Exhibit 10.49.1
Execution Copy
PURCHASE AND CONTRIBUTION AGREEMENT
Dated as of September 30, 1997
Between
THE CONNECTICUT LIGHT AND POWER COMPANY
As Seller
and
CL&P RECEIVABLES CORPORATION
as Purchaser
TABLE OF CONTENTS
PRELIMINARY STATEMENTS
ARTICLE I DEFINITIONS
SECTION 1.01. Certain Defined Terms
Adverse Claim
Affiliate
Alternate Base Rate
Business Day
Collection Agent
Collection Agent Fee
Collections
Contract
Contributed Receivable
Credit and Collection Policy
Debt
Defaulted Receivable
Deferred Purchase Price
Designated Account
Discount
ERISA
Event of Termination
Facility
Facility Termination Date
Inactive Account
Incipient Event of Termination
Indemnified Amounts
Invested Amount
Obligor
Original Purchase Agreement
Outstanding Balance
Person
Public Disclosure Documents
Purchase
Purchase Date
Purchased Receivable
Receivable
Regulatory Authority
Related Security
Sale Agreement
Seller Report
Settlement Date
Settlement Period
Significant Subsidiary
Sold Receivable
Subsidiary
Tariffs
Transferred Receivable
UCC
SECTION 1.02. Other Terms
ARTICLE II AMOUNTS AND TERMS OF PURCHASES AND
CONTRIBUTIONS
SECTION 2.01. Facility
SECTION 2.02. Making Purchases
SECTION 2.03. Collections
SECTION 2.04. Settlement Procedures
SECTION 2.05. Payments and Computations, Etc.
SECTION 2.06. Contributions
ARTICLE III CONDITIONS OF PURCHASES
SECTION 3.01. Conditions Precedent to Initial Purchase from the Seller
SECTION 3.02. Conditions Precedent to All Purchases
ARTICLE IV REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Seller
ARTICLE V COVENANTS
SECTION 5.01. Covenants of the Seller
SECTION 5.02. Grant of Security Interest
SECTION 5.03. Covenant of the Seller and the Purchaser
ARTICLE VI ADMINISTRATION AND COLLECTION
SECTION 6.01. Designation of Collection Agent
SECTION 6.02. Duties of Collection Agent
SECTION 6.03. Collection Agent Fee
SECTION 6.04. Certain Rights of the Purchaser
SECTION 6.05. Rights and Remedies
SECTION 6.06. Transfer of Records to Purchaser
ARTICLE VII EVENTS OF TERMINATION
SECTION 7.01. Events of Termination
ARTICLE VIII INDEMNIFICATION
SECTION 8.01. Indemnities by the Seller
ARTICLE IX MISCELLANEOUS
SECTION 9.01. Amendments, Etc.
SECTION 9.02. Notices, Etc.
SECTION 9.03. No Waiver; Remedies
SECTION 9.04. Binding Effect; Assignability
SECTION 9.05. Costs, Expenses and Taxes
SECTION 9.06. No Proceedings
SECTION 9.07. Confidentiality
SECTION 9.08. GOVERNING LAW
SECTION 9.09. Third Party Beneficiary
SECTION 9.10. Execution in Counterparts
PURCHASE AND CONTRIBUTION AGREEMENT
Dated as of September 30, 1997
THE CONNECTICUT LIGHT AND POWER COMPANY, a Connecticut corporation (the
"Seller"), and CL&P RECEIVABLES CORPORATION, a Connecticut corporation (the
"Purchaser"), 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 and will have Receivables that it wishes to sell to the
Purchaser from time to time, and the Purchaser is prepared to purchase such
Receivables on the terms set forth herein.
(3) The Seller also wishes to contribute Receivables not sold to the capital
of the Purchaser on the terms set forth herein.
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.
"Alternate Base Rate" means a fluctuating interest rate per annum as shall be
in effect from time to time, which rate per annum shall be at all times equal
to the higher of:
(a) the rate of interest announced publicly by Citibank, N.A. in New York,
New York, from time to time as Citibank, N.A.'s base rate; and
(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, N.A. 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, N.A. from three New York certificate of deposit dealers
of recognized standing selected by Citibank, N.A., 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.
"Business Day" means any day on which banks are not authorized or required to
close in New York City.
"Collection Agent" means at any time the Person then authorized pursuant to
Section 6.01 to service, administer and collect Transferred Receivables.
"Collection Agent Fee" has the meaning specified in Section 6.03.
"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 all
funds deemed to have been received by the Seller or any other Person as a
Collection pursuant to Section 2.04.
"Contract" means the Tariffs and any agreement between the Seller 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.
"Contributed Receivable" has the meaning specified in Section 2.06.
"Credit and Collection Policy" means those credit and collection policies and
practices of the Seller in effect on the date of this Agreement relating to
the Receivables, as modified in compliance with Section 5.01(f).
"Debt" means (i) indebtedness for borrowed money, (ii) obligations evidenced
by bonds, debentures, notes or other similar instruments, (iii) obligations
to pay the deferred purchase price of property or services, (iv) obligations
as lessee under leases which shall have been or should be, in accordance with
generally accepted accounting principles, recorded as capital leases, (v)
obligations under direct or indirect guaranties in respect of, and
obligations (contingent or otherwise) to purchase or otherwise acquire, or
otherwise to assure a creditor against loss in respect of, indebtedness or
obligations of others of the kinds referred to in clauses (i) through (iv)
above, and (vi) liabilities in respect of unfunded vested benefits under
plans covered by Title IV of ERISA.
"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 as uncollectible.
"Deferred Purchase Price" means the portion of the Purchase Price of
Purchased Receivables purchased on any Purchase Date which is not paid in
cash under Section 2.02, which portion, when added to the cumulative amount
of all previous Deferred Purchase Prices (after giving effect to any payments
made on account thereof) shall not exceed the lesser of (a) $100,000,000 and
(b) 15% of the Outstanding Balance of the Transferred Receivables.
"Designated Account" means an account in the name of, and owned by, the
Purchaser or its designee, designated for the purpose of receiving
collections of Transferred Receivables directly from Obligors.
"Discount" means, in respect of any Purchase, 1.65% of the Outstanding
Balance of the Receivables that are the subject of such Purchase; provided,
however, that the foregoing Discount may be revised by agreement of the
parties hereto to reflect changes in collection experience and the
Purchaser's cost of funds.
"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.
"Event of Termination" has the meaning specified in Section 7.01.
"Facility" means the willingness of the Purchaser to consider making
Purchases of Receivables from the Seller from time to time pursuant to the
terms of this Agreement.
"Facility Termination Date" means the earliest of (i) July 11, 2001, (ii) the
date of termination of the Facility pursuant to Section 7.01 and (iii) the
date which either the Purchaser or the Seller designates by at least two
Business Days' notice to the other party hereto.
"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.
"Indemnified Amounts" has the meaning specified in Section 8.01.
"Invested Amount" means the sum of amounts paid by the Purchaser to the
Seller for each Purchase of Receivables from the Seller pursuant to Section
2.02, reduced from time to time by Collections of such Receivables actually
received by the Purchaser in excess of the applicable portion of the Discount
representing yield (assumed to be 0.8% unless otherwise mutually agreed);
provided, however, that such Invested Amount shall not be reduced by any
Collections to the extent that at any time such Collections are rescinded or
must otherwise be returned for any reason.
"Obligor" means a Person obligated to make payments pursuant to a Contract.
"Original Purchase Agreement" means the Receivables Purchase and Sale
Agreement, dated as of July 11, 1996, among the Seller, Corporate Asset
Funding Company, Inc., Citibank, N.A., and Citicorp North America, Inc., as
agent.
"Outstanding Balance" of any Receivable at any time means the then
outstanding principal balance thereof.
"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.
"Public Disclosure Documents" means (i) the Seller's Annual Report on Form
10-K for the year ending December 31, 1996, (ii) the Seller's Quarterly
Reports on Form 10-Q for the quarters ended March 31, 1997 and June 30, 1997,
(iii) 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 Seller's Registration Statement No.
333-30911 on Form S-1, as amended.
"Purchase" means a purchase by the Purchaser of Receivables from the Seller
pursuant to Article II.
"Purchase Date" means each day on which a Purchase is made pursuant to
Article II.
"Purchase Price" means with respect to a Purchase of Receivables the amount
paid for such Receivables in cash or by Deferred Purchase Price and shall be
equal to the Outstanding Balance of such Receivables minus the Discount for
such Purchase of Receivables.
"Purchased Receivable" means any Receivable included in a Purchase pursuant
to Section 2.02.
"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 Seller 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 Seller, but excluding any
obligation of such Obligor to pay finance charges and other amounts in the
case of late payment.
"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.
"Sale Agreement" means that certain Receivables Purchase and Sale Agreement,
dated as of the date hereof, among the Purchaser, as seller, the Conduit (as
defined therein), as purchaser, Citibank, N.A., Citicorp North America, Inc.,
as agent, and the Seller, as collection agent and originator, as amended or
restated from time to time.
"Seller Report" means a report, in form and substance satisfactory to the
Purchaser, furnished by the Collection Agent to the Purchaser pursuant to
Section 6.02(b).
"Settlement Date" means the second Business Day after the end of each
Settlement Period during the term of this Agreement; provided, however, that
following the occurrence of an Event of Termination, Settlement Dates shall
occur on such days as are selected from time to time by the Purchaser or its
designee in a written notice to the Collection Agent.
"Settlement Period" means each period of time during the term of this
Agreement selected by the Purchaser to coincide with the "Settlement Periods"
under the Sale Agreement.
"Significant Subsidiary" means the Purchaser and any Subsidiary having total
assets exceeding 10% of consolidated total assets of the Seller.
"Sold Receivable" has the meaning specified in Section 2.02(a).
"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 Purchaser, as the case may be, or one or more Subsidiaries,
or by the Seller or the Purchaser, as the case may be, and one or more
Subsidiaries.
"Tariffs" means the tariffs described in Exhibit A, which have been approved
by the governing Regulatory Authority, as hereafter amended or modified by
the governing Regulatory Authority, pursuant to which the Seller provides
electricity to the Obligors and the Obligors are obligated to pay for such
electricity.
"Transferred Receivable" means a Purchased Receivable or a Contributed
Receivable.
"UCC" means the Uniform Commercial Code as from time to time in effect in the
specified jurisdiction.
SECTION 1.02. Other Terms. All accounting terms not specifically defined
herein shall be construed in accordance with generally accepted accounting
principles. All terms used in Article 9 of the UCC in the State of New York,
and not specifically defined herein, are used herein as defined in such
Article 9.
ARTICLE II
AMOUNTS AND TERMS OF PURCHASES AND CONTRIBUTIONS
SECTION 2.01. Facility. On the terms and conditions hereinafter set forth
and without recourse (except to the extent specifically provided herein), the
Seller may at its option sell or contribute to the Purchaser all Receivables
originated by it from time to time and the Purchaser may at its option
purchase or accept as a capital contribution from the Seller all Receivables
of the Seller from time to time during the period from the date hereof to the
Facility Termination Date.
SECTION 2.02. Making Purchases.
(a) Initial Purchase. The Seller shall give the Purchaser at least one
Business Day's notice of its request for the initial Purchase hereunder, and
such request for the initial Purchase shall specify the date of such Purchase
(which shall be a Business Day)and the proposed Purchase Price for such
Purchase. The Purchaser shall promptly notify the Seller whether it has
determined to make such Purchase. On the date of such Purchase, the
Purchaser shall, upon satisfaction of the applicable conditions set forth in
Article III, pay the Purchase Price for such Purchase in the manner provided
in Section 2.02(c); provided, however, that because interests in all
Receivables 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 by the Seller to the Agent pursuant
to the Original Purchase Agreement and the Purchaser is assuming the Seller's
rights and obligations with respect to the Sold Receivables pursuant to the
Sale Agreement, the purchase price payable for the initial Purchase of
Receivables hereunder shall be reduced by the aggregate purchase price
received by the Seller with respect to the Sold Receivables under the
Original Purchase Agreement.
(b) Subsequent Purchases. On each Business Day following the date of the
initial Purchase, unless either party shall notify the other party to the
contrary, the Seller shall sell to the Purchaser and the Purchaser shall
purchase from the Seller all Receivables originated by the Seller which have
not previously been sold or contributed to the Purchaser; provided, however,
that the Seller may, at its option on any Purchase Date, contribute all or
any of such Receivables to the Purchaser pursuant to Section 2.06, instead of
selling such Receivables to the Purchaser pursuant to this Section 2.02(b).
On the date of each such Purchase, the Purchaser shall, upon satisfaction of
the applicable conditions set forth in Article III, pay the Purchase Price
for such Purchase in the manner provided in Section 2.02(c).
(c) Payment of Purchase Price. The Purchase Price for each Purchase shall
be paid on the Purchase Date therefor by means of one or both of the
following: (a) a deposit in same day funds to the Seller's account designated
by the Seller or (b) an increase in the Deferred Purchase Price (subject at
all times to the limitations contained in the definition thereof). The
allocation of the Purchase Price between such methods of payment shall be
subject in each instance to the approval of the Purchaser and the Seller.
(d) Ownership of Receivables and Related Security. On each Purchase Date,
after giving effect to each Purchase and any contribution of Receivables, the
Purchaser shall own all Receivables originated by the Seller as of such date
(including Receivables which have been previously sold or contributed to the
Purchaser hereunder). The Purchase or contribution of any Receivable shall
include all Related Security with respect to such Receivable.
(e) Assignment and Assumption of Interests Under the Original Purchase
Agreement. The Seller hereby transfers and assigns to the Purchaser as a
capital contribution, and the Purchaser hereby assumes, in each case as of
the date of the initial Purchase hereunder, all of the Seller's remaining
rights and obligations with respect to all Sold Receivables, and the
Purchaser hereby agrees that all such rights and obligations shall be
governed by the terms of the Sale Agreement.
SECTION 2.03. Collections. (a) The Collection Agent shall, on each
Settlement Date, deposit into an account of the Purchaser or the Purchaser's
designee all Collections of Transferred Receivables then held by the
Collection Agent.
(b) In the event that the Seller believes that Collections which are not
Collections of Transferred Receivables have been deposited into an account of
the Purchaser or the Purchaser's designee, the Seller shall so advise the
Purchaser and, on the Business Day following such identification, the
Purchaser shall remit, or shall cause to be remitted to the Seller, all
Collections so deposited which are identified, to the Purchaser's
satisfaction, not to be Collections of Transferred Receivables.
(c) At any time when all amounts then due from the Purchaser under the Sale
Agreement have been paid in full and all amounts required to be set aside by
the Purchaser or the Collection Agent under the Sale Agreement have been so
set aside, all Collections of Transferred Receivables received by the
Purchaser shall be applied first to the reduction of the principal amount of
any Deferred Purchase Price before any such amount is applied to the purchase
of additional Receivables.
SECTION 2.04. Settlement Procedures. (a) If on any day the Outstanding
Balance of any Transferred Receivable is reduced or adjusted as a result of
any defective, rejected, returned, repossessed or foreclosed merchandise or
services or any cash discount or other adjustment made by the Seller, or any
set-off or dispute in respect of any claim by the Obligor thereof against the
Seller (whether such claim arises out of the same or a related transaction or
an unrelated transaction but excluding adjustments, reductions or
cancellations in respect of such Obligor's bankruptcy), the Seller shall be
deemed to have received on such day a Collection of such Transferred
Receivable in the amount of such reduction or adjustment. If the Seller is
not the Collection Agent, the Seller shall pay to the Collection Agent on or
prior to the next Settlement Date all amounts deemed to have been received
pursuant to this subsection.
(b) Upon discovery by the Seller or the Purchaser of a breach of any of the
representations and warranties made by the Seller in Section 4.01(j) with
respect to any Transferred Receivable, such party shall give prompt written
notice thereof to the other party, as soon as practicable and in any event
within three Business Days following such discovery. The Seller shall, upon
not less than two Business Days' notice from the Purchaser or its assignee or
designee, repurchase such Transferred Receivable on the next succeeding
Settlement Date for a repurchase price equal to the Outstanding Balance of
such Transferred Receivable. Each repurchase of a Transferred Receivable
shall include the Related Security with respect to such Transferred
Receivable. The proceeds of any such repurchase shall be deemed to be a
Collection in respect of such Transferred Receivable. If the Seller is not
the Collection Agent, the Seller shall pay to the Collection Agent on or
prior to the next Settlement Date the repurchase price required to be paid
pursuant to this subsection.
(c) Except as stated in subsection (a) or (b) of this Section 2.04 or as
otherwise required by law or the underlying Contract, all Collections from an
Obligor of any Transferred Receivable shall be applied to the Receivables of
such Obligor in the order of the age of such Receivables, starting with the
oldest such Receivable, unless such Obligor designates its payment for
application to specific Receivables.
SECTION 2.05. 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 no later than 11:00 A.M. (New York City time) on the day when due
in same day funds to the Purchaser's account at Fleet National Bank,
Hartford, Connecticut, ABA # 011500010, Account # 9370212183, or to such
other account as the Purchaser may designate in writing to the Seller from
time to time.
(b) The Seller shall, to the extent permitted by law, pay to the Purchaser
interest on any amount not paid or deposited by the Seller (whether as
Collection Agent or otherwise) when due 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.
(c) All computations of interest 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 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 be included in the computation
of such payment or deposit.
SECTION 2.06. Contributions. The Seller may from time to time at its
option, by notice to the Purchaser, contribute Receivables to the Purchaser
as a capital contribution. On the date of each such contribution and after
giving effect thereto, the Purchaser shall own the Receivables so contributed
(collectively, the "Contributed Receivables") and all Related Security with
respect thereto. The foregoing notwithstanding, on the date of the initial
Purchase hereunder the Seller agrees to contribute to the Purchaser all
Receivables which are not included in such initial Purchase as provided in
Section 2.02(e).
ARTICLE III
CONDITIONS OF PURCHASES
SECTION 3.01. Conditions Precedent to Initial Purchase from the Seller. The
initial Purchase of Receivables from the Seller hereunder is subject to the
conditions precedent that the Purchaser shall have received on or before the
date of such Purchase the following, each (unless otherwise indicated) dated
such date, in form and substance satisfactory to the Purchaser:
(a) Certified copies of the resolutions of the Board of Directors of the
Seller approving this Agreement and certified copies of all documents
evidencing other necessary corporate action and governmental approvals, if
any, with respect to this Agreement.
(b) A certificate of the Secretary or Assistant Secretary of the Seller
certifying the names and true signatures of the officers of the Seller
authorized to sign this Agreement and the other documents to be delivered by
it hereunder.
(c) Acknowledgment copies of proper financing statements or time stamped
receipt copies, duly filed on or before the date of the initial Purchase or
other similar instruments or documents, as the Purchaser may deem necessary
or desirable under the UCC of all appropriate jurisdictions or other
applicable law to perfect the Purchaser's ownership of and security interest
in the Transferred Receivables and Related Security and Collections with
respect thereto.
(d) Acknowledgment copies or time stamped receipt copies of proper
instruments, if any, necessary to release all security interests and other
rights of any Person in the Transferred Receivables, Contracts or Related
Security previously granted by the Seller.
(e) Completed requests for information, dated on or before the date of such
initial Purchase, listing all effective financing statements filed in the
jurisdictions referred to in subsection (c) above that name the Seller as
debtor, together with copies of such other financing statements (none of
which, other than the financing statements filed pursuant to subsection (c),
shall cover any Transferred Receivables, Contracts or Related Security).
SECTION 3.02. Conditions Precedent to All Purchases. Each Purchase
(including the initial Purchase) shall be subject to the further conditions
precedent that:
(a) on or prior to the date of such Purchase, the Collection Agent shall
have delivered to the Purchaser, in form and substance satisfactory to the
Purchaser, a completed Seller Report for the most recently ended reporting
period for which information is required pursuant to Section 6.02(b) and
containing such additional information as may reasonably be requested by the
Purchaser;
(b) the Seller shall have marked its master data processing records and all
other relevant records evidencing all Transferred Receivables and all other
relevant records evidencing the Transferred Receivables which are the subject
of such Purchase with a legend, acceptable to the Purchaser, stating that
such Receivables, the Related Security and Collections with respect thereto,
have been sold or contributed in accordance with this Agreement;
(c) on the date of such Purchase the following statements shall be true (and
the Seller, by accepting the amount of such Purchase, shall be deemed to have
certified that):
(i) the representations and warranties contained in Section 4.01 are correct
on and as of the date of such Purchase as though made on and as of such date,
(ii) no event has occurred and is continuing, or would result from such
Purchase, that constitutes an Event of Termination or would constitute an
Incipient Event of Termination and
(iii) the Purchaser shall not have delivered to the Seller a notice
fixing the Facility Termination Date on or prior to the date of such
Purchase; and
(d) the Purchaser shall have received such other approvals, opinions or
documents as the Purchaser 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 Connecticut, and is duly qualified to do
business, and is in good standing, in every jurisdiction where the nature of
its business requires it to be so qualified, unless the failure to so qualify
would not have a material adverse effect on (i) the interests of the
Purchaser hereunder, (ii) the collectibility of the Transferred Receivables
or (iii) the ability of the Seller or the Collection Agent to perform its
respective obligations hereunder.
(b) The execution, delivery and performance by the Seller of this Agreement
and the other documents to be delivered by it hereunder, including the
Seller's sale and contribution of Receivables hereunder and the Seller's use
of the proceeds of Purchases, (i) are within the Seller's corporate powers,
(ii) have been duly authorized by all necessary corporate action, (iii) do
not contravene (A) the Seller's charter or by-laws, (B) any law, rule or
regulation applicable to the Seller, (C) any contractual restriction binding
on or affecting the Seller or its property or (D) any order, writ, judgment,
award, injunction or decree binding on or affecting the Seller or its
property and (iv) 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 (except for the transfer of the Seller's interest in the
Transferred Receivables pursuant to this Agreement). This Agreement has been
duly executed and delivered by the Seller.
(c) No authorization or approval 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 this Agreement
or any other document 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) This Agreement constitutes the legal, valid and binding obligation of
the Seller enforceable against the Seller in accordance with its terms.
(e) Each sale and contribution made pursuant to this Agreement will
constitute a valid sale, transfer, and assignment in fee simple of the
Transferred Receivables to the Purchaser, enforceable against creditors of,
and purchasers from, the Seller. The Seller shall have no remaining property
interest in any Transferred Receivable.
(f) The balance sheets of the Seller and its subsidiaries as at December 31,
1996, and the related statements of income and retained earnings of the
Seller and its subsidiaries for the fiscal year then ended (the "Financial
Statements"), copies of which have been furnished to the Purchaser, fairly
present the financial condition of the Seller and its subsidiaries as at such
date and the results of the operations of the Seller and its subsidiaries for
the period ended on such date, all in accordance with generally accepted
accounting principles consistently applied.
(g) Except as disclosed in the Financial Statements and the Public
Disclosure Documents, there is no pending or threatened action, suit or
proceeding against or affecting the Seller or any of its subsidiaries before
any court, governmental agency or arbitrator which may materially adversely
affect the financial condition or operations of the Seller or any of its
subsidiaries or the ability of the Seller to perform its obligations under
this Agreement, or which purports to affect the legality, validity or
enforceability of this Agreement.
(h) No proceeds of any Purchase will be used 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) No transaction contemplated hereby requires compliance with any bulk
sales act or similar law.
(j) Each Transferred Receivable, together with the Related Security, is a
bona fide obligation of the Obligor purported to be liable thereon and is
owned (prior to its sale or contribution hereunder) by the Seller free and
clear of any Adverse Claim (other than any Adverse Claim arising solely as
the result of any action taken by the Purchaser). When the Purchaser makes a
Purchase or acquires by contribution any Transferred Receivable, it shall
acquire valid and perfected first priority ownership of each Transferred
Receivable and the Related Security and Collections with respect thereto free
and clear of any Adverse Claim (other than any Adverse Claim arising solely
as the result of any action taken by the Purchaser), and no effective
financing statement or other instrument similar in effect covering any
Transferred Receivable, any interest therein, the Related Security or
Collections with respect thereto is on file in any recording office except
such as may be filed in favor of the Purchaser in accordance with this
Agreement or in connection with any Adverse Claim arising solely as the
result of any action taken by the Purchaser.
(k) Each Seller Report prepared by the Seller (or, if not prepared by the
Seller, to the extent that information contained therein is supplied by the
Seller), information, exhibit, financial statement, document, book, record or
report furnished or to be furnished at any time by the Seller to the
Purchaser in connection with this Agreement is or will be accurate in all
material respects as of its date or (except as otherwise disclosed to the
Purchaser at such time) as of the date so furnished, and no such document
contains or will contain any untrue statement of a material fact or omits or
will omit to state a material fact necessary in order to make the statements
contained therein, in the light of the circumstances under which they were
made, not misleading.
(l) The principal place of business and chief executive office of the Seller
and the office where the Seller keeps its records concerning the Transferred
Receivables are located at the address or addresses referred to in Section
5.01(b).
(m) The Seller is not known by and does not use any tradename or
doing-business-as name in the origination or collection of any of the
Receivables.
(n) With respect to any program used by the Seller in the servicing of the
Receivables, no sublicensing agreement is necessary in connection with the
designation of a new Collection Agent pursuant to Section 6.01 so that such
new Collection Agent shall have the benefit of such programs (it being
understood, however, that the Collection Agent, if other than the Seller,
shall be required to be bound by a confidentiality agreement reasonably
acceptable to the Seller).
(o) The transfers of Transferred Receivables by the Seller to the Purchaser
pursuant to this Agreement, and all other transactions between the Seller and
the Purchaser, have been and will be made in good faith and without intent to
hinder, delay or defraud creditors of the Seller.
ARTICLE V
COVENANTS
SECTION 5.01. Covenants of the Seller. From the date hereof until the first
day following the Facility Termination Date on which all of the Transferred
Receivables are either collected in full or become Defaulted Receivables, the
Seller will:
(a) Compliance with Laws, Etc. Comply in all material respects with all
applicable laws, rules, regulations and orders and preserve and maintain its
corporate existence, rights, franchises, qualifications and privileges except
to the extent that the failure so to comply with such laws, rules and
regulations or the failure so to preserve and maintain such existence,
rights, franchises, qualifications, and privileges would not materially
adversely affect the collectibility of the Transferred Receivables or the
ability of the Seller to perform its obligations under this Agreement.
(b) Offices, Records and Books of Account. (i) Keep its principal place of
business and chief executive office and the office where it keeps its records
concerning the Transferred Receivables and all Contracts related thereto (and
all original documents relating thereto), at the address of the Seller set
forth under its name on the signature page to this Agreement or (x) in the
case of such records and Contracts, at the Seller's offices in Wethersfield,
Connecticut or (y) upon 30 days' prior written notice to the Purchaser, at
any other locations in jurisdictions where all actions required by Section
5.01(i) shall have been taken and completed; (ii) maintain and implement
administrative and operating procedures (including, without limitation, an
ability to recreate records evidencing Transferred Receivables and related
Contracts in the event of the destruction of the originals thereof), and keep
and maintain all documents, books, records and other information reasonably
necessary or advisable for the collection of all Transferred Receivables
(including, without limitation, records adequate to permit the daily
identification of each new Transferred Receivable and all Collections of and
adjustments to each existing Transferred Receivable); and (iii) make a
notation in its books and records, including its computer files, indicating
that the Transferred Receivables have been sold or contributed to the
Purchaser hereunder.
(c) Performance and Compliance with Contracts and Credit and Collection
Policy. 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 Transferred Receivables, and timely and
fully comply in all material respects with the Credit and Collection Policy
in regard to each Transferred Receivable and the related Contract.
(d) Sales, Liens, Etc. Except for the sales and contributions of
Receivables contemplated herein, not sell, assign (by operation of law or
otherwise) or otherwise dispose of, or create or suffer to exist any Adverse
Claim upon or with respect to, any Transferred Receivable, Related Security,
related Contract or Collections, or upon or with respect to any account to
which any Collections of any Transferred Receivable are sent, or assign any
right to receive income in respect thereof.
(e) Extension or Amendment of Transferred Receivables. Except as provided
in Section 6.02(c), not extend, amend or otherwise modify the terms of any
Transferred Receivable, or amend, modify or waive any term or condition of
any Contract related thereto.
(f) Change in Business or Credit and Collection Policy. Not make any change
in the character of its business or in the Credit and Collection Policy that
would, in either case, materially adversely affect the collectibility of the
Transferred Receivables or the ability of the Seller to perform its
obligations under this Agreement.
(g) Audits. From time to time during regular business hours as reasonably
requested by the Purchaser or its assigns, permit the Purchaser, or its
agents, representatives or assigns, (i) 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 relating to Transferred Receivables and the Related Security,
including, without limitation, the related Contracts, and (ii) to visit the
offices and properties of the Seller for the purpose of examining such
materials described in clause (i) above, and to discuss matters relating to
Transferred Receivables and the Related Security or the Seller's performance
hereunder or under the Contracts with any of the officers or employees of the
Seller responsible for such matters; provided, that the Purchaser and its
assignees shall be required to maintain the confidentiality of any such
examinations, records and discussions.
(h) Collections. (i) At the request of the Purchaser, made at any time
after the occurrence of an Event of Termination or Incipient Event of
Termination, immediately deposit or cause to be deposited all Collections to
a Designated Account; and (ii) use reasonable commercial efforts to not
deposit or otherwise credit, or cause or permit to be so deposited or
credited, to any Designated Account cash or cash proceeds other than
Collections of Transferred Receivables.
(i) Further Assurances. (i) From time to time, at its expense, promptly
execute and deliver all further instruments and documents, and take all
further actions, that may be necessary or desirable, or that the Purchaser or
its assignee may reasonably request, to perfect, protect or more fully
evidence the sale and contribution of Receivables under this Agreement, or to
enable the Purchaser or its assignee to exercise and enforce its respective
rights and remedies under this Agreement, including, without limitation, upon
the request of the Purchaser or its assignee, (A) executing and filing such
financing or continuation statements, or amendments thereto, and such other
instruments and documents, that may be necessary or desirable to perfect,
protect or evidence such Transferred Receivables; and (B) subject to the
last sentence of Section 5.01(g), delivering to the Purchaser copies of all
Contracts relating to the Transferred Receivables and all records relating to
such Contracts and the Transferred Receivables, whether in hard copy or in
magnetic tape or diskette format (which if in magnetic tape or diskette
format shall be compatible with the Purchaser's computer equipment). In
connection with the foregoing, the Seller hereby authorizes the Purchaser or
its assignee to file financing or continuation statements, and amendments
thereto and assignments thereof, relating to the Transferred Receivables and
the Related Security, the related Contracts and the Collections with respect
thereto without the signature of the Seller where permitted by law. The
Purchaser or assignees making any such filing shall provide a copy thereof to
the Seller. A photocopy or other reproduction of this Agreement shall be
sufficient as a financing statement where permitted by law.
(ii) Perform its obligations under the Contracts related to the Transferred
Receivables to the same extent as if the Transferred Receivables had not been
sold or transferred.
(j) Reporting Requirements. Provide to the Purchaser the following:
(i) 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 Seller a
copy of the Seller's Quarterly Report on Form 10-Q for such quarter;
(ii) as soon as available and in any event within 105 days after the end
of each fiscal year of the Seller a copy of the Seller's Annual Report on
Form 10-K, for such fiscal year;
(iii) upon request by the Purchaser, copies of all reports which the
Seller sends to any holders of its publicly held securities and copies of all
reports and registration statements which the Seller files with the
Securities and Exchange Commission or any national securities exchange;
(iv) promptly after the filing or receipt thereof, copies of all reports
and notices with respect to any Reportable Event (as defined in Article IV of
ERISA) which the Seller 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 Seller 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 Seller in excess of
$10,000,000;
(v) 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;
(vi) upon the request of the Purchaser, a list of the Receivables which
the Purchaser has purchased hereunder;
(vii) 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 Seller or any
significant Subsidiary as the Purchaser may from time to time reasonably
request in order to protect the Purchaser's interests under or contemplated
by this Agreement;
(viii) on or prior to the 18th day of each month, such Seller Reports
and other reports, information, documents, books or records as the Purchaser
may reasonably request;
(ix) at the time of the delivery of the financial statements provided
for in clauses (i) and (ii) 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;
(x) at least ten Business Days prior to any change in the Seller's
name, a notice setting forth the new name and the effective date thereof; and
(xi) such other information respecting the Transferred Receivables or
the condition or operations, financial or otherwise, of the Seller as the
Purchaser may from time to time reasonably request.
(k) Separate Conduct of Business. (i) Maintain separate corporate records
and books of account from those of the Purchaser; (ii) except as otherwise
contemplated hereby, ensure that all oral and written communications,
including without limitation, letters, invoices, purchase orders, contracts,
statements and applications, will be made solely in its own name; (iii) have
stationery and other business forms and a telephone number separate from
those of the Purchaser; (iv) not hold itself out as having agreed to pay, or
as being liable for, the obligations of the Purchaser; (v) not engage in any
transaction with the Purchaser except as contemplated by this Agreement or as
permitted by the Sale Agreement; (vi) continuously maintain as official
records the resolutions, agreements and other instruments underlying the
transactions contemplated by this Agreement; and (vii) disclose on its annual
financial statements (A) the effects of the transactions contemplated by this
Agreement in accordance with generally accepted accounting principles, (B)
that the Seller has acquired the Receivables from the Purchaser and (C) that
the Seller is a separate corporate entity with creditors who have purchased
or otherwise received ownership and security interests in the Seller's
assets.
SECTION 5.02. Grant of Security Interest. To secure all obligations of the
Seller arising in connection with this Agreement, and each other agreement
entered into in connection with this Agreement, whether now or hereafter
existing, due or to become due, direct or indirect, or absolute or
contingent, including, without limitation, Indemnified Amounts, payments on
account of Collections received or deemed to be received, and any other
amounts due the Purchaser hereunder, the Seller hereby assigns and grants to
Purchaser, a security interest in all of the Seller's right, title and
interest now or hereafter existing in, to and under all Receivables which do
not constitute Transferred Receivables, the Related Security and all
Collections with regard thereto.
SECTION 5.03. Covenant of the Seller and the Purchaser. The Seller and the
Purchaser have structured this Agreement with the intention that each
Purchase or contribution of Receivables hereunder be treated as a sale or
contribution of such Receivables by the Seller to the Purchaser for all
purposes. The Seller and the Purchaser shall record each Purchase or
contribution as a sale, purchase or contribution, as the case may be, on its
books and records, and reflect each Purchase and contribution in its
financial statements as a sale, purchase or contribution, as the case may be.
In the event that, contrary to the mutual intent of the Seller and the
Purchaser, any Purchase of Receivables hereunder is not characterized as a
sale or contribution, the Seller shall, effective as of the date hereof, be
deemed to have granted (and the Seller hereby does grant) to the Purchaser a
first priority security interest in and to any and all Transferred
Receivables and the proceeds thereof to secure the repayment of all amounts
advanced to the Seller hereunder with accrued interest thereon, and this
Agreement shall be deemed to be a security agreement.
ARTICLE VI
ADMINISTRATION AND COLLECTION
SECTION 6.01. Designation of Collection Agent. The servicing,
administration and collection of the Transferred Receivables shall be
conducted by such Person (the "Collection Agent") so designated hereunder
from time to time. Until the Purchaser or its assignee gives notice to the
Seller of the designation of a new Collection Agent, the Seller is hereby
designated as, and hereby agrees to perform the duties and obligations of,
the Collection Agent pursuant to the terms hereof. The Seller agrees that
such notice may be given at any time in the Purchaser's or assignee's
discretion after the occurrence of an Event of Termination or Incipient Event
of Termination. Upon the Seller's receipt of such notice, the Seller agrees
that it will terminate its activities as Collection Agent hereunder in a
manner which the Purchaser (or its designee) believes will facilitate the
transition of the performance of such activities to the new Collection Agent,
and the Seller shall use its best efforts to assist the Purchaser (or its
designee) to take over the servicing, administration and collection of the
Transferred Receivables, including, without limitation, providing access to
and copies of all computer tapes or disks and other documents or instruments
that evidence or relate to Transferred Receivables maintained in its capacity
as Collection Agent and access to all employees and officers of the Seller
responsible with respect thereto. The Purchaser at any time after giving
such notice may designate as Collection Agent any Person (including itself)
to succeed the Seller or any successor Collection Agent, if such Person shall
consent and agree to the terms hereof. The Collection Agent may subcontract
with Northeast Utilities Service Company and may, with the prior consent of
the Purchaser, subcontract with any other Person for the servicing,
administration or collection of Transferred Receivables. Any such
subcontract shall not affect the Collection Agent's liability for performance
of its duties and obligations pursuant to the terms hereof.
SECTION 6.02. Duties of Collection Agent. (a) The Collection Agent shall
take or cause to be taken all such actions as may be necessary or advisable
to collect each Transferred Receivable from time to time, all in accordance
with applicable laws, rules and regulations, with reasonable care and
diligence, and in accordance with the Credit and Collection Policy. The
Purchaser hereby appoints the Collection Agent, from time to time designated
pursuant to Section 6.01, as agent to enforce its ownership and other rights
in the Transferred Receivables, the Related Security and the Collections with
respect thereto. 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 the Transferred Receivables and shall
act in the best interests of the Purchaser and its assignees.
(b) On or before the 18th day of each month, the Collection Agent shall
prepare and forward to the Purchaser a Seller Report, relating to all then
outstanding Transferred Receivables, and the Related Security and Collections
with respect thereto, in each case, as of the close of business of the
Collection Agent on the last day of the immediately preceding month.
(c) The Collection Agent may not extend, amend or otherwise modify the terms
of any Transferred 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 Transferred Receivable, except in conformance with
the Credit and Collection Policy.
(d) The Seller shall deliver to the Collection Agent, and the Collection
Agent shall hold in trust for the Seller and the Purchaser in accordance with
their respective interests, all documents, instruments and records
(including, without limitation, computer tapes or disks) which evidence or
relate to Transferred Receivables.
(e) The Collection Agent shall, as soon as practicable following receipt,
turn over to the Seller any cash collections or other cash proceeds received
with respect to Receivables not constituting Transferred Receivables, less,
in the event the Seller is not the Collection Agent, all reasonable and
appropriate out-of-pocket costs and expenses of the Collection Agent of
servicing, collecting and administering the Receivables to the extent not
covered by the Collection Agent Fee received by it.
(f) The Collection Agent also shall perform the other obligations of the
"Collection Agent" set forth in this Agreement with respect to the
Transferred Receivables.
SECTION 6.03. Collection Agent Fee. The Purchaser shall pay to the
Collection Agent a periodic collection fee (the "Collection Agent Fee") in an
amount equal to the greater of (i) 1/4 of 1% per annum on the average daily
outstanding Invested Amount with respect to the Purchased Receivables, or
(ii) 110% of the reasonable costs and expenses of the Collection Agent
attributable to collecting the Invested Amount with respect to the Purchased
Receivables. Such fee shall be payable in arrears on each Settlement Date,
commencing November 21, 1997, for the period from the preceding Settlement
Date to such Settlement Date; provided, however, that so long as the Seller
is the Collection Agent, such fee may be paid on the last day of the month in
which such Settlement Date occurs.
SECTION 6.04. Certain Rights of the Purchaser. (a) The Purchaser may, at
any time after the occurrence of an Event of Termination or Incipient Event
of Termination, give notice of ownership and/or direct the Obligors of
Transferred Receivables and any Person obligated on any Related Security, or
any of them, that payment of all amounts payable under any Transferred
Receivable shall be made directly to the Purchaser or its designee or
directly to the Designated Account.
(b) The Seller shall, at any time upon the Purchaser's request and at the
Seller's expense after the occurrence of an Event of Termination or Incipient
Event of Termination, give notice of such ownership to each Obligor of
Transferred Receivables and direct that payments of all amounts payable under
such Transferred Receivables be made directly to the Purchaser or its
designee or directly to the Designated Account.
(c) At the Purchaser's request after the occurrence of an Event of
Termination or Incipient Event of Termination, and at the Seller's expense,
the Seller and the Collection Agent shall (A) assemble all of the documents,
instruments and other records (including, without limitation, computer tapes
and disks) that evidence or relate to the Transferred Receivables, and the
related Contracts and Related Security, or that are otherwise necessary or
desirable to collect the Transferred Receivables, and make the same available
to the Purchaser at a place selected by the Purchaser or its designee and (B)
segregate all cash, checks and other instruments received by it from time to
time constituting Collections of Transferred Receivables in a manner
acceptable to the Purchaser and, promptly upon receipt, remit all such cash,
checks and instruments, duly endorsed or with duly executed instruments of
transfer, to the Purchaser or its designee. The Purchaser shall also have
the right to make copies of all such documents, instruments and other records
at any time, subject to the last sentence of Section 5.01(g).
(d) The Seller authorizes the Purchaser, after the occurrence of an Event of
Termination or Incipient Event of Termination, to take any and all steps in
the Seller's name and on behalf of the Seller that are necessary or
desirable, in the determination of the Purchaser, to collect amounts due
under the Transferred Receivables, including, without limitation, endorsing
the Seller's name on checks and other instruments representing Collections of
Transferred Receivables and enforcing the Transferred Receivables and the
Related Security and related Contracts.
SECTION 6.05. Rights and Remedies. (a) If the Seller or the Collection
Agent fails to perform any of its obligations under this Agreement, the
Purchaser may (but shall not be required to) itself perform, or cause
performance of, such obligation, and, if the Seller (as Collection Agent or
otherwise) fails to so perform, the costs and expenses of the Purchaser
incurred in connection therewith shall be payable by the Seller as provided
in Section 8.01 or Section 9.04 as applicable.
(b) The Seller shall perform all of its obligations under the Contracts
related to the Transferred Receivables to the same extent as if the Seller
had not sold or contributed Receivables hereunder and the exercise by the
Purchaser of its rights hereunder shall not relieve the Seller from such
obligations or its obligations with respect to the Transferred Receivables.
The Purchaser shall not have any obligation or liability with respect to any
Transferred Receivables or related Contracts, nor shall the Purchaser be
obligated to perform any of the obligations of the Seller thereunder.
(c) The Seller shall cooperate with the Collection Agent in collecting
amounts due from Obligors in respect of the Transferred Receivables.
(d) The Seller hereby grants to the Collection Agent an irrevocable power of
attorney, with full power of substitution, coupled with an interest, to take
in the name of the Seller all steps necessary or advisable to endorse,
negotiate or otherwise realize on any writing or other right of any kind held
or transmitted by the Seller or transmitted or received by Purchaser (whether
or not from the Seller) in connection with any Transferred Receivable.
SECTION 6.06. Transfer of Records to Purchaser. Each Purchase and
contribution of Receivables hereunder shall include the transfer to the
Purchaser of all of the Seller's right, title to and interest in the records
relating to such Receivables and shall include the right to use the Seller's
computer software system to access and create such records. Such right shall
be without royalty or payment of any kind, is coupled with an interest, and
shall be irrevocable until all of the Transferred Receivables are either
collected in full or become Defaulted Receivables.
The Seller shall take such action requested by the Purchaser, from time to
time hereafter, that may be necessary or appropriate to ensure that the
Purchaser has an enforceable ownership interest in the records relating to
the Transferred Receivables and rights (whether by ownership, license,
sublicense or otherwise) to the use of the Seller's computer software system
to access and create such records.
In recognition of the Seller's need to have access to the records transferred
to the Purchaser hereunder, the Purchaser hereby grants to the Seller the
right to access such records in connection with any activity arising in the
ordinary course of the Seller's business or in performance of its duties as
Collection Agent, provided that (i) the Seller shall not disrupt or otherwise
interfere with the Purchaser's use of and access to such records during such
period and (ii) the Seller consents to the assignment and delivery of the
records (including any information contained therein relating to the Seller
or its operations) to any assignees or transferees of the Purchaser provided
they agree to hold such records confidential.
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 the Seller or any of its Affiliates) (i) shall
fail to perform or observe any term, covenant or agreement under this
Agreement (other than as referred to in clause (ii) of this subsection (a))
and such failure shall remain unremedied for three Business Days or (ii)
shall fail to make when due any payment or deposit to be made by it under
this Agreement; or
(b) The Seller shall fail (i) to transfer to the Purchaser when requested
any rights pursuant to this Agreement which the Seller then has as Collection
Agent, or (ii) to make any payment required under Section 2.04(a) or 2.04(b);
or
(c) Any representation or warranty made or deemed made by the Seller (or any
of its officers) under or in connection with this Agreement or any Seller
Report or any other information or report delivered by the Seller pursuant to
this Agreement shall prove to have been incorrect or untrue in any material
respect when made or deemed made or delivered; or
(d) The Seller 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 by the Purchaser; or
(e) The Seller shall fail to pay any principal of or premium or interest on
any of its Debt which is outstanding in a principal amount of at least
$10,000,000 in the aggregate when the same becomes due and payable (whether
by scheduled maturity, required prepayment, acceleration, demand or
otherwise), and such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument relating to such
Debt; or any other event shall occur or condition shall exist under any
agreement or instrument relating to any such Debt and shall continue after
the applicable grace period, if any, specified in such agreement or
instrument, if the effect of such event or condition is to accelerate, or to
permit the acceleration of, the maturity of such Debt; or any such Debt shall
be declared to be due and payable, or required to be prepaid (other than by a
regularly scheduled required prepayment), redeemed, purchased or defeased, or
an offer to repay, redeem, purchase or defease such Debt shall be required to
be made, in each case prior to the stated maturity thereof; or
(f) Any Purchase or contribution of Receivables hereunder, the Related
Security and the Collections with respect thereto shall for any reason cease
to constitute valid and perfected ownership of such Receivables, Related
Security and Collections free and clear of any Adverse Claim; or
(g) The Seller 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 Seller 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, custodian or other similar official for
it or for any substantial part of its property and, in the case of any such
proceeding instituted against it (but not instituted by it), either such
proceeding shall remain undismissed or unstayed for a period of 60 days, or
any of the actions sought in such proceeding (including, without limitation,
the entry of an order for relief against, 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 the Seller or any of its Significant
Subsidiaries shall take any corporate action to authorize any of the actions
set forth above in this subsection (g); or
(h) An Event of Termination shall have occurred under the Sale Agreement; or
(i) There shall have occurred any event which may materially adversely
affect the collectibility of the Transferred Receivables or the ability of
the Seller to collect Transferred Receivables or otherwise perform its
obligations under this Agreement;
then, and in any such event, the Purchaser may, by notice to the Seller, take
either or both of the following actions: (x) declare the Facility
Termination Date to have occurred (in which case the Facility Termination
Date shall be deemed to have occurred) and (y) without limiting any right
under this Agreement to replace the Collection Agent, designate another
Person to succeed the Seller as the Collection Agent; 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 shall occur, the Seller (if
it is then serving as the Collection Agent) shall cease to be the Collection
Agent, and the Purchaser (or its assigns or designees) shall become the
Collection Agent. Upon any such declaration or designation or upon such
automatic termination, the Purchaser shall have, in addition to the rights
and remedies under this Agreement, all other rights and remedies with respect
to the Receivables provided after default under the UCC and under other
applicable law, which rights and remedies shall be cumulative.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.01. Indemnities by the Seller. Without limiting any other rights
which the Purchaser may have hereunder or under applicable law, the Seller
hereby agrees to indemnify the Purchaser and its assigns and transferees
(each, an "Indemnified Party") from and against any and all damages, claims,
losses, liabilities and related costs and expenses, including reasonable
attorneys' fees and disbursements (all of the foregoing being collectively
referred to as "Indemnified Amounts"), awarded against or incurred by any
Indemnified Party arising out of or as a result of:
(i) the characterization in any Seller Report or other statement
made by the Seller of any Receivable as an Eligible Receivable (as defined in
the Sale Agreement) which is not an Eligible Receivable as of the date of
such Seller Report or statement;
(ii) any representation or warranty or statement made or deemed made by
the Seller (or any of its officers) under or in connection with this
Agreement, which shall have been false or incorrect in any material respect
when made;
(iii) the failure by the Seller to comply with any applicable law,
rule or regulation with respect to any Transferred Receivable, Related
Security or the related Contract; or the nonconformity of any Transferred
Receivable, Related Security or the related Contract with any such applicable
law, rule or regulation;
(iv) the failure to vest in the Purchaser absolute ownership of the
Receivables that are, or that purport to be, the subject of a Purchase or
contribution under this Agreement and the Related Security and Collections
in respect thereof, free and clear of any Adverse Claim;
(v) the failure of the Seller 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 that are, or that purport to be, the subject of a Purchase
or contribution under this Agreement and the Related Security and Collections
in respect thereof, whether at the time of any Purchase or contribution or at
any subsequent time;
(vi) any dispute, claim, offset or defense of any Obligor (other than
discharge in bankruptcy of such Obligor) to the payment of any Receivable
that is, or that purports to be, the subject of a Purchase or contribution
under this Agreement (including, without limitation, a defense based on such
Receivable or the related Contract not being a legal, valid and binding
obligation of such Obligor enforceable against it in accordance with its
terms), or 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 acting as Collection Agent) except to the extent that such
dispute, claim, offset or defense results solely from actions or failures to
act of the Purchaser or its assigns;
(vii) any failure of the Seller, as Collection Agent or otherwise,
to perform its duties or obligations in accordance with the provisions hereof
or to perform its duties or obligations under any Contract related to a
Transferred Receivable;
(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 Transferred Receivables by the
Seller or a designee of the Seller, as Collection Agent or otherwise, at any
time with other funds of the Seller or an Affiliate of the Seller;
(x) any investigation, litigation or proceeding related to this
Agreement or the use of proceeds of Purchases or the ownership of Transferred
Receivables, the Related Security, or Collections with respect thereto or in
respect of any Transferred Receivable, Related Security or Contract, except
to the extent any such investigation, litigation or proceeding relates to a
possible matter involving an Indemnified Party for which neither the Seller
nor any of its Affiliates is at fault;
(xi) any failure of the Seller to comply with its covenants contained in
Section 5.01;
(xii) 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 Seller hereunder; or
(xiii) 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 Transferred Receivable.
It is expressly agreed and understood by the parties hereto (i) that the
foregoing indemnification is not intended to, and shall not, constitute a
guarantee of the collectibility or payment of the Transferred Receivables and
(ii) that nothing in this Section 8.01 shall require the Seller to indemnify
any Person (A) for Receivables which are not collected, not paid or
uncollectible on account of the insolvency, bankruptcy, or financial
inability to pay of the applicable Obligor, (B) for damages, losses, claims
or liabilities or related costs or expenses resulting from such Person's
gross negligence or willful misconduct, or (C) for any income taxes or
franchise taxes incurred by such Person arising out of or as a result of this
Agreement or in respect of any Transferred Receivable or any Contract.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Amendments, Etc. No amendment or waiver of any provision of
this Agreement or consent to any departure by the Seller therefrom shall in
any event be effective unless the same shall be in writing signed by the
Purchaser and, in the case of any amendment, also signed by the Seller, and
then such amendment, waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given. 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 9.02. 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 9.03. No Waiver; Remedies. No failure on the part of the Purchaser
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 9.04. Binding Effect; Assignability. (a) This Agreement shall be
binding upon and inure to the benefit of the Seller, the Purchaser and their
respective successors and assigns; provided, however, that the Seller may not
assign its rights or obligations hereunder or any interest herein without the
prior written consent of the Purchaser. In connection with any sale or
assignment by the Purchaser of all or a portion of the Transferred
Receivables, the buyer or assignee, as the case may be, shall, to the extent
of its purchase or assignment, have all rights of the Purchaser under this
Agreement (as if such buyer or assignee, as the case may be, were the
Purchaser hereunder) except to the extent specifically provided in the
agreement between the Purchaser and such buyer or assignee, as the case may
be.
(b) This Agreement shall create and constitute the continuing obligations of
the parties hereto in accordance with its terms, and shall remain in full
force and effect until such time, after the Facility Termination Date, when
all of the Transferred Receivables are either collected in full or become
Defaulted Receivables; provided, however, that rights and remedies with
respect to any breach of any representation and warranty made by the Seller
pursuant to Article IV and the provisions of Article VIII and Sections 9.05,
9.06 and 9.07 shall be continuing and shall survive any termination of this
Agreement.
SECTION 9.05. Costs, Expenses and Taxes. (a) In addition to the rights of
indemnification granted to the Purchaser pursuant to Article VIII hereof, the
Seller agrees to pay on demand all costs and expenses in connection with the
preparation, execution and delivery of this Agreement and the other documents
and agreements to be delivered hereunder, including, without limitation, the
reasonable fees and out-of-pocket expenses of counsel for the Purchaser with
respect thereto and with respect to advising the Purchaser as to its rights
and remedies under this Agreement, and the Seller agrees to pay all costs and
expenses, if any (including reasonable counsel fees and expenses), in
connection with the enforcement of this Agreement and the other documents to
be delivered hereunder excluding, however, any costs of enforcement or
collection of Transferred Receivables.
(b) In addition, the Seller agrees to pay any and all stamp and other taxes
and fees payable or determined to be payable in connection with the
execution, delivery, filing and recording of this Agreement or the other
documents or agreements to be delivered hereunder, and the Seller 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 9.06. No Proceedings. The Seller hereby agrees that it will not
institute against the Purchaser any proceeding of the type referred to in
Section 7.01(g) so long as there shall not have elapsed one year plus one day
since the later of (i) the Facility Termination Date and (ii) the date on
which all of the Transferred Receivables are either collected in full or
become Defaulted Receivables.
SECTION 9.07. Confidentiality. Unless otherwise required by applicable law,
each party hereto agrees to maintain the confidentiality of this Agreement in
communications with third parties and otherwise; provided that this Agreement
may be disclosed to (i) third parties to the extent such disclosure is made
pursuant to a written agreement of confidentiality in form and substance
reasonably satisfactory to the other party hereto, and (ii) such party's
legal counsel and auditors and the Purchaser's assignees, if they agree in
each case to hold it confidential.
SECTION 9.08. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CONNECTICUT (WITHOUT
GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF).
SECTION 9.09. Third Party Beneficiary. Each of the parties hereto hereby
acknowledges that the Purchaser may assign all or any portion of its rights
under this Agreement and that such assignees may (except as otherwise agreed
to by such assignees) further assign their rights under this Agreement, and
the Seller hereby consents to any such assignments. All such assignees,
including parties to the Sale Agreement in the case of assignment to such
parties, shall be third party beneficiaries of, and shall be entitled to
enforce the Purchaser's rights and remedies under, this Agreement to the same
extent as if they were parties thereto, except to the extent specifically
limited under the terms of their assignment.
SECTION 9.10. Execution in Counterparts. This Agreement may be executed in
any number of 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:
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:
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
EXHIBIT A
TARIFFS
1. The retail rates charged by the Seller 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.