Exhibit 10.49
Execution Copy
U.S. $200,000,000
RECEIVABLES
PURCHASE AND SALE AGREEMENT
Dated as of September 30, 1997
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
TABLE OF CONTENTS
ARTICLE I DEFINITIONS
SECTION 1.01. Certain Defined Terms
SECTION 1.02. Other Terms
SECTION 1.03. Computation of Time Periods
ARTICLE II AMOUNTS AND TERMS OF THE PURCHASES
SECTION 2.01. Designated Obligors; Special Concentration Limits
SECTION 2.02. Purchase Facility
SECTION 2.03. Making Purchases from the Seller
SECTION 2.04. Receivable Interest Percentage Computation
SECTION 2.05. Fees
SECTION 2.06. Settlement Procedures
SECTION 2.07. Payments and Computations, Etc.
SECTION 2.08. Increased Costs
SECTION 2.09. Additional Yield on Receivable
Interests Bearing a
Eurodollar Rate
SECTION 2.10. Security Interest
ARTICLE III CONDITIONS OF PURCHASES
SECTION 3.01. Conditions Precedent to Initial Purchase
SECTION 3.02. Conditions Precedent to All Purchases
ARTICLE IV REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Seller
ARTICLE V GENERAL COVENANTS
SECTION 5.01. Affirmative Covenants of the Seller and the Originator
SECTION 5.02. Reporting Requirements of the Seller
SECTION 5.03. Negative Covenants of the Seller
SECTION 5.04. Special Covenants Regarding Corporate
Separateness, Etc.
ARTICLE VI ADMINISTRATION AND COLLECTION
SECTION 6.01. Designation of Collection Agent
SECTION 6.02. Duties of Collection Agent
SECTION 6.03. Rights of the Agent
SECTION 6.04. Responsibilities of the Seller and the Originator
SECTION 6.05. Further Action Evidencing Purchases
SECTION 6.06. Application of Collections
SECTION 6.07. Indemnities by the Collection Agent
ARTICLE VII EVENTS OF TERMINATION
SECTION 7.01. Events of Termination
ARTICLE VIII THE AGENT
SECTION 8.01. Authorization and Action
SECTION 8.02. Agent's Reliance, Etc.
SECTION 8.03. CNAI and Affiliates
SECTION 8.04. Purchasers' and Banks' Purchase Decisions
ARTICLE IX ASSIGNMENT
SECTION 9.01. Assignability
ARTICLE X INDEMNIFICATION
SECTION 10.01. Indemnities by the Seller
ARTICLE XI MISCELLANEOUS
SECTION 11.01. Amendments, Etc.
SECTION 11.02. Notices, Etc.
SECTION 11.03. No Waiver; Remedies.
SECTION 11.04. Binding Effect.
SECTION 11.05. GOVERNING LAW.
SECTION 11.06. Costs, Expenses and Taxes.
SECTION 11.07. No Proceedings
SECTION 11.08. Confidentiality
SECTION 11.09. Execution in Counterparts
EXHIBIT A Special Concentration Limits
EXHIBIT B Form of Seller Report
EXHIBIT C Description of Tariffs
EXHIBIT D Cancellation of Designation of Obligors and/or Special
Concentration Limits
EXHIBIT E Form of Opinion of Counsel for Seller
EXHIBIT F Audit Scope
RECEIVABLES PURCHASE AND SALE AGREEMENT
Dated as of September 30, 1997
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.
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):
"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-/Baa3 or above 1.00%
BB+/Ba1 1.25%
BB/Ba2 1.50%
BB-/Ba3 1.75%
"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.
Notwithstanding the foregoing, with respect to each assignment entered into
between Citibank and another Bank, so long as the aggregate amount of such
assignments does not exceed $100,000,000, the Bank Commitment of Citibank
shall be automatically increased, immediately following such assignment, to
$100,000,000, and the Agent shall, concurrently with such assignment, notify
the Seller of the Bank Commitment of the applicable assignee and of the new
Bank Commitment of Citibank; provided, however, that in no event shall the
aggregate Bank Commitments of all Banks exceed $200,000,000.
"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.
"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) September 29, 1998,
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.
"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.
"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 of even date 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.
"Inactive Account" means an account of an Obligor which has been sent a final
bill.
"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.
"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 Out-standing 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 Moody's 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."
"Obligor" means a Person obligated to make payments pursuant to a Contract.
"Originator" means The Connecticut Light and Power Company, a Connecticut
corporation.
"Originator Purchase Agreement" means the Purchase and Contribution
Agreement, dated the date of this 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 (i) 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.
"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 Limit" means $200,000,000, 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 hedges 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.
"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 Connecticut Department of Public
Utility Control, 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.
"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.
"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.
"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 # 011500010, 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 there-after 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) 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 such item 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 hereunder is 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 this Agreement and the Originator
Purchase Agreement and the other documents to be delivered by it hereunder
and thereunder and the transactions contemplated hereby and 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 this Agreement and the Originator
Purchase Agreement and the other documents to be delivered by it hereunder
and 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 this 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 Kaye, Scholer, Fierman, Hays & 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.
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 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.
(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 this 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, Arthur Andersen, 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. Take all actions necessary to ensure that all items of
payment with respect to Pool Receivables (including, without limitation,
cash, checks, money orders, wire transfers and automated clearing house
payments) are deposited in the Collection Account within two Business Days
following receipt thereof.
(i) Supplemental Collection Account. Within 30 days after the date hereof,
obtain the agreement of Fleet National Bank to the letter agreement relating
to the Supplemental Collection Account referred to in Section 3.01(j).
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; and
(l) promptly after receipt thereof, copies of all notices received by the
Seller from the Originator under the Originator Purchase Agreement.
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.
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, Berry & Howard delivered pursuant to
Section 3.01(g) and designated as Exhibit E to this 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, all computer tapes or disks which evidence or relate to Pool
Receivables and 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 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, mark
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) mark 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.
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
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 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;
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 enforce-able 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.
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, (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: s/s Robert C. Aronson
Name: Robert C. Aronson
Title: Assistant Treasurer
107 Selden Street
Berlin, Connecticut 06037
Attention: Assistant Treasurer
Facsimile No.: (860) 665-5457
ORIGINATOR
AND COLLECTION
AGENT:
THE CONNECTICUT LIGHT AND POWER COMPANY
By s/s David R. McHale
Name: David R. McHale
Title: Assistant Treasurer
107 Selden Street
Berlin, Connecticut 06037
Attention: Assistant Treasurer
Facsimile No.: 860-665-5457
PURCHASER:
CORPORATE ASSET FUNDING COMPANY, INC.
By: Citicorp North America, Inc.
as Attorney-in-Fact
By s/s R. P. DiLeo
Name: R. P. DiLeo
Title: Vice President
450 Mamaroneck Avenue
Harrison, NY 10528
Attention: Corporate Asset Funding
Facsimile No. 914-899-7890
BANK:
CITIBANK, N.A.
By: s/s R. P. DiLeo
Name: R. P. DiLeo
Title: Attorney-in-Fact
Percentage: 100%
450 Mamaroneck Avenue
Harrison, N.Y. 10528
Facsimile No. 914-899-7890
AGENT:
CITICORP NORTH AMERICA, INC., as Agent
By s/s R. P. DiLeo
Name: R. P. DiLeo
Title: Vice President
450 Mamaroneck Avenue
Harrison, N.Y. 10528
Attention: Corporate Asset Funding
Facsimile No. 914-899-7890
EXHIBIT A
SPECIAL CONCENTRATION LIMITS
Date: , 19
Citicorp North America, Inc.,
as Agent
450 Mamaroneck Avenue
Harrison, New York 10528
Attention: Corporate Asset Funding Department
Reference is made to the Receivables Purchase and Sale Agreement, dated as of
September 30, 1997 (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
s/s s/s
s/s s/s
[etc.]
CL&P RECEIVABLES CORPORATION
By s/s
Name:
Title:
The undersigned hereby approves the above Special Concentration Limit[s], as
of the date hereof.
CITICORP NORTH AMERICA, INC.
as Agent
By s/s
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 Rules and Regulations, effective
July 1, 1993, 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: , 19
[Citicorp North America, Inc.,
as Agent
450 Mamaroneck Avenue
Harrison, New York 10528
Attention: Corporate Asset
Funding]
[CL&P Receivables Corporation
107 Selden Street
Berlin, Connecticut]
Reference is made to the Receivables Purchase and Sale Agreement, dated
as of September 30, 1997 (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 s/s
Name:
Title:
EXHIBIT E
FORM OF OPINION OF COUNSEL FOR THE SELLER
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