U.S. $200,000,000
RECEIVABLES
PURCHASE AND SALE AGREEMENT
Dated as of September 30, 1997
As Amended and Restated as of March 30, 2001
Among
CL&P RECEIVABLES CORPORATION
as Seller
THE CONNECTICUT LIGHT AND POWER COMPANY
as Collection Agent and Originator
CORPORATE ASSET FUNDING COMPANY, INC.
as a Purchaser
CITIBANK, N.A.
as a Bank
and
CITICORP NORTH AMERICA, INC.
as Agent
RECEIVABLES PURCHASE AND SALE AGREEMENT
Dated as of September 30, 1997
As Amended and Restated as of March 30, 2001
CL&P RECEIVABLES CORPORATION, a Connecticut corporation
(the "Seller"), THE CONNECTICUT LIGHT AND POWER COMPANY, a
Connecticut corporation, as Collection Agent and Originator,
CORPORATE ASSET FUNDING COMPANY, INC., a Delaware corporation,
CITIBANK, N.A. and CITICORP NORTH AMERICA INC., a Delaware
corporation ("CNAI"), as agent (the "Agent") for the Purchasers
and the Banks (as defined herein), agree as follows:
PRELIMINARY STATEMENTS. (1) Certain terms which are
capitalized and used throughout this Agreement (in addition to
those defined above) are defined in Article I of this Agreement.
(2) The Seller has acquired, and may continue to
acquire Receivables from the Originator, either by purchase or by
contribution to the capital of the Seller, as determined from
time to time by the Seller and the Originator. The Seller is
prepared to sell undivided fractional ownership interests in the
Receivables (referred to herein as "Receivable Interests").
(3) The Conduit and the Banks are prepared to purchase
such Receivable Interests from the Seller on the terms set forth
herein.
(4) CNAI has been requested and is prepared to act as
Agent.
(5) The Act and the Financing Order have become
effective and the Notes and the Certificates are being issued,
the effect of which is to require several changes to the Original
Agreement.
(6) This Agreement is an amendment and restatement of
the Receivables Purchase and Sale Agreement, dated as of
September 30, 1997, as amended as of September 29, 1998, as of
September 28, 1999 and as of September 27, 2000, among the
Seller, the Conduit, Citibank and the Agent (the "Original
Agreement").
NOW, THEREFORE, the parties agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings
(such meanings to be equally applicable to both the singular and
plural forms of the terms defined):
"Act" means Sections 8 to 14, inclusive, of Public Act
98-28, codified as 16-245e to 16-245k of the General Statutes
of Connecticut.
"Adverse Claim" means a lien, security interest, charge
or encumbrance, or other right or claim of any Person.
"Affiliate" when used with respect to a Person means
any other Person controlling, controlled by or under common
control with such Person.
"Affiliated Obligor" means any Obligor which is an
Affiliate of another Obligor.
"Alternate Base Rate" means a fluctuating interest rate
per annum as shall be in effect from time to time, which rate per
annum shall at all times be equal to the higher of:
(a) the rate of interest announced publicly by
Citibank in New York, New York, from time to time as Citibank's
base rate; or
(b) 1/2 of one percent above the latest three-week
moving average of secondary market morning offering rates in the
United States for three-month certificates of deposit of major
United States money market banks, such three- week moving average
being determined weekly on each Monday (or, if such day is not a
Business Day, on the next succeeding Business Day) for the three-
week period ending on the previous Friday by Citibank on the
basis of such rates reported by certificate of deposit dealers to
and published by the Federal Reserve Bank of New York or, if such
publication shall be suspended or terminated, on the basis of
quotations for such rates received by Citibank from three New
York certificate of deposit dealers of recognized standing, in
either case adjusted to the nearest 1/4 of one percent or, if
there is no nearest 1/4 of one percent, to the next higher 1/4 of
one percent.
"Applicable Percentage" means, for any Settlement
Period, the rate per annum set forth below corresponding, as of
the first Business Day of such Settlement Period, to the actual
ratings for the Originator's long-term public senior debt on such
date (or, if the two ratings do not correlate on any such date,
the lower of the two ratings):
Public Debt Rating by
Standard & Poor's and Moody's Applicable Percentage
BBB/Baa2 (or higher) 1.00%
BBB-/Baa3 1.25%
BB+/Ba1 1.50%
BB/Ba2 2.00%
BB-/Ba3 2.25%
"Assignee Rate" for any Settlement Period for any
Receivable Interest means an interest rate per annum equal to the
Eurodollar Rate plus the Applicable Percentage for such
Settlement Period; provided, however, that in case of:
(i) any Settlement Period on or prior to the
first day of which a Purchaser or Bank shall have notified the
Agent that the introduction of or any change in or in the
interpretation of any law or regulation makes it unlawful, or any
central bank or other governmental authority asserts that it is
unlawful, for such Purchaser or Bank to fund such Receivable
Interest at the Assignee Rate set forth above (and such Purchaser
or Bank shall not have subsequently notified the Agent that such
circumstances no longer exist),
(ii) any Settlement Period of one to (and
including) 29 days,
(iii) any Settlement Period as to which the
Agent does not receive notice, by no later than 12:00 noon (New
York City time) on the third Business Day preceding the first day
of such Settlement Period, that the related Receivable Interest
will not be funded by issuance of commercial paper, or
(iv) any Settlement Period for a Receivable
Interest the Capital of which allocated to the Purchasers or the
Banks is less than $500,000,
the "Assignee Rate" for such Settlement Period shall be an
interest rate per annum equal to 0.25% per annum above the
Alternate Base Rate in effect on the first day of such Settlement
Period; provided further that the Agent and the Seller may agree
in writing from time to time upon a different "Assignee Rate."
"Average Dilution Ratio" means for any calendar month
the average of the Dilution Ratios for the 12 most recently ended
calendar months.
"Average Maturity" means at any time that period of
days equal to the average maturity of the Pool Receivables
calculated by the Collection Agent in the then most recent Seller
Report; provided that if the Agent shall determine that such
calculation is incorrect, the Agent may recalculate such Average
Maturity.
"Bank Commitment" of any Bank means, (a) with respect
to Citibank $100,000,000 or such amount as reduced by any
assignment entered into between Citibank and other Banks; or (b)
with respect to a Bank that has entered into an assignment with
another Bank, the amount set forth therein as such Bank's Bank
Commitment, in each case as such amount may be reduced by an
assignment entered into between such Bank and an Eligible
Assignee, and as may be further reduced (or terminated) pursuant
to the next sentence. Any reduction (or termination) of the
Purchase Limit pursuant to the terms of this Agreement shall
reduce ratably (or terminate) each Bank's Bank Commitment.
"Banks" means Citibank and each Eligible Assignee that
shall become a party to this Agreement pursuant to Section 9.01.
"Budget Account" means an account of an Obligor with
the Originator pursuant to which such Obligor is billed a fixed
monthly fee for a fixed period of time at the end of which such
Obligor's account with the Originator is adjusted.
"Budget Account Credit Balance" means for any date the
amount by which amounts paid by an Obligor pursuant to a Budget
Account exceeds the amount for which such Obligor should have
been billed by the Originator had such Obligor not been party to
a Budget Account.
"Business Day" means any day on which (i) banks are not
authorized or required to close in New York City, and (ii) if
this definition of "Business Day" is utilized in connection with
the Eurodollar Rate, dealings are carried out in the London
interbank market.
"Capital" of any Receivable Interest means the original
amount paid to the Seller for such Receivable Interest at the
time of its Purchase by the Conduit or a Bank pursuant to this
Agreement, in each case reduced from time to time by Collections
distributed on account of such Capital pursuant to Section
2.06(d); provided that if such Capital shall have been reduced by
any distribution and thereafter all or a portion of such
distribution is rescinded or must otherwise be returned for any
reason, such Capital shall be increased by the amount of such
rescinded or returned distribution, as though it had not been
made.
"Certificate Indenture" means the Certificate Indenture
dated as of March 30, 2001, among the Certificate Issuer, the
Delaware Trustee and the Certificate Trustee, as the same may be
amended, modified or restated from time to time.
"Certificate Issuer " means Connecticut RRB Special
Purpose Trust CL&P-1, a Delaware business trust.
"Certificate Trustee" means the Person acting as
trustee under the Certificate Indenture.
"Certificates" means the Connecticut RRB Special
Purpose Trust CL&P- 1 Rate Reduction Certificates issued under
the Certificate Indenture.
"Citibank" means Citibank, N.A., a national banking
association.
"Collection Agent" means at any time the Person then
authorized pursuant to Article VI to administer and collect Pool
Receivables.
"Collection Account" means Account # 9370121283 at
Fleet National Bank, Hartford, Connecticut.
"Collection Agent Fee" has the meaning specified in the
Originator Purchase Agreement.
"Collection Agent Fee Reserve" for any Receivable
Interest at any time means the sum of (i) the unpaid Collection
Agent Fee relating to such Receivable Interest accrued to such
time plus (ii) an amount equal to (a) the Capital of such
Receivable Interest on such date multiplied by (b) the product of
(x) the percentage per annum at which the Collection Agent Fee is
accruing on such date and (y) a fraction having the sum of the
Average Maturity plus the Collection Delay Period (each as in
effect at such date) as its numerator and 360 as its denominator.
"Collection Delay Period" means 10 days or such other
number of days as may be agreed to by the Agent and the Seller.
"Collections" means, with respect to any Receivable,
all cash collections and other cash proceeds of such Receivable,
including, without limitation, all cash proceeds of Related
Security with respect to such Receivable, and any Collection of
such Receivable deemed to have been received pursuant to Section
2.06.
"Commitment Termination Date" means the earliest of (a)
July 11, 2001, unless, prior to such date (or the date so
extended pursuant to this clause), upon the Seller's request,
made not more than 90 nor less than 45 days prior to the then
Commitment Termination Date, one or more Banks having 100% of the
Purchase Limit shall in their sole discretion consent, which
consent shall be given not more than 30 days prior to the then
Commitment Termination Date, to the extension of the Commitment
Termination Date to the date occurring not more than 360 days
after the then Commitment Termination Date; provided, however,
that any failure of any Bank to respond to the Seller's request
for such extension shall be deemed a denial of such request by
such Bank, (b) the Facility Termination Date and (c) the date
determined pursuant to Section 7.01.
"Concentration Limit" means, with respect to any
Obligor, 2% (or such higher percentage as is agreed to by the
Agent) of the Outstanding Balance of all Pool Receivables (a
"Normal Concentration Limit"), or such other percentage of the
Outstanding Balance of all Pool Receivables, or such amount as
may be designated for any Obligor by the Seller and agreed to for
such Obligor by the Agent, in a notice to the Agent in
substantially the form of Exhibit A (such other percentage or
amount for any Obligor being a "Special Concentration Limit"),
subject to cancellation thereof pursuant to Section 2.01;
provided, however, that, in the case of an Obligor with one or
more Affiliated Obligors which is or are Designated Obligors, the
Concentration Limit shall be calculated as if such Obligor and
such one or more Affiliated Obligors were one Obligor.
"Conduit" means Corporate Asset Funding Company, Inc.
and any successor or assign thereof that is a receivables
investment company which in the ordinary course of its business
issues commercial paper or other securities to fund its
acquisition and maintenance of receivables.
"Contract" means the Tariffs and any agreement between
the Originator and an Obligor, provided that such agreement does
not vary the payment terms of such Obligor from those in the
Tariffs or the Credit and Collection Policy.
"Credit and Collection Policy" means those credit and
collection policies and practices of the Originator in effect on
the date hereof relating to the Receivables, as they may be
modified in the manner permitted under Section 5.03(c).
"Default Ratio" means the ratio (expressed as a
percentage) computed as of the last day of each calendar month by
dividing (i) the aggregate Outstanding Balance of all Pool
Receivables that were Defaulted Receivables on such day or that
would have been Defaulted Receivables on such day had they not
been written off the books of the Originator or the Seller during
such month by (ii) the aggregate Outstanding Balance of all Pool
Receivables on such day.
"Defaulted Receivable" means a Receivable:
(i) as to which any payment, or part thereof, remains
unpaid for 91 days or more from the original billing date for
such payment and which does not relate to an Inactive Account,
(ii) as to which the Obligor thereof, or any other
Person obligated thereon or owning any Related Security in
respect thereof, has taken any action, or suffered any event to
occur, of the type described in Section 7.01(g), or
(iii) which, consistent with the Credit and
Collection Policy, would be written off the Originator's or the
Seller's books as uncollectible.
"Deferred Purchase Price" has the meaning specified in
the Originator Purchase Agreement.
"Delaware Trustee" means First Union Trust Company,
National Association.
"Delinquency Ratio" means the ratio (expressed as a
percentage) computed as of the last day of each calendar month by
dividing (i) the aggregate Outstanding Balance of all Pool
Receivables that were Delinquent Receivables on such day by (ii)
the aggregate Outstanding Balance of all Pool Receivables on such
day.
"Delinquent Receivable" means a Receivable that is not
a Defaulted Receivable and:
(i) as to which any payment, or part thereof, remains
unpaid for 61 days or more from the original billing date for
such payment; or
(ii) which, consistent with the Credit and Collection
Policy, would be classified as delinquent by the Originator or
the Seller.
"Designated Account" means an account in the name of,
and owned by, CNAI, as Agent, designated by the Agent for the
purpose of receiving collections of Pool Receivables directly
from Obligors.
"Designated Obligor" means, at any time, any Obligor
unless the Seller or the Agent has, following three Business
Days' notice in accordance with Section 2.01, advised the other
that such Obligor shall not be considered a Designated Obligor.
"Dilution" means any reduction in the Outstanding
Balance of any Receivable, except for reductions resulting from
payments or writeoffs with respect to such Receivable.
"Dilution Horizon Factor" means the ratio (expressed as
percentage) computed by dividing (i) the sum of (a) the aggregate
Outstanding Balance of all Receivables created during the most
recently ended calendar month and (b) the aggregate Outstanding
Balance of Unbilled Receivables as determined on the last day of
the most recently ended calendar month by (ii) the Net
Receivables Pool Balance as of the last day of the most recently
ended calendar month.
"Dilution Ratio" means for any calendar month the
greater of (i) the ratio (expressed as a percentage) of (A) the
aggregate amount of Dilution with respect to the Receivables
during such calendar month to (B) the aggregate original
Outstanding Balance of all Receivables generated during the month
preceding the most recently ended calendar month and (ii) 0.5%.
"Dilution Volatility Factor" means, as of the last day
of each calendar month, the product (expressed as a percentage)
of (i) the amount by which (A) the highest Dilution Ratio for any
of the twelve most recently ended calendar months exceeds (B) the
average of the Dilution Ratios for the twelve most recently ended
calendar months and (ii) a fraction equal to (A) the highest
Dilution Ratio for any of the twelve most recently ended calendar
months divided by (B) the average of the Dilution Ratios for the
twelve most recently ended calendar months.
"DPUC " means the Connecticut Department of Public
Utility Control.
"Eligible Assignee" means (a) CNAI, any of its
Affiliates, any Person managed by Citibank or CNAI or any of
their Affiliates or (b) any financial or other institution
acceptable to the Agent.
"Eligible Receivable" means, at any time and with
respect to any Receivable Interest, a Receivable:
(i) the Obligor of which is a United States resident
and is not a government or a governmental subdivision or agency
(including, without limitation, any such government, subdivision
or agency that has the right to offset obligations to the
Originator with tax-related claims of any kind), except that
Receivables of governmental Obligors will be permitted to the
extent that the aggregate Outstanding Balance of such Receivables
does not exceed 15% of the aggregate Outstanding Balance of all
Pool Receivables;
(ii) the Obligor of which, at the time of the purchase
of an undivided percentage ownership interest in such Receivable,
is a Designated Obligor;
(iii) which, at the time of the purchase of an
undivided percentage ownership interest in such Receivable, is
not a Delinquent Receivable or a Defaulted Receivable;
(iv) which does not relate to an Inactive Account and
which, according to the Contract related thereto, is required to
be paid in full within 30 days of the original billing date
therefor;
(v) the Outstanding Balance of which, at the time of
the purchase of an undivided percentage ownership interest in
such Receivable, does not, when calculated substantially as
provided in the Seller Report, exceed the Concentration Limit of
the Obligor thereon;
(vi) which arises under a Contract which has been duly
authorized and which, together with such Receivable, is in full
force and effect and constitutes the legal, valid and binding
obligation of the Obligor of such Receivable enforceable against
such Obligor in accordance with its terms and is not subject to
any dispute, offset, counter-claim or defense whatsoever (except
the discharge in bankruptcy of such Obligor);
(vii) which, together with the Contract related
thereto, does not contravene in any material respect any law,
rule or regulation applicable thereto (including, without
limitation, any law, rule or regulation relating to usury,
consumer protection, truth in lending, fair credit billing, fair
credit reporting, equal credit opportunity, fair debt collection
practices and privacy) and with respect to which none of the
Seller, the Originator or the Obligor is in violation of any such
law, rule or regulation in any material respect;
(viii) which (A) satisfies all applicable
requirements of the Credit and Collection Policy and (B) complies
with such other reasonable criteria and requirements (other than
those relating to the collectibility of such Receivable) as the
Agent may from time to time specify to the Seller following 30
days' notice;
(ix) which is an account receivable representing all or
part of the sales price of merchandise, insurance or services,
within the meaning of Section 3(c)(5) of the Investment Company
Act of 1940, as amended;
(x) a purchase of which with the proceeds of notes
would constitute a "current transaction" within the meaning of
Section 3(a)(3) of the Securities Act of 1933, as amended;
(xi) which is an "account" within the meaning of
Section 9-106 of the UCC of all applicable jurisdictions;
(xii) which is denominated and payable only in
United States dollars in the United States of America; and
(xiii) as to which, at or prior to the time of
purchase hereunder, the Agent has not notified the Seller that
the Agent has determined, in its sole discretion, that such
Receivable (or class of Receivables) is not acceptable for
purchase hereunder.
"ERISA" means the U.S. Employee Retirement Income
Security Act of 1974, as amended from time to time, and the
regulations promulgated and rulings issued thereunder.
"Eurocurrency Liabilities" has the meaning assigned to
that term in Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Eurodollar Rate" means, for any Settlement Period, an
interest rate per annum equal to the rate per annum at which
deposits in U.S. dollars are offered by the principal office of
Citibank in London, England to prime banks in the London
interbank market at 11:00 A.M. (London Time) two Business Days
before the first day of such Settlement Period in an amount
substantially equal to the Capital associated with such
Settlement Period on such first day and for a period equal to
such Settlement Period.
"Eurodollar Rate Reserve Percentage" of any Purchaser
or Bank for any Settlement Period in respect of which Yield is
computed by reference to the Eurodollar Rate means the reserve
percentage applicable two Business Days before the first day of
such Settlement Period under regulations issued from time to time
by the Board of Governors of the Federal Reserve System (or any
successor) (or if more than one such percentage shall be
applicable, the daily average of such percentages for those days
in such Settlement Period during which any such percentage shall
be so applicable) for determining the maximum reserve requirement
(including, without limitation, any emergency, supplemental or
other marginal reserve requirement) for such Purchaser or Bank
with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities (or with respect to any other category
of liabilities that includes deposits by reference to which the
interest rate on Eurocurrency Liabilities is determined) having a
term equal to such Settlement Period.
"Event of Termination" has the meaning specified in
Section 7.01.
"Facility" means the willingness of the Conduit to
consider, in its sole discretion pursuant to Article II, or the
obligation of the Banks to make pursuant to Article II, the
purchase from the Seller of undivided percentage interests in
Pool Receivables by making Purchases of Receivable Interests or
reinvestments from time to time.
"Facility Termination Date" means the earlier of July
11, 2001 or the date of termination of the Facility pursuant to
Section 2.02(c) or Section 7.01.
"Fee Agreement" means the agreement dated the date of
the Original Agreement between the Seller and the Agent, as the
same may be amended or restated from time to time, with respect
to the fees to be paid by or on behalf of the Seller in
connection with this Agreement.
"Financing Order" means the order of the DPUC, in DPUC-
Docket No. 00-05-01, issued on November 8, 2000, as supplemented
December 12, 2000, and as further supplemented March 12, 2001.
"Inactive Account" means an account of an Obligor which
has been sent a final ▇▇▇▇.
"Incipient Event of Termination" means an event which
would constitute an Event of Termination but for the requirement
that notice be given or time elapse or both.
"Intercreditor Agreement" means that certain Inter-
Creditor Agreement dated as of March 30, 2001, among the Agent,
Citibank, the Note Trustee, the Seller, the Collection Agent (in
its capacities as Collection Agent under this Agreement and as
the Servicer under the Servicing Agreement) and the SPE,
consented to by the Certificate Trustee, the Delaware Trustee and
the Certificate Issuer, as the same may be amended, modified or
restated from time to time.
"Liquidation Day" means, for any Receivable Interest,
(i) each day during a Settlement Period for such Receivable
Interest on which the conditions set forth in Section 3.02 are
not satisfied, and (ii) each day which occurs on or after the
Termination Date for such Receivable Interest.
"Liquidation Fee" means, for any Settlement Period
during which a Liquidation Day occurs, the amount, if any, by
which (i) the additional Yield (calculated without taking into
account any Liquidation Fee or any shortened duration of such
Settlement Period) which would have accrued during such
Settlement Period on the reductions of Capital of the Receivable
Interest relating to such Settlement Period had such reductions
remained as Capital exceeds (ii) the income, if any, received by
the Purchasers' investing the proceeds of such reductions of
Capital.
"Loss and Dilution Percentage" means for any calendar
month the greater of (i) the sum of (A) the product of (x) the
highest of the Loss Ratios as of the last day of each of the
twelve most recently ended calendar months, (y) the Loss Horizon
Factor as of the last day of the most recently ended calendar
month and (z) 1.6 plus (B) the product of (a) the Average
Dilution Ratio for the most recently ended calendar month, (b)
1.6 and (c) the Dilution Horizon Factor as of the most recently
ended calendar month plus (C) the product of (a) the Dilution
Volatility Factor as of the last day of the most recently ended
calendar month and (b) the Dilution Horizon Factor as of the last
day of the most recently ended calendar month and (ii) the
Minimum Percentage as of the last day of the most recently ended
calendar month.
"Loss and Dilution Reserve" means, for any Receivable
Interest on any date, an amount equal to the Capital of such
Receivable Interest at the close of business of the Collection
Agent on such date multiplied by the Loss and Dilution Percentage
on such date.
"Loss Horizon Factor" means for any date the ratio
(expressed as a percentage) computed as of the last day of the
most recently ended calendar month by dividing (i) the aggregate
Outstanding Balance of all Receivables created during the two
most recently ended calendar months plus the Unbilled Receivables
for the most recent calendar month by (ii) the Net Receivable
Pool Balance as of such date.
"Loss Ratio" means for any date the average of the
ratios (expressed as a percentage) for each of the three most
recently ended calendar months computed as of the last day of
each such calendar month determined by dividing the sum of (i)
the gross writeoffs for such calendar month, (ii) increases, if
any, in the outstanding balance of accounts designated by the
Originator as "hardship accounts" as of the last day of such
calendar month over the outstanding balance of such accounts as
of the last day of the preceding calendar month and (iii)
additions to Inactive Accounts for such calendar month by the
aggregate original Outstanding Balance of Receivables that were
created during the fifth preceding calendar month. For purposes
of this definition, "additions to Inactive Accounts" for any
calendar month shall be (A) the outstanding balance of Inactive
Accounts as of the last day of the most recently ended calendar
month less (B) the difference between (x) the outstanding balance
of Inactive Accounts as of the last day of the month preceding
the most recently ended calendar month and (y) gross writeoffs
for the most recently ended calendar month; provided, however,
that if the amount calculated under this sentence shall, for any
date, be a negative number, then, for purposes of calculating the
Loss Ratio on such date, the amount set forth in clause (iii)
above shall be zero.
"Loss-to-Liquidation Ratio" means for any calendar
month the ratio (expressed as a percentage) computed as of the
last day of such calendar month by dividing (i) the aggregate
Outstanding Balance of all Pool Receivables written off by the
Collection Agent or the Seller, or which should have been written
off by the Collection Agent or the Seller in accordance with its
Credit and Collection Policy, during such calendar month by (ii)
the aggregate amount of Collections of Pool Receivables actually
received during such calendar month.
"Minimum Percentage" means on any date the sum of (i)
the product of (A) 4 and (B) the Normal Concentration Limit in
effect on such date and (ii) the product of (A) the Dilution
Horizon Factor on such date and (B) the Average Dilution Ratio on
such date.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Net Receivables Pool Balance" means at any time the
Outstanding Balance of Eligible Receivables then in the
Receivables Pool reduced by the sum of (i) the Outstanding
Balance of such Eligible Receivables that are then Defaulted
Receivables or Delinquent Receivables or arise from Inactive
Accounts, (ii) the aggregate amount by which the Outstanding
Balance of Eligible Receivables (other than Defaulted Receivables
or Delinquent Receivables) of any Obligor or group of Obligors
exceeds the product of (A) the Concentration Limit of such
Obligor or group of Obligors multiplied by (B) the Outstanding
Balance of the Receivables then in the Receivables Pool and (iii)
the sum of all Budget Account Credit Balances.
"Normal Concentration Limit" has the meaning specified
in the definition of "Concentration Limit."
"Note Indenture" means the Note Indenture dated as of
March 30, 2001, between the SPE, as Note Issuer, and the Note
Trustee, as the same may be amended, modified or restated from
time to time.
"Notes" means the CL&P Funding LLC Notes issued under
the Note Indenture.
"Note Trustee" means the Person acting as trustee under
the Note Indenture.
"Obligor" means a Person obligated to make payments
pursuant to a Contract.
"Original Agreement" has the meaning specified in the
Preliminary Statements.
"Originator" means The Connecticut Light and Power
Company, a Connecticut corporation.
"Originator Purchase Agreement" means the Purchase and
Contribution Agreement, dated the date of the Original Agreement,
between the Originator, as seller, and the Seller, as purchaser,
as the same may be amended, modified or restated from time to
time.
"Other Corporations" means the Originator and all of
its Subsidiaries except the Seller.
"Outstanding Balance" of any Receivable at any time
means the then outstanding principal balance thereof.
"Percentage" of any Bank means (a) with respect to
Citibank the percentage set forth on the signature page to this
Agreement, or such amount to which such percentage is reduced by
an assignment entered into with an Eligible Assignee, and (b)
with respect to a Bank that has entered into an assignment, the
amount set forth therein as such Bank's Percentage, or such
amount to which such percentage is reduced by an assignment
entered into between such Bank and an Eligible Assignee.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, limited
liability company, trust, unincorporated association, joint
venture or other entity, or a government or any political
subdivision or agency thereof.
"Pool Receivable" means a Receivable in the Receivables
Pool.
"Pro Rata RRB Interest " has the meaning specified in
Section 4.01(i).
"Public Disclosure Documents" means (i) the
Originator's Annual Report on Form 10-K for the year ending
December 31, 1996, (ii) the Originator's Quarterly Reports on
Form 10-Q for the quarters ended March 31, 1997 and June 30,
1997, Northeast Utilities' reports on Form 8-K dated January 20,
1997, February 20, 1997, February 28, 1997, April 11, 1997, June
26, 1997, July 22, 1997 and August 19, 1997 and (iv) the
Originator's Registration Statement No. 333-30911 on Form S-1, as
amended.
"Purchase" means the purchase of a Receivable Interest
from the Seller, in accordance with Section 2.03(a).
"Purchase and Sale Agreement" means the Transition
Property Purchase and Sale Agreement dated as of March 30, 2001,
between the SPE, as Note Issuer and the Originator, as Seller, as
the same may be amended, modified or restated from time to time.
"Purchase Limit" means $100,000,000, as such amount may
be reduced pursuant to Section 2.02; provided, however, that at
no time shall the Purchase Limit exceed the aggregate Bank
Commitments in effect at such time. References to the unused
portion of the Purchase Limit shall mean, at any time, the
Purchase Limit, as then reduced pursuant to Section 2.02(c),
minus the then outstanding Capital of Receivable Interests under
this Agreement.
"Purchaser" means the Conduit and all other owners by
assignment or otherwise of a Receivable Interest (other than
Banks) and, to the extent of the undivided interests so
purchased, shall include any participants.
"Purchaser Rate" for any Settlement Period for any
Receivable Interest means, to the extent the Conduit funds such
Receivable Interest for such Settlement Period by issuing
commercial paper, the per annum rate equivalent to the weighted
average of the per annum rates paid or payable by the Conduit
from time to time as interest on or otherwise (by means of
interest rate ▇▇▇▇▇▇ or otherwise) in respect of those promissory
notes issued by the Conduit that are allocated, in whole or in
part, by the Agent (on behalf of the Conduit) to fund the
purchase or maintenance of such Receivable Interest during such
Settlement Period as determined by the Agent (on behalf of the
Conduit) and reported to the Seller, which rates shall reflect
and give effect to the commissions of placement agents and
dealers in respect of such commercial paper notes, to the extent
such commissions are allocated, in whole or in part, to such
commercial paper notes by the Agent (on behalf of the Conduit);
provided, however, that if any component of such rate is a
discount rate, in calculating the 'Purchaser Rate' for such
Settlement Period the Agent shall for such component use the rate
resulting from converting such discount rate to an interest
bearing equivalent rate per annum.
"Receivable" means the accounts, general intangibles
and other indebtedness (billed and unbilled) of an Obligor
arising from the retail sale of electricity and related services
by the Originator in Connecticut to such Obligor pursuant to a
Contract as booked to Accounts 142 (excluding amounts booked to
Account 142.04) and 173 as defined under the Federal Energy
Regulatory Commission Chart of Accounts as utilized by the
Originator, but excluding any obligation of such Obligor to pay
finance charges and other amounts in the case of late payment and
further excluding the RRB Charge.
"Receivable Interest" means, at any time, an undivided
percentage ownership interest in all Receivables in the
Receivables Pool and in all Related Security with respect to such
Pool Receivables and all Collections with respect to, and other
proceeds of, such Pool Receivables equal to the Receivable
Interest Percentage.
"Receivable Interest Percentage" means, with respect to
any Receivable Interest, a percentage equal to the following
fraction:
C + YR + LR + CAFR
__________________
NRPB
where:
C = the Capital of such Receivable
Interest at the time of computation.
YR = the Yield Reserve of such Receivable
Interest at the time of computation.
LR = the Loss and Dilution Reserve of such
Receivable Interest at the time of computation.
CAFR = the Collection Agent Fee Reserve of such
Receivable Interest at the time of computation.
NRPB = the Net Receivables Pool Balance at the time of
computation.
"Receivables Pool" means at any time the aggregation of
each then outstanding Receivable in respect of which the Obligor
is a Designated Obligor at such time or was a Designated Obligor
on the date of the initial creation of an interest in such
Receivable under this Agreement.
"Regulatory Authority" means each of the DPUC, Federal
Energy Regulatory Commission, and any successor commission
thereto.
"Related Security" means, with respect to any
Receivable:
(i) all security interests or liens and property subject
thereto from time to time purporting to secure payment of such
Receivable, whether pursuant to the Contract related to such
Receivable or otherwise;
(ii) all guarantees, indemnities, warranties, insurance
policies and proceeds and premium refunds thereof and other
agreements or arrangements of whatever character from time to
time supporting or securing payment of such Receivable, whether
pursuant to the Contract related to such Receivable or otherwise;
and
(iii) the Contract and all other books, records and other
information (including, without limitation, computer programs,
tapes, discs, punch cards, data processing software and related
property and rights) relating to such Receivable and the related
Obligor.
"Report" means each Advice Letter and Certificate of
Compliance, as each of those terms is defined in the Servicing
Agreement and any notice or report sent pursuant to Section
3.01(b)(1) or Section 4.01(d) of the Servicing Agreement.
"RRB Charge" means the non-bypassable rate reduction
bond charge permitted to be charged by the Originator to Obligors
as part of a competitive transition assessment pursuant to the
Financing Order, including, in case of special contract
customers, the portion of the contract charge allocated to the RRB
Charge, and which may increase or decrease from time to time as
provided in the Financing Order.
"Seller Report" means a report in substantially the
form of Exhibit B hereto and containing such additional
information as the Agent may reasonably request from time to
time, furnished by the Collection Agent to the Agent.
"Servicing Agreement" means the Transition Property
Servicing Agreement dated as of March 30, 2001, between the SPE,
as Note Issuer and the Originator, as Servicer, as the same may
be amended, modified or restated from time to time.
"Settlement Date" means the third Business Day after
the end of each Settlement Period during the term of this
Agreement; provided that with respect to any Settlement Period
for which Yield is computed by reference to the Assignee Rate and
such rate is known prior to the last day of the Settlement
Period, the Settlement Date shall be the last day of the
Settlement Period.
"Settlement Period" means:
(a) in the case of any Settlement Period in respect of
which Yield is computed by reference to the Purchaser Rate, each
successive period commencing on the 19th day of each calendar
month during the term of this Agreement and ending on the 18th
day of the succeeding calendar month during the term of this
Agreement; provided, however, that in the case of any Settlement
Period for any Receivable Interest which commences before the
Termination Date for such Receivable Interest and would otherwise
end on a date occurring after such Termination Date, such
Settlement Period shall end on such Termination Date and the
duration of each Settlement Period which commences on or after
the Termination Date for such Receivable Interest may be any
period (including, without limitation, a period of one day) as
shall be selected from time to time by the Agent;
(b) in the case of any Settlement Period in respect of
which Yield is computed by reference to the Assignee Rate, each
successive period commencing on the 19th day of each calendar
month during the term of this Agreement and ending on the 18th
day of the succeeding calendar month during the term of this
Agreement; provided, however, that any Settlement Period which is
other than the monthly Settlement Period shall be of such
duration as shall be selected by the Agent; and
(c) in the case of any Settlement Period in respect of
which Yield is computed by reference to the Alternate Base Rate,
such Settlement Period shall be of such duration as shall be
selected by the Agent.
"Significant Subsidiary" means the Seller and any
Subsidiary having total assets exceeding 10% of consolidated
total assets of the Originator.
"SPE" means CL&P Funding LLC, a Delaware limited
liability company.
"Special Concentration Limit" has the meaning specified
in the definition of "Concentration Limit."
"Standard & Poor's" means Standard & Poor's Ratings
Group.
"Subsidiary" means any corporation of which securities
having ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions are at
the time directly or indirectly owned by the Seller or the
Originator, as the case may be, or one or more Subsidiaries, or
by the Seller or the Originator, as the case may be, and one or
more Subsidiaries.
"Supplemental Collection Account" means Account # 5044-
3708 at Fleet National Bank, Hartford, Connecticut, which is the
account to which Obligors are directed to make ACH payments on
Receivables.
"Tangible Net Worth" means at any time the excess of
(i) the Outstanding Balance of all Receivables plus cash and cash
equivalents of the Seller at such time minus (ii) the sum at such
time of (a) the Outstanding Balance of such Receivables which
have become Defaulted Receivables, (b) Capital, Yield Reserve,
Loss and Dilution Reserve and Collection Agent Fee Reserve plus
(c) the Deferred Purchase Price.
"Tariffs" means the tariffs described in Exhibit C,
which have been approved by the governing Regulatory Authority,
as hereafter amended or modified by the governing Regulatory
Authority, pursuant to which the Originator provides electricity
to the Obligors and the Obligors are obligated to pay for such
electricity.
"Termination Date" for any Receivable Interest means
(i) in the case of a Receivable Interest owned by a Purchaser,
the earlier of (a) the Business Day which the Seller or the Agent
so designates by notice to the other at least three Business Days
(or such shorter period as is required under the circumstances,
but in any event not less than one Business Day) in advance for
such Receivable Interest and (b) the Facility Termination Date
and (ii) in the case of a Receivable Interest owned by a
Bank, the earlier of (a) the Business Day which the Seller
so designates by notice to the Agent at least three Business Days
(or such shorter period as is required under the circumstances,
but in any event not less than one Business Day) in advance for
such Receivable Interest and (b) the Commitment Termination Date.
"Transaction Document" means any of this Agreement, the
Originator Purchase Agreement and all other agreements and
documents delivered and/or related hereto or thereto.
"UCC" means the Uniform Commercial Code as from time to
time in effect in the specified jurisdiction.
"Unbilled Receivable" means a Receivable which has not
yet been billed to an Obligor.
"Yield" means:
(i) for each Receivable Interest for any
Settlement Period to the extent the Conduit will be funding such
Receivable Interest during such Settlement Period through the
issuance of commercial paper,
PR x C x ED + LF/360
(ii) for each Receivable Interest for any
Settlement Period to the extent (x) the Purchasers will not be
funding such Receivable Interest during such Settlement Period
through the issuance of commercial paper or (y) the Banks will be
funding such Receivable Interest,
AR x C x ED + LF/360
where:
AR = the Assignee Rate for such Receivable Interest
for such Settlement Period
C = the Capital of such Receivable Interest during
such Settlement Period
ED = the actual number of days elapsed during such
Settlement Period
LF = the Liquidation Fee, if any, for such Receivable
Interest for such Settlement Period
PR = the Purchaser Rate for such Receivable Interest
for such Settlement Period
provided that no provision of this Agreement shall require the
payment or permit the collection of Yield in excess of the
maximum permitted by applicable law; and provided further that
Yield for any Receivable Interest shall not be considered paid by
any distribution to the extent that at any time all or a portion
of such distribution is rescinded or must otherwise be returned
for any reason.
"Yield Reserve" for any Receivable Interest at any time
means the sum of (i) the Liquidation Yield at such time for such
Receivable Interest, and (ii) the then accrued and unpaid Yield
for such Receivable Interest. For purposes of this definition,
(a) "Liquidation Yield" means, for any Receivable
Interest on any date, an amount equal to the Rate Variance
Factor on such date multiplied by the product of (i) the
Capital of such Receivable Interest on such date and (ii)
the product of (a) the Assignee Rate for such Receivable
Interest for a 30- day period deemed to commence on such
date and (b) a fraction having the sum of the Average
Maturity plus the Collection Delay Period (each as in effect
at such date) as its numerator and 360 as its denominator;
and
(b) "Rate Variance Factor" means a number greater than
one that reflects the potential variance in selected
interest rates over a period of time designated by the
Agent, as computed by the Collection Agent each month and
set forth in the Seller Report in accordance with the
provisions thereof; provided that the factors used in
computing the "Rate Variance Factor" may be changed from
time to time in accordance with industry standards upon at
least five days' prior notice by the Agent to the Collection
Agent.
SECTION 1.02. Other Terms. All accounting terms not
specifically defined herein shall be construed in accordance with
generally accepted accounting principles. All terms used in
Article 9 of the UCC in effect in the State of New York and not
specifically defined herein, are used herein as defined in such
Article 9. References herein to Receivables "generated" or
"created" during any period shall mean all Receivables billed
during such period.
SECTION 1.03. Computation of Time Periods. Unless
otherwise stated in this Agreement, in the computation of a
period of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and
"until" each means "to but excluding."
ARTICLE II
AMOUNTS AND TERMS OF THE PURCHASES
SECTION 2.01. Designated Obligors; Special
Concentration Limits. Either the Seller or the Agent may cancel
the designation of an Obligor as a Designated Obligor or any
Special Concentration Limit for any Obligor, by notice in
substantially the form of Exhibit D delivered by it to the other
at least three Business Days prior to the date on which such
cancellation shall become effective. Such notice of cancellation
shall be applicable only to Receivable Interests purchased on and
after its effective date.
SECTION 2.02. Purchase Facility. (a) On the terms and
conditions hereinafter set forth, the Conduit may, in its sole
discretion, and the Banks shall, ratably in accordance with their
respective Bank Commitments, purchase Receivable Interests from
the Seller by making Purchases through the Agent, for the benefit
of the Conduit or the Banks, as the case may be, from time to
time during the period from the date hereof to the Facility
Termination Date (in the case of the Conduit) and to the
Commitment Termination Date (in the case of the Banks). Under no
circumstances shall the Conduit make any Purchase of a Receivable
Interest, or the Banks be obligated to make any such Purchase if
(i) after giving effect to such Purchase, the
outstanding Capital of Receivable Interests owned by all
Purchasers and all Banks would exceed the Purchase Limit or
(ii) in the case of the Conduit, a notice of
termination in whole of the Purchase Limit has been delivered to
the Seller by the Agent and has become effective.
Nothing in this Agreement shall be deemed to be or construed as a
commitment by the Conduit to purchase, or a commitment by the
Seller to sell, any Receivable Interest at any time.
(b) The Agent, on behalf of the Purchasers, may, at
any time, by written notice to the Seller terminate in whole the
Purchase Limit, such termination to become effective at the close
of business on the last day of the Settlement Period following
the Settlement Period in which such notice is given.
(c) The Seller may, upon at least five Business Days'
notice to the Agent, terminate in whole or reduce in part the
unused portion of the Purchase Limit; provided, however, that for
purposes of this Section 2.02(c), the unused portion of the
Purchase Limit shall be computed as the excess of (i) the
Purchase Limit immediately prior to giving effect to such
termination or reduction over (ii) the aggregate Capital of all
Receivable Interests outstanding under this Agreement; provided,
further, that each partial reduction shall be in the amount of at
least $5,000,000 and shall be an integral multiple of $1,000,000.
(d) Until the Agent gives the Seller the notice
provided in Section 3.02(b)(iv), the Agent, on behalf of the
Purchasers which own Receivable Interests, may have the
Collections attributable to such Receivable Interests
automatically reinvested pursuant to Section 2.06 in additional
undivided percentage interests in the Pool Receivables by making
an appropriate readjustment of the Receivable Interest
Percentage. The Agent, on behalf of the Banks which own
Receivable Interests, shall have the Collections attributable to
such Receivable Interests automatically reinvested pursuant to
Section 2.06 in additional undivided percentage interests in the
Pool Receivables by making an appropriate readjustment of such
Receivable Interest Percentage.
(e) Interests in all Receivable in existence on the
date of the initial Purchase (and all related security with
respect to such Receivables) (collectively, the "Sold
Receivables") have heretofore been sold to the Agent, on behalf
of the Purchasers and the Banks, pursuant to the Original
Purchase Agreement (as such term is defined in the Originator
Purchase Agreement). The Seller, with the consent of the Agent
and the Originator, hereby assumes, as of the date of the initial
Purchase hereunder, all of the Originator's rights and
obligations under the Original Purchase Agreement with respect to
the Sold Receivables; the Seller, the Agent and the Conduit agree
that from and after the initial Purchase hereunder the terms of
the Seller's rights and obligations with respect to the Sold
Receivables shall be governed by this Agreement and the Original
Purchase Agreement shall terminate; and both the Seller and the
Conduit agree that the purchase price for the initial Purchase
hereunder shall be reduced by the aggregate purchase price
received by the Originator with respect to the Sold Receivables
under the Original Purchase Agreement.
SECTION 2.03. Making Purchases from the Seller. (a)
Each Purchase by the Conduit or the Banks shall be made on at
least three Business Days' notice from the Seller to the Agent.
Each such notice of a Purchase shall specify (i) the amount
requested to be paid to the Seller (such amount, which shall not
be less than $5,000,000, being referred to herein as the initial
"Capital" of the Receivable Interest then being purchased) and
(ii) the date of such Purchase (which shall be a Business Day).
The Agent shall promptly thereafter transmit such request to the
Conduit and the Banks. The Agent shall promptly thereafter
verbally notify the Seller whether the Conduit has determined to
make a Purchase and, if so, whether all of the terms specified by
the Seller are acceptable to the Conduit. If the Conduit has
determined not to make a proposed Purchase, the Agent shall
promptly notify all of the Banks concurrently by telecopier,
telex or cable specifying the date of such Purchase, each Bank's
Percentage multiplied by the aggregate amount of Capital of the
Receivable Interest being purchased and whether the Yield for
such Receivable Interest is calculated based on the Eurodollar
Rate (which may be selected only if such notice is given at least
two Business Days prior to the purchase date) or the Alternate
Base Rate.
(b) On the date for the Purchase of a Receivable
Interest, the Conduit or the Banks, as the case may be, shall,
upon satisfaction of the applicable conditions set forth in
Article III, make available to the Agent at its address specified
on the signature page to this Agreement an amount equal to the
initial Capital of such Receivable Interest in same day funds.
After receipt by the Agent of such funds, the Agent will make
such funds immediately available to the Seller at Fleet National
Bank, Hartford, Connecticut, ABA # ▇▇▇▇▇▇▇▇▇, Account #
9370212175, or at such other account as the Seller may notify the
Agent in writing.
(c) Effective on the date of each Purchase pursuant to
this Section 2.03 and each reinvestment, the Seller hereby sells
and assigns to the Agent, for the benefit of the parties making
such Purchase, an undivided percentage ownership interest, to the
extent of the Receivable Interest Percentage, in each Pool
Receivable then existing and in the Related Security and
Collections with respect thereto.
(d) Notwithstanding the foregoing, a Bank shall not be
obligated to make Purchases under this Section 2.03 at any time
in an amount which would exceed such Bank's Bank Commitment less
(in the case of any Bank other than Citibank) the outstanding and
unpaid amount of any purchases made by such Bank under any asset
purchase agreement related hereto. Each Bank's obligation shall
be several, such that the failure of any Bank to make available
to the Seller any funds in connection with any Purchase shall not
relieve any other Bank of its obligation, if any, hereunder to
make funds available on the date of such Purchase, but no Bank
shall be responsible for the failure of any other Bank to make
funds available in connection with any Purchase.
SECTION 2.04. Receivable Interest Percentage
Computation. The Receivable Interest Percentage shall be
initially computed on the date of purchase of the applicable
Receivable Interest. Thereafter until the Termination Date for
such Receivable Interest, such Receivable Interest Percentage
shall be automatically recomputed (or deemed to be recomputed) on
each day other than a Liquidation Day. Any Receivable Interest
Percentage, as computed (or deemed recomputed) as of the day
immediately preceding the Termination Date for such Receivable
Interest, shall thereafter remain constant. Such Receivable
Interest shall become zero when Capital thereof and Yield thereon
shall have been paid in full, and all other amounts owed by the
Seller hereunder to the Purchasers, the Banks or the Agent are
paid and the Collection Agent shall have received the accrued
Collection Agent Fee thereon.
SECTION 2.05. Fees. (a) The Seller shall pay to the
Agent certain fees in the amounts and on the dates set forth in
the Fee Agreement.
(b) In consideration of the purchase by the Purchaser
and/or the Banks of Receivable Interests as herein provided, the
Seller agrees to pay to the Collection Agent the Collection Agent
Fee. The Collection Agent Fee shall be payable only from
Collections pursuant to, and subject to the priority of payment
set forth in, Section 2.06.
SECTION 2.06. Settlement Procedures. (a) Collection
of the Pool Receivables shall be administered by a Collection
Agent, in accordance with the terms of Article VI of this
Agreement. The Seller shall provide to the Collection Agent (if
other than the Seller) on a timely basis all information needed
for such administration, including notice of the occurrence of
any Liquidation Day and current computations of the Receivable
Interest Percentage.
(b) In the event that both S&P and Moody's shall lower
the Originator's long term public unsecured debt securities
rating to below BBB, in the case of S&P, and Baa2, in the case of
Moody's, within two Business Days following its receipt of any
item of payment with respect to the Pool Receivables (including,
without limitation, cash, checks, money orders, wire transfers
and automated clearing house payments), the Collection Agent
shall deposit Collections into the Collection Account. Except
during the continuance of an Event of Termination or Incipient
Event of Termination or as otherwise required in this Agreement,
funds received in the Collection Account shall be transferred to
an account designated by the Seller for the benefit of the
Collection Agent. The Collection Agent shall, on each day on
which it receives any such funds:
(i) set aside on its books and hold in trust for
the Purchasers or the Banks that hold such Receivable Interest
out of the applicable Receivable Interest Percentage of such
Collections an amount equal to the Yield and Collection Agent Fee
accrued through such day for such Receivable Interest and not
previously set aside;
(ii) if such day is not a Liquidation Day for such
Receivable Interest, reinvest with the Seller on behalf of the
Purchasers or the Banks that hold such Receivable Interest the
percentage of such Collections represented by such Receivable
Interest Percentage, to the extent representing a return of
Capital, by recomputation of such Receivable Interest Percentage
pursuant to Section 2.04;
(iii) if such day is a Liquidation Day for such
Receivable Interest, set aside, hold in trust and segregate for
the Purchasers or the Banks that hold such Receivable Interest
the entire remainder of such percentage of Collections; provided
that if amounts are set aside and held in trust on any
Liquidation Day occurring prior to the Termination Date, and
thereafter during such Settlement Period the conditions set forth
in Section 3.02 are satisfied or waived by the Agent, such
previously set aside amounts shall, to the extent representing a
return of Capital, be reinvested in accordance with the preceding
subsection (ii) on the day of such subsequent satisfaction or
waiver of conditions; and
(iv) during such times as amounts are
required to be reinvested in accordance with the foregoing
subsection (ii) or the proviso to subsection (iii), apply any
Collections in excess of such amounts or in excess of the amounts
that are required to be set aside pursuant to subsection (i)
above to the payment of any "Purchase Price" (including any
"Deferred Purchase Price", as such terms are defined in the
Originator Purchase Agreement) then due and release the balance,
if any, to the Seller.
(c) On each Settlement Date, the Collection Agent, on
behalf of the Seller, shall deposit funds equal to the lesser of
(x) the Collections received or deemed received during the
preceding Settlement Period which are held or required to be held
for the benefit of the Purchasers or the Banks pursuant to
Section 2.06(b) or 2.06(e) and (y) an amount sufficient to make
the distributions set forth in clauses (i) and (ii) below in
account #4070-3544 at Citibank or to such other account
designated by the Agent therefor (provided, however, that so long
as the Collection Agent is the Originator and no Event of
Termination or Incipient Event of Termination has occurred, the
Collection Agent may, on the last day of each month following
each Settlement Date, retain from such funds an amount equal to
the accrued Collection Agent Fee as of such Settlement Date,
instead of including such amount in the deposit made on such
Settlement Date.) Upon receipt of such funds, the Agent shall
distribute them as follows:
(i) if such distribution occurs on a day that is
not a Liquidation Day, first to the Purchasers or the Banks that
hold the relevant Receivable Interest in payment in full of all
accrued Yield and then to the Collection Agent in payment in full
of all accrued Collection Agent Fees; and
(ii) if such distribution occurs on a Liquidation
Day, first to the Purchasers or the Banks that hold the relevant
Receivable Interest in payment in full of all accrued Yield,
second to such Purchasers or Banks in reduction to zero of all
Capital, third to such Purchasers, Banks or the Agent in payment
of any other amounts owed by the Seller hereunder, and fourth to
the Collection Agent in payment in full of all accrued Collection
Agent Fee.
After the Capital and Yield and Collection Agent Fee with respect
to a Receivable Interest, and any other amounts payable by the
Seller to the Purchasers, the Banks or the Agent hereunder, have
been paid in full, all additional Collections with respect to
such Receivable Interest shall revert to and be paid to the
Seller for its own account.
(e) For the purposes of this Section 2.06:
(i) if on any day the Outstanding Balance of any
Pool Receivable is reduced or adjusted as a result of any
defective, rejected, returned, repossessed or foreclosed
merchandise or services, or any cash discount, other promotional
adjustment or other retroactive credit made by the Seller or the
Originator, the Seller shall be deemed to have received on such
day a Collection of such Pool Receivable in the amount of such
reduction or adjustment;
(ii) if on any day any of the representations or
warranties in Section 4.01(i) is no longer true with respect to
any Pool Receivable, the Seller shall be deemed to have received
on such day a Collection of such Pool Receivable in full; and
(iii) except as provided in paragraph (i) or (ii) of
this subsection 2.06(e), or as otherwise required by applicable
law or the relevant Contract, all Collections received from an
Obligor of any Receivables 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 its payment for application to specific Receivables.
(f) If and to the extent that the Agent, any Purchaser
or any Bank shall be required for any reason to pay over to an
Obligor any amount received on its behalf hereunder, such amount
shall be deemed not to have been so received but rather to have
been retained by the Seller and, accordingly, such Purchaser, the
Agent or such Bank, as the case may be, shall have a claim
against the Seller for such amount, payable when and to the
extent that any distribution from or on behalf of such Obligor is
made in respect thereof.
SECTION 2.07. Payments and Computations, Etc. (a) All
amounts to be paid or deposited by the Seller or the Collection
Agent hereunder shall be paid or deposited in accordance with the
terms hereof no later than 11:00 A.M. (New York City time) on the
day when due in lawful money of the United States of America in
immediately available funds at the office of Citibank specified
on the signature page hereto.
(b) The Seller shall, to the extent permitted by
applicable law, pay interest to the Agent on any amount not paid
by the Seller when required to be paid by it hereunder, at an
interest rate per annum equal to the Alternate Base Rate, payable
on demand; provided, however, that such interest rate shall not
at any time exceed the maximum rate permitted by applicable law.
Such interest shall be for the account of, and shall be
distributed to, the Purchasers or the Banks, as the case may be,
ratably in accordance with their respective interests in such
overdue amount and shall be paid by the Seller free and clear of
and without deduction for any taxes of any kind whatsoever.
(c) All computations of interest under subsection (b)
above and all computations of fees hereunder shall be made on the
basis of a year of 360 days for the actual number of days
(including the first but excluding the last day) elapsed.
Whenever any payment or deposit to be made hereunder shall be
stated to be due on a day other than a Business Day, such payment
or deposit shall be made on the next succeeding Business Day and
such extension of time shall in such case be included in the
computation of such payment or deposit.
SECTION 2.08. Increased Costs. (a) If CNAI, any
Purchaser, any Bank, any entity which enters into a commitment to
purchase Receivable Interests or interests therein, or any of
their respective Affiliates (each an "Affected Person")
determines that compliance with any law or regulation or any
guideline or request from any central bank or other governmental
authority (whether or not having the force of law) affects or
would affect the amount of the capital required or expected to be
maintained by such Affected Person and such Affected Person
determines that the amount of such capital is increased by or
based upon the existence of any commitment to make purchases of
or otherwise to maintain the investment in Pool Receivables or
interests therein related to this Agreement or to the funding
thereof and other commitments of the same type, then, upon demand
by such Affected Person (with a copy to the Agent), the Seller
shall immediately pay to the Agent for the account of such
Affected Person (as a third-party beneficiary), from time to time
as specified by such Affected Person, additional amounts
sufficient to compensate such Affected Person in the light of
such circumstances, to the extent that such Affected Person
reasonably determines such increase in capital to be allocable to
the existence of any of such commitments. A certificate as to
such amounts submitted to the Seller and the Agent by such
Affected Person shall be conclusive and binding for all purposes,
absent manifest error.
(b) If, due to either (i) the introduction of or any
change in or in the interpretation of any law or regulation or
(ii) compliance with any guideline or request from any central
bank or other governmental authority (whether or not having the
force of law), there shall be any increase in the cost to any
Purchaser or Bank of agreeing to purchase or purchasing, or
maintaining the ownership of Receivable Interests in respect of
which Yield is computed by reference to a Eurodollar Rate, then,
upon demand by such Purchaser or Bank (with a copy to the Agent),
the Seller shall immediately pay to the Agent, for the account of
such Purchaser or Bank (as a third-party beneficiary), from time
to time as specified by such Purchaser or Bank, additional
amounts sufficient to compensate such Purchaser or Bank for such
increased costs. A certificate as to such amounts submitted to
the Seller and the Agent by such Purchaser or Bank shall be
conclusive and binding for all purposes, absent manifest error.
SECTION 2.09. Additional Yield on Receivable Interests
Bearing a Eurodollar Rate. The Seller shall pay to any Purchaser
or Bank, so long as such Purchaser or Bank shall be required
under regulations of the Board of Governors of the Federal
Reserve System to maintain reserves with respect to liabilities
or assets consisting of or including Eurocurrency Liabilities,
additional Yield on the unpaid Capital of each Receivable
Interest of such Purchaser or Bank during each Settlement Period
in respect of which Yield is computed by reference to the
Eurodollar Rate, for such Settlement Period, at a rate per annum
equal at all times during such Settlement Period to the remainder
obtained by subtracting (i) the Eurodollar Rate for such
Settlement Period from (ii) the rate obtained by dividing such
Eurodollar Rate referred to in clause (i) above by that
percentage equal to 100% minus the Eurodollar Rate Reserve
Percentage of such Purchaser or Bank for such Settlement Period,
payable on each date on which Yield is payable on such Receivable
Interest. Such additional Yield shall be determined by such
Purchaser or Bank and notice thereof given to the Seller through
the Agent within 30 days after any Yield payment is made with
respect to which such additional Yield is requested. A
certificate as to such additional Yield submitted to the Seller
and the Agent by such Purchaser or Bank shall be conclusive and
binding for all purposes, absent manifest error.
SECTION 2.10. Security Interest. As collateral
security for the performance by the Seller of all the terms,
covenants and agreements on the part of the Seller (whether as
Seller or otherwise) to be performed under this Agreement or any
document delivered in connection with this Agreement in
accordance with the terms thereof, including the punctual payment
when due of all obligations of the Seller hereunder or
thereunder, whether for indemnification payments, fees, expenses
or otherwise, the Seller hereby assigns to the Agent for its
benefit and the ratable benefit of the Purchasers and the Banks,
and hereby grants to the Agent for its benefit and the ratable
benefit of the Purchasers and the Banks, a security interest in,
all of the Seller's right, title and interest in and to (a) the
Originator Purchase Agreement, including, without limitation, (i)
all rights of the Seller to receive moneys due or to become due
under or pursuant to the Originator Purchase Agreement, (ii) all
security interests and property subject thereto from time to time
purporting to secure payment of monies due or to become due under
or pursuant to the Originator Purchase Agreement, (iii) all
rights of the Seller to receive proceeds of any insurance,
indemnity, warranty or guaranty with respect to the Originator
Purchase Agreement, (iv) claims of the Seller for damages arising
out of or for breach of or default under the Originator Purchase
Agreement and (v) the right of the Seller to compel performance
and otherwise exercise all remedies thereunder, (b) all
Receivables, the Related Security with respect thereto and the
Collections and all other assets, including, without limitation,
accounts, instruments and general intangibles (as those terms are
defined in the UCC) owned by the Seller and not otherwise
purchased or scheduled to be purchased under this Agreement and
(c) to the extent not included in the foregoing, all proceeds of
any and all of the foregoing.
ARTICLE III
CONDITIONS OF PURCHASES
SECTION 3.01. Conditions Precedent to Initial
Purchase. The initial Purchase under the Original Agreement was
subject to the conditions precedent that the Agent shall have
received on or before the date of such Purchase the following,
each in form and substance satisfactory to the Agent:
(a) A copy of the resolutions of the Board of
Directors of each of the Seller and the Originator authorizing
the Original Agreement and the Originator Purchase Agreement and
the other documents to be delivered by it thereunder and the
transactions contemplated thereby, certified by its Secretary or
Assistant Secretary.
(b) A certificate of the Secretary or Assistant
Secretary of each of the Seller and the Originator certifying the
names and true signatures of the officers authorized on its
behalf to sign the Original Agreement and the Originator Purchase
Agreement and the other documents to be delivered by it
thereunder (on which certificate the Agent, the Purchasers and
the Banks may conclusively rely unless and until such time as the
Agent shall receive from the Seller or the Originator a
replacement certificate meeting the requirements of this
subsection (b)).
(c) Acknowledgment copies or time stamped receipt
copies of proper Financing Statements (Form UCC-1), duly filed on
or before the date of such initial Purchase under the UCC of all
appropriate jurisdictions or any comparable law that the Agent
may deem necessary or desirable in order to perfect the ownership
and security interests in all Receivables and Related Security
contemplated by the Original Agreement and the Originator
Purchase Agreement.
(d) Acknowledgment copies or time stamped receipt
copies of proper Financing Statements (Form UCC-3), if any,
necessary to release all security interests and other rights of
any person in (i) the Receivables and Related Security previously
granted by the Seller or the Originator and (ii) the collateral
security referred to in Section 2.10 previously granted by the
Seller.
(e) Certified copies of requests for information or
copies (Form UCC- 11) (or a similar search report certified by a
party acceptable to the Agent), dated a date reasonably near to
the date of the initial Purchase, listing all effective financing
statements which name the Seller or the Originator (under its
present name and any previous name) as debtor and which are filed
in the jurisdictions in which filings were made pursuant to
subsection (c) above, together with copies of such financing
statements (none of which, other than the financing statements
filed pursuant to subsection (c), shall cover any Receivables,
Related Security or Contracts or the collateral security referred
to in Section 2.10).
(f) The Fee Agreement referred to in Section 2.05.
(g) A favorable opinion or opinions of counsel for the
Seller and the Originator, in substantially the form of Exhibit E
and as to such other matters as the Agent may reasonably request.
(h) A favorable opinion of ▇▇▇▇, Scholer, Fierman,
▇▇▇▇ & Handler, LLP, counsel for the Agent, as the Agent may
reasonably request.
(i) A letter agreement with Fleet National Bank
acknowledging the Agent's dominion and control over the
Collection Account, duly executed by Fleet National Bank, the
Originator and the Seller.
(j) A letter agreement acknowledging the Agent's
dominion and control over the Supplemental Collection Account,
duly executed by the Originator and the Seller.
(k) An executed copy of the Originator Purchase
Agreement.
(l) A copy of the by-laws of the Seller, certified by
the Secretary or Assistant Secretary of the Seller.
(m) A copy of the certificate or articles of
incorporation of the Seller, certified as of a recent date by the
Secretary of State or other appropriate official of the state of
its organization, and a certificate as to the good standing of
the Seller from such Secretary of State or other official, dated
as of a recent date.
SECTION 3.02. Conditions Precedent to All Purchases.
Each Purchase (including the initial Purchase) and each
reinvestment hereunder shall be subject to the further conditions
precedent that:
(a) the Collection Agent shall have prepared and
forwarded to the Agent, for each Purchaser and each Bank, on or
prior to the 18th day of each month, a Seller Report related to
each Receivable Interest owned by such Purchaser or Bank as of
the close of business of the Seller on the last day of the
preceding Settlement Period and containing such additional
information as may be reasonably requested by the Agent;
(b) on the date of such Purchase or reinvestment the
following statements shall be true, except that the statement in
clause (iv) below is required to be true only if such Purchase or
reinvestment is by a Purchaser (and the Seller by accepting a
payment of Capital shall be deemed to have certified that):
(i) the representations and warranties contained
in Section 4.01 of this Agreement are correct on and as of such
date as though made on and as of such date,
(ii) no event has occurred and is continuing, or
would result from such Purchase, which constitutes an Event of
Termination or Incipient Event of Termination,
(iii) on such date, all of the Originator's long-
term public senior debt securities are rated at least BB- by
Standard & Poor's or Ba3 by Moody's,
(iv) the Agent shall not have given the Seller at
least one Business Day's notice that the Purchasers have
terminated new Purchases of Receivable Interests or reinvestments
therein, and
(v) the Originator shall have sold or contributed
to the Seller, pursuant to the Originator Purchase Agreement, all
Pool Receivables then outstanding; and
(c) the Agent shall have received such other
approvals, opinions or documents as the Agent may reasonably
request.
SECTION 3.03. Conditions Precedent to the Restatement.
The restatement of the Original Agreement is subject to the
condition precedent that the Agent shall have received on or
before the date of the effective date of such restatement the
following, each (unless otherwise indicated) dated such date, in
form and substance satisfactory to the Agent:
(a) A copy of the resolutions adopted by the Board of
Directors of the Seller approving this Agreement and the other
documents to be delivered by it hereunder and the transactions
contemplated hereby, certified by its Secretary or Assistant
Secretary;
(b) A certificate of the Secretary or Assistant
Secretary of the Seller certifying the names and true signatures
of the officers authorized on its behalf to sign this Agreement
and the other documents to be delivered by it hereunder (on which
certificate the Agent and each Purchaser and Bank may
conclusively rely until such time as the Agent shall receive from
the Seller a revised certificate meeting the requirements of this
subsection (b));
(c) Acknowledgment copies of proper Financing
Statements (Form UCC-3) amending the existing Financing
Statements filed in 1997 pursuant to subsection (c) of Section
3.01 of the Original Agreement to reflect the exclusion of RRB
Charge, in all jurisdictions where the original forms UCC-1 were
filed.
(d) Copies of the Basic Documents (as defined in the
Note Indenture), certified as true by an appropriate officer of
the Seller or other appropriate Person.
(e) The Intercreditor Agreement.
(f) An amendment to the Originator Purchase Agreement.
(g) An agreement among Fleet National Bank, the Agent,
the Originator and the Seller which, among other things,
terminates the Agent's dominion and control over the
Supplemental Collection Account.
(h) Payment of an amount to the Agent sufficient to
reduce Capital to no more than $100,000,000.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the
Seller. The Seller represents and warrants as follows:
(a) The Seller is a corporation duly incorporated,
validly existing and in good standing under the laws of the State
of Connecticut.
(b) The execution, delivery and performance by the
Seller of the Transaction Documents and the other instruments and
documents to be delivered by it hereunder, and the transactions
contemplated hereby and thereby, including the Seller's use of
the proceeds of Purchases and reinvestments, are within the
Seller's corporate powers, have been duly authorized by all
necessary corporate action, do not contravene (i) the Seller's
charter and by-laws, (ii) any law, rule or regulation applicable
to the Seller, (iii) any contractual restriction binding on or
affecting the Seller or its property or (iv) any order, writ,
judgment, award, injunction or decree binding on or affecting the
Seller or its property, and (except as contemplated hereby) do
not result in or require the creation of any lien, security
interest or other charge or encumbrance upon or with respect to
any of its properties; and no transaction contemplated hereby
requires compliance with any bulk sales act or similar law. Each
of the Transaction Documents to which the Seller is a party has
been duly executed and delivered by the Seller.
(c) No authorization, approval, declaration, order or
other action by, and no notice to or filing with, any
governmental authority or regulatory body is required for the due
execution, delivery and performance by the Seller of the
Transaction Documents to which the Seller is a party or any other
document or instrument to be delivered hereunder except for such
as have been accomplished and except for the filing of the UCC
Financing Statements referred to in Article III, all of which, at
the time required in Article III, shall have been duly made and
shall be in full force and effect.
(d) Each of the Transaction Documents to which the
Seller is a party constitutes the legal, valid and binding
obligation of the Seller enforceable against the Seller in
accordance with its terms.
(e) This Agreement evidences the transfer to the
Agent, for the benefit of the Purchasers and the Banks, as the
case may be, of legal and equitable title to, and ownership of,
an undivided percentage ownership interest in Receivables to the
extent of the applicable Receivable Interest Percentage.
(f) The consolidated balance sheet of the Originator
as at December 31, 1996, and the related statements of income and
retained earnings of the Originator for the year then ended (the
"Financial Statements"), copies of which have been furnished to
the Agent, fairly present the financial condition of the
Originator and its Subsidiaries as of 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, 1996 there has not occurred any event which may
materially adversely affect the collectibility of the Pool
Receivables or the ability of the Originator to collect Pool
Receivables or otherwise perform its obligations under this
Agreement. The opening pro forma balance sheet of the Seller as
at September 30, 1997, giving effect to the initial Purchase to
be made under this Agreement, a copy of which has been furnished
to the Agent, fairly presents the financial condition of the
Seller as at such date, in accordance with generally accepted
accounting principles, and since September 30, 1997 there has not
occurred any event which may materially adversely affect the
collectibility of the Pool Receivables or the ability of the
Seller to collect Pool Receivables or otherwise perform its
obligations under this Agreement.
(g) There are no actions, suits or proceedings
pending, or to the knowledge of the Seller or the Originator
threatened, against or affecting the Originator or any
Significant Subsidiary, or the property of the Originator or of
any Significant Subsidiary, except as otherwise disclosed in the
Financial Statements and the Public Disclosure Documents, in any
court, or before any arbitrator of any kind, or before or by any
governmental body, which may materially adversely affect the
collectibility of the Receivables Pool or the ability of the
Seller or the Originator to collect Pool Receivables or otherwise
perform their respective obligations under the Transaction
Documents. Neither the Originator nor any Significant Subsidiary
is in default with respect to any order of any court, arbitrator
or governmental body except for defaults, if any, which are not
material to the business or operations of the Originator or any
Significant Subsidiary.
(h) No proceeds of any Purchase or reinvestment will
be used by the Seller to acquire any security in any transaction
which is subject to Section 13 or 14 of the Securities Exchange
Act of 1934, as amended.
(i) Each Pool Receivable (i) at the time that the
Purchasers or the Banks initially purchase an undivided
percentage ownership interest in such Pool Receivable from the
Seller, is owned by the Seller free and clear of any Adverse
Claim and (ii) together with the Contract related thereto, at all
times after such time is free and clear of any Adverse Claim
except as otherwise specifically provided hereunder. Upon each
Purchase of a Receivable Interest and each reinvestment, the
Agent, for the benefit of the Purchasers or the Banks, as the
case may be, will acquire a valid and perfected first priority
undivided percentage ownership interest (to the extent of such
Receivable Interest) in each Pool Receivable then existing or
thereafter arising and in the Related Security (to the extent
able to be perfected by filing), related Contract and (subject to
Section 9-306 of the UCC) Collections with respect thereto free
and clear of any Adverse Claim except as provided hereunder and
except, in the case of Related Security and Contracts (but not
the Receivables), the proportionate interest therein of the SPE
and the Note Trustee insofar as any such Related Security and
Contracts relate to the RRB Charge (the "Pro Rata RRB Interest
"); and no effective financing statement or other instrument
similar in effect covering any such Receivable or the Related
Security, related Contract and Collections with respect thereto
is on file in any recording office, or otherwise effective,
except such as may be filed in favor of the Agent in accordance
with this Agreement and those filed by the Seller pursuant to the
Originator Purchase Agreement and except, in the case of Related
Security and Contracts, such as may relate to the Pro Rata RRB
Interest.
(j) No Seller Report (if prepared by the Seller, or
any Person with which the Seller has subcontracted pursuant to
Section 6.01, or to the extent that information contained therein
is supplied by the Seller or such other Person), information,
exhibit, financial statement, document, book, record or report
furnished or to be furnished by the Seller to the Agent, any
Purchaser or any Bank in connection with this Agreement is
inaccurate in any material respect or omits to state a material
fact or any fact necessary to make the statements contained
therein not materially misleading.
(k) The chief place of business and chief executive
office of the Seller and the offices where the Seller keeps all
its books, records and documents evidencing Pool Receivables or
the related Contracts are located at the address specified in
Section 5.01(f), in jurisdictions where all action required by
Section 6.05 has been taken and completed.
(l) The Seller has not (i) extended, modified or
waived any of the terms of any Contract giving rise to a Pool
Receivable or (ii) made any change in its Credit and Collection
Policy except, in either case, as permitted by Section 5.03(c).
(m) Each Purchase of a Receivable Interest hereunder
and each reinvestment will constitute (i) a "current transaction"
within the meaning of Section 3(a)(3) of the Securities Act of
1933, as amended, and (ii) a purchase or other acquisition of
notes, drafts, acceptances, open accounts receivable or other
obligations representing part or all of the sales price of
merchandise, insurance or services within the meaning of Section
3(c)(5) of the Investment Company Act of 1940, as amended.
(n) On any date, the Net Receivables Pool Balance will
not be less than 105% of the sum of Capital, Yield Reserve,
Collection Agent Fee Reserve and Loss and Dilution Reserve for
all Receivable Interests on such date; provided that no breach of
the representation contained in this subsection (n) shall be
deemed to have occurred if the condition set forth herein shall
be cured within three Business Days after the Seller shall become
aware of such condition.
(o) Neither the Seller nor the Originator is known by
or uses any tradename or doing-business-as name in the
origination or collection of any of the Receivables.
(p) The Seller was incorporated on September 5, 1997,
and did not engage in any business activities prior to the date
of the Original Agreement. The Seller has no Subsidiaries.
(q) (i) The fair value of the property of the Seller
is greater than the total amount of liabilities, including
contingent liabilities, of the Seller, (ii) the present fair
salable value of the assets of the Seller is not less than the
amount that will be required to pay all probable liabilities of
the Seller on its debts as they become absolute and matured,
(iii) the Seller does not intend to, and does not believe that it
will, incur debts or liabilities beyond the Seller's abilities to
pay such debts and liabilities as they mature and (iv) the Seller
is not engaged in a business or a transaction, and is not about
to engage in a business or a transaction, for which the Seller's
property would constitute unreasonably small capital.
(r) With respect to each Pool Receivable as to which
any Receivable Interest is outstanding, the Seller either (i)
received such Pool Receivable as a contribution to the capital of
the Seller by the Originator or (ii) purchased such Pool
Receivable from the Originator in exchange for payment (made by
the Seller to the Originator in accordance with the provisions of
the Originator Purchase Agreement) of cash, Deferred Purchase
Price, or a combination thereof in an amount which constitutes
fair consideration and reasonably equivalent value. Each such
sale referred to in clause (ii) of the preceding sentence was not
made for or on account of an antecedent debt owed by the
Originator to the Seller and no such sale is or may be voidable
or subject to avoidance under any section of the Federal
Bankruptcy Code.
ARTICLE V
GENERAL COVENANTS
SECTION 5.01. Affirmative Covenants of the Seller and
the Originator. Until the latest of the Facility Termination
Date, the Commitment Termination Date, the date that the Capital
and Yield with respect to all Receivable Interests shall be paid
in full or the date all other amounts owed by the Seller
hereunder to the Purchasers, the Banks or the Agent are paid in
full, the Seller and the Originator will each, unless the Agent
shall otherwise consent in writing:
(a) Compliance with Laws, Etc. Comply in all material
respects with all applicable laws, rules, regulations and orders
with respect to it, its business and properties and all Pool
Receivables, Related Security and related Contracts, except to
the extent any such failure to comply is being contested in good
faith by appropriate proceedings or any such failure would not
have a material adverse effect on the collectibility of the
Receivables Pool or the ability of the Seller or the Originator
to perform their respective obligations under this Agreement and
the related documents.
(b) Preservation of Corporate Existence. Preserve and
maintain its corporate existence, rights, franchises and
privileges in the jurisdiction of its incorporation, and qualify
and remain qualified in good standing as a foreign corporation in
each jurisdiction where the failure to preserve and maintain such
existence, rights, franchises, privileges and qualification would
materially adversely affect the interests of any Purchaser, any
Bank or the Agent hereunder or in the Pool Receivables, or the
ability of the Seller or the Collection Agent to perform their
respective obligations under this Agreement.
(c) Audits. At any time and from time to time during
regular business hours as requested by the Agent, permit the
Agent, or its agents or representatives (including independent
public accountants, which may be the Seller's or the Originator's
independent public accountants), (i) to conduct periodic audits
of the Pool Receivables, the Related Security and the related
books and records and collections systems of the Seller or the
Originator, as the case may be, (ii) to examine and make copies
of and abstracts from all books, records and documents
(including, without limitation, computer tapes and disks) in the
possession or under the control of the Seller or the Originator,
as the case may be, relating to Pool Receivables and the Related
Security, including, without limitation, the related Contracts,
and (iii) to visit the offices and properties of the Seller or
the Originator, as the case may be, for the purpose of examining
such materials described in clause (ii) above, and to discuss
matters relating to Pool Receivables and the Related Security or
the Seller's or the Originator's performance under the
Transaction Documents or under the Contracts with any of the
officers or employees of the Seller or the Originator, as the
case may be, having knowledge of such matters. In addition, upon
the Agent's request at least once per year, the Seller will, at
its expense, appoint independent public accountants (which may be
the Originator's regular independent public accountants, ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, LLP, or other major nationally recognized independent
public accountants), or utilize the Agent's representatives or
auditors, to prepare and deliver to the Agent a written report
with respect to the Pool Receivables and the Credit and
Collection Policy (including, in each case, the systems,
procedures and records relating thereto) on a scope and in a form
set forth in Exhibit F hereto or in such other form as may be
reasonably requested by the Agent. In connection herewith and
unless otherwise required by applicable law, the Agent agrees to
maintain the confidentiality of all results of such inspections
(except that the Agent shall have no obligation or
confidentiality in respect of any information which may be
generally available to the public or becomes available to the
public through no fault of the Agent).
(d) Keeping of Records and Books of Account. Maintain
and implement, or cause to be maintained and implemented,
administrative and operating procedures (including, without
limitation, an ability to recreate records evidencing Pool
Receivables and related Contracts in the event of the destruction
of the originals thereof), and keep and maintain, or cause to be
kept and maintained, all documents, books, records and other
information reasonably necessary or advisable for the collection
of all Pool Receivables (including, without limitation, records
adequate to permit the daily identification of each Pool
Receivable and all Collections of and adjustments to each
existing Pool Receivable).
(e) Performance and Compliance with Receivables and
Contracts. At its expense timely and fully perform and comply
with all material provisions, covenants and other promises
required to be observed by it under the Contracts related to the
Pool Receivables.
(f) Location of Records. Keep its chief place of
business and chief executive office, and the offices where it
keeps its records concerning the Pool Receivables and all
Contracts related thereto (and all original documents relating
thereto), at the address of the Seller or the Originator, as the
case may be, set forth under its name on the signature pages to
this Agreement or (i) in the case of such records and Contracts,
at the Originator's offices in Wethersfield, Connecticut or (ii)
upon 30 days' prior written notice to the Agent, at such other
locations in a jurisdiction where all action required by Section
6.05 shall have been taken and completed.
(g) Credit and Collection Policies. Comply in all
material respects with the Credit and Collection Policy in regard
to each Pool Receivable and the related Contract.
(h) Collections. In the event that both S&P and
▇▇▇▇▇'▇ shall lower the Originator's long term public unsecured
debt securities rating to below BBB, in the case of S&P, and
Baa2, in the case of ▇▇▇▇▇'▇, take all actions necessary to
ensure that Collections with respect to Pool Receivables are
deposited in the Collection Account within two Business Days
following receipt thereof.
(i) [Intentionally Omitted]
SECTION 5.02. Reporting Requirements of the Seller.
Until the latest of the Facility Termination Date, the Commitment
Termination Date, the date that the Capital and Yield with
respect to all Receivable Interests shall be paid in full or the
date all other amounts owed by the Seller hereunder to the
Purchasers, the Banks or the Agent are paid in full, the Seller
will, unless the Agent shall otherwise consent in writing,
furnish or cause to be furnished to the Agent:
(a) as soon as available and in any event within 60
days after the end of each of the first three quarters of each
fiscal year of the Originator a copy of the Originator's
Quarterly Report on Form 10-Q for such quarter;
(b) as soon as available and in any event within 105
days after the end of each fiscal year of the Originator a copy
of the Originator's Annual Report on Form 10-K, for such fiscal
year;
(c) upon request by the Agent, copies of all reports
which the Originator sends to any holders of its publicly held
securities and copies of all reports and registration statements
which the Originator files with the Securities and Exchange
Commission or any national securities exchange;
(d) promptly after the filing or receiving thereof,
copies of all reports and notices with respect to any Reportable
Event (as defined in Article IV of ERISA) which the Originator or
any Significant Subsidiary files under ERISA with the Internal
Revenue Service or the Pension Benefit Guaranty Corporation or
the U.S. Department of Labor or which the Originator or any
Significant Subsidiary receives from any of the foregoing in each
case in respect of the assessment of withdrawal liability or
event or condition which could, in the aggregate, result in the
imposition of liability on the Originator in excess of
$10,000,000;
(e) as soon as possible and in any event within five
days after an officer of the Seller obtains knowledge of the
occurrence of an Event of Termination or an Incipient Event of
Termination, the statement of the chief financial officer or
chief accounting officer or the Treasurer or an Assistant
Treasurer of the Seller setting forth the details of such Event
of Termination or Incipient Event of Termination and the action
that the Seller proposes to take with respect thereto;
(f) upon the request of the Agent, a list of the
Receivables in which each Purchaser and each Bank has purchased
an undivided percentage ownership interest hereunder;
(g) promptly, from time to time, such other
information, documents, records or reports respecting the
Receivables or Related Security or the conditions or operations,
financial or otherwise, of the Originator or any Significant
Subsidiary as the Agent may from time to time reasonably request
in order to protect any Purchaser's, any Bank's or the Agent's
interests under or contemplated by this Agreement;
(h) on or prior to the 18th day of each month, such
Seller Reports and other reports, information, documents, books
or records as the Agent may reasonably request;
(i) promptly after the Seller obtains knowledge
thereof, notice of any "Event of Termination" or "Facility
Termination Date" under the Originator Purchase Agreement;
(j) so long as any Capital shall be outstanding, as
soon as possible and in any event no later than the day of
occurrence thereof, notice that the Originator has stopped
selling or contributing to the Seller, pursuant to the Originator
Purchase Agreement, all newly arising Pool Receivables;
(k) at the time of the delivery of the financial
statements provided for in clauses (a) and (b) of this paragraph,
a certificate of the chief financial officer or chief accounting
officer or the treasurer or an assistant treasurer of the Seller
to the effect that, to the best of such officer's knowledge, no
Event of Termination has occurred and is continuing or, if any
Event of Termination has occurred and is continuing, specifying
the nature and extent thereof;
(l) promptly after receipt thereof, copies of all
notices received by the Seller from the Originator under the
Originator Purchase Agreement;
(m) promptly, upon the delivery thereof pursuant to
the Servicing Agreement, a copy of each notice (i) of a Servicer
Default (as that term is defined in the Servicing Agreement),
(ii) permitting the resignation of the Seller from its servicing
obligations pursuant to Section 6.05 of the Servicing Agreement
and (iii) of the Seller's intention to appoint another Person to
perform all of its obligations as servicer pursuant to Section
6.09(a) of the Servicing Agreement;
(n) promptly, upon the delivery thereof pursuant to
the Purchase and Sale Agreement, a copy of each notice sent
thereunder which relates to Article 5 of that agreement;
(o) promptly, upon the delivery thereof pursuant to
the Servicing Agreement, copies of all Reports to be furnished
pursuant to the Servicing Agreement;
(p) promptly upon receipt thereof, a copy of each
amendment to the Financing Order issued pursuant to the Act; and
(q) not less than 30 days before it shall occur, in
detail reasonably acceptable to the Agent notice of the
commencement by a Person other than the Seller of the billing
and/or collecting on behalf of the Seller of charges which
constitute Receivables.
SECTION 5.03. Negative Covenants of the Seller. Until
the latest of the Facility Termination Date, the Commitment
Termination Date, the date that the Capital and Yield with
respect to all Receivable Interests shall be paid in full or the
date all other amounts owed by the Seller hereunder to the
Purchasers, the Banks or the Agent are paid in full, the Seller
will not, without the written consent of the Agent:
(a) Sales, Liens, Etc. Except as otherwise provided
herein, sell, assign (by operation of law or otherwise) or
otherwise dispose of, or create or suffer to exist any Adverse
Claim upon or with respect to, the Seller's undivided interest in
any Pool Receivable, Related Security, related Contract or
Collections, or upon or with respect to any lock-box account to
which any Collections of any Pool Receivable are sent, or assign
any right to receive income in respect thereof.
(b) Extension or Amendment of Receivables. Except in
conformance with the Credit and Collection Policy, extend, amend
or otherwise modify the terms of any Pool Receivable, or amend,
modify or waive any term or condition of any Contract related
thereto if such action might reduce or impair the rights of any
Purchaser, any Bank or the Agent with respect to any Pool
Receivable or the collectibility or value of any Pool Receivable.
(c) Change in Business or Contracts or Credit and
Collection Policy. Make any change in the character of its
business or its Contracts or Credit and Collection Policy, which
change would, in any case, impair the collectibility of any Pool
Receivable.
(d) No Actions Against Obligors. Commence or settle
any legal action to enforce collection of any Pool Receivable
except in conformance with the Credit and Collection Policy.
(e) Deposits to Designated Accounts. Deposit or
otherwise credit, or cause or fail to use commercially reasonable
efforts to prevent from being so deposited or credited, to any
Designated Account cash or cash proceeds other than Collections
of Pool Receivables.
(f) Servicing Agreement and Purchase and Sale
Agreement. Amend any provision of the Servicing Agreement or the
Purchase and Sale Agreement in a manner that will have a material
adverse effect on the collectibility of the Receivables or the
ability of the Seller to perform hereunder.
SECTION 5.04. Special Covenants Regarding Corporate
Separateness, Etc. The Seller and the Originator each
acknowledges that the Agent, each Purchaser and each Bank is
entering into the transactions contemplated hereby in reliance on
the separate legal identity of the Seller. In accordance with
such reliance, the Seller hereby agrees that until the latest of
the Facility Termination Date, the Commitment Termination Date,
the date that the Capital and Yield with respect to all
Receivable Interests shall be paid in full or the date all other
amounts owed by the Seller hereunder to the Purchasers, the Banks
or the Agent are paid in full, the Seller shall:
(a) Corporate Separateness. (i) At all times maintain
at least one independent director who (x) is not currently and
has not been during the five years preceding the date of this
Agreement an officer, director or employee of an Affiliate of the
Seller or any Other Corporation, (y) is not a current or former
officer or employee of the Seller and (z) is not a stockholder of
any Other Corporation or any of their respective Affiliates.
(ii) Not direct or participate in the management of any
of the Other Corporations' operations.
(iii) Have stationery and other business forms and
a telephone number separate from that of the Other Corporations.
(iv) At all times be adequately capitalized in light of
its contemplated business.
(v) At all times provide for its own operating
expenses and liabilities from its own funds.
(vi) (A) Except as contemplated hereby, maintain its
assets and transactions separately from those of the Other
Corporations and reflect such assets and transactions in
financial statements separate and distinct from those of the
Other Corporations and evidence such assets and transactions by
appropriate entries in books and records separate and distinct
from those of the Other Corporations; (B) hold itself out to the
public under the Seller's own name as a legal entity separate and
distinct from the Other Corporations; and (C) not hold itself out
as having agreed to pay, or as being liable, primarily or
secondarily, for, any obligations of the Other Corporations.
(vii) Not maintain any joint account with any Other
Corporation or become liable as a guarantor or otherwise with
respect to any debt or contractual obligation of any Other
Corporation.
(viii) Not make any payment or distribution of
assets with respect to any obligation of any Other Corporation or
grant an Adverse Claim on any of its assets to secure any
obligation of any Other Corporation.
(ix) Not make loans, advances or otherwise extend
credit to any of the Other Corporations except as contemplated
hereby and by the Originator Purchase Agreement.
(x) Hold regular duly noticed meetings of its Board of
Directors and make and retain minutes of such meetings.
(xi) Have bills of sale (or similar instruments of
assignment) (except with respect to purchases of Receivables)
and, if appropriate, UCC-1 financing statements, with respect to
all assets purchased from any of the Other Corporations.
(xii) Not engage in any transaction with any of the
Other Corporations, except as permitted by this Agreement and as
contemplated by the Originator Purchase Agreement.
(xiii) Comply with (and cause to be true and
correct) each of the facts and assumptions contained in Part A on
pages 3-6 of the true sale and non-consolidation opinion of Day,
▇▇▇▇▇ & ▇▇▇▇▇▇ delivered pursuant to Section 3.01(g) and
designated as Exhibit E to the Original Agreement.
(b) Originator Purchase Agreement. Not amend, waive
or modify any provision of the Originator Purchase Agreement or
waive the occurrence of any "Event of Termination" under the
Originator Purchase Agreement, without in each case the prior
written consent of the Agent. The Seller will perform all of its
obligations under the Originator Purchase Agreement in all
material respects and will enforce the Originator Purchase
Agreement in accordance with its terms in all material respects.
(c) Nature of Business. Not engage in any business
other than the purchase of Receivables, Related Security and
Collections from the Originator and the transactions contemplated
by this Agreement or create or form any Subsidiary.
(d) Mergers, Etc. Not merge with or into or
consolidate with or into, or convey, transfer, lease or otherwise
dispose of (whether in one transaction or in a series of
transactions), all or substantially all of its assets (whether
now owned or hereafter acquired) to, or acquire all or
substantially all of the assets or capital stock or other
ownership interest of, or enter into any joint venture or
partnership agreement with, any Person, other than as
contemplated by this Agreement and the Originator Purchase
Agreement.
(e) Distributions, Etc. Not declare or make any
dividend payment or other distribution of assets, properties,
cash, rights, obligations or securities on account of any shares
of any class of capital stock of the Seller, or return any
capital to its shareholders as such, or purchase, retire,
defease, redeem or otherwise acquire for value or make any
payment in respect of any shares of any class of capital stock of
the Seller or any warrants, rights or options to acquire any such
shares, now or hereafter outstanding; provided, however, that the
Seller may declare and pay cash dividends on its capital stock to
its shareholders so long as (i) no Event of Termination shall
then exist or would occur as a result thereof, (ii) such
dividends are in compliance with all applicable law including the
law of the state of Connecticut, and (iii) such dividends have
been approved by all necessary and appropriate corporate action
of the Seller.
(f) Debt. Not incur any debt, other than any debt
incurred pursuant to this Agreement and the Originator Purchase
Agreement, including the Deferred Purchase Price.
(g) Certificate of Incorporation. Not amend or delete
Articles Third, Fourth, Sixth or Seventh of its certificate of
incorporation.
(h) Tangible Net Worth. Maintain Tangible Net Worth
at all times equal to at least 3% of the Outstanding Balance of
the Receivables at such time.
ARTICLE VI
ADMINISTRATION AND COLLECTION
SECTION 6.01. Designation of Collection Agent. The
servicing, administration and collection of the Pool Receivables
shall be conducted by such Person (the "Collection Agent") so
designated from time to time in accordance with this Section
6.01. Until the Agent gives notice to the Seller of a
designation of a new Collection Agent, the Originator is hereby
designated as, and hereby agrees to perform the duties and
obligations of, the Collection Agent pursuant to the terms
hereof. The Agent, at any time after the occurrence of an Event
of Termination or Incipient Event of Termination, upon notice to
the Seller, may designate as Collection Agent any Person
(including itself) to succeed the Originator or any successor
Collection Agent, on the condition in each case that any such
Person so designated agrees in writing (a) to perform the duties
and obligations of the Collection Agent pursuant to the terms
hereof and (b) to adhere to the provisions of Section 11.07,
which agreement shall survive the termination of this Agreement
or such writing. For purposes of satisfying the condition
contained in the preceding sentence, the Agent hereby agrees that
if and when it shall designate itself as the Collection Agent it
shall perform the duties and obligations of the Collection Agent
pursuant to the terms hereof. The Collection Agent may
subcontract with Northeast Utilities Service Company and may,
upon 45 days' notice to the Seller, with the prior consent of the
Agent, subcontract with any other Person for the administration
and collection of the Pool Receivables, provided that the
Collection Agent shall remain liable for the performance of the
duties and obligations of the Collection Agent pursuant to the
terms hereof. In performing its duties as Collection Agent, the
Collection Agent shall exercise the same care and apply the same
policies as it would exercise and apply if it owned such
Receivables and shall act in the best interests of the Seller,
the Purchasers and the Banks.
SECTION 6.02. Duties of Collection Agent. (a) The
Collection Agent shall (unless the Agent directs otherwise) take
or cause to be taken only such actions as shall be necessary or
customary to collect each Pool Receivable from time to time, all
in accordance with applicable laws, rules and regulations, with
reasonable care and diligence, and solely in accordance with the
Credit and Collection Policy. The Seller and the Agent hereby
appoint the Collection Agent, from time to time designated
pursuant to Section 6.01, as agent for themselves and for the
Purchasers and the Banks to enforce their respective rights and
interests in and under the Pool Receivables, the Related Security
and the related Contracts and to monitor the Seller's compliance
with the terms and conditions set forth in this Agreement.
(b) The Collection Agent shall not extend, amend or
otherwise modify the terms of any Pool Receivable or amend,
modify or waive any term or condition of any Contract related
thereto, or commence or settle any legal action to enforce
collection of any Pool Receivable, except in conformance with the
Credit and Collection Policy.
(c) Upon the Agent's request following the occurrence
of any Event of Termination or Incipient Event of Termination,
the Seller shall deliver to the Collection Agent, and the
Collection Agent shall hold in trust, keep confidential and
legend appropriately for the Seller and the Agent, acting on
behalf of each Purchaser and each Bank, in accordance with their
respective interests, copies of all computer tapes or disks which
evidence or relate to Pool Receivables and copies of all
documents, instruments and other records which evidence or relate
to Pool Receivables.
(d) The Collection Agent shall as soon as practicable
upon demand deliver to the Seller copies of all documents,
instruments and other records (including, without limitation,
computer tapes or disks) in its possession which evidence or
relate to Receivables of the Seller other than Pool Receivables,
and copies of documents, instruments and other records in its
possession which evidence or relate to Pool Receivables.
(e) The Collection Agent shall, at any time and from
time to time at the written request of the Agent, furnish to the
Agent (within five Business Days after any such request) a
calculation of the amounts set aside for the Purchasers and the
Banks pursuant to Section 2.06(b).
(f) The Collection Agent shall, to the extent
permitted by applicable law, pay interest to the Agent on any
amount not paid by the Collection Agent when required to be paid
by it hereunder, at an interest rate per annum equal to the
Alternate Base Rate, payable on demand; provided, however, that
such interest rate shall not at any time exceed the maximum rate
permitted by applicable law. Such interest shall be for the
account of, and shall be distributed to, the Purchasers and the
Banks, as the case may be, entitled thereto ratably in accordance
with their respective interests in such overdue amount and shall
be paid by the Collection Agent free and clear of and without
deduction for any taxes of any kind whatsoever.
(g) The Collection Agent's authorization under this
Agreement shall terminate, after the Facility Termination Date
and Commitment Termination Date, upon receipt by each Purchaser
and each Bank which has purchased a Receivable Interest of the
allocable Capital and Yield and upon payment in full of all other
amounts payable to the Agent, each Purchaser, each Bank and the
Collection Agent under this Agreement.
SECTION 6.03. Rights of the Agent. (a) The Agent is
hereby authorized, at any time, upon notice to the Seller after
the occurrence of an Event of Termination or Incipient Event of
Termination, to direct the Obligors of Pool Receivables, or any
of them (and the Seller shall at the Agent's request and at the
Seller's expense, direct such Obligors), to make payment of all
amounts payable under any Pool Receivable directly to the
Designated Account. Further, the Agent (upon notice to the
Seller and at the Seller's expense) may, at any time after the
occurrence of an Event of Termination or Incipient Event of
Termination, notify the Obligors of Pool Receivables, or any of
them, of the ownership of Receivable Interests by the Purchasers
and the Banks.
(b) At any time after the occurrence of an Event of
Termination or Incipient Event of Termination:
(i) The Agent may direct the Obligors of Pool
Receivables, or any of them, that payment of all amounts payable
under any Pool Receivable be made directly to the Agent or its
designee.
(ii) The Seller shall, at the Agent's request and at
the Seller's expense, give notice of the ownership of Receivable
Interests by the Agent, for the benefit of the Purchasers and the
Banks to each such Obligor and direct that payments be made
directly to the Agent or its designee.
(iii) The Seller and the Originator shall, at the
Agent's request and at the Seller's expense, (A) assemble all of
the documents, instruments and other records (including, without
limitation, computer tapes and disks) which evidence or relate to
the Pool Receivables, and the related Contracts and Related
Security, or which are otherwise necessary or desirable to
collect such Pool Receivables, and shall make the same available
to the Agent at a place selected by the Agent or its designee,
and (B) segregate all cash, checks and other instruments received
by it from time to time constituting Collections of Pool
Receivables in a manner acceptable to the Agent and shall,
promptly upon receipt, remit all such cash, checks and
instruments, duly endorsed or with duly executed instruments of
transfer, to the Agent or its designee.
(iv) Each of the Seller, each Purchaser and each Bank
hereby authorizes the Agent to take any and all steps in the
Seller's name and on behalf of the Seller necessary or desirable,
in the determination of the Agent, to collect all amounts due
under any and all Pool Receivables, including, without
limitation, endorsing the Seller's name on checks and other
instruments representing Collections of Pool Receivables and
enforcing such Pool Receivables and the related Contracts and
taking action or causing action to be taken with respect to any
Related Security, including with respect to transferring
possession of the same to the Agent or its designee.
SECTION 6.04. Responsibilities of the Seller and the
Originator. Anything herein to the contrary notwithstanding:
(a) The Seller and the Originator shall remain
responsible and liable to perform all of their respective duties
and obligations under the Contracts related to the Pool
Receivables, to the extent set forth therein; the Seller and the
Originator shall perform their respective obligations under the
Contracts related to the Pool Receivables to the same extent as
if Receivable Interests had not been sold;
(b) The exercise by the Agent of any of its rights
hereunder shall not release the Seller or the Originator from any
of their respective duties or obligations with respect to any
Pool Receivables or under the Contacts related to the Pool
Receivables;
(c) Neither the Agent nor any Purchaser or Bank shall
have any obligation or liability with respect to any Pool
Receivables or related Contracts, nor shall any of them be
obligated to perform any of the obligations of the Seller or the
Originator thereunder;
(d) In the event of any conflict between the
provisions of Article VI of this Agreement and Article VI of the
Originator Purchase Agreement, the provisions of this Agreement
shall control; and
(e) The Seller shall promptly notify the Agent of any
claim or threatened claim probable, in the opinion of the
management of the Seller, to result in any liability referred to
in Article X.
SECTION 6.05. Further Action Evidencing Purchases.
(a) Each of the Seller and 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 may be necessary or that the Agent may reasonably request in
order to perfect, protect or more fully evidence the Receivable
Interests purchased by the Purchasers or the Banks hereunder, or
to enable any of them or the Agent to exercise or enforce any of
their respective rights hereunder. Without limiting the
generality of the foregoing, the Originator will upon the request
of the Agent: (i) 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; (ii) following the occurrence of any
Event of Termination, ▇▇▇▇ conspicuously each invoice evidencing
each Pool Receivable and the related Contract with a legend,
acceptable to the Agent, evidencing that an undivided percentage
ownership interest in such Receivable has been sold in accordance
with this Agreement; and (iii) ▇▇▇▇ its master data processing
records evidencing such Pool Receivables and related Contracts
with such legend.
(b) The Seller hereby authorizes the Agent to file or
cause to be filed one or more financing or continuation
statements, and amendments thereto and assignments thereof,
relative to all or any of the Pool Receivables and the Related
Security now existing or hereafter arising without the signature
of the Seller where permitted by law.
(c) If the Seller fails to perform any of its
agreements or obligations under this Agreement, the Agent may
(but shall not be required to) itself perform, or cause
performance of, such agreement or obligation, and the expenses of
the Agent incurred in connection therewith shall be payable by
the Seller as provided in Section 11.06.
SECTION 6.06. Application of Collections. Any payment
by an Obligor in respect of any indebtedness owed by it to the
Seller shall, except as otherwise specified by such Obligor or
otherwise required by contract or law and unless otherwise
instructed by the Agent, be applied as a Collection of any Pool
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, except to the extent that
such payment is required to be applied on a pro rata basis to the
RRB Charge.
SECTION 6.07. Indemnities by the Collection Agent.
Without limiting any other rights that the Agent, any Purchaser,
any Bank or any of their respective Affiliates (each, a "Special
Indemnified Party") may have hereunder or under applicable law,
and in consideration of its appointment as Collection Agent, the
Collection Agent hereby agrees to indemnify each Special
Indemnified Party from and against any and all claims, losses and
liabilities (including reasonable attorneys' fees) (all of the
foregoing being collectively referred to as "Special Indemnified
Amounts") arising out of or resulting from any of the following
(excluding, however, (a) Special Indemnified Amounts to the
extent resulting from gross negligence or willful misconduct on
the part of such Special Indemnified Party, (b) recourse for
uncollectible Receivables or (c) any income taxes or any other
tax or fee measured by income incurred by such Special
Indemnified Party arising out of or as a result of this Agreement
or the ownership of Receivable Interests or in respect of any
Receivable or any Contract):
(i) any representation or warranty or
statement made or deemed made by the Collection Agent under or in
connection with this Agreement which shall have been incorrect in
any material respect when made;
(ii) the failure by the Collection Agent to
comply with any applicable law, rule or regulation with respect
to any Pool Receivable or Contract; or the failure of any Pool
Receivable or Contract to conform to any such applicable law,
rule or regulation;
(iii) the failure to have filed, or any delay in
filing, financing statements or other similar instruments or
documents under the UCC of any applicable jurisdiction or other
applicable laws with respect to any Receivables in, or purporting
to be in, the Receivables Pool, the Contracts and the Related
Security and Collections in respect thereof, whether at the time
of any purchase or reinvestment or at any subsequent time;
(iv) any failure of the Collection Agent to
perform its duties or obligations in accordance with the
provisions of this Agreement;
(v) the commingling of Collections of Pool
Receivables at any time by the Collection Agent with other funds;
(vi) any action or omission by the Collection
Agent reducing or impairing the rights of the Purchasers or the
Banks with respect to any Pool Receivable or the value of any
Pool Receivable;
(vii) any Collection Agent Fees or other costs
and expenses payable to any replacement Collection Agent, to the
extent in excess of the Collection Agent Fees payable to the
Collection Agent hereunder; or
(viii) any claim brought by any Person other
than a Special Indemnified Party arising from any activity by the
Collection Agent or its Affiliates in servicing, administering or
collecting any Receivable.
ARTICLE VII
EVENTS OF TERMINATION
SECTION 7.01. Events of Termination. If any of the
following events ("Events of Termination") shall occur and be
continuing:
(a) The Collection Agent (if other than the Agent or
its designee) (i) shall fail to perform or observe any term,
covenant or agreement hereunder (other than as referred to in
clause (ii) of this Section 7.01(a)) and such failure shall
remain unremedied for three Business Days or (ii) shall fail to
make any payment or deposit to be made by it hereunder when due;
or
(b) The Seller or the Originator shall fail (i) to
transfer to the Agent when requested by the Agent any rights
pursuant to this Agreement which it has as Collection Agent, (ii)
to perform or observe any term, covenant or agreement contained
in Section 5.03(e) or Section 6.03(a), (iii) to make any payment
required under Section 10.01 or (iv) to turn over to the
Collection Agent the amounts referred to in Sections 2.06(e)(i)
and (ii); or
(c) Any representation or warranty made or deemed made
by the Seller or the Collection Agent (or any of their respective
officers) under or in connection with this Agreement, any other
Transaction Document, any Seller Report or any other information
or report delivered by the Seller or the Collection Agent
pursuant hereto or any Transaction Document shall prove to have
been incorrect in any material respect when made or deemed made
or delivered; or
(d) The Seller or 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 any
such failure shall remain unremedied for 10 days after written
notice thereof shall have been given to the Seller or the
Originator by the Agent; or
(e) The Seller or the Originator shall fail to pay the
principal of or interest on any obligation of the Seller or the
Originator for borrowed money (it being agreed that neither the
Notes nor the Certificates are such an obligation) in an
outstanding amount of $10,000,000 or more when due, whether by
acceleration, by required prepayment or otherwise, for a period
longer than any period of grace provided in such obligation, or
fail to perform any other term, condition or covenant contained
in any such obligation, the effect of which is to cause, or to
permit the holder of such obligation or others on its behalf to
cause, such obligation then to become due prior to its stated
maturity, unless such failure shall have been cured or
effectively waived; or
(f) Any Purchase of a Receivable Interest pursuant
hereto or any reinvestment shall for any reason, except to the
extent permitted by the terms hereof, cease to create a valid and
perfected first priority undivided percentage ownership interest
to the extent of such Receivable Interest in each applicable Pool
Receivable and the Related Security and Collections with respect
thereto; or this Agreement shall for any reason cease to evidence
the transfer to the owner thereof of legal and equitable title
to, and ownership of, an undivided percentage ownership interest
in Pool Receivables and Related Security to the extent of the
applicable Receivable Interest; or the security interest created
pursuant to Section 2.10 shall for any reason (but subject to the
Pro Rata RRB Interest) cease to be a valid and perfected first
priority security interest in the collateral security referred to
in that section; or
(g) (i) The Originator or any of its Significant
Subsidiaries shall generally not pay its debts as such debts
become due, or shall admit in writing its inability to pay its
debts generally, or shall make a general assignment for the
benefit of creditors; or any proceeding shall be instituted by or
against the Originator or any of its Significant Subsidiaries
seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any
law relating to bankruptcy, insolvency or reorganization or
relief of debtors, or seeking the entry of an order for relief or
the appointment of a receiver, trustee, or other similar official
for it or for any substantial part of its property and, if
instituted against the Originator or any of its Significant
Subsidiaries, either such proceeding shall not be stayed or
dismissed for 60 days or any of the actions sought in such
proceeding (including, without limitation, the entry of an order
for relief against it or the appointment of a receiver, trustee,
custodian or other similar official for it or for any substantial
part of its property) shall occur; or (ii) the Originator or any
of its Significant Subsidiaries shall take any corporate action
to authorize any of the actions set forth in clause (i) above in
this subsection (g); or
(h) The Delinquency Ratio shall at any time exceed 7%,
the Default Ratio shall at any time exceed 8% or the Loss-To-
Liquidation Ratio shall at any time exceed 2%; or
(i) The Net Receivables Pool Balance shall at any time
be less than 105% of the sum of Capital, Yield Reserve,
Collection Agent Fee Reserve and Loss and Dilution Reserve for
all Receivable Interests at such time and such condition shall
continue for three Business Days after the Seller shall become
aware of such condition; or
(j) There shall have occurred any event which may
materially adversely affect the ability of the Seller or the
Originator to perform its obligations under this Agreement or the
collectibility of the Pool Receivables; or
(k) An "Event of Termination" or "Facility Termination
Date" shall occur under the Originator Purchase Agreement, or the
Originator Purchase Agreement shall cease to be in full force and
effect; or
(l) All of the outstanding capital stock of the Seller
shall cease to be owned, directly or indirectly, by the
Originator; or
(m) A "Servicer Default" shall occur under the
Servicing Agreement; or
(n) The Seller shall be required to pay indemnity
payments under the Purchase and Sale Agreement on account of its
breach of representations and warranties or the Repurchase Date
(as defined in the Purchase and Sale Agreement) shall occur; or
(o) The Note Trustee commences action to enforce the
security interest under the Note Indenture; or, the Note Trustee
or any other Person requests the DPUC to order the sequestration
and payment to the holders of the Notes of all revenues arising
with respect to the RRB Charge and/or the related competitive
transition assessment; or
(p) The Act or the Financing Order is amended in a
manner which materially affects the ability of the Seller to
collect Pool Receivables or the ability of the Seller to perform
hereunder.
then, and in any such event, the Agent may, by notice to the
Seller, take either or both of the following actions: (x)
designate the Facility Termination Date or the Commitment
Termination Date; and (y) designate a Person to succeed the
Originator as the Collection Agent (if the Originator is then
serving as the Collection Agent) pursuant to Section 6.01;
provided, that, automatically upon the occurrence of any event
(without any requirement for the passage of time or the giving of
notice) described in paragraph (g) of this Section 7.01, the
Facility Termination Date and the Commitment Termination Date
shall occur, the Originator (if the Originator is then serving as
the Collection Agent) shall cease to be the Collection Agent and
the Agent or its designee shall become the Collection Agent.
Upon any such declaration or designation by the Agent, or upon
such automatic termination, the Agent, each Purchaser and each
Bank shall have, in addition to the rights and remedies which
they may have under this Agreement, all other rights and remedies
provided after default under the UCC of the applicable
jurisdiction or jurisdictions and other applicable laws, which
rights shall be cumulative.
ARTICLE VIII
THE AGENT
SECTION 8.01. Authorization and Action. Each
Purchaser and each Bank hereby appoints and authorizes the Agent
to take such action as agent on its behalf and to exercise such
powers under this Agreement as are delegated to the Agent by the
terms hereof, together with such powers as are reasonably
incidental thereto.
SECTION 8.02. Agent's Reliance, Etc. Neither the
Agent nor any of its directors, officers, agents or employees
shall be liable for any action taken or omitted to be taken by it
or them as Agent under or in connection with this Agreement
(including, without limitation, any action taken or omitted to be
taken by it or them on behalf of the Purchasers or the Banks if
designated as Collection Agent pursuant to Section 6.01), except
for its or their own gross negligence or willful misconduct.
Without limiting the foregoing, the Agent:
(i) may consult with legal counsel (including
counsel for the Seller or the Originator), independent public
accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken in good faith
by it in accordance with the advice of such counsel, accountants
or experts;
(ii) makes no warranty or representation to any
Purchaser or any Bank (whether written or oral) and shall not be
responsible to any Purchaser or any Bank for any statements,
warranties or representations (whether written or oral) made in
or in connection with this Agreement;
(iii) shall not have any duty to ascertain or to
inquire as to the performance or observance of any of the terms,
covenants or conditions of this Agreement on the part of the
Seller or the Collection Agent or to inspect the property
(including the books and records) of the Seller or the Collection
Agent;
(iv) shall not be responsible to any Purchaser or
any Bank for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this
Agreement or any other instrument or document furnished pursuant
hereto; and
(v) shall incur no liability under or in respect
of this Agreement by acting upon any notice (including notice by
telephone), consent, certificate or other instrument or writing
(which may be by telecopier or telex) believed by it to be
genuine and signed or sent by the proper party or parties.
SECTION 8.03. CNAI and Affiliates. The obligation of
Citibank to Purchase Receivable Interests or make reinvestments
under this Agreement may be satisfied by CNAI or any of its
Affiliates. With respect to any Receivable Interest or interest
therein owned by it, CNAI shall have the same rights and powers
under this agreement as any Bank and may exercise the same as
though it were not the Agent. CNAI and any of its Affiliates may
generally engage in any kind of business with the Seller, the
Originator or any Obligor, any of their respective Affiliates and
any Person who may do business with or own securities of the
Seller, the Originator or any Obligor or any of their respective
Affiliates, all as if CNAI were not the Agent and without any
duty to account therefor to any Purchaser or any Bank.
SECTION 8.04. Purchasers' and Banks' Purchase
Decisions. Each Purchaser and each Bank acknowledges that it
has, independently and without reliance upon the Agent, any of
its Affiliates or any other Purchaser or Bank and based on such
documents and information as it has deemed appropriate, made its
own evaluation and decision to enter into this Agreement and, if
it so determines, to purchase Receivable Interests hereunder.
Each Purchaser and each Bank also acknowledges that it will,
independently and without reliance upon the Agent, any of its
Affiliates or any other Purchaser or Bank and based on such
documents and information as it shall deem appropriate at the
time, continue to make its own decisions in taking or not taking
action under this Agreement.
ARTICLE IX
ASSIGNMENT
SECTION 9.01. Assignability. (a) Purchasers. This
Agreement and the Purchasers' rights and obligations herein
(including ownership of each Receivable Interest) shall be
assignable by the Purchasers and their successors and assigns.
Each assignor of a Receivable Interest or any interest therein
shall notify the Agent and the Seller of any such assignment.
Each assignor of a Receivable Interest or any interest therein
may, in connection with the assignment or participation, disclose
to the assignee or participant any information relating to the
Seller, including the Receivables, furnished to such assignor by
or on behalf of the Seller or by the Agent; provided that, prior
to any such disclosure, the assignee or participant agrees to
preserve the confidentiality of any confidential information
relating to the Seller received by it from any of the foregoing
entities.
(b) Banks. Each Bank may assign to any Eligible
Assignee or to any other Bank all or a portion of its rights and
obligations under this Agreement (including, without limitation,
all or a portion of its Bank Commitment and any Receivable
Interests or interests therein owned by it). The parties to each
such assignment shall execute and deliver an assignment to the
Agent. In addition, Citibank or any of its Affiliates may assign
any of its rights (including, without limitation, rights to
payment of Capital and Yield) under this Agreement to any Federal
Reserve Bank without notice to or consent of the Seller or the
Agent.
(c) Agent. This Agreement and the rights and
obligations of the Agent herein shall be assignable by the Agent
and its successors and assigns.
(d) Seller. The Seller may not assign its rights or
obligations hereunder or any interest herein without the prior
written consent of the Agent.
ARTICLE X
INDEMNIFICATION
SECTION 10.01. Indemnities by the Seller. Without
limiting any other rights that the Agent, any Purchaser, any Bank
or any of their respective Affiliates (each, an "Indemnified
Party") may have hereunder or under applicable law, the Seller
hereby agrees to indemnify each Indemnified Party from and
against any and all damages, losses, claims, liabilities and
related costs and expenses, including reasonable attorneys' fees
and disbursements (collectively, "Indemnified Amounts"), awarded
against or incurred by any of them arising out of or as a result
of this Agreement or the ownership of Receivable Interests or in
respect of any Receivable or any Contract, excluding, however,
(a) Indemnified Amounts to the extent resulting from gross
negligence or willful misconduct on the part of such Indemnified
Party, (b) recourse (except as otherwise specifically provided in
this Agreement) for uncollectible Receivables or (c) any taxes
based on or measured by the income of any Indemnified Party
incurred by such Indemnified Party arising out of or as a result
of this Agreement or the ownership of Receivable Interests or in
respect of any Receivable or any Contract. Without limiting or
being limited by the foregoing, the Seller shall pay on demand to
each Indemnified Party any and all amounts necessary to indemnify
such Indemnified Party from and against any and all Indemnified
Amounts relating to or resulting from any of the following:
(i) any Receivable, at the time of the transfer of an
undivided percentage ownership interest therein, not being an
Eligible Receivable;
(ii) reliance on any representation or warranty made or
deemed made by the Seller (or any of its officers) under or in
connection with this Agreement, any Seller Report, the other
Transaction Documents or any other information or report
delivered by the Seller pursuant hereto which shall have been
false or incorrect in any material respect when made or deemed
made;
(iii) the failure by the Seller or the Originator
to comply with any applicable law, rule or regulation with
respect to any Pool Receivable, Related Security or the related
Contract, or the nonconformity of any Pool Receivable, Related
Security or the related Contract with any such applicable law,
rule or regulation;
(iv) the failure to vest in the Agent, for the benefit
of the Purchasers or the Banks, as the case may be, or to
transfer to the Agent, for the benefit of the Purchasers or the
Banks, as the case may be, (a) legal and equitable title to, and
ownership of, an undivided percentage ownership interest, to the
extent of each Receivable Interest owned by it hereunder, in the
Receivables in, or purporting to be in, the Receivables Pool for
such Receivable Interest, or (b) a perfected security interest as
provided in Section 2.10, in each case free and clear of any
Adverse Claim;
(v) the failure 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 in, or purporting to be in,
the Receivables Pool for any Receivable Interest, any Contract or
Related Security whether at the time of any Purchase or
reinvestment or at any subsequent time;
(vi) any dispute, claim, offset or defense of the
Obligor (other than discharge in bankruptcy of the Obligor) to
the payment of any Receivable in, or purporting to be in, the
Receivables Pool (including, without limitation, a defense based
on such Receivables or the related Contract not being a legal,
valid and binding obligation of such Obligor enforceable against
it in accordance with its terms), or any other claim resulting
from the sale of the merchandise or services related to such
Receivable or the furnishing or failure to furnish such
merchandise or services or relating to collection activities with
respect to such Receivable (if such collection activities were
performed by the Seller or any of its Affiliates acting as
Collection Agent);
(vii) any failure of the Seller to perform its duties
or obligations in accordance with the provisions hereof or to
perform its duties and obligations under the Contracts;
(viii) any products liability claim or personal injury
or property damage suit or other similar or related claim or
action of whatever sort arising out of or in connection with
merchandise or services which are the subject of any Contract;
(ix) the commingling of Collections of Pool Receivables
at any time with any funds (provided that this paragraph (ix)
will not cover commingling that occurs after such Collections
have been either (1) deposited or otherwise paid over to the
Agent for the account of the Purchasers or the Banks in
accordance with this Agreement or (2) received by CNAI or any of
its Affiliates acting as Collection Agent);
(x) any investigation, litigation or proceeding
related to this Agreement or the use of proceeds of Purchases or
the ownership of Pool Receivables or in respect of any Pool
Receivable or any Contract;
(xi) any failure of the Seller or the Originator to
comply with its respective covenants contained in Section 5.01;
or
(xii) any claim brought by any Person other than an
Indemnified Party arising from any activity by the Seller or any
Affiliate of the Seller in servicing, administering or collecting
any Receivable.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Amendments, Etc. No amendment or waiver
of any provision of this Agreement nor consent to any departure
by the Seller or the Originator therefrom shall in any event be
effective unless the same shall be in writing and signed by the
Agent, as agent for the Purchasers and the Banks (and, in the
case of any amendment, also signed by the Seller and the
Originator), and then such amendment, waiver or consent shall be
effective only in the specific instance and for the specific
purpose for which given; provided, however, that no amendment,
waiver or consent shall, unless in writing and signed by the
Collection Agent in addition to the Agent, affect the rights or
duties of the Collection Agent under this Agreement. This
Agreement contains a final and complete integration of all prior
expressions by the parties hereto with respect to the subject
matter hereof and shall constitute the entire agreement among the
parties hereto with respect to the subject matter hereof,
superseding all prior oral or written understandings, except that
certain of the provisions hereof are subject to the terms of the
Intercreditor Agreement.
SECTION 11.02. Notices, Etc. All notices and other
communications hereunder shall, unless otherwise stated herein,
be in writing (which shall include facsimile communication) and
faxed or delivered, to each party hereto, at its address set
forth under its name on the signature pages hereof or at such
other address as shall be designated by such party in a written
notice to the other parties hereto. Notices and communications
by facsimile shall be effective when sent (and shall be followed
by hard copy sent by regular mail), and notices and
communications sent by other means shall be effective when
received.
SECTION 11.03. No Waiver; Remedies. No failure on the
part of the Agent, any Purchaser or any Bank to exercise, and no
delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or
the exercise of any other right. The remedies herein provided
are cumulative and not exclusive of any remedies provided by law.
SECTION 11.04. Binding Effect. (a) This Agreement
shall be binding upon and inure to the benefit of the Seller, the
Originator, the Agent, the Purchasers, the Banks and their
respective successors and assigns.
(b) This Agreement shall create and constitute the
continuing agreement of the parties hereto in accordance with its
terms, and shall remain in full force and effect until the
Facility Termination Date; provided, however, that (i) the rights
of the Purchasers and the Banks to collect the Capital and Yield
in respect of the Receivable Interests owned by them, (ii) the
rights and remedies of the Purchasers and the Banks with respect
to any breach of any representation and warranty made by the
Seller pursuant to Article IV or Section 3.02, (iii) the
indemnification provisions of Article X and Section 11.06, (iv)
the rights of the Agent and the Collection Agent to be paid the
fees, costs and expenses provided for hereunder and (v) the
agreement set forth in Section 11.07 shall be continuing and
shall survive any termination of this Agreement.
SECTION 11.05. GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK, EXCEPT TO THE EXTENT THAT THE PERFECTION OF
THE INTERESTS OF THE PURCHASERS AND THE BANKS IN THE RECEIVABLES,
OR REMEDIES HEREUNDER IN RESPECT THEREOF, ARE GOVERNED BY THE
LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.
SECTION 11.06. Costs, Expenses and Taxes. (a) In
addition to the rights of indemnification granted under Article X
hereof, the Seller agrees to pay on demand all reasonable costs
and expenses in connection with the preparation, execution,
delivery and administration (including periodic auditing and the
other activities contemplated in Section 5.01(c)) of this
Agreement and the other documents to be delivered hereunder,
including, without limitation, the reasonable fees and out- of-
pocket expenses of counsel for the Agent, with respect thereto
and with respect to advising the Agent, CNAI, the Conduit,
Citibank and their respective Affiliates as to their respective
rights and remedies under this Agreement, and all reasonable
costs and expenses, if any (including reasonable counsel fees and
expenses), of the Agent, CNAI, the Purchasers, the Banks and
their respective Affiliates, in connection with the enforcement
of this Agreement and the other documents to be delivered
hereunder.
(b) In addition, the Seller shall pay any and all stamp
and other taxes and fees payable or determined to be payable in
connection with the execution, delivery, filing, recording or
enforcement of this Agreement or the other documents to be
delivered hereunder, and agrees to save each Indemnified Party
harmless from and against any and all liabilities with respect to
or resulting from any delay in paying or omission to pay such
taxes and fees.
SECTION 11.07. No Proceedings. Each of the Seller, the
Originator, the Agent, the Collection Agent, each Purchaser, each
Bank, each assignee of a Receivable Interest or any interest
therein and each entity which enters into a commitment to
purchase Receivable Interests or interests therein hereby agrees
that it will not institute against the Conduit any proceeding of
the type referred to in Section 7.01(g) so long as any commercial
paper or other senior indebtedness issued by the Conduit shall be
outstanding or there shall not have elapsed one year plus one day
since the last day on which any such commercial paper or other
senior indebtedness shall have been outstanding.
SECTION 11.08. Confidentiality. (a) By the Seller and
the Originator. Unless otherwise required by applicable law
(including, without limitation, the order of any governmental
authority having jurisdiction and authority to issue such order
or upon the request or demand of, or in connection with any
investigation, proceeding or audit by, any governmental
authority, if such request or demand shall have the force of law
or be made in connection with the exercise of such authority's
regulatory functions), the Seller and the Originator agree to
maintain the confidentiality of this Agreement (and all drafts
thereof) in communications with third parties and otherwise;
provided, however, that the Agreement may be disclosed to third
parties to the extent such disclosure is (i) required in
connection with a sale of securities of the Originator, or in
connection with the Certificates (ii) made solely to persons who
are legal counsel for the purchaser or underwriter of such
securities, (iii) limited in scope to the provisions of Articles
V, VII, X and, to the extent defined terms are used in Articles
V, VII and X, such terms defined in Article I of this Agreement,
(iv) made pursuant to a written agreement of confidentiality in
form and substance reasonably satisfactory to the Agent, (v) to
the Seller's or the Originator's legal counsel and accountants if
they agree to hold it confidential or (vi) with respect to
information generally available to the public or which becomes
available to the public through no fault of the Seller or the
Originator.
(b) By the Agent. Unless otherwise required by
applicable law (including, without limitation, the order of any
governmental authority having jurisdiction and authority to issue
such order or upon the request or demand of, or in connection
with any investigation, proceeding or audit by, any governmental
authority or rating agency, if such request or demand shall have
the force of law or be made in connection with the exercise of
such authority's regulatory functions or such agency's normal
functions), the Agent agrees to maintain the confidentiality of
any information provided to the Agent by the Seller or the
Originator; provided, however, that such information may be
disclosed to third parties to the extent such disclosure is (i)
made pursuant to a written agreement of confidentiality in form
and substance reasonably satisfactory to the Seller and the
Originator or (ii) to the Agent's legal counsel and accountants
if they agree to hold it confidential or (iii) with respect to
information generally available to the public or which becomes
available to the public through no fault of the Agent.
SECTION 11.09. 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. Delivery of an executed counterpart of a signature
page to this Agreement by facsimile shall be effective as
delivery of a manually executed counterpart of this Agreement.
IN WITNESS WHEREOF, the parties have caused this
Agreement to be executed by their respective officers thereunto
duly authorized, as of the date first above written.
SELLER: CL&P RECEIVABLES CORPORATION
By:_________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Treasurer
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Assistant Treasurer
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
ORIGINATOR
AND COLLECTION
AGENT: THE CONNECTICUT LIGHT AND
POWER COMPANY
By_____________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Treasurer
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Assistant Treasurer
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
PURCHASER: CORPORATE ASSET FUNDING
COMPANY, INC.
By: Citicorp North America, Inc.
as Attorney-in-Fact
By_____________________________
Name:
Title: Vice President
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Asset Funding
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
BANK: CITIBANK, N.A.
By:_______________________________
Name:
Title: Vice President
Percentage: 100%
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
AGENT: CITICORP NORTH AMERICA, INC., as Agent
By__________________________________
Name:
Title: Vice President
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: Corporate Asset Funding
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
EXHIBIT A
SPECIAL CONCENTRATION LIMITS
Date: ____________, 20__
Citicorp North America, Inc.,
as Agent
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Asset Funding Department
Reference is made to the Amended and Restated
Receivables Purchase and Sale Agreement, dated as of March 30,
2001 (the terms defined therein being used herein as therein
defined) among CL&P Receivables Corporation, The Connecticut
Light and Power Company, Corporate Asset Funding Company, Inc.,
Citibank, N.A. and Citicorp North America, Inc., as Agent.
The Seller hereby designates for the Designated
Obligor[s] named below the Special Concentration Limit[s] set
forth below opposite [its] [their respective] name[s]:
Designated Obligor Special Concentration Limit
__________________ ___________________________
__________________ ___________________________
[etc.]
CL&P RECEIVABLES CORPORATION
By____________________________
Name:
Title:
The undersigned hereby approves the above Special
Concentration Limit[s], as of the date hereof.
CITICORP NORTH AMERICA, INC.
as Agent
By____________________________
Name:
Title:
EXHIBIT B
FORM OF SELLER REPORT
EXHIBIT C
DESCRIPTION OF TARIFFS
1. The retail rates charged by the Originator to Obligors, as
approved from time to time by the Connecticut Department of
Public Utility Control.
2. The Connecticut Light and Power Company Terms and Conditions
for Delivery Service, effective January 12, 2000, applicable to
its retail rate accounts as approved by the Connecticut
Department of Public Utility Control.
EXHIBIT D
CANCELLATION OF DESIGNATION OF
OBLIGORS AND/OR SPECIAL CONCENTRATION LIMITS
Date: _____________, 20__
[Citicorp North America, Inc.,
as Agent
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Asset
Funding]
[CL&P Receivables Corporation
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇]
Reference is made to the Amended and Restated
Receivables Purchase and Sale Agreement, dated as of March 30,
2001 (the "Receivables Agreement"; the terms defined therein
being used herein as therein defined) among CL&P Receivables
Corporation, The Connecticut Light and Power Company, Corporate
Asset Funding Company, Inc., Citibank, N.A. and Citicorp North
America, Inc., as Agent.
Pursuant to Section 2.01 of the Receivables Agreement,
the undersigned hereby cancels, effective as of the date
occurring three days after the date hereof, the designation of
[each of] the following Obligor[s] as a Designated Obligor:
1. _________________________________________________
2. _________________________________________________
3. _________________________________________________
(etc.)
The undersigned hereby cancels, effective as of the
date occurring three days after the date hereof, the Special
Concentration Limit of each of the following Obligor[s]:
1. _______________________
2. _______________________
3. _______________________
(etc.)
and thus as of the date occurring three days after the date
hereof the Normal Concentration Limit shall apply to the above
Obligor[s].
[CITICORP NORTH AMERICA, INC.,
as Agent]
[CL&P RECEIVABLES CORPORATION]
By_______________________________
Name:
Title:
EXHIBIT E
FORM OF OPINION OF COUNSEL FOR THE SELLER
See tabs 12 and 13.
EXHIBIT F
AUDIT SCOPE
I. Review of 2-3 monthly Seller Reports
A. Agree numerical amounts to source documents
B. Recalculate percentages and ratios
C. Review customer concentrations (cross-agings)
D. Review write-off activity
E. Review AR eligibility
F. Review the aging of outstanding invoices
II. Perform a verification of receivable activity for sample
Seller Report
A. Monthly activity
1. Sales
2. Collections
3. Write-offs
4. Debit and Credit memos
B. Statistical analysis
1. Turnover
2. Dilution
3. Loss-to-liquidation
III. If available, supply copy of most recent review of
accounting controls