receivables, or are
applied to such amounts owed by the Obligors (including, without
limitation, insurance payments that the Originator or Servicer applies
in the ordinary course of its business to amounts owed in respect of
any Receivable and net proceeds of sale or other disposition of
repossessed goods or other collateral or property of the Obligors or
any other parties directly or indirectly liable for payment of such
Receivables).
All purchases and contributions hereunder shall be made without recourse, but
shall be made pursuant to, and in reliance upon, the representations, warranties
and covenants of the Originator set forth in this Agreement and each other
Transaction Document. No obligation or liability to any Obligor on any
Receivable is intended to be assumed by the Company hereunder, and any such
assumption is expressly disclaimed. The Company's foregoing commitment to
purchase Receivables and the proceeds and rights described in
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CLAUSES (c) through (f) (collectively, the "RELATED RIGHTS") is herein called
the "PURCHASE FACILITY."
1.2 TIMING OF PURCHASES.
(a) CLOSING DATE PURCHASES. The Originator's entire right,
title and interest in (i) each Receivable that existed and was owing to
the Originator as at the Cut-off Date (other than Contributed
Receivables, as defined in SECTION 1.1), (ii) all Receivables created
by the Originator from and including the Cut-off Date, to and including
the Closing Date, and (iii) all Related Rights in respect of the
foregoing automatically shall be sold to the Company on the Closing
Date.
(b) REGULAR PURCHASES. After the Closing Date, until the
Purchase and Sale Termination Date, each Receivable (and the Related
Rights in respect thereof) created by the Originator shall be sold to
the Company, and each such sale shall be deemed to have occurred
(without further action) upon the creation of such Receivable.
1.3 CONSIDERATION FOR PURCHASES. On the terms and subject to the
conditions set forth in this Agreement, the Company agrees to make Purchase
Price payments to the Originator and to reflect all contributions in accordance
with ARTICLE III.
1.4 PURCHASE AND SALE TERMINATION DATE. The "PURCHASE AND SALE
TERMINATION DATE" shall be the earliest to occur of (a) the date of the
termination of this Agreement pursuant to SECTION 8.2 and (b) the Payment Date
immediately following the day on which the Originator shall have given notice to
the Company at or prior to 10:00 a.m. (
New York City time) that the Originator
desires to terminate this Agreement.
1.5 INTENTION OF THE PARTIES. It is the express intent of the parties
hereto that the transfers of the Receivables and Related Rights by the
Originator to the Company, as contemplated by this Agreement be, and be treated
as, sales or contributions, as applicable and not as secured loans secured by
the Receivables and Related Rights. If, however, notwithstanding the intent of
the parties, such transactions are deemed to be loans, the Originator hereby
grants to the Company a first priority security interest in all of the
Originator's right, title and interest in and to the Receivables and the Related
Rights now existing and hereafter created by the Originator, all monies due or
to become due and all amounts received with respect thereto, and all proceeds
thereof, to secure all of the Originator's obligations hereunder.
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ARTICLE II
CALCULATION OF PURCHASE PRICE
2.1 CALCULATION OF PURCHASE PRICE. On the Closing Date and two Business
Days prior to each Settlement Date, the Servicer shall deliver to the Company
and the Originator a report in substantially the form of EXHIBIT A (each such
report being herein called a "PURCHASE REPORT") with respect to the matters set
forth therein and the Company's purchases of Receivables from the Originator:
(a) that are to be made on the Closing Date, reflecting Receivables
existing as of the Cut-off Date (in the case of the Purchase Report to be
delivered on the Closing Date), or
(b) that were made during the immediately preceding calendar month (in
the case of each subsequent Purchase Report).
The "PURCHASE PRICE" (to be paid to the Originator in accordance with the terms
of ARTICLE III) for the Receivables and the Related Rights that are purchased
hereunder from the Originator shall be determined in accordance with the
following formula:
PP = OB X FMVD
WHERE:
PP = Purchase Price for each Receivable as calculated on the relevant
Payment Date.
OB = the Outstanding Balance of such Receivable.
FMVD = Fair Market Value Discount, as measured on
such Payment Date, which is equal to the
quotient (expressed as percentage) of (a)
one DIVIDED by (b) the sum of (i) one, plus
(ii) the product of (A) the Prime Rate on
such Payment Date plus .25% and (B) a
fraction, the numerator of which is the
Day's Sales Outstanding (calculated as of
the last day of the calendar month next
preceding such Payment Date) and the
denominator of which is 365.
"PAYMENT DATE" means (i) the Closing Date and (ii) each Business Day
thereafter that the Originator is open for business.
"PRIME RATE" means the rate described in part (a) of the definition of
Market Street Base Rate.
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ARTICLE III
PAYMENT OF PURCHASE PRICE
3.1 CONTRIBUTION OF RECEIVABLES AND INITIAL PURCHASE PRICE PAYMENT. (a)
On the Closing Date the Originator shall, and hereby does, contribute to the
capital of the Company Receivables and Related Rights with respect thereto
consisting of each Receivable of the Originator that existed and was owing to
the Originator on the Closing Date beginning with the oldest of such Receivables
and continuing chronologically thereafter such that the aggregate Outstanding
Balance of all such Contributed Receivables shall be equal to $5,000,000.
(b) On the terms and subject to the conditions set forth in this
Agreement, the Company agrees to pay to the Originator the Purchase Price for
the purchase to be made from the Originator on the Closing Date partially in
cash (in an amount to be agreed between the Company and the Originator and set
forth in the initial Purchase Report) and partially by issuing a promissory note
in the form of EXHIBIT B to the Originator with an initial principal balance
equal to the remaining Purchase Price (such promissory note, as it may be
amended, supplemented, indorsed or otherwise modified from time to time,
together with any promissory notes issued from time to time in substitution
therefor or renewal thereof in accordance with the Transaction Documents, being
herein called the "COMPANY NOTE").
3.2 SUBSEQUENT PURCHASE PRICE PAYMENTS. On each Payment Date falling
after the Closing Date, on the terms and subject to the conditions set forth in
this Agreement, the Company shall pay to the Originator the Purchase Price for
the Receivables generated by the Originator during the immediately preceding
month as follows:
(a) FIRST, the Purchase Price shall be paid in cash to
the extent the Company has cash available therefor; and
(b) SECOND, to the extent any portion of the Purchase Price
remains unpaid, the principal amount outstanding under the Company Note
issued to the Originator shall be increased by an amount equal to such
remaining Purchase Price.
Servicer shall make all appropriate record keeping entries with respect
to the Company Note or otherwise to reflect the foregoing payments and
Servicer's books and records shall constitute rebuttable presumptive evidence of
the principal amount of and accrued interest on the Company Note at any time.
Furthermore, Servicer shall hold the Company Note for the benefit of the
Originator. The Originator hereby irrevocably authorizes Servicer to ▇▇▇▇ the
Company Note "CANCELLED" and to return the Company Note to the Company upon the
final payment thereof after the occurrence of the Purchase and Sale Termination
Date.
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3.3 SETTLEMENT AS TO SPECIFIC RECEIVABLES AND DILUTION.
(a) If on the day of purchase or contribution of any Receivable from
the Originator hereunder, any of the representations or warranties set forth in
SECTIONS 5.4 AND 5.12 of the Originator is not true with respect to such
Receivable, or as a result of any action or inaction of the Originator, on any
day any of the representations or warranties set forth in Sections 5.4 and 5.12
is no longer true with respect to such a Receivable, then the Purchase Price
with respect to such Receivables (or in the case of a Contributed Receivable,
the Outstanding Balance of such Receivable (the "Contributed Value")) shall be
reduced by an amount equal to the Outstanding Balance of such Receivable and
shall be accounted to the Originator as provided in SUBSECTION (c) below;
PROVIDED, that if the Company thereafter receives payment on account of
Collections due with respect to such Receivable, the Company promptly shall
deliver such funds to the Originator.
(b) If, on any day, the Outstanding Balance of any Receivable
(including any Contributed Receivable) purchased or contributed hereunder is
reduced or adjusted downward as a result of any defective, rejected or returned
goods or services, or any revision, cancellation, allowance, discount or other
adjustment (except a setoff in the ordinary course in connection with a Security
Deposit or Obligor Payment Plan or pursuant to the terms of an Energy Wholesale
Contract or any revision, cancellation, allowance, discount or other adjustment
to any Receivable to the extent such Receivable is uncollectible in whole or
part on account of the lack of creditworthiness of, or any Insolvency Event
related to, the related Obligor) made by the Originator, the Company, the
Servicer or any Affiliate thereof or any setoff or dispute between the
Originator, the Company, the Servicer or any Affiliate thereof and an Obligor as
indicated on the books of the Company (or, for periods prior to the Closing
Date, the books of the Originator), then the Purchase Price or Contributed
Value, as the case may be, with respect to such Receivable shall be reduced by
the amount of such net reduction and shall be accounted to the Originator as
provided in SUBSECTION (c) below; PROVIDED, HOWEVER that if the Servicer is not
the Originator or an Affiliate of the Company or the Originator, no such
reduction and accounting will be required for any reduction or downward
adjustment of a Receivable resulting from such Servicer's failure to comply with
applicable Legal Requirements.
(c) Any reduction in the Purchase Price (or Contributed Value) of any
Receivable pursuant to SUBSECTION (a) or (b) above shall be applied as a credit
for the account of the Company against the Purchase Price of Receivables
subsequently purchased by the Company from the Originator hereunder; PROVIDED,
HOWEVER if there have been no purchases of Receivables from the Originator (or
insufficiently large purchases of Receivables) to create a Purchase Price
sufficient to so apply such credit against, the amount of such credit
(i) shall be paid in cash to the Company by the
Originator in the manner and for application as described in the
following proviso, or
6
(ii) shall be deemed to be a payment under, and shall be
deducted from the principal amount outstanding under, the Company Note;
PROVIDED, FURTHER, that at any time (y) when a Termination Event or Unmatured
Termination Event exists under the Receivables Purchase Agreement or (z) on or
after the Purchase and Sale Termination Date, the amount of any such credit
shall be paid by the Originator to the Company by deposit in immediately
available funds into the relevant Lock-Box Account for application by Servicer
to the same extent as if Collections of the applicable Receivable in such amount
had actually been received on such date.
(d) Each Purchase Report (other than the Purchase Report delivered on
the Closing Date) shall include, in respect of the Receivables previously
generated by the Originator (including Contributed Receivables), a calculation
of the aggregate reductions described in SUBSECTION (a) or (b) relating to such
Receivables since the last Purchase Report delivered hereunder, as indicated on
the books of the Company (or, for such period prior to the Closing Date, the
books of the Originator).
(e) Except as provided in CLAUSE (b, or as otherwise required by
applicable Legal Requirements or the relevant Contract, all Collections received
from an Obligor of any Receivable shall be applied to the Receivables of such
Obligor in the order of the age of such Receivables, starting with the oldest
such Receivable, unless such Obligor designates in writing its payment for
application to specific Receivables.
3.4 RECONVEYANCE OF RECEIVABLES. In the event that the Originator has
paid to the Company the full Outstanding Balance of any Receivable pursuant to
SECTION 3.3, the Company shall reconvey such Receivable to the Originator,
without representation or warranty, but free and clear of all liens created by
the Company.
ARTICLE IV
CONDITIONS OF PURCHASES
4.1 CONDITIONS PRECEDENT TO INITIAL PURCHASE. The initial purchase
hereunder is subject to the condition precedent that Servicer (on the Company's
behalf) shall have received, on or before the Closing Date, the following, each
(unless otherwise indicated) dated the Closing Date, and each in form and
substance satisfactory to Servicer (acting on the Company's behalf):
(a) An Originator Assignment Certificate in the form of
EXHIBIT C from the Originator, duly completed, executed and delivered
by the Originator;
(b) A copy of the resolutions of the Board of Directors of the
Originator approving the Transaction Documents to be delivered by it
and the transactions
7
contemplated hereby and thereby, certified by the respective Secretary
or Assistant Secretary of the Originator;
(c) Good standing certificates for the Originator issued as of
a recent date acceptable to Servicer by the Secretary of State of the
jurisdiction of the Originator's incorporation and the jurisdiction
where such Originator's chief executive office is located;
(d) A certificate of the Secretary or Assistant Secretary of
the Originator certifying the names and true signatures of the officers
authorized on such Person's behalf to sign the Transaction Documents to
be delivered by it (on which certificate Servicer and the Company may
conclusively rely until such time as Servicer shall receive from such
Person a revised certificate meeting the requirements of this
SUBSECTION (d));
(e) The certificate or articles of incorporation or other
organizational document of the Originator, duly certified by the
Secretary of State of the jurisdiction of such Originator's
incorporation as of a recent date acceptable to Servicer, together
with a copy of the by-laws of the Originator, each duly certified by
the Secretary or an Assistant Secretary of the Originator;
(f) Originals of the proper financing statements (Form UCC-1)
that have been duly executed and name the Originator as the
debtor/seller and the Company as the secured party/purchaser (and the
Administrator, as assignee of the Company) of the Receivables generated
by the Originator as may be necessary or, in Servicer's or the
Administrator's opinion, desirable under the UCC of all appropriate
jurisdictions to perfect the Company's ownership interest in all
Receivables and such other rights, accounts, instruments and moneys
(including, without limitation, Related Security) in which an ownership
or security interest may be assigned to it hereunder;
(g) A written search report from a Person satisfactory to
Servicer listing all effective financing statements that name the
Originator as debtor or seller and that are filed in the jurisdictions
in which filings were made pursuant to the foregoing SUBSECTION (f),
together with copies of such financing statements (none of which,
except for those described in the foregoing SUBSECTION (f), shall cover
any Receivable or any Related Rights which are to be sold to the
Company hereunder), and tax and judgment lien search reports from a
Person satisfactory to Servicer showing no evidence of such liens filed
against the Originator;
(h) A favorable opinion of ▇▇▇▇▇▇▇, Carton & ▇▇▇▇▇▇▇
and ▇▇▇▇ ▇. ▇▇▇▇▇▇, counsel to the Originator, in form and substance
satisfactory to Servicer and the Administrator;
8
(i) The Company Note in favor of the Originator, duly
executed by the Company; and
(j) A certificate from an officer of the Originator to the
effect that the Servicer and the Originator have placed on the most
recent, and have taken all steps reasonably necessary to ensure that
there shall be placed on each subsequent, data processing report or
other books and records that it generates which are of the type that a
proposed purchaser or lender would use to evaluate the Receivables, the
following legend (or the substantive equivalent thereof): "THE
RECEIVABLES DESCRIBED HEREIN HAVE BEEN SOLD BY THE ORIGINATOR TO LG&E
RECEIVABLES LLC PURSUANT TO A
PURCHASE AND SALE AGREEMENT, DATED AS OF
FEBRUARY 6, 2001, AS AMENDED, BETWEEN LOUISVILLE GAS AND ELECTRIC
COMPANY, AND LG&E RECEIVABLES LLC; AND AN UNDIVIDED, FRACTIONAL
OWNERSHIP INTEREST IN THE RECEIVABLES DESCRIBED HEREIN HAS BEEN SOLD TO
MARKET STREET FUNDING CORPORATION, THREE RIVERS FUNDING CORPORATION AND
THE OTHER PURCHASERS PURSUANT TO A RECEIVABLES PURCHASE AGREEMENT,
DATED AS OF FEBRUARY 6, 2001, AS AMENDED, AMONG LOUISVILLE GAS AND
ELECTRIC COMPANY, AS THE SERVICER, LG&E RECEIVABLES LLC, MARKET STREET
FUNDING CORPORATION, THREE RIVERS FUNDING CORPORATION AND THE OTHER
PURCHASERS THEREUNDER AND PNC BANK, NATIONAL ASSOCIATION AS
ADMINISTRATOR."
4.2 CERTIFICATION AS TO REPRESENTATIONS AND WARRANTIES. The Originator,
by accepting the Purchase Price related to each purchase of Receivables
generated by the Originator, shall be deemed to have certified that the
representations and warranties contained in ARTICLE V are true and correct on
and as of such day, with the same effect as though made on and as of such day.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE ORIGINATOR
In order to induce the Company to enter into this Agreement and to make
purchases and accept contributions hereunder, the Originator hereby makes with
respect to itself, the representations and warranties set forth in this ARTICLE
V.
5.1 ORGANIZATION AND GOOD STANDING. The Originator has been duly
organized and is validly existing as a corporation in good standing under the
laws of the Commonwealth of Kentucky, with power and authority to own its
properties and to conduct its business as such properties are presently owned
and such business is presently conducted.
9
5.2 DUE QUALIFICATION. The Originator is duly licensed or qualified to
do business as a foreign corporation in good standing in the jurisdiction where
its chief executive office is located and in all other jurisdictions in which
(a) the ownership or lease of its property or the conduct of its business
requires such licensing or qualification and (b) the failure to be so licensed
or qualified would have a Material Adverse Effect.
5.3 POWER AND AUTHORITY; DUE AUTHORIZATION. The Originator has (a) all
necessary power, authority and legal right (i) to execute and deliver, and
perform its obligations under, each Transaction Document to which it is a party
and (ii) to generate, own, sell, contribute and assign Receivables on the terms
and subject to the conditions herein and therein provided; and (b) duly
authorized such execution and delivery and such sale, contribution and
assignment and the performance of such obligations by all necessary corporate
action.
5.4 VALID SALE; BINDING OBLIGATIONS. Each sale or contribution, as the
case may be, made by the Originator pursuant to this Agreement shall constitute
a valid sale or contribution, as the case may be, transfer, and assignment of
Receivables to the Company, enforceable against creditors of, and purchasers
from, the Originator; and this Agreement constitutes, and each other Transaction
Document to be signed by the Originator, when duly executed and delivered, will
constitute, a legal, valid, and binding obligation of the Originator,
enforceable in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, or other similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity, regardless of whether such enforceability is considered in
a proceeding in equity or at law.
5.5 NO VIOLATION. The consummation of the transactions contemplated by
this Agreement and the other Transaction Documents and the fulfillment of the
terms hereof or thereof, (a) will not contravene or result in a default under or
conflict with: (i) the Originator's charter or by-laws or (ii) any indenture,
loan agreement, mortgage, deed of trust or other material agreement or
instrument to which it is a party or by which it is bound; (b) will not in any
material respect contravene or conflict with: (i) any Legal Requirement
applicable to it, or (ii) any order, writ, judgment, award, injunction or decree
binding on or affecting it or any of its property; and (c) will not result in or
require the creation of any material Adverse Claim (other than those
specifically contemplated thereby) upon or with respect to any of its
properties.
5.6 PROCEEDINGS. Except as disclosed in the SEC Reports or as otherwise
disclosed to the Administrator and each Purchaser Agent, there is no action,
suit, proceeding or investigation pending before any Governmental Authority or
arbitrator (a) asserting the invalidity of any Transaction Document, (b) seeking
to prevent the issuance of the Originator's Originator Assignment Certificate or
the consummation of any of the transactions contemplated by any Transaction
Document, or (c) that is reasonably likely
10
to have an effect of the type described in clauses (b) through (e) of the
definition of Material Adverse Effect.
5.7 BULK SALES ACTS. No transaction contemplated hereby requires
compliance with, or will be subject to avoidance under, any bulk sales act or
similar law.
5.8 GOVERNMENT APPROVALS. Except for the filing of the UCC Financing
Statements referred to in ARTICLE IV, no authorization, approval or other action
by, and no notice to or filing with, any Governmental Authority or other Person
is required for the due execution, delivery and performance by the Originator of
this Agreement or any other Transaction Document to which it is a party that has
not been made or obtained.
5.9 FINANCIAL CONDITION.
(a) MATERIAL ADVERSE CHANGE. The balance sheets of the
Originator and its consolidated Subsidiaries as at December 31, 1999, and the
related statements of income and retained earnings for the fiscal year then
ended, copies of which have been furnished to the Administrator and each
Purchaser Agent, fairly present the financial condition of the Originator and
its consolidated Subsidiaries as at such date and the results of the operations
of the Originator and its Subsidiaries for the period ended on such date, all in
accordance with generally accepted accounting principles consistently applied,
and, since December 31, 1999 there has been no event or circumstances which have
had an effect of the type described in clauses (b) through (e) of the definition
of Material Adverse Effect (except for those disclosed in the SEC Reports prior
to the Closing Date).
(b) SOLVENT. On the date hereof, and on the date of
each purchase hereunder (both before and after giving effect to
such purchase), the Originator shall be Solvent.
5.10 LICENSES, CONTINGENT LIABILITIES, AND LABOR CONTROVERSIES.
(a) The Originator has not failed to obtain any licenses,
permits, franchises or other governmental authorizations necessary to
the ownership of its properties or to the conduct of its business,
which violation or failure to obtain would be reasonably likely to have
a Material Adverse Effect.
(b) There are no labor controversies pending against the
Originator that have had (or are reasonably likely to have) an effect
of the type described in clauses (b) through (e) of the definition of
Material Adverse Effect.
5.11 MARGIN REGULATIONS. No use of any funds acquired by the Originator
under this Agreement will conflict with or contravene any of Regulations T, U
and X promulgated by the Federal Reserve Board from time to time.
11
5.12 QUALITY OF TITLE.
(a) Each Receivable of the Originator (together with the
Related Rights with respect to such Receivable) which is to be sold to
the Company hereunder is or shall be owned by the Originator, free and
clear of any Adverse Claim, except as provided herein and in the
Receivables Purchase Agreement. Whenever the Company makes a purchase
or accepts a contribution hereunder, it shall have acquired and shall
continue to have maintained a valid and perfected ownership interest
(free and clear of any Adverse Claim) in all Receivables generated by
the Originator and all Collections related thereto, and in the
Originator's entire right, title and interest in and to the Related
Rights with respect thereto.
(b) No effective financing statement or other instrument
similar in effect covering any Receivable generated by the Originator
or any Related Rights is on file in any recording office except such as
may be filed in favor of the Company or the Originator, as the case may
be, in accordance with this Agreement or in favor of the Administrator
(for the benefit of the Purchasers) in accordance with the Receivables
Purchase Agreement.
(c) Unless otherwise identified to the Company on the date of
the purchase or contribution hereunder, each Receivable purchased
hereunder is on the date of purchase or contribution, an Eligible
Receivable.
5.13 NO PROCEEDS FOR REGISTERED SECURITIES. No proceeds of any purchase
or reinvestment will be used to acquire any equity security of a class that is
registered pursuant to Section 12 of the Securities Exchange Act of 1934.
5.14 ACCURACY OF INFORMATION. All factual written information
heretofore or contemporaneously furnished (and prepared) by the Originator to
the Company, the Servicer or the Administrator for purposes of or in connection
with any Transaction Document, Information Package or any transaction
contemplated hereby or thereby is, and all other such factual written
information hereafter furnished (and prepared) by the Originator to the Company
or the Administrator pursuant to or in connection with any Transaction Document
will be, true and accurate in every material respect on the date as of which
such information is dated or certified, and does not and will not contain any
material misstatement of fact or omit to state a material fact or any fact
necessary to make the statements contained therein not misleading.
5.15 OFFICES. The Originator's principal place of business and chief
executive office is located at the address set forth under the Originator's
signature hereto, and the offices where the Originator keeps all its books,
records and documents evidencing its Receivables, the related Contracts and all
other agreements related to the Receivables are located at the addresses
specified in EXHIBIT D (or at such other locations, notified to Servicer and the
Administrator in accordance with SECTION 6.1(f), in jurisdictions where all
action required by SECTION 7.3 has been taken and completed).
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5.16 TRADE NAMES. The Originator does not use any trade name other than
its actual corporate name and the trade names set forth in EXHIBIT E. From and
after the date that fell five (5) years before the date hereof, except as set
forth in Exhibit F, the Originator has not been known by any legal name other
than its corporate name as of the date hereof, nor has the Originator been the
subject of any merger or other corporate reorganization.
5.17 TAXES. The Originator has filed all tax returns and reports
required by law to have been filed by it and has paid all material taxes and
governmental charges thereby shown to be owing, except any such taxes or charges
which are being diligently contested in good faith by appropriate proceedings
and for which adequate reserves in accordance with GAAP shall have been set
aside on its books.
5.18 COMPLIANCE WITH APPLICABLE LAWS. The Originator is in compliance
with the requirements of all applicable Legal Requirements, and orders of all
governmental authorities, a breach of any of which, individually or in the
aggregate, would be reasonably likely to have a Material Adverse Effect and the
Originator is not in violation of any order of any court, arbitrator or
Governmental Authority, which could have a Material Adverse Effect.
5.19 RELIANCE ON SEPARATE LEGAL IDENTITY. The Originator acknowledges
that the Purchasers and the Administrator are entering into the Receivables
Purchase Agreement in reliance upon the Company's identity as a legal entity
separate from the Originator.
5.20 UTILITY HOLDING COMPANY. LGEC has complied in all material
respects with the requirements, rules and regulations of the Public Utility
Holding Company Act of 1935, as amended.
5.21 PAYMENTS TO ORIGINATOR. With respect to each Receivable
transferred to the Company hereunder, the Purchase Price received by the
Originator constitutes reasonably equivalent value in consideration therefor and
such transfer was not made for or on account of an antecedent debt. No transfer
by the Originator of any Receivable hereunder is or may be voidable under any
section of the Bankruptcy Reform Act of 1978 (11 U.S.C. ss. ss. 101 et seq.), as
amended.
5.22 INVESTMENT COMPANY. The Originator is not an "investment company,"
or a company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
5.23 FINANCIAL INTERESTS. Neither the Originator nor any of its
Affiliates has any direct or indirect ownership or financial interest in any
Purchaser.
5.24 OBLIGATION OF OBLIGOR. Pursuant to each Contract with respect to
each Receivable or applicable Legal Requirements, such Receivable is effective
to create, and
13
has created, a legal, valid and binding obligation of the related Obligor to pay
the Outstanding Balance of such Receivable and any accrued interest thereon,
enforceable against the Obligor in accordance with its terms, except as such
enforcement may be limited by applicable Legal Requirements or 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).
5.25 LOCK-BOXES. The names and addresses of all the Lock-Box Banks,
together with the account numbers of the Lock-Box Accounts (if any) at such
Lock-Box Banks and the number and location of the LGEC Post-Office Box, are
specified in SCHEDULE II to the Receivables Purchase Agreement (or as have been
identified in a notice to the Administrator in accordance with the Agreement)
and, from and after the 30th day after the Closing Date, all Lock-Box Accounts
are or will be subject to (and Travelers will be a party to) Lock-Box Agreements
(except as otherwise agreed to in writing by the Administrator). Twenty-one days
after the Administrator's written request and at all times thereafter, the LGEC
Post-Office Box shall be subject to a Lock-Box Agreement. Originator has not
granted to any Person, other than the Administrator and Servicer as contemplated
by the Receivables Purchase Agreement, dominion and control of any Lock-Box
Account or the LGEC Post-Office Box, and no party other than the Administrator
has the right to take dominion and control of any such account or post office
box or Collections deposited with Travelers at a future time or upon the
occurrence of a future event.
5.26 CREDIT AND COLLECTION POLICY. The Originator and its Affiliates
(other than the Company, as to which the Originator makes no representation)
have complied in all material respects with the Credit and Collection Policy and
applicable Legal Requirements with regard to each Receivable.
5.27 TRANSACTION DOCUMENTS. The Originator has complied in all material
respects with all of the terms, covenants and agreements contained in this
Agreement and the other Transaction Documents to which it is a party.
ARTICLE VI
COVENANTS OF THE ORIGINATOR
6.1 AFFIRMATIVE COVENANTS. From the date hereof until the first day
following the Purchase and Sale Termination Date, the Originator will, unless
the Administrator and the Company shall otherwise consent in writing:
(a) COMPLIANCE WITH LAWS, ETC. Comply in all material
respects with all applicable Legal Requirements except where the
failure to so comply would not have a Material Adverse Effect.
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(b) PRESERVATION OF CORPORATE EXISTENCE. Preserve and maintain
its corporate existence, rights, franchises, qualifications and
privileges, except to the extent that the failure to pursue and
maintain such existence, rights, franchises, qualifications and
privileges would not have a Material Adverse Effect.
(c) AUDIT. From time to time during regular business hours,
but no more frequently than annually unless (x) a Purchase and Sale
Termination Event has occurred and is continuing or (y) in the opinion
of the Company or the Administrator (with the consent or at the
direction of the Majority Purchasers) reasonable grounds for insecurity
exist with respect to the collectibility of a material portion of the
Receivables or with respect to the Originator's performance or ability
to perform in any material respect its obligations under the Agreement,
as reasonably requested in advance (unless a Termination Event or
Unmatured Termination Event exists) by the Company or Administrator,
permit the Company or Administrator, or its agents or representatives:
(i) to examine and make copies of and abstracts from all books, records
and documents (including computer tapes and disks) in the possession or
under the control of the Originator relating to Receivables and the
Related Security, including the related Contracts, and (ii) to visit
the offices and properties of the Originator for the purpose of
examining such materials described in CLAUSE (i) above, and to discuss
matters relating to Receivables and the Related Security or the
Originator's performance under the Transaction Documents or under the
Contracts or applicable Legal Requirements with any of the officers,
employees, agents or contractors of the Originator having knowledge of
such matters and (iii) without limiting the CLAUSES (i) and (ii) above,
to engage certified public accountants or other auditors acceptable to
the Company and the Administrator to conduct at the Originator's
expense, a review of the Originator's books and records with respect to
the Receivables.
(d) KEEPING OF RECORDS AND BOOKS OF ACCOUNT. Maintain and
implement administrative and operating procedures (including, without
limitation, an ability to recreate records evidencing Receivables and
the related Contracts it generates in the event of the destruction of
the originals thereof), and keep and maintain all documents, books,
records, computer tapes and disks and other information reasonably
necessary or advisable for the collection of such Receivables
(including, without limitation, records adequate to permit the daily
identification of each new Receivable and all Collections of and
adjustments to each existing Receivable).
(e) PERFORMANCE AND COMPLIANCE WITH RECEIVABLES, APPLICABLE
LEGAL REQUIREMENTS AND CONTRACTS. Timely and fully perform and comply,
at its expense, with all material provisions, covenants and other
promises required to be observed by it under the Contracts or
applicable Legal Requirements and all other agreements related to the
Receivables that it generates.
15
(f) LOCATION OF RECORDS. Keep its principal place of business
and chief executive office (as such terms or similar terms are used in
this applicable UCC), and the offices where it keeps its records
concerning or related to Receivables, at the address(es) referred to in
EXHIBIT E or, upon 30 days' prior written notice to the Company and the
Administrator, at such other locations in jurisdictions where all
action required by SECTION 7.3 shall have been taken and completed.
(g) CREDIT AND COLLECTION POLICIES. Comply in all
material respects with its Credit and Collection Policy in connection
with the Receivables that it generates and all Contracts or applicable
Legal Requirements.
(h) POST OFFICE BOXES. On or prior to the date hereof, deliver
to Servicer (on behalf of the Company) a certificate from an authorized
officer of the Originator to the effect that the name of the renter of
all post office boxes into which Collections may from time to time be
mailed has been changed to the name of the Company (unless such post
office boxes are in the name of the relevant Lock-Box Banks).
6.2 REPORTING REQUIREMENTS. From the date hereof until the first day
following the Purchase and Sale Termination Date, the Originator will, unless
Servicer (on behalf of the Company) and the Administrator shall otherwise
consent in writing, furnish to the Company and the Administrator:
(a) PURCHASE AND SALE TERMINATION EVENTS. As soon as possible
after knowledge of the occurrence of, and in any event within three
Business Days after knowledge of the occurrence of each Purchase and
Sale Termination Event or each Unmatured Purchase and Sale Termination
Event in respect of the Originator, the statement of the chief
financial officer, chief accounting officer, treasurer, secretary or
any Vice President of the Originator describing such Purchase and Sale
Termination Event or Unmatured Purchase and Sale Termination Event and
the action that the Originator proposes to take with respect thereto,
in each case in reasonable detail;
(b) UCC FILING INFORMATION. At least thirty days before any
change in the Originator's name or any other change requiring the
amendment of UCC financing statements, a notice setting forth such
changes and the effective date thereof;
(c) PROCEEDINGS. Promptly after the Originator obtains
knowledge thereof, notice of any: (A) litigation, investigation or
proceeding that may exist at any time between the Originator or any of
its Affiliates and any Governmental Authority that, if not cured or if
adversely determined, as the case may be, would have a Material Adverse
Effect, (B) litigation or proceeding adversely affecting the Originator
or any of its Affiliates in which the amount involved is $500,000 or
more and not covered by insurance or in which injunctive or similar
relief is
16
sought, (C) material litigation or proceeding relating to any
Transaction Document or (D) material adverse developments that have
occurred with respect to any previously disclosed litigation,
proceedings and investigations;
(d) OTHER. Promptly, from time to time, such other
information, documents, records or reports respecting the Receivables
or the conditions or operations, financial or otherwise, of the
Originator as the Company, any Purchaser, any Purchaser Agent or the
Administrator may from time to time reasonably request in order to
protect the interests of the Company, any Purchaser Agent, any
Purchaser or the Administrator under or as contemplated by the
Transaction Documents.
6.3 NEGATIVE COVENANTS. From the date hereof until the date following
the Purchase and Sale Termination Date, the Originator agrees that, unless
Servicer (on behalf of the Company) and the Administrator shall otherwise
consent in writing, it shall not:
(a) SALES, LIENS, ETC. Except as otherwise provided herein or
in any other Transaction Document, sell, assign (by operation of law or
otherwise) or otherwise dispose of, or create or suffer to exist any
Adverse Claim upon or with respect to, any Receivable or related
Contract or Related Security, or any interest therein, or any
Collections thereon, or assign any right to receive income in respect
thereof.
(b) EXTENSION OR AMENDMENT OF RECEIVABLES. Except as otherwise
required by applicable Legal Requirements or permitted by SECTION
4.2(a) of the Receivables Purchase Agreement, extend, amend or
otherwise modify the terms of any Receivable in any material respect
generated by it, or amend, modify or waive, in any material respect,
any term or condition of any Contract related thereto or waive any
right granted by the applicable Legal Requirements related thereto, or
permit the Servicer (so long as the Servicer is an Affiliate of the
Originator) to take any of the foregoing actions.
(c) CHANGE IN BUSINESS OR CREDIT AND COLLECTION POLICY. Except
as required by applicable Legal Requirements, make any change in the
character of its business or materially alter its Credit and Collection
Policy, which change would have a material adverse effect on the terms
and conditions or the collectibility of a material portion of the
Receivables, or make any other material change in the Credit and
Collection Policy without prior written notice to the Administrator and
each Purchaser Agent.
(d) RECEIVABLES NOT TO BE EVIDENCED BY PROMISSORY NOTES
OR CHATTEL PAPER. Take any action to cause or permit any Receivable
generated by it to become evidenced by any "instrument" or "chattel
paper" (as defined in the
New York UCC).
17
(e) MERGERS, ACQUISITIONS, SALES, ETC. (i) Be a party to any
merger or consolidation or (ii) directly or indirectly sell, transfer,
assign, convey or lease (A) whether in one or a series of transactions,
all or substantially all of its assets, or (B) any Receivables or any
interest therein (other than pursuant to this Agreement).
6.4 LOCK-BOX BANKS. Add or terminate any bank or other entity as a
Lock-Box Bank or any account as a Lock-Box Account from those listed in EXHIBIT
G to the Receivables Purchase Agreement, make any change to the LGEC Post Office
Box, make any change in its instructions to Obligors regarding payments to be
made to the Company, the Servicer, Travelers or any Lock-Box Account (or related
post office box or the LGEC Post Office Box), make any change in its
instructions to Travelers regarding the handling of Collections or make any
changes in its procedures for processing Collections received in the LGEC Post
Office Box, unless the Administrator and the Majority Purchasers shall have
consented thereto (which consent shall not be unreasonably withheld, conditioned
or delayed) in writing and the Administrator shall have received copies of all
agreements and documents (including Lock-Box Agreements) that it may reasonably
request in connection therewith.
6.5 ACCOUNTING FOR PURCHASES. Account for or treat (whether in
financial statements or otherwise) the transactions contemplated hereby in any
manner other than as a contribution and as sales of the Receivables and Related
Rights by the Originator to the Company.
6.6 TRANSACTION DOCUMENTS. Without the prior written consent of the
Administrator and the Majority Purchasers, amend, modify, supplement, waive,
revoke or terminate any Transaction Document to which it is a party or enter
into, execute, deliver or otherwise become bound by any agreement, instrument,
document or other arrangement that restricts the right of the Originator to: (i)
amend, supplement, amend and restate or otherwise modify the provisions of
ARTICLE II of the Receivables Purchase Agreement, EXHIBIT V to the Receivables
Purchase Agreement or ARTICLES V, VI and VIII of this Agreement or any ratio,
percentage, equation or time frame contained in any definition (other than the
definitions of Purchase Limit and Facility Termination Date) contained in
EXHIBIT I to the Receivables Purchase Agreement or (ii) extend or renew, or to
waive any right under, this Agreement or any other Transaction Documents,
PROVIDED THAT the Originator may enter into, execute, deliver or otherwise
become bound by any agreement, instrument, document or other arrangement that
requires termination of this Agreement based upon the level of Total Reserves.
6.7 SUBSTANTIVE CONSOLIDATION. The Originator hereby acknowledges that
this Agreement and the other Transaction Documents are being entered into in
reliance upon the Company's identity as a legal entity separate from the
Originator and its Affiliates. Therefore, from and after the date hereof, the
Originator shall take all reasonable steps necessary to make it apparent to
third Persons that the Company is an entity with assets
18
and liabilities distinct from those of the Originator and any other Person, and
is not a division of the Originator, its Affiliates or any other Person. Without
limiting the generality of the foregoing and in addition to and consistent with
the other covenants set forth herein, the Originator shall take such actions as
shall be required in order that:
(a) the Originator shall not be involved in the day to day
management of the Company;
(b) the Originator shall maintain separate corporate records
and books of account from the Company and otherwise will observe
corporate formalities and have a separate area from the Company for its
business;
(c) the financial statements and books and records of the
Originator shall be prepared after the date of creation of the Company
to reflect and shall reflect the separate existence of the Company;
PROVIDED, that the Company's assets and liabilities may be included in
a consolidated financial statement issued by an affiliate of the
Company; PROVIDED, HOWEVER, that any such consolidated financial
statement shall make clear that the Company's assets are not available
to satisfy the obligations of such affiliate;
(d) except as permitted by the Receivables Purchase Agreement,
(i) the Originator shall maintain its assets separately from the assets
of the Company, (ii) and the Originator's assets, and records relating
thereto, have not been, are not, and shall not be, commingled with
those of the Company;
(e) all of the Company's business correspondence and
other communications shall be conducted in the Company's own name
and on its own stationery;
(f) the Originator shall not act as an agent for the Company,
other than LGEC in its capacity as the Servicer, and in connection
therewith, shall present itself to the public as an agent for the
Company and a legal entity separate from the Company;
(g) the Originator shall not conduct any of the business of
the Company in its own name;
(h) the Originator shall not pay any liabilities of the
Company out of its own funds or assets;
(i) the Originator shall maintain an arm's-length
relationship with the Company;
(j) the Originator shall not assume or guarantee or become
obligated for the debts of the Company or hold out its credit as being
available to satisfy the obligations of the Company;
19
(k) the Originator shall not acquire obligations of the
Company, other than the Company Note;
(l) the Originator shall allocate fairly and reasonably
overhead or other expenses that are properly shared with the Company,
including, without limitation, shared office space;
(m) the Originator shall identify and hold itself out as a
separate and distinct entity from the Company;
(n) the Originator shall correct any known misunderstanding
regarding its separate identity from the Company;
(o) the Originator shall not enter into, or be a party to, any
transaction with the Company, except in the ordinary course of its
business and on terms which are intrinsically fair and not less
favorable to it than would be obtained in a comparable arm's-length
transaction with an unrelated third party; and
(p) the Originator shall not pay the salaries of the
Company's employees, if any.
ARTICLE VII
ADDITIONAL RIGHTS AND OBLIGATIONS IN
RESPECT OF THE RECEIVABLES
7.1 RIGHTS OF THE COMPANY. The Originator hereby authorizes the
Company, Servicer, the Administrator or their respective designees to take any
and all steps permitted by applicable Legal Requirements in the Originator's
name necessary or desirable, in their respective determination, to collect all
amounts due under any and all Receivables, including, without limitation,
indorsing the name of the Originator on checks and other instruments
representing Collections and enforcing such Receivables and the provisions of
the related Contracts (or exercising any rights under the applicable Legal
Requirements) that concern payment and/or enforcement of rights to payment.
7.2 RESPONSIBILITIES OF THE ORIGINATOR. Anything herein to the contrary
notwithstanding:
(a) COLLECTION PROCEDURES. The Originator agrees: (i) to
instruct all Obligors to make payments of all Receivables to one of the
following: (A) one or more Lock-Box Accounts or to post office boxes to
which only Lock-Box Banks have access (and shall instruct the Lock-Box
Banks to cause all items and amounts relating to such Receivables
received in such post office boxes to be removed and deposited into a
Lock-Box Account on a daily basis), (B) the LGEC
20
Post Office Box and (C) Travelers payment centers (and shall instruct
the Travelers to cause all items and amounts relating to such
Receivables received in such payment centers to be removed and
deposited into a Lock-Box Account within three days of Traveler's
receipt of such items and amounts); and (ii) deposit, or cause to be
deposited, any Collections received by it, the Servicer or the Company
into Lock-Box Accounts not later than one Business Day after receipt
thereof and agrees that all such Collections shall be deemed to be
received in trust for the Company and shall be set aside and segregated
until such transfer. Except as otherwise agreed to in writing by the
Administrator and the Majority Purchasers, thirty (30) days after the
Closing Date each Lock-Box Account shall at all times be subject to,
and Travelers shall at all times be a party to, a Lock-Box Agreement.
Twenty-one (21) days after the Administrator's written request and at
all times thereafter, the LGEC Post Office Box shall be subject to a
Lock-Box Agreement. The Originator will not (and will not permit the
Servicer or the Company to) deposit or otherwise credit, or cause or
permit to be so deposited or credited, to any Lock-Box Account or the
LGEC Post Office Box cash or cash proceeds other than Collections.
(b) The Originator shall perform its obligations hereunder,
and the exercise by the Company or its designee of its rights hereunder
shall not relieve the Originator from such obligations.
(c) Except for compliance with Legal Requirements in respect
thereto, none of the Company, Servicer or the Administrator shall have
any obligation or liability to any Obligor or any other third Person
with respect to any Receivables, Contracts or applicable Legal
Requirements related thereto or any other related agreements, nor shall
the Company, Servicer, any Purchaser or the Administrator be obligated
to perform any of the obligations of the Originator thereunder.
(d) The Originator hereby grants to the Administrator an
irrevocable power of attorney, with full power of substitution, coupled
with an interest, to take in the name of the Originator all steps
necessary or advisable to indorse, negotiate or otherwise realize on
any writing or other right of any kind held or transmitted by the
Originator or transmitted or received by the Company (whether or not
from the Originator) in connection with any Receivable.
7.3 FURTHER ACTION EVIDENCING PURCHASES. The Originator agrees that
from time to time, at its expense, it will promptly execute and deliver all
further instruments and documents, and take all further action that Servicer,
the Company or the Administrator may reasonably request in order to perfect,
protect or more fully evidence the Receivables and Related Rights purchased by
or contributed to the Company hereunder, or to enable the Company to exercise or
enforce any of its rights hereunder or under any other Transaction Document.
Without limiting the generality of the foregoing, upon the request of Servicer,
the Originator will:
21
(a) 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; and
(b) ▇▇▇▇ the master data processing records and other books
and records that evidence or list (i) such Receivables and (ii) related
Contracts with the legend set forth in SECTION 4.1(J).
The Originator hereby authorizes the Company or its designee to file one or more
financing or continuation statements, and amendments thereto and assignments
thereof, relative to all or any of the Receivables and Related Rights now
existing or hereafter generated by the Originator. If the Originator fails to
perform any of its agreements or obligations under this Agreement, the Company
or its designee may (but shall not be required to) itself perform, or cause
performance of, such agreement or obligation, and the expenses of the Company or
its designee incurred in connection therewith shall be payable by Originator as
provided in SECTION 9.1.
7.4 APPLICATION OF COLLECTIONS. Any payment by an Obligor in respect of
any indebtedness owed by it to the Originator shall, except as otherwise
specified by such Obligor or otherwise required by contract or law and unless
otherwise instructed by the Company or the Administrator, be applied as a
Collection of any Receivable or Receivables of such Obligor to the extent of any
amounts then due and payable thereunder before being applied to any other
indebtedness of such Obligor.
ARTICLE VIII
PURCHASE AND SALE TERMINATION EVENTS
8.1 PURCHASE AND SALE TERMINATION EVENTS. Each of the following events
or occurrences described in this SECTION 8.1 shall constitute a "PURCHASE AND
SALE TERMINATION EVENT":
(a) A Termination Event (as defined in the Receivables
Purchase Agreement) shall have occurred and, in the case of a
Termination Event (other than one described in paragraph (f) of Exhibit
V of the Receivables Purchase Agreement), the Administrator shall have
declared the Facility Termination Date to have occurred; or
(b) The Originator shall fail to make any payment or deposit
to be made by it hereunder when due and such failure shall remain
unremedied for two (2) Business Days; or
(c) Any representation or warranty made or deemed to be made
by the Originator (or any of its officers) under or in connection with
this Agreement, any
22
other Transaction Documents or any other information or report
delivered pursuant hereto or thereto shall prove to have been false or
incorrect in any material respect when made or deemed made and shall
remain incorrect or untrue for seven (7) Business Days after notice to
the Originator of such inaccuracy; or
(d) The Originator shall fail to perform or observe any other
term, covenant or agreement contained in this Agreement on its part to
be performed or observed and such failure shall remain unremedied for
seven (7) Business Days after written notice thereof shall have been
given by Servicer to the Originator.
8.2 REMEDIES.
(a) OPTIONAL TERMINATION. Upon the occurrence of a Purchase
and Sale Termination Event, the Company (and not Servicer) shall have
the option by notice to the Originator (with a copy to the
Administrator) to declare the Purchase and Sale Termination Date to
have occurred.
(b) REMEDIES CUMULATIVE. Upon any termination of the Purchase
Facility pursuant to this SECTION 8.2 (a), the Company shall have, in
addition to all other rights and remedies under this Agreement or
otherwise, all other rights and remedies provided under the UCC of each
applicable jurisdiction and other applicable laws, which rights shall
be cumulative. Without limiting the foregoing, the occurrence of the
Purchase and Sale Termination Date shall not deny the Company any
remedy in addition to termination of the Purchase Facility to which the
Company may be otherwise appropriately entitled, whether at law or
equity.
ARTICLE IX
INDEMNIFICATION
9.1 INDEMNITIES BY THE ORIGINATOR. Without limiting any other rights
which the Company may have hereunder or under applicable law, the Originator
hereby agrees to indemnify the Company and each of its officers, directors,
employees and agents (each of the foregoing Persons being individually called a
"PURCHASE AND SALE INDEMNIFIED PARTY"), forthwith on demand, from and against
any and all damages, losses, claims, judgments, liabilities and related costs
and expenses, including reasonable attorneys' fees and disbursements (all of the
foregoing being collectively called "PURCHASE AND SALE INDEMNIFIED AMOUNTS")
awarded against or incurred by any of them arising out of or as a result of the
failure of the Originator to perform its obligations under this Agreement, any
other Transaction Document or arising out of the claims asserted against a
Purchase and Sale Indemnified Party relating to the transactions contemplated
herein or therein or the use of proceeds thereof or therefrom, EXCLUDING,
HOWEVER, (i) Purchase and Sale Indemnified Amounts to the extent resulting from
gross negligence or willful misconduct on the part of such Purchase and Sale
Indemnified Party, (ii) any indemnification which
23
has the effect of recourse with respect to any Receivable to the extent that
such Receivable is uncollectible in whole or part on account of the lack of
credit worthiness or any Insolvency Proceeding of the related Obligor and (iii)
any tax based upon or measured by net income or gross receipts (except a tax
imposed by the jurisdiction under the laws of which such Purchase and Sale
Indemnified Party is organized or otherwise is considered doing business (unless
such Purchase and Sale Indemnified Party would not be considered doing business
in such jurisdiction, but for having entered into, or engaged in the
transactions in connection with, this Agreement or any other Transaction
Document) or any political subdivision thereof). Without limiting the foregoing,
the Originator indemnifies each Purchase and Sale Indemnified Party for Purchase
and Sale Indemnified Amounts relating to or resulting from:
(a) the transfer by the Originator of an interest in any
Receivable to any Person other than the Company;
(b) the breach of any representation or warranty made by the
Originator (or any of its officers) under or in connection with this
Agreement or any other Transaction Document, or any information or
report delivered by the Originator pursuant hereto or thereto which
shall have been false or incorrect when made or deemed made;
(c) the failure by the Originator to comply with any
applicable Legal Requirement with respect to any Receivable generated
by the Originator or the related Contract or applicable Legal
Requirement under which any Receivable arises, or the nonconformity of
any Receivable or the related Contract with any such applicable Legal
Requirement;
(d) the failure to vest and maintain vested in the Company an
ownership interest in the Receivables generated by the Originator free
and clear of any Adverse Claim, other than an Adverse Claim arising
solely as a result of an act of the Company, whether existing at the
time of the purchase or contribution of such Receivables or at any time
thereafter;
(e) the failure, to the extent resulting from an action or
inaction of Originator or any Affiliate thereof, to file, or any delay
in filing, financing statements or other similar instruments or
documents under the UCC of any applicable jurisdiction or other
applicable laws with respect to any Receivables or purported
Receivables generated by the Originator, whether at the time of any
purchase or contribution or at any subsequent time;
(f) any dispute, claim, offset or defense (other than any
reduction, revision or discharge in any Insolvency Proceeding relating
to the Obligor) of the Obligor to the payment of any Receivable or
purported Receivable generated by the Originator (including, without
limitation, a defense not connected to an Insolvency Event based on
such Receivable's, the related Contract's or applicable
24
Legal Requirements not being a legal, valid and binding obligation of
such Obligor enforceable against it in accordance with its terms), or
any other claim resulting from the sale of goods or services related to
any such Receivable or the furnishing of or failure to furnish such
goods or services or relating to any collection activity with respect
to such Receivable by the Originator or any Affiliate thereof;
(g) any products liability or other claim, investigation,
litigation or proceeding arising out of or in connection with
merchandise, insurance or services that give rise to a Receivable;
(h) any tax or governmental fee or charge (other than any tax
excluded pursuant to CLAUSE (iii) in the exclusion in the preceding
sentence), all interest and penalties thereon or with respect thereto,
and all out-of-pocket costs and expenses, including the reasonable fees
and expenses of counsel in defending against the same, which may arise
by reason of the purchase or ownership of the Receivables or any
Related Security connected with any such Receivables;
(i) any failure of the Originator or any Affiliate of the
Originator to perform its duties or obligations in accordance with the
provisions hereof or under the Contracts or applicable Legal
Requirements; and
(j) any obligation or liability of any Purchase and Sale
Indemnified Party to any Obligor or any other third Person with respect
to any Receivables, Contracts or applicable Legal Requirements related
thereto, other than any obligation or liability resulting from the
Servicer (if the Servicer is not the Originator or an Affiliate of the
Originator) failing to comply with applicable Legal Requirements, or
any obligation of any Purchase and Sale Indemnified Party to perform
any of the obligations of the Originator with respect to any
Receivables, Contracts or applicable Legal Requirements related
thereto.
If for any reason the indemnification provided above in this SECTION
9.1 is unavailable to a Purchase and Sale Indemnified Party or is insufficient
to hold such Purchase and Sale Indemnified Party harmless to the extent
contemplated hereby, then the Originator shall contribute to the amount paid or
payable by such Purchase and Sale Indemnified Party to the maximum extent
permitted under applicable law.
25
ARTICLE X
MISCELLANEOUS
10.1 AMENDMENTS, ETC.
(a) The provisions of this Agreement may from time to time be
amended, modified or waived, if such amendment, modification or waiver
is in writing and consented to by the Company, Servicer, the
Administrator, the Majority Purchasers and the Originator (with respect
to an amendment) or by the Company, the Administrator and the Majority
Purchasers (with respect to a waiver or consent by them).
(b) No failure or delay on the part of the Company, Servicer,
the Originator or any third party beneficiary in exercising any power
or right hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power or right preclude any
other or further exercise thereof or the exercise of any other power or
right. No notice to or demand on the Company, Servicer or the
Originator in any case shall entitle it to any notice or demand in
similar or other circumstances. No waiver or approval by the Company or
Servicer under this Agreement shall, except as may otherwise be stated
in such waiver or approval, be applicable to subsequent transactions.
No waiver or approval under this Agreement shall require any similar or
dissimilar waiver or approval thereafter to be granted hereunder.
(c) The Transaction Documents contain a final and complete
integration of all prior expressions by the parties hereto with respect
to the subject matter thereof and shall constitute the entire agreement
among the parties hereto with respect to the subject matter thereof,
superseding all prior oral or written understandings.
10.2 NOTICES, ETC. All notices and other communications provided for
hereunder shall, unless otherwise stated herein, be in writing (including
facsimile communication) and shall be personally delivered or sent by certified
mail, postage-prepaid, or by facsimile, to the intended party at the address or
facsimile number of such party set forth under its name on the signature pages
hereof or at such other address or facsimile number as shall be designated by
such party in a written notice to the other parties hereto. All such notices and
communications shall be effective, (i) if personally delivered, when received,
(ii) if sent by certified mail three (3) Business Days after having been
deposited in the mail, postage prepaid, and (iii) if transmitted by facsimile,
when sent, receipt confirmed by telephone or electronic means.
10.3 NO WAIVER; CUMULATIVE REMEDIES. Without limiting the foregoing,
the Originator hereby authorizes the Company, at any time and from time to time,
to the fullest extent permitted by law, to set off against any obligations of
the Originator to the
26
Company arising in connection with the Transaction Documents (including, without
limitation, amounts payable pursuant to SECTION 9.1) that are then due and
payable or that are not then due and payable but are accruing in respect of the
then current Yield Period, any and all indebtedness at any time owing by the
Company to or for the credit or the account of the Originator.
10.4 BINDING EFFECT; ASSIGNABILITY. This Agreement shall be binding
upon and inure to the benefit of the Company, Servicer and the Originator and
their respective successors and permitted assigns. The Originator may not assign
any of its rights hereunder or any interest herein without the prior written
consent of the Company and the Administrator, except as otherwise herein
specifically provided. 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 such time as the parties hereto shall agree. The
rights and remedies with respect to any breach of any representation and
warranty made by the Originator pursuant to ARTICLE V and the indemnification
and payment provisions of ARTICLE IX and SECTION 10.6 shall be continuing and
shall survive any termination of this Agreement.
10.5 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK.
10.6 COSTS, EXPENSES AND TAXES. In addition to the obligations of the
Originator under ARTICLE IX, the Originator agrees to pay on demand:
(a) all reasonable costs and expenses in connection with the
enforcement against the Originator or any Affiliate of the Originator
of this Agreement, the Originator Assignment Certificate and the other
Transaction Documents; and
(b) all stamp and other taxes and fees payable or determined
to be payable in connection with the execution, delivery, filing and
recording of this Agreement or the other Transaction Documents to be
delivered hereunder, and agrees to indemnify each Purchase and Sale
Indemnified Party against any liabilities with respect to or resulting
from any delay in paying or omission to pay such taxes and fees.
10.7 WAIVER OF JURY TRIAL. EACH PARTY HERETO WAIVES ANY RIGHT TO A
TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER
OR RELATING TO THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT, OR ANY AMENDMENT,
INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE
DELIVERED IN CONNECTION HEREWITH OR ARISING FROM ANY RELATIONSHIP EXISTING IN
CONNECTION WITH THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT, AND
27
AGREES THAT (a) ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND
NOT BEFORE A JURY AND (b) ANY PARTY HERETO (OR ANY ASSIGNEE OR THIRD PARTY
BENEFICIARY OF THIS AGREEMENT) MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF
THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF ANY OTHER
PARTY OR PARTIES HERETO TO WAIVER OF ITS OR THEIR RIGHT TO TRIAL BY JURY.
10.8 CAPTIONS AND CROSS REFERENCES; INCORPORATION BY REFERENCE. The
various captions (including, without limitation, the table of contents) in this
Agreement are included for convenience only and shall not affect the meaning or
interpretation of any provision of this Agreement. Unless otherwise indicated,
references in this Agreement to any Section or Exhibit are to such Section or
Exhibit of this Agreement, as the case may be. APPENDIX A and the Exhibits
hereto are hereby incorporated by reference into and made a part of this
Agreement.
10.9 EXECUTION IN COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which when taken together shall constitute one and the same Agreement.
10.10 ACKNOWLEDGMENT AND AGREEMENT. By execution below, the Originator
expressly acknowledges and agrees that all of the Company's rights, title, and
interests in, to, and under this Agreement (but not its obligations), shall be
assigned by the Company pursuant to the Receivables Purchase Agreement, and the
Originator consents to such assignment. Each of the parties hereto acknowledges
and agrees that the Administrator, each Purchaser Agent and each Purchaser are
third party beneficiaries of the rights of the Company arising hereunder and
under the other Transaction Documents to which the Originator is a party.
10.11 NO PROCEEDINGS. Each of the Company, the Servicer and the
Originator, hereby covenants and agrees that it will not institute against, or
join any other Person in instituting against, any Conduit Purchaser any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding,
or other proceeding under any federal or state bankruptcy or similar law, for
one year and one day after the latest maturing Note issued by such Conduit
Purchaser is paid in full. The provision of this SECTION 10.12 shall survive any
termination of this Agreement.
[SIGNATURES FOLLOW]
28
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
LG&E RECEIVABLES LLC
By:________________________________
Name:
Title:
Address:
LG&E Receivables LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
LOUISVILLE GAS AND ELECTRIC COMPANY,
as Initial Servicer and as the Originator
By:_______________________________
Name:
Title:
Address:
Louisville Gas and Electric Company
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
EXHIBIT A
FORM OF PURCHASE REPORT
ORIGINATOR: Louisville Gas and Electric Company
PURCHASER: LG&E Receivables LLC
DATE: ________________
XI. OUTSTANDING BALANCE OF RECEIVABLES PURCHASED: __________________
XII. FAIR MARKET VALUE DISCOUNT:
1/(1 + ((Prime Rate + .25%) X DAYS' SALES OUTSTANDING ))
-----------------------
365
Prime Rate = __________________
Days' Sales Outstanding = __________________
XIII. PURCHASE PRICE (I X II) = $_______________
EXHIBIT B
FORM OF COMPANY NOTE
New York,
New York
[ ], 2001
FOR VALUE RECEIVED, the undersigned, LG&E Receivables LLC (the
"Company"), a Delaware limited liability company, promises to pay to Louisville
Gas and Electric Company, a Kentucky corporation ("LGEC"), on the terms and
subject to the conditions set forth herein and in the
Purchase and Sale
Agreement referred to below, the aggregate unpaid Purchase Price of all
Receivables purchased by the Company from LGEC pursuant to such
Purchase and
Sale Agreement, as such unpaid Purchase Price is shown in the records of
Servicer.
1.
PURCHASE AND SALE AGREEMENT. This Company Note is the Company Note
described in, and is subject to the terms and conditions set forth in, that
certain
Purchase and Sale Agreement of even date herewith (as the same may be
amended, supplemented, amended and restated or otherwise modified in accordance
with its terms, the "
PURCHASE AND SALE AGREEMENT"), between the Company and
LGEC. Reference is hereby made to the
Purchase and Sale Agreement for a
statement of certain other rights and obligations of the Company and LGEC.
2. DEFINITIONS. Capitalized terms used (but not defined) herein have
the meanings assigned thereto in Exhibit I to the Receivables Purchase Agreement
(as defined in the Purchase and Sale Agreement). In addition, as used herein,
the following terms have the following meanings:
"BANKRUPTCY PROCEEDINGS" has the meaning set forth in CLAUSE
(b) of PARAGRAPH 9 hereof.
"FINAL MATURITY DATE" means the Payment Date immediately
following the date that falls one hundred twenty one (121) days after
the Purchase and Sale Termination Date.
"INTEREST PERIOD" means the period from and including a
Settlement Date (or, in the case of the first Interest Period, the date
hereof) to but excluding the next Settlement Date.
"SENIOR INTERESTS" means, collectively, (i) all accrued
Discount, (ii) all fees payable by the Company to the Senior Interest
Holders pursuant to the Receivables Purchase Agreement, (iii) all
amounts payable pursuant to SECTION 1.7 and 1.8 of the Receivables
Purchase Agreement, (iv) the Aggregate Investment and (v) all other
obligations owed by the Company to the Senior
Interest Holders under the Receivables Purchase Agreement and other
Transaction Documents that are due and payable, together with any and
all interest and Discount accruing on any such amount after the
commencement of any Bankruptcy Proceedings, notwithstanding any
provision or rule of law that might restrict the rights of any Senior
Interest Holder, as against the Company or anyone else, to collect such
interest.
"SENIOR INTEREST HOLDERS" means, collectively, the Purchaser,
the Administrator and the Indemnified Parties.
"SUBORDINATION PROVISIONS" means, collectively, CLAUSES (a)
through (l) of PARAGRAPH 9 hereof.
"TELERATE SCREEN RATE" means, for any Interest Period, the
rate for thirty day commercial paper denominated in dollars which
appears on Page 1250 of the Dow ▇▇▇▇▇ Telerate Service (or such other
page as may replace that page on that service for the purpose of
displaying dollar commercial paper rates) at approximately 9:00 a.m.,
New York City time, on the first day of such Interest Period.
3. INTEREST. Subject to the Subordination Provisions set forth below,
the Company promises to pay interest on this Company Note as follows:
(a) Prior to the Final Maturity Date, the aggregate unpaid
Purchase Price from time to time outstanding during any Interest Period
shall bear interest at a rate PER ANNUM equal to the Telerate Screen
Rate for such Interest Period, as determined by Servicer; and
(b) From (and including) the Final Maturity Date to (but
excluding) the date on which the entire aggregate unpaid Purchase Price
payable to LGEC is fully paid, such aggregate unpaid Purchase Price
from time to time outstanding shall bear interest at a rate PER ANNUM
equal to the "Prime Rate" as published in the "Money Rates" section of
the Wall Street Journal or such other publication as determined by the
Administrator in its sole discretion.
4. INTEREST PAYMENT DATES. Subject to the Subordination Provisions set
forth below, the Company shall pay accrued interest on this Company Note on each
Settlement Date, and shall pay accrued interest on the amount of each principal
payment made in cash on a date other than a Settlement Date at the time of such
principal payment.
5. BASIS OF COMPUTATION. Interest accrued hereunder that is computed by
reference to the Telerate Screen Rate shall be computed for the actual number of
days elapsed on the basis of a 360-day year, and interest accrued hereunder that
is computed by reference to the rate described in PARAGRAPH 3(B) of this Company
Note shall be computed for the actual number of days elapsed on the basis of a
365- or 366-day year.
6. PRINCIPAL PAYMENT DATES. Subject to the Subordination Provisions set
forth below, payments of the principal amount of this Company Note shall be made
as follows:
(a) The principal amount of this Company Note shall be reduced
by an amount equal to each payment deemed made pursuant to SECTION 3.3
of the Purchase and Sale Agreement; and
(b) The entire remaining unpaid Purchase Price of all
Receivables purchased by the Company from LGEC pursuant to the Purchase
and Sale Agreement shall be due and payable on the Final Maturity Date.
Subject to the Subordination Provisions set forth below, the principal amount of
and accrued interest on this Company Note may be prepaid on any Business Day
without premium or penalty.
7. PAYMENT MECHANICS. All payments of principal and interest hereunder
are to be made in lawful money of the United States of America.
8. ENFORCEMENT EXPENSES. In addition to and not in limitation of the
foregoing, but subject to the Subordination Provisions set forth below and to
any limitation imposed by applicable law, the Company agrees to pay all
expenses, including reasonable attorneys' fees and legal expenses, incurred by
LGEC in seeking to collect any amounts payable hereunder which are not paid when
due.
9. SUBORDINATION PROVISIONS. Company covenants and agrees, and LGEC and any
other holder of this Company Note (collectively, LGEC and any such other holder
are called the "HOLDER"), by its acceptance of this Company Note, likewise
covenants and agrees on behalf of itself and any holder of this Company Note,
that the payment of the principal amount of and interest on this Company Note is
hereby expressly subordinated in right of payment to the payment and performance
of the Senior Interests to the extent and in the manner set forth in the
following clauses of this PARAGRAPH 9:
(a) No payment or other distribution of the Company's assets
of any kind or character, whether in cash, securities, or other rights
or property, shall be made on account of this Company Note except to
the extent such payment or other distribution is (i) permitted under
PARAGRAPH 1(m) of EXHIBIT IV of the Receivables Purchase Agreement or
(ii) made pursuant to CLAUSE (a) or (b) of PARAGRAPH 6 of this Company
Note;
(b) In the event of any dissolution, winding up, liquidation,
readjustment, reorganization or other similar event relating to the
Company, whether voluntary or involuntary, partial or complete, and
whether in bankruptcy, insolvency or receivership proceedings, or upon
an assignment for the benefit of creditors, or any other marshalling of
the assets and liabilities of the Company or any sale of all or
substantially all of the assets of the Company other than as
permitted by the Purchase and Sale Agreement (such proceedings being
herein collectively called "BANKRUPTCY PROCEEDINGS"), the Senior
Interests shall first be paid and performed in full and in cash before
LGEC shall be entitled to receive and to retain any payment or
distribution in respect of this Company Note. In order to implement the
foregoing: (i) all payments and distributions of any kind or character
in respect of this Company Note to which Holder would be entitled
except for this CLAUSE (B) shall be made directly to the Administrator
(for the benefit of the Senior Interest Holders); (ii) Holder shall
promptly file a claim or claims, in the form required in any Bankruptcy
Proceedings, for the full outstanding amount of this Company Note, and
shall use commercially reasonable efforts to cause said claim or claims
to be approved and all payments and other distributions in respect
thereof to be made directly to the Administrator (for the benefit of
the Senior Interest Holders) until the Senior Interests shall have been
paid and performed in full and in cash; and (iii) Holder hereby
irrevocably agrees that the Purchaser (or the Administrator acting on
the Purchaser's behalf), may in the name of Holder or otherwise,
demand, ▇▇▇ for, collect, receive and receipt for any and all such
payments or distributions, and file, prove and vote or consent in any
such Bankruptcy Proceedings with respect to any and all claims of
Holder relating to this Company Note, in each case until the Senior
Interests shall have been paid and performed in full and in cash;
(c) In the event that Holder receives any payment or other
distribution of any kind or character from the Company or from any
other source whatsoever, in respect of this Company Note, other than as
expressly permitted by the terms of this Company Note, such payment or
other distribution shall be received in trust for the Senior Interest
Holders and shall be turned over by Holder to the Administrator (for
the benefit of the Senior Interest Holders) forthwith. Holder will ▇▇▇▇
its books and records so as clearly to indicate that this Company Note
is subordinated in accordance with the terms hereof. All payments and
distributions received by the Administrator in respect of this Company
Note, to the extent received in or converted into cash, may be applied
by the Administrator (for the benefit of the Senior Interest Holders)
first to the payment of any and all expenses (including reasonable
attorneys' fees and legal expenses) paid or incurred by the Senior
Interest Holders in enforcing these Subordination Provisions, or in
endeavoring to collect or realize upon this Company Note, and any
balance thereof shall, solely as between LGEC and the Senior Interest
Holders, be applied by the Administrator (in the order of application
set forth in SECTION 1.4(d)(ii) of the Receivables Purchase Agreement)
toward the payment of the Senior Interests; but as between the Company
and its creditors, no such payments or distributions of any kind or
character shall be deemed to be payments or distributions in respect of
the Senior Interests;
(d) Notwithstanding any payments or distributions received by
the Senior Interest Holders in respect of this Company Note, while any
Bankruptcy Proceedings are pending Holder shall not be subrogated to
the then existing rights
of the Senior Interest Holders in respect of the Senior Interests until
the Senior Interests have been paid and performed in full and in cash.
If no Bankruptcy Proceedings are pending, Holder shall only be entitled
to exercise any subrogation rights that it may acquire (by reason of a
payment or distribution to the Senior Interest Holders in respect of
this Company Note) to the extent that any payment arising out of the
exercise of such rights would be permitted under PARAGRAPH 1(M) of
EXHIBIT IV of the Receivables Purchase Agreement;
(e) These Subordination Provisions are intended solely for the
purpose of defining the relative rights of Holder, on the one hand, and
the Senior Interest Holders on the other hand. Nothing contained in
these Subordination Provisions or elsewhere in this Company Note is
intended to or shall impair, as between the Company, its creditors
(other than the Senior Interest Holders) and Holder, the Company's
obligation, which is unconditional and absolute, to pay Holder the
principal of and interest on this Company Note as and when the same
shall become due and payable in accordance with the terms hereof or to
affect the relative rights of Holder and creditors of the Company
(other than the Senior Interest Holders);
(f) Holder shall not, until the Senior Interests have been
paid and performed in full and in cash, (i) cancel, waive, forgive,
transfer or assign, or commence legal proceedings to enforce or
collect, or subordinate to any obligation of the Company, howsoever
created, arising or evidenced, whether direct or indirect, absolute or
contingent, or now or hereafter existing, or due or to become due,
other than the Senior Interests, this Company Note or any rights in
respect hereof or (ii) convert this Company Note into an equity
interest in the Company, unless Holder shall have received the prior
written consent of the Administrator and the Purchaser in each case;
(g) Holder shall not, without the advance written consent of
the Administrator and the Purchaser, commence, or join with any other
Person in commencing, any Bankruptcy Proceedings with respect to the
Company until at least one year and one day shall have passed since the
Senior Interests shall have been paid and performed in full and in
cash;
(h) If, at any time, any payment (in whole or in part) of any
Senior Interest is rescinded or must be restored or returned by a
Senior Interest Holder (whether in connection with Bankruptcy
Proceedings or otherwise), these Subordination Provisions shall
continue to be effective or shall be reinstated, as the case may be, as
though such payment had not been made;
(i) Each of the Senior Interest Holders may, from time to
time, at its sole discretion, without notice to Holder, and without
waiving any of its rights under these Subordination Provisions, take
any or all of the following actions: (i) retain or obtain an interest
in any property to secure any of the Senior Interests;
(ii) retain or obtain the primary or secondary obligations of any other
obligor or obligors with respect to any of the Senior Interests; (iii)
extend or renew for one or more periods (whether or not longer than the
original period), alter or exchange any of the Senior Interests, or
release or compromise any obligation of any nature with respect to any
of the Senior Interests; (iv) amend, supplement, amend and restate, or
otherwise modify any Transaction Document; and (v) release its security
interest in, or surrender, release or permit any substitution or
exchange for all or any part of any rights or property securing any of
the Senior Interests, or extend or renew for one or more periods
(whether or not longer than the original period), or release,
compromise, alter or exchange any obligations of any nature of any
obligor with respect to any such rights or property;
(j) Holder hereby waives: (i) notice of acceptance of these
Subordination Provisions by any of the Senior Interest Holders; (ii)
notice of the existence, creation, non-payment or non-performance of
all or any of the Senior Interests; and (iii) all diligence in
enforcement, collection or protection of, or realization upon, the
Senior Interests, or any thereof, or any security therefor;
(k) Each of the Senior Interest Holders may, from time to
time, on the terms and subject to the conditions set forth in the
Transaction Documents to which such Persons are party, but without
notice to Holder, assign or transfer any or all of the Senior
Interests, or any interest therein; and, notwithstanding any such
assignment or transfer or any subsequent assignment or transfer
thereof, such Senior Interests shall be and remain Senior Interests for
the purposes of these Subordination Provisions, and every immediate and
successive assignee or transferee of any of the Senior Interests or of
any interest of such assignee or transferee in the Senior Interests
shall be entitled to the benefits of these Subordination Provisions to
the same extent as if such assignee or transferee were the assignor or
transferor; and
(l) These Subordination Provisions constitute a continuing
offer from the holder of this Company Note to all Persons who become
the holders of, or who continue to hold, Senior Interests; and these
Subordination Provisions are made for the benefit of the Senior
Interest Holders, and the Administrator may proceed to enforce such
provisions on behalf of each of such Persons.
10. GENERAL. No failure or delay on the part of LGEC in exercising any
power or right hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise of any such power or right preclude any other or further
exercise thereof or the exercise of any other power or right. No amendment,
modification or waiver of, or consent with respect to, any provision of this
Company Note shall in any event be effective unless (i) the same shall be in
writing and signed and delivered by the Company and Holder and (ii) all consents
required for such actions under the Transaction Documents shall have been
received by the appropriate Persons.
11. MAXIMUM INTEREST. Notwithstanding anything in this Company Note to the
contrary, the Company shall never be required to pay unearned interest on any
amount outstanding hereunder and shall never be required to pay interest on the
principal amount outstanding hereunder at a rate in excess of the maximum
nonusurious interest rate that may be contracted for, charged or received under
applicable federal or state law (such maximum rate being herein called the
"HIGHEST LAWFUL RATE"). If the effective rate of interest which would otherwise
by payable under this Company Note would exceed the Highest Lawful Rate, or if
the holder of this Company Note shall receive any unearned interest or shall
receive monies that are deemed to constitute interest which would increase the
effective rate of interest payable by the Company under this Company Note to a
rate in excess of the Highest Lawful Rate, then (i) the amount of interest which
would otherwise by payable by the Company under this Company Note shall be
reduced to the amount allowed by applicable law, and (ii) any unearned interest
paid by the Company or any interest paid by the Company in excess of the Highest
Lawful Rate shall be refunded to the Company. Without limitation of the
foregoing, all calculations of the rate of interest contracted for, charged or
received by LGEC under this Company Note that are made for the purpose of
determining whether such rate exceeds the Highest Lawful Rate applicable to LGEC
(such Highest Lawful Rate being herein called the "LGEC'S MAXIMUM PERMISSIBLE
RATE") shall be made, to the extent permitted by usury laws applicable to LGEC
(now or hereafter enacted), by amortizing, prorating and spreading in equal
parts during the actual period during which any amount has been outstanding
hereunder all interest at any time contracted for, charged or received by LGEC
in connection herewith. If at any time and from time to time (i) the amount of
interest payable to LGEC on any date shall be computed at LGEC's Maximum
Permissible Rate pursuant to the provisions of the foregoing sentence and (ii)
in respect of any subsequent interest computation period the amount of interest
otherwise payable to LGEC would be less than the amount of interest payable to
LGEC computed at LGEC's Maximum Permissible Rate, then the amount of interest
payable to LGEC in respect of such subsequent interest computation period shall
continue to be computed at LGEC's Maximum Permissible Rate until the total
amount of interest payable to LGEC shall equal the total amount of interest
which would have been payable to LGEC if the total amount of interest had been
computed without giving effect to the provisions of the foregoing sentence.
12. NO NEGOTIATION. This Company Note is not negotiable.
13. GOVERNING LAW. THIS COMPANY NOTE HAS BEEN DELIVERED IN
NEW YORK,
NEW YORK, AND SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE
INTERNAL LAWS OF THE STATE OF
NEW YORK.
14. CAPTIONS. Paragraph captions used in this Company Note are for
convenience only and shall not affect the meaning or interpretation of any
provision of this Company Note.
LG&E RECEIVABLES LLC
By:___________________________
EXHIBIT C
FORM OF ORIGINATOR ASSIGNMENT CERTIFICATE
Reference is made to the Purchase and Sale Agreement of even date herewith
(as the same may be amended, supplemented, amended and restated or otherwise
modified from time to time, the "PURCHASE AND SALE AGREEMENT") between the
undersigned, Louisville Gas and Electric Company ("LGEC"), and LG&E Receivables
LLC (the "COMPANY"). Unless otherwise defined herein, capitalized terms used
herein have the meanings provided in the Purchase and Sale Agreement or in
EXHIBIT I to the Receivables Purchase Agreement (as defined in the Purchase and
Sale Agreement), as applicable.
The undersigned hereby sells, assigns and transfers unto the Company and
its successors and assigns all right, title and interest of the undersigned in
and to:
(n) each Receivable of the undersigned that existed and
was owing to the undersigned as of the Cut-off Date
other than Receivables contributed pursuant to
SECTION 3.1 of the Purchase and Sale Agreement;
(b) each Receivable created by the undersigned from and
including the Cut-off Date to and including the
Purchase and Sale Termination Date;
(c) all rights to, but not the obligations under, all
Related Security;
(d) all monies due or to become due with respect to any
of the foregoing;
(e) all books and records related to any of the
foregoing; and
(f) all collections and other proceeds of any of the foregoing
(as defined in the applicable UCC) that are or were received by the
undersigned on or after the Cut-off Date, including, without
limitation, all funds which either are received by the undersigned, the
Company or the Servicer from or on behalf of the Obligors in payment of
any amounts owed (including, without limitation, invoice price, finance
charges, interest and all other charges) in respect of Receivables, or
are applied to such amounts owed by the Obligors (including, without
limitation, insurance payments that the undersigned or the Servicer
applies in the ordinary course of its business to amounts owed in
respect of any Receivable and net proceeds of sale or other disposition
of repossessed goods or other collateral or property of the Obligors or
any other parties directly or indirectly liable for payment of such
Receivables).
This Originator Assignment Certificate is made without recourse but on the
terms and subject to the conditions set forth in the Transaction Documents to
which the undersigned is a party. The undersigned acknowledges and agrees that
the Company and its successors and
assigns are accepting this Originator Assignment Certificate in reliance on the
representations, warranties and covenants of the undersigned contained in the
Transaction Documents to which the undersigned is a party.
THIS ORIGINATOR ASSIGNMENT CERTIFICATE SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE PURCHASE AND SALE AGREEMENT AND THE INTERNAL LAWS OF THE
STATE OF NEW YORK.
IN WITNESS WHEREOF, the undersigned has caused this Originator Assignment
Certificate to be duly executed and delivered by its duly authorized officer
this ___ day of , 2001.
LOUISVILLE GAS AND ELECTRIC COMPANY
By:__________________________________
Name:________________________________
Title:_______________________________
EXHIBIT D
OFFICE LOCATIONS
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EXHIBIT E
TRADE NAMES
None