Exhibit 10.60
CONFORMED COPY
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PURCHASE AND SALE AGREEMENT
Dated as of November 30, 2001
As Amended by AMENDMENT NO. 1
Dated as of August 29, 2003
between
UGI ENERGY SERVICES, INC.
and
ENERGY SERVICES FUNDING CORPORATION
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THIS PURCHASE AND SALE AGREEMENT (this "Agreement"), dated as of November
30, 2001, as amended by Amendment No. 1, dated as of August 29, 2003, is entered
into between UGI ENERGY SERVICES, INC. (the "Originator"), a Pennsylvania
corporation, and ENERGY SERVICES FUNDING CORPORATION, a Delaware corporation
(the "Company").
DEFINITIONS
Unless otherwise indicated herein, capitalized terms used in this
Agreement are defined in Exhibit I to the Receivables Purchase Agreement of even
date herewith (as the same may be amended, supplemented or otherwise modified
from time to time, the "Receivables Purchase Agreement") among the Company, as
the Seller; UGI Energy Services, Inc. (individually, "UGI"), as the initial
Servicer; Market Street Funding Corporation; and PNC Bank, National Association,
as the Administrator. All references herein to months are to calendar months
unless otherwise expressly indicated.
BACKGROUND:
1. The Company is a special purpose corporation, the issued and
outstanding shares of which are owned by the Originator;
2. The Originator generates Receivables in the ordinary course of its
business;
3. The Originator, in order to finance its business, wishes to sell or
contribute, as the case may be, Receivables to the Company, and the Company is
willing to purchase or accept Receivables, as the case may be, from the
Originator, on the terms and subject to the conditions set forth herein; and
4. The Originator and the Company intend this transaction to be an
absolute and irrevocable true sale and conveyance of Receivables by the
Originator to the Company, providing the Company with the full benefits of
ownership of the Receivables, and the Originator and the Company do not intend
the transactions hereunder to be characterized as a loan from the Company to the
Originator.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the parties hereto agree as follows:
ARTICLE I
AGREEMENT TO PURCHASE AND SELL
SECTION 1.1 Agreement To Purchase and Sell. On the terms and subject to
the conditions set forth in this Agreement, the Originator, severally and for
itself, agrees to sell to the Company, and the Company agrees to purchase from
the Originator, from time to time on or after the Closing Date, but before the
Purchase and Sale Termination Date, all of the Originator's right, title and
interest in and to:
(a) each Receivable of the Originator that existed and was owing to
the Originator at the closing of the Originator's business on December 3, 2001
(the "Cut-off Date") other than Receivables contributed pursuant to Section 3.1
(the "Contributed Receivables");
(b) each Receivable generated by the Originator from and including
the Cut-off Date to and including the Purchase and Sale Termination Date (other
than any Receivable later contributed pursuant to the second sentence of Section
3.1(a));
(c) all rights to, but not the obligations of the Originator under,
all Related Security;
(d) all monies due or to become due to the Originator with respect
to any of the foregoing;
(e) all books and records of the Originator related to any of the
foregoing, and all rights, remedies, powers, privileges, title and interest of
the Originator in each lock-box and related lock-box address and account to
which Collections are sent, all amounts on deposit therein, all certificates and
instruments, if any, from time to time evidencing such accounts and amounts on
deposit therein, and all related agreements between the Originator and each
Lock-Box Bank; and
(f) all collections and other proceeds and products of any of the
foregoing (as defined in the applicable UCC) that are or were received by the
Originator on or after the Cut-off Date, including, without limitation, all
funds which either are received by the Originator, the Company or the Servicer
from or on behalf of the Obligors in payment of any amounts owed (including,
without limitation, invoice price, finance charges, interest and all other
charges) in respect of Receivables, or are applied to such amounts owed by the
Obligors (including, without limitation, any insurance payments that the
Originator or the Servicer applies in the ordinary course of its business to
amounts owed in respect of any Receivable, and net proceeds of sale or other
disposition of repossessed goods or other collateral or property of the Obligors
in respect of Receivables or any other parties directly or indirectly liable for
payment of such Receivables).
All purchases and contributions hereunder are absolute and irrevocable and shall
be made without recourse except as expressly provided in Sections 3.3, 3.4 and
9.1, but shall be made pursuant to, and in reliance upon, the representations,
warranties and covenants of the Originator set forth in this Agreement and each
other Transaction Document. No obligation or liability to any Obligor on any
Receivable is intended to be, or shall be, assumed by the Company hereunder, and
any such assumption is expressly disclaimed. The Company's foregoing commitment
to purchase Receivables and the proceeds and rights described in clauses (c)
through (f) (collectively, the "Related Rights") is herein called the "Purchase
Facility."
In connection with the transfer of ownership or the grant of the security
interest in the Receivables and Related Rights, by signing this Agreement in the
space provided, the Originator hereby authorizes the filing of all applicable
UCC financing statements in all necessary jurisdictions.
SECTION 1.2 Timing of Purchases.
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(a) Closing Date Purchases. The Originator's entire right, title and
interest in, to and under (i) each Receivable that existed and was owing to the
Originator at the Cut-off Date (other than Contributed Receivables), (ii) all
Receivables created by the Originator from and including the Cut-off Date, to
and including the Closing Date (other than Contributed Receivables), and (iii)
all Related Rights with respect thereto automatically shall be deemed to have
been sold by the Originator to the Company on the Closing Date.
(b) Subsequent Purchases. After the Closing Date, until the Purchase
and Sale Termination Date, each Receivable and the Related Rights generated by
the Originator shall be, and shall be deemed to have been, sold by the
Originator to the Company immediately (and without further action) upon the
creation of such Receivable.
SECTION 1.3 Consideration for Purchases. On the terms and subject to the
conditions set forth in this Agreement, the Company agrees to make Purchase
Price payments to the Originator in accordance with Article III and to reflect
all contributions in accordance with Section 3.1.
SECTION 1.4 Purchase and Sale Termination Date. The "Purchase and Sale
Termination Date" shall be the earlier to occur of (a) the date the Purchase
Facility is terminated pursuant to Section 8.2 and (b) the Facility Termination
Date.
SECTION 1.5 Intention of the Parties. It is the express intent of the
parties hereto that the transfers of the Receivables, Contributed Receivables
and Related Rights by the Originator to the Company, as contemplated by this
Agreement, be treated as true, final, absolute and irrevocable sales or
contributions, as applicable (without recourse except as expressly provided in
Sections 3.3, 3.4 and 9.1), of all of the Originator's legal and equitable
right, title and interest in, to and under the Receivables or the Contributed
Receivables, as applicable, and Related Rights. If, however, notwithstanding the
intent of the parties, such transactions are deemed to be loans, the Originator
hereby grants to the Company a first priority security interest in all of the
Originator's right, title and interest in and to: (i) the Receivables,
Contributed Receivables and the Related Rights now existing and hereafter
created by the Originator, (ii) all monies due or to become due and all amounts
received with respect thereto, (iii) all books and records of the Originator
related to any of the foregoing, and all rights, remedies, powers, privileges,
title and interest of the Originator in each lock-box and related lock-box
address and account to which Collections are sent, all amounts on deposit
therein, all certificates and instruments, if any, from time to time evidencing
such accounts and amounts on deposit therein, and all related agreements between
the Originator and each Lock-Box Bank, and (iv) all proceeds and products of any
of the foregoing to secure all of the Originator's obligations hereunder.
ARTICLE II
PURCHASE REPORT; CALCULATION OF PURCHASE PRICE
SECTION 2.1 Purchase Report. On the Closing Date and on each Settlement
Date, the Servicer shall deliver to the Company and the Originator a report in
substantially the form of Exhibit A (each such report being herein called a
"Purchase Report") setting forth, among other things:
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(a) Receivables purchased by the Company from the Originator on the
Closing Date (in the case of the Purchase Report to be delivered on the Closing
Date);
(b) Receivables purchased by the Company from the Originator during
the period commencing on, and including, the Settlement Date immediately
preceding such Settlement Date to (but not including) such Settlement Date (in
the case of each subsequent Purchase Report); and
(c) the calculations of reductions of the Purchase Price for any
Receivables as provided in Section 3.3 (a) and (b).
SECTION 2.2 Calculation of Purchase Price. The "Purchase Price" to be paid
to the Originator (or in the case of Contributed Receivables, the amount to be
recognized as a capital contribution) for the Receivables that are hereunder
purchased from or contributed by, as the case may be, the Originator shall be
determined in accordance with the following formula:
PP = OB x FMVD
where:
PP = Purchase Price for each Receivable as calculated on
the relevant Payment Date.
OB = The Outstanding Balance of such Receivable on the
relevant Payment Date.
FMVD = Fair Market Value Discount, as measured on such
Payment Date, which is equal to the quotient
(expressed as percentage) of (a) one divided by (b)
the sum of (i) one, plus (ii) the product of (A) the
Prime Rate on such Payment Date plus 0.25% and (B) a
fraction, the numerator of which is the Turnover Rate
(calculated as of the last day of the Settlement
Period next preceding such Payment Date) and the
denominator of which is 12.
"Payment Date" means (i) the Closing Date and (ii) each Business Day
thereafter that the Originator is open for business.
"Prime Rate" means a per annum rate equal to the "Prime Rate" as published
in the "Money Rates" section of The Wall Street Journal or if such information
ceases to be published in The Wall Street Journal, such other publication as
determined by the Administrator in its reasonable discretion.
ARTICLE III
PAYMENT OF PURCHASE PRICE
SECTION 3.1 Contribution of Receivables and Initial Purchase Price
Payment.
(a) On the Closing Date, UGI shall, and hereby does, irrevocably and
absolutely contribute to the capital of the Company Receivables and Related
Rights consisting of
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each Receivable of UGI that existed and was owing to UGI on the Closing Date
beginning with the oldest of such Receivables and continuing chronologically
thereafter such that the aggregate Outstanding Balance of all such Contributed
Receivables shall be not less than $4,000,000. Notwithstanding anything in this
Agreement to the contrary, UGI shall not be prevented from contributing
Receivables to the Company from time to time. Contributions made in connection
with the immediately preceding sentence (i) shall have no effect on the
aggregate Purchase Price of any Receivables sold by UGI to the Company on the
date of such contribution and (ii) shall not affect the aggregate outstanding
balance of any Company Note.
(b) On the terms and subject to the conditions set forth in this
Agreement, the Company agrees to pay to the Originator the Purchase Price for
the purchase to be made from the Originator on the Closing Date partially in
cash (in an amount to be agreed between the Company and the Originator and set
forth in the initial Purchase Report) and partially by issuing a promissory note
in the form of Exhibit B to the Originator with an initial principal balance
equal to the remaining Purchase Price (each such promissory note, as it may be
amended, supplemented, endorsed or otherwise modified from time to time,
together with all promissory notes issued from time to time in substitution
therefor or renewal thereof in accordance with the Transaction Documents, each
being herein called a "Company Note").
SECTION 3.2 Subsequent Purchase Price Payments. On each Payment Date
subsequent to the Closing Date, on the terms and subject to the conditions set
forth in this Agreement, the Company shall pay to the Originator the Purchase
Price for the Receivables generated by the Originator on such Payment Date and
sold to the Company hereunder:
(a) First, in cash to the extent the Company has cash available
therefor; and
(b) Second, to the extent any portion of the Purchase Price remains
unpaid, the principal amount outstanding under the applicable Company Note shall
be increased by an amount equal to such remaining Purchase Price.
The Servicer shall make all appropriate record keeping entries with respect to
each of the Company Notes to reflect the foregoing payments and reductions made
pursuant to Section 3.3, and in the absence of manifest error the Servicer's
books and records shall constitute rebuttable presumptive evidence of the
principal amount of, and accrued interest on, each of the Company Notes at any
time. Furthermore, the Servicer shall hold the Company Notes for the benefit of
the Originator. The Originator hereby irrevocably authorizes the Servicer to
mark the Company Notes "CANCELED" and to return such Company Notes to the
Company upon the final payment thereof after the occurrence of the Purchase and
Sale Termination Date.
SECTION 3.3 Settlement as to Specific Receivables and Dilution.
(a) If, on the day of purchase or contribution of any Receivable
from the Originator hereunder, any of the representations or warranties set
forth in Sections 5.4 and 5.12 are not true with respect to such Receivable or
as a result of any action or inaction of the Originator, on any subsequent day,
any of such representations or warranties set forth in Sections 5.4 and 5.12 are
no longer true with respect to such Receivable, then the Purchase Price (or in
the case of a Contributed Receivable, the capital contribution with respect to
such Receivable (the
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"Contributed Value")), with respect to such Receivable shall be reduced by an
amount equal to the Outstanding Balance of such Receivable and shall be
accounted to the Originator as provided in clause (c) below; provided, that if
the Company thereafter receives payment on account of Collections due with
respect to such Receivable, the Company promptly shall deliver such funds to the
Originator.
(b) If, on any day, the Outstanding Balance of any Receivable
(including any Contributed Receivable) purchased or contributed hereunder is
reduced or adjusted as a result of any defective, rejected, returned goods or
services, or any discount or other adjustment made by the Originator, the
Company or the Servicer or any setoff or dispute between the Originator or the
Servicer and an Obligor as indicated on the books of the Company (or, for
periods prior to the Closing Date, the books of the Originator), then the
Purchase Price or Contributed Value, as the case may be, with respect to such
Receivable shall be reduced by the amount of such net reduction and shall be
accounted to the Originator as provided in clause (c) below.
(c) Any reduction in the Purchase Price or Contributed Value of any
Receivable pursuant to clause (a) or (b) above shall be applied as a credit for
the account of the Company against the Purchase Price of Receivables
subsequently purchased by or contributed to the Company from the Originator
hereunder; provided, however if there have been no purchases of Receivables from
the Originator (or insufficiently large purchases of Receivables) to create a
Purchase Price sufficient to so apply such credit against, the amount of such
credit: (i) shall be paid in cash to the Company by the Originator in the manner
and for application as described in the following proviso, or (ii) shall be
deemed to be a payment under, and shall be deducted from the principal amount
outstanding under, the Company Note payable to the Originator;
provided, further, that at any time (y) when a Termination Event or Unmatured
Termination Event exists under the Receivables Purchase Agreement or (z) on or
after the Purchase and Sale Termination Date, the amount of any such credit
shall be paid by the Originator to the Company by deposit in immediately
available funds into the relevant Lock-Box Account for application by the
Servicer to the same extent as if Collections of the applicable Receivable in
such amount had actually been received on such date.
SECTION 3.4 Reconveyance of Receivables. In the event that the Originator
has paid to the Company the full Outstanding Balance of any Receivable pursuant
to Section 3.3, the Company shall reconvey such Receivable to the Originator,
without representation or warranty, but free and clear of all liens, security
interests, charges, and encumbrances created by the Company.
ARTICLE IV
CONDITIONS OF PURCHASES
SECTION 4.1 Conditions Precedent to Initial Purchase. The initial purchase
hereunder is subject to the condition precedent that the Servicer (on the
Company's behalf) shall have received, on or before the Closing Date, the
following, each (unless otherwise indicated) dated the Closing Date, and each in
form and substance satisfactory to the Servicer (acting on the Company's
behalf):
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(a) An Originator Assignment Certificate in the form of Exhibit C
from the Originator, duly completed, executed and delivered by the Originator;
(b) A copy of the resolutions of the Board of Directors of the
Originator approving the Transaction Documents to be delivered by it and the
transactions contemplated hereby and thereby, certified by the Secretary or
Assistant Secretary of the Originator;
(c) Good standing or validly subsisting certificates for the
Originator issued as of a recent date acceptable to the Servicer by the
Secretary of State of the jurisdiction of the Originator's organization and each
jurisdiction where the Originator is qualified to transact business;
(d) A certificate of the Secretary or Assistant Secretary of the
Originator certifying the names and true signatures of the officers authorized
on such Person's behalf to sign the Transaction Documents to be delivered by it
(on which certificate the Servicer and the Company may conclusively rely until
such time as the Servicer shall receive from such Person a revised certificate
meeting the requirements of this clause (d));
(e) Copies of the certificate or articles of incorporation or other
organizational document of the Originator duly certified by the Secretary of
State of the jurisdiction of the Originator's organization as of a recent date,
together with a copy of the by-laws of the Originator, each duly certified by
the Secretary or an Assistant Secretary of the Originator;
(f) Originals of the proper financing statements (Form UCC-1) that
have been duly executed and name the Originator as the debtor/seller and the
Company as the secured party/purchaser (and the Issuer, as assignee of the
Company) of the Receivables generated by the Originator as may be necessary or,
in the Servicer's or the Administrator's opinion, desirable under the UCC of all
appropriate jurisdictions to perfect the Company's ownership interest in all
Receivables and such other rights, accounts, instruments and moneys (including,
without limitation, Related Security) in which an ownership or security interest
may be assigned to it hereunder;
(g) A written search report from a Person satisfactory to the
Servicer listing all effective financing statements that name the Originator as
debtor or seller and that are filed in the jurisdictions in which filings were
made pursuant to the foregoing clause (f), together with copies of such
financing statements (none of which, except for those described in the foregoing
clause (f), shall cover any Receivable or any Related Rights which are to be
sold to the Company hereunder), and tax and judgment lien search reports from a
Person satisfactory to the Servicer showing no evidence of such liens filed
against the Originator;
(h) A favorable opinion of Morgan, Lewis & Bockius LLP, counsel to
the Originator, in form and substance satisfactory to the Servicer and the
Administrator;
(i) [Intentionally Omitted.]
(j) A certificate from an officer of the Originator to the effect
that the Servicer and the Originator have placed on the most recent, and have
taken all steps reasonably necessary to ensure that there shall be placed on
each subsequent, data processing report that the
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Originator generates which are of the type that a proposed purchaser or lender
would use to evaluate the Receivables, the following legend (or the substantive
equivalent thereof): "THE RECEIVABLES DESCRIBED HEREIN HAVE BEEN CONTRIBUTED OR
SOLD BY UGI ENERGY SERVICES, INC. TO ENERGY SERVICES FUNDING CORPORATION
PURSUANT TO A PURCHASE AND SALE AGREEMENT, DATED AS OF NOVEMBER 30, 2001, AS MAY
BE AMENDED FROM TIME TO TIME, BETWEEN UGI ENERGY SERVICES, INC. AND ENERGY
SERVICES FUNDING CORPORATION, AS PURCHASER; AND AN UNDIVIDED, FRACTIONAL
OWNERSHIP INTEREST IN THE RECEIVABLES DESCRIBED HEREIN HAS BEEN SOLD TO MARKET
STREET FUNDING CORPORATION PURSUANT TO A RECEIVABLES PURCHASE AGREEMENT, DATED
AS OF NOVEMBER 30, 2001 AS MAY BE AMENDED FROM TIME TO TIME, AMONG ENERGY
SERVICES FUNDING CORPORATION, AS SELLER, UGI ENERGY SERVICES, INC., AS SERVICER,
MARKET STREET FUNDING CORPORATION, AND PNC BANK, NATIONAL ASSOCIATION, AS
ADMINISTRATOR"; and
(k) Such other approvals, opinions or documents as the Administrator
or the Issuer may reasonably request.
SECTION 4.2 Certification as to Representations and Warranties. The
Originator, by accepting the Purchase Price related to each purchase of
Receivables generated by the Originator, shall be deemed to have certified that
the representations and warranties contained in Article V are true and correct
on and as of such day, with the same effect as though made on and as of such
day.
SECTION 4.3 Additional Originators. Additional Persons may be added as
Originators hereunder, with the consent of the Company and the Administrator,
provided that the following conditions are satisfied on or before the date of
such addition:
(a) The Servicer shall have given the Administrator and the Company
at least thirty days prior written notice of such proposed addition and the
identity of the proposed additional Originator and shall have provided such
other information with respect to such proposed additional Originator as the
Administrator may reasonably request;
(b) such proposed additional Originator has executed and delivered
to the Company and the Administrator an agreement substantially in the form
attached hereto as Exhibit D (a "Joinder Agreement");
(c) such proposed additional Originator has delivered to the Company
and the Administrator each of the documents with respect to the Originator
described in Sections 4.1 and 4.2;
(d) the Administrator shall have received a written statement from
each of Moody's and Standard & Poor's confirming that the addition of the
Originator will not result in a downgrade or withdrawal of the current ratings
of the Notes; and
(e) the Purchase and Sale Termination Date shall not have occurred.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE ORIGINATOR
In order to induce the Company to enter into this Agreement and to make
purchases hereunder, the Originator hereby makes, with respect to itself, the
representations and warranties set forth in this Article V.
SECTION 5.1 Organization and Valid Subsistence. The Originator has been
duly incorporated or formed and is validly existing or subsisting as a
corporation, limited liability company or partnership, as applicable, in good
standing under the laws of its jurisdiction of incorporation or formation, with
corporate power and authority to own its properties and to conduct its business
as such properties are presently owned and such business is presently conducted.
SECTION 5.2 Due Qualification. The Originator is located and is qualified
to transact business as a foreign corporation, limited liability company or
partnership, as applicable, in good standing in all jurisdictions in which (a)
the ownership or lease of its property or the conduct of its business requires
such licensing or qualification (except for the District of Columbia and the
State of New York, in which jurisdictions the Originator shall be qualified
within 90 days after the Closing Date) and (b) the failure to be so licensed or
qualified would be reasonably likely to have a Material Adverse Effect.
SECTION 5.3 Power and Authority; Due Authorization. The Originator has (a)
all necessary corporate power, authority and legal right (i) to execute and
deliver, and perform its obligations under, each Transaction Document to which
it is a party (including the use of the proceeds of the Purchase Price) and (ii)
to generate, own, sell, contribute and assign Receivables on the terms and
subject to the conditions herein and therein provided; and (b) duly authorized
such execution and delivery and such sale, contribution and assignment and the
performance of such obligations by all necessary corporate action.
SECTION 5.4 Valid Sale; Binding Obligations. Each sale or contribution, as
the case may be, of Receivables made by the Originator pursuant to this
Agreement is and shall constitute an irrevocable and absolute valid sale or
contribution, as the case may be, transfer, and assignment of Receivables to the
Company, enforceable against creditors of, and purchasers from, the Originator;
and this Agreement constitutes, and each other Transaction Document to be signed
by the Originator, when duly executed and delivered by the Originator, will
constitute, a legal, valid, and binding obligation of the Originator,
enforceable against the Originator in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization, or
other similar laws affecting the enforcement of creditors' rights generally and
by general principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law.
SECTION 5.5 No Violation. The consummation by the Originator of the
transactions contemplated by this Agreement and the other Transaction Documents
to be signed by the Originator, and the fulfillment by the Originator of the
terms hereof or thereof, will not (a) conflict with, result in any breach of any
of the terms and provisions of, or constitute (with or without notice or lapse
of time) a default under (i) the Originator's certificate or articles of
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incorporation or bylaws, limited partnership agreements, articles of
organization or limited liability company agreements, as applicable or (ii) any
indenture, loan agreement, mortgage, deed of trust, or other similar agreement
or instrument to which it is a party or by which it is bound, (b) result in the
creation or imposition of any Adverse Claim upon any of its properties pursuant
to the terms of any such indenture, loan agreement, mortgage, deed of trust, or
other similar agreement or instrument, other than the Transaction Documents, or
(c) violate any law or any order, rule or regulation applicable to it of any
court or of any state or foreign regulatory body, administrative agency, or
other governmental instrumentality having jurisdiction over it or any of its
properties.
SECTION 5.6 Proceedings. Except as set forth in Schedule 5.6, there is no
action, suit, proceeding or investigation pending before any court, regulatory
body, arbitrator, administrative agency, or other tribunal or governmental
instrumentality (a) asserting the invalidity of any Transaction Document, (b)
seeking to prevent the Originator from transferring any Receivable hereunder (or
in the case such transfer does not constitute a sale or an absolute conveyance
under any applicable law, from granting or maintaining the security interest in
any Receivable) to the Company or the consummation of any of the transactions
contemplated by any Transaction Document or (c) seeking any determination or
ruling that is reasonably likely to have a Material Adverse Effect.
SECTION 5.7 Bulk Sales Acts. No transaction contemplated hereby requires
compliance with, or will be subject to avoidance under, any bulk sales act or
similar law.
SECTION 5.8 Government Approvals. Except for the filing of the UCC
financing statements referred to in Article IV, all of which, at the time
required in Article IV, shall have been duly made and shall be in full force and
effect, 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
Originator's due execution, delivery and performance of any Transaction Document
to which it is a party.
SECTION 5.9 Financial Condition.
(a) Material Adverse Effect. Since September 30, 2001, no event has
occurred that has had, or is reasonably likely to have, a Material Adverse
Effect.
(b) Solvent. On the date hereof, and on the date of each purchase
hereunder (both before and after giving effect to such purchase), the Originator
shall be Solvent.
SECTION 5.10 Licenses, Contingent Liabilities, and Labor Controversies.
(a) The Originator has not failed to obtain any licenses, permits,
franchises or other governmental authorizations necessary to the ownership of
its properties or to the conduct of its business, which violation or failure to
obtain would be reasonably likely to have a Material Adverse Effect.
(b) There are no labor controversies pending against the Originator
that have had (or are reasonably likely to have) a Material Adverse Effect.
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SECTION 5.11 Margin Regulations. No use of any funds acquired by the
Originator under this Agreement will conflict with or contravene any of
Regulations, T, U and X promulgated by the Federal Reserve Board from time to
time.
SECTION 5.12 Quality of Title.
(a) Each Receivable of the Originator (together with the Related
Rights with respect to such Receivable) which is to be sold to the Company
hereunder is or shall be owned by the Originator, free and clear of any Adverse
Claim, except as provided herein and in the Receivables Purchase Agreement.
Whenever the Company makes a purchase or accepts a contribution hereunder, it
shall have acquired and shall continue to have maintained a valid and perfected
ownership interest (free and clear of any Adverse Claim) in all Receivables
(except for those Receivables reconveyed to the Originator pursuant to Section
3.4) generated by the Originator and all Collections related thereto, and in the
Originator's entire right, title and interest in and to the Related Rights with
respect thereto.
(b) No effective financing statement or other instrument similar in
effect covering any Receivable generated by the Originator or any Related Rights
is on file in any recording office except such as may be filed in favor of the
Company or the Originator, as the case may be, in accordance with this Agreement
or in favor of the Issuer in accordance with the Receivables Purchase Agreement.
(c) Unless otherwise identified to the Company on the date of the
purchase or contribution hereunder, each Receivable purchased hereunder is on
the date of purchase or contribution an Eligible Receivable.
SECTION 5.13 Accuracy of Information. All factual written information
heretofore or contemporaneously furnished (and prepared) by the Originator to
the Company or the Administrator for purposes of or in connection with any
Transaction Document or any transaction contemplated hereby or thereby is, and
all other such factual written information hereafter furnished (and prepared) by
the Originator to the Company or the Administrator pursuant to or in connection
with any Transaction Document will be, true and accurate in all material
respects on the date as of which such information is dated or certified.
SECTION 5.14 Offices. The Originator's principal place of business and
chief executive office is located at the address set forth in Schedule 5.14A and
the offices where the Originator keeps all its books, records and documents
evidencing its Receivables, the related Contracts and all other agreements
related to such Receivables are located at the addresses specified in Schedule
5.14B (or at such other locations, notified to the Servicer and the
Administrator in accordance with Section 6.1(f)), in jurisdictions where all
action required by Section 7.3 has been taken and completed. The Originator's
organization type, jurisdiction of organization and organizational
identification number are set forth on Schedule 5.14A.
SECTION 5.15 Trade Names. The Originator does not use any trade name other
than its actual corporate name and the trade names set forth in Schedule 5.15.
From and after the date that fell five (5) years before the date hereof, except
as set forth in Schedule 5.15, the Originator
11
has not been known by any legal name other than its corporate name as of the
date hereof, nor has the Originator been the subject of any merger or other
corporate reorganization.
SECTION 5.16 Taxes. The Originator has filed all tax returns and reports
required by law to have been filed by it and has paid all taxes and governmental
charges thereby shown to be owing, except any such taxes or charges which are
being diligently contested in good faith by appropriate proceedings and for
which adequate reserves in accordance with GAAP shall have been set aside on its
books.
SECTION 5.17 Compliance with Applicable Laws. The Originator is in
compliance with the requirements of all applicable laws, rules, regulations and
orders of all Governmental Authorities, a breach of any of which, individually
or in the aggregate, would be reasonably likely to have a Material Adverse
Effect.
SECTION 5.18 Reliance on Separate Legal Identity. The Originator
acknowledges that the Issuer and the Administrator are entering into the
Receivables Purchase Agreement in reliance upon the Company's identity as a
legal entity separate from the Originator.
SECTION 5.19 Investment Company. The Originator is not an "investment
company," or a company "controlled" by an "investment company" within the
meaning of the Investment Company Act of 1940 as amended. In addition, the
Originator is not a "holding company," a "subsidiary company" of a "holding
company" or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company" within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
SECTION 5.20 Valid Contracts. Each Contract with respect to each
Receivable is effective to create, and has created, a legal, valid and binding
obligation of the related Obligor to pay the Outstanding Balance of the
Receivable created thereunder and any accrued interest thereon, enforceable
against the Obligor in accordance with its terms, except as such enforcement may
be limited by applicable bankruptcy, insolvency, reorganization or other similar
laws relating to or limiting creditors' rights generally and by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
ARTICLE VI
COVENANTS OF THE ORIGINATOR
SECTION 6.1 Affirmative Covenants. Until the latest of the Facility
Termination Date, the date on which no Capital of or Discount in respect of the
Purchased Interest shall be outstanding or the date on which all other amounts
owed by the Originator under this Agreement or the Receivables Purchase
Agreement to the Seller, the Issuer, the Administrator and any other Indemnified
Party or Affected Person shall be paid in full, the Originator will, unless the
Administrator and the Company shall otherwise consent in writing:
(a) Compliance with Laws, Etc. Comply in all material respects with
all applicable laws, rules, regulations and orders with respect to the
Receivables generated by it and the Contracts and other agreements related
thereto except where the failure to so comply would not materially and adversely
affect the collectibility of such Receivables or the rights of the Company
hereunder.
12
(b) Preservation of Corporate Existence. Except as otherwise
permitted in Section 6.3(e), preserve and maintain its existence as a
corporation, partnership or limited liability company, as applicable, and all
rights, franchises and privileges in the jurisdiction of its incorporation, and
qualify and remain qualified in good standing as a foreign corporation,
partnership or limited liability company, as applicable, in each jurisdiction
where the failure to preserve and maintain such existence, rights, franchises,
privileges and qualification would be reasonably likely to have a Material
Adverse Effect.
(c) Receivables Reviews. (i) From time to time during regular
business hours as reasonably requested in advance by the Company or the
Administrator (unless a Termination Event or an Unmatured Termination Event
exists or there shall be a material variance in the performance of the
Receivables), permit the Company or the Administrator, or their respective
agents or representatives, (A) to examine and make copies of and abstracts from
all books, records and documents (including, without limitation, computer tapes
and disks) in possession or under the control of the Originator relating to
Receivables, including, without limitation, the related Contracts and purchase
orders and other agreements related thereto, and (B) to visit the offices and
properties of the Originator for the purpose of examining such materials
described in clause (A) above and to discuss matters relating to Receivables
originated by it or the performance hereunder with any of the officers or
employees of the Originator having knowledge of such matters, and (ii) without
limiting the foregoing clause (i) above, permit certified public accountants or
other auditors acceptable to the Company and Administrator to conduct, at the
Company's expense, a review of the Originator's books and records with respect
to such Receivables, provided that the Company shall not pay for more than one
audit per year unless a Termination Event has occurred and is continuing.
(d) Keeping of Records and Books of Account. Maintain and implement
administrative and operating procedures (including, without limitation, an
ability to re-create records evidencing Receivables it generates 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 such Receivables (including, without limitation, records adequate
to permit the daily identification of each new Receivable and all Collections of
and adjustments to each existing Receivable).
(e) Performance and Compliance with Receivables and Contracts.
Timely and fully perform and comply, in all material respects, with all
provisions, covenants and other promises required to be observed by it under the
Contracts and all other agreements related to the Receivables that it generates.
(f) Location of Records. Keep its principal place of business and
chief executive office, and the offices where it keeps its records concerning or
related to Receivables, at the address(es) referred to in Schedule 5.14 or, upon
15 days' prior written notice to the Company and the Administrator, at such
other locations in jurisdictions where all action required by Section 7.3 shall
have been taken and completed.
(g) Credit and Collection Policies. Comply in all material respects
with its Credit and Collection Policy in connection with the Receivables that it
generates and all Contracts and other agreements related thereto.
13
(h) Post Office Boxes. Within 30 days of the Closing Date, the only
post office boxes into which Obligors will have been directed to send payments
are post office boxes in the name of the relevant Lock-Box Banks.
(i) Transaction Documents. Comply in all material respects with the
Transaction Documents to which it is a party.
(j) Change Affecting UCC. At least 30 days before any change in the
Originator's name or any other change requiring the amendment of UCC financing
statements, provide to the Company and the Servicer notice setting forth such
changes and the effective date thereof and, prior to the effectiveness of such
change, take all steps necessary to amend such financing statements to reflect
such change.
SECTION 6.2 Reporting Requirements. Until the latest of the Facility
Termination Date, the date on which no Capital of or Discount in respect of the
Purchased Interest shall be outstanding or the date on which all other amounts
owed by the Originator under this Agreement or the Receivables Purchase
Agreement to the Seller, the Issuer, the Administrator and any other Indemnified
Party or Affected Person shall be paid in full, the Originator will, unless the
Servicer (on behalf of the Company) shall otherwise consent in writing, furnish
to the Company and the Administrator:
(a) Purchase and Sale Termination Events. As soon as possible after
the Originator has knowledge of the occurrence of, and in any event within three
Business Days after the Originator has knowledge of the occurrence of each
Purchase and Sale Termination Event or each Unmatured Purchase and Sale
Termination Event in respect of the Originator, the statement of the chief
financial officer or chief accounting officer of the Originator describing such
Purchase and Sale Termination Event or Unmatured Purchase and Sale Termination
Event and the action that the Originator proposes to take with respect thereto,
in each case in reasonable detail;
(b) Proceedings. As soon as possible and in any event within three
Business Days after the Originator otherwise has knowledge thereof, written
notice of (i) material litigation, investigation or proceeding of the type
described in Section 5.6 not previously disclosed to the Company and (ii) all
materially adverse developments that have occurred with respect to any
previously disclosed litigation, proceedings and investigations; and
(c) Other. Promptly, from time to time, such other information,
documents, records or reports respecting the Receivables or the conditions or
operations, financial or otherwise, of the Originator as the Company, the Issuer
or the Administrator may from time to time reasonably request in order to
protect the interests of the Company, the Issuer or the Administrator under or
as contemplated by the Transaction Documents.
SECTION 6.3 Negative Covenants. Until the latest of the Facility
Termination Date, the date on which no Capital of or Discount in respect of the
Purchased Interest shall be outstanding or the date on which all other amounts
owed by the Originator under this Agreement or the Receivables Purchase
Agreement to the Seller, the Issuer, the Administrator and any other Indemnified
Party or Affected Person shall be paid in full, the Originator agrees that,
unless the
14
Servicer (on behalf of the Company) and the Administrator shall otherwise
consent in writing, it shall not:
(a) Sales, Liens, Etc. Except as otherwise provided herein or in any
other Transaction Document, sell, assign (by operation of law or otherwise) or
otherwise dispose of, or create or suffer to exist any Adverse Claim upon or
with respect to, any Receivable or related Contract or Related Security, or any
interest therein, or any Collections thereon, or assign any right to receive
income in respect thereof.
(b) Extension or Amendment of Receivables. Except as otherwise
permitted in Section 4.2(a) of the Receivables Purchase Agreement, extend, amend
or otherwise modify the terms of any Receivable in any material respect
generated by it, or amend, modify or waive, in any material respect, any
Contract related thereto (which term or condition relates to payments under, or
the enforcement of, such Contract).
(c) Change in Business or Credit and Collection Policy. Make any
change in the character of its business or materially alter its Credit and
Collection Policy (other than a change to the insurance provisions of any such
policy), which change or alteration would, in either case, materially adversely
change the credit standing required of particular Obligors or potential Obligors
or impair the collectibility of a material portion of Receivables generated by
it.
(d) Receivables Not to be Evidenced by Promissory Notes or Chattel
Paper. Take any action to cause or permit any Receivable generated by it to
become evidenced by any "instrument" or "chattel paper" (as defined in the
applicable UCC).
(e) Mergers, Acquisitions, Sales, etc. (i) Be a party to any merger
or consolidation, except a merger or consolidation where the Originator is the
surviving entity, or (ii) directly or indirectly sell, transfer, assign, convey
or lease (A) whether in one or a series of transactions, all or substantially
all of its assets or (B) any Receivables or any interest therein (other than
pursuant to this Agreement).
(f) Lock-Box Banks. Make any changes in its instructions to Obligors
regarding Collections or add or terminate any bank as a Lock-Box Bank unless the
requirements of paragraph 2(g) of Exhibit IV to the Receivables Purchase
Agreement have been met.
(g) Accounting for Purchases. Account for or treat (whether in
financial statements or otherwise) the transactions contemplated hereby in any
manner other than as sales or contributions to capital of the Receivables and
Related Rights by the Originator to the Company.
(h) Transaction Documents. Enter into, execute, deliver or otherwise
become bound by any agreement, instrument, document or other arrangement that
restricts the right of the Originator to amend, supplement, amend and restate or
otherwise modify, or to extend or renew, or to waive any right under, this
Agreement or any other Transaction Document.
SECTION 6.4 Substantive Consolidation. The Originator hereby acknowledges
that this Agreement and the other Transaction Documents are being entered into
in reliance upon the
15
Company's identity as a legal entity separate from the Originator and its
Affiliates. Therefore, from and after the date hereof, the Originator shall take
all reasonable steps necessary to make it apparent to third Persons that the
Company is an entity with assets and liabilities distinct from those of the
Originator and any other Person, and is not a division of the Originator, its
Affiliates or any other Person. Without limiting the generality of the foregoing
and in addition to and consistent with the other covenants set forth herein, the
Originator shall take such actions as shall be required in order that:
(a) except as provided for in Section 10.6, the Originator shall not
be involved in the day to day management of the Company;
(b) the Originator shall maintain separate corporate records and
books of account from the Company and otherwise will observe corporate
formalities and have a separate area from the Company for its business;
(c) the financial statements and books and records of the Originator
shall be prepared after the date of creation of the Company to reflect and shall
reflect the separate existence of the Company; provided, that the Company's
assets and liabilities may be included in a consolidated financial statement
issued by an Affiliate of the Company; provided, however, all financial
statements of UGI or any Affiliate thereof that are consolidated to include the
Company will contain detailed notes clearly stating that (i) a special purpose
corporation exists as a Subsidiary of UGI, (ii) the Originator has sold
receivables and other related assets to such special purpose Subsidiary that, in
turn, has sold undivided interests therein to certain financial institutions and
other entities and (iii) that the special purpose Subsidiary's assets are not
available to satisfy the obligations of UGI or any Affiliate;
(d) except as permitted by the Receivables Purchase Agreement or
this Agreement, (i) the Originator shall maintain its assets separately from the
assets of the Company, and (ii) the Company's assets, and records relating
thereto, have not been, are not, and shall not be, commingled with those of the
Originator;
(e) all of the Company's business correspondence and other
communications shall be conducted in the Company's own name and on its own
stationery;
(f) the Originator shall not act as an agent for the Company, other
than UGI in its capacity as the Servicer, and in connection therewith, shall
present itself to the public as an agent for the Company and a legal entity
separate from the Company;
(g) the Originator shall not conduct any of the business of the
Company in its own name;
(h) except as provided in Section 10.6, the Originator shall not pay
any liabilities of the Company out of its own funds or assets;
(i) the Originator shall maintain an arm's-length relationship with
the Company;
16
(j) the Originator shall not assume or guarantee or become obligated
for the debts of the Company or hold out its credit as being available to
satisfy the obligations of the Company;
(k) the Originator shall not acquire obligations of the Company;
(l) the Originator shall allocate fairly and reasonably overhead or
other expenses that are properly shared with the Company, including, without
limitation, shared office space;
(m) the Originator shall identify and hold itself out as a separate
and distinct entity from the Company;
(n) the Originator shall correct any known misunderstanding
respecting its separate identity from the Company;
(o) the Originator shall not enter into, or be a party to, any
transaction with the Company, except in the ordinary course of its business and
on terms which are intrinsically fair and not less favorable to it than would be
obtained in a comparable arm's-length transaction with an unrelated third party;
and
(p) the Originator shall not pay the salaries of the Company's
employees, if any.
The provisions of this Section 6.4 shall survive any termination of this
Agreement for one year and one day after the latest of the Facility Termination
Date, the date on which no Capital of or Discount in respect of the Purchased
Interest shall be outstanding or the date on which all other amounts owed by the
Originator under this Agreement or the Receivables Purchase Agreement to the
Seller, the Issuer, the Administrator and any other Indemnified Party or
Affected Person shall be paid in full.
ARTICLE VII
ADDITIONAL RIGHTS AND OBLIGATIONS IN
RESPECT OF RECEIVABLES
SECTION 7.1 Rights of the Company. The Originator hereby authorizes the
Company, the Servicer or their respective designees to take any and all steps in
the Originator's name necessary or desirable, in their respective determination,
to collect on behalf of the Company all amounts due under any and all
Receivables, including, without limitation, indorsing the name of the Originator
on checks and other instruments representing Collections and enforcing such
Receivables and the provisions of the related Contracts that concern payment
and/or enforcement of rights to payment.
SECTION 7.2 Responsibilities of the Originator. Anything herein to the
contrary notwithstanding:
(a) Collection Procedures. Within 30 days of the Closing Date, the
Originator agrees to direct its respective Obligors to make payments of
Receivables directly to a post office
17
box related to the relevant Lock-Box Account at a Lock-Box Bank. The Originator
further agrees to transfer any Collections that it receives directly to the
Servicer (for the Company's account) within two (2) Business Days of receipt
thereof, and agrees that all such Collections shall be deemed to be received in
trust for the Company.
(b) The Originator shall perform its obligations hereunder, and the
exercise by the Company or its designee of its rights hereunder shall not
relieve the Originator from such obligations.
(c) None of the Company, the Servicer or the Administrator shall
have any obligation or liability to any Obligor or any other third Person with
respect to any Receivables, Contracts related thereto or any other related
agreements, nor shall the Company, the Servicer, the Issuer or the Administrator
be obligated to perform any of the obligations of the Originator thereunder.
(d) The Originator hereby grants to the Servicer an irrevocable
power of attorney, with full power of substitution, coupled with an interest, to
take, upon the occurrence and continuation of a Purchase and Sale Termination
Event, in the name of the Originator and on behalf of the Company 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 Originator or transmitted
or received by the Company (whether or not from the Originator) in connection
with any Receivable and to take all other steps necessary to comply with its
obligations as Servicer set forth in Article IV of the Receivables Purchase
Agreement.
SECTION 7.3 Further Action Evidencing Purchases. The Originator agrees
that from time to time, at its expense, it will promptly execute and deliver all
further instruments and documents, and take all further action that the Servicer
may reasonably request in order to perfect, protect or more fully evidence the
Receivables and Related Rights purchased by or contributed to the Company
hereunder, or to enable the Company to exercise or enforce any of its rights
hereunder or under any other Transaction Document. Without limiting the
generality of the foregoing, upon the request of the Servicer, the Originator
will:
(a) execute and file such financing or continuation statements, or
amendments thereto or assignments thereof, and such other instruments or
notices, as may be necessary or appropriate; and
(b) mark the master data processing records that evidence or list
(i) such Receivables and (ii) related Contracts with the legend set forth in
Section 4.1(j).
The Originator hereby authorizes the Company or its designee to file one or more
financing or continuation statements, and amendments thereto and assignments
thereof, relative to all or any of the Receivables and Related Rights now
existing or hereafter generated by the Originator. If the Originator fails to
perform any of its agreements or obligations under this Agreement, the Company
or its designee may (but shall not be required to) itself perform, or cause the
performance of, such agreement or obligation, and the expenses of the Company or
its designee incurred in connection therewith shall be payable by the Originator
as provided in Section 9.1.
18
SECTION 7.4 Application of Collections. Any payment by an Obligor in
respect of any amount owed by it to the Originator shall, except as otherwise
specified by such Obligor or required by applicable law and unless otherwise
instructed by the Servicer (with the prior written consent of the Administrator)
or the Administrator, be applied as a Collection of any Receivable or
Receivables of such Obligor to the extent of any amounts then due and payable
thereunder (such application to be made starting with the oldest outstanding
Receivable or Receivables) before being applied to any other indebtedness of
such Obligor.
ARTICLE VIII
PURCHASE AND SALE TERMINATION EVENTS
SECTION 8.1 Purchase and Sale Termination Events. Each of the following
events or occurrences described in this Section 8.1 shall constitute a "Purchase
and Sale Termination Event":
(a) A Termination Event (as defined in the Receivables Purchase
Agreement) shall have occurred and, in the case of a Termination Event (other
than one described in paragraph (f) of Exhibit V of the Receivables Purchase
Agreement), the Administrator, shall have declared the Facility Termination Date
to have occurred; or
(b) The Originator shall fail to make any payment or deposit to be
made by it hereunder when due and such failure shall remain unremedied for two
(2) Business Days; or
(c) Any representation or warranty made or deemed to be made
(pursuant to Section 4.2) by the Originator (or any of its officers) under or in
connection with this Agreement, any other Transaction Documents, or any other
written information or report delivered pursuant hereto or thereto shall prove
to have been false or incorrect in any material respect when made or deemed
made; provided, however, that if the violation of this paragraph (c) by the
Originator may be cured without any potential or actual detriment to the
Purchaser, the Administrator or any Program Support Provider, the Originator
shall have 30 days from the earlier of (i) such Person's knowledge of such
failure and (ii) notice to such Person of such failure to cure any such
violation, before a Purchase and Sale Termination Event shall occur so long as
such Person is diligently attempting to effect such cure; or
(d) The Originator shall fail to perform or observe any other term,
covenant or agreement contained in this Agreement on its part to be performed or
observed and such failure shall remain unremedied for 30 days after written
notice thereof shall have been given by the Servicer to the Originator.
SECTION 8.2 Remedies.
(a) Optional Termination. Upon the occurrence of a Purchase and Sale
Termination Event, the Company (and not the Servicer) shall have the option, by
notice to the Originator (with a copy to the Administrator), to declare the
Purchase Facility as terminated.
(b) Remedies Cumulative. Upon any termination of the Purchase
Facility pursuant to Section 8.2(a), the Company shall have, in addition to all
other rights and remedies
19
under this Agreement, all other rights and remedies provided under the UCC of
each applicable jurisdiction and other applicable laws, which rights shall be
cumulative.
ARTICLE IX
INDEMNIFICATION
SECTION 9.1 Indemnities by the Originator. Without limiting any other
rights which the Company may have hereunder or under applicable law, the
Originator hereby agrees to indemnify the Company and each of its officers,
directors, employees and agents (each of the foregoing Persons being
individually called a "Purchase and Sale Indemnified Party"), forthwith on
demand, from and against any and all damages, losses, claims, judgments,
liabilities and related costs and expenses, including reasonable attorneys' fees
and disbursements (all of the foregoing being collectively called "Purchase and
Sale Indemnified Amounts") awarded against or incurred by any of them arising
out of or as a result of the failure of the Originator to perform its
obligations under this Agreement or any other Transaction Document, or arising
out of the claims asserted against a Purchase and Sale Indemnified Party
relating to the transactions contemplated herein or therein or the use of
proceeds thereof or therefrom, excluding, however, (i) Purchase and Sale
Indemnified Amounts to the extent resulting from gross negligence or willful
misconduct on the part of such Purchase and Sale Indemnified Party, (ii)
recourse with respect to any Receivable to the extent that such Receivable is
uncollectible on account of insolvency, bankruptcy or lack of creditworthiness
of the related Obligor (except as otherwise specifically provided under this
Agreement) and (iii) any tax based upon or measured by net income property, or
gross receipts. Without limiting the foregoing, the Originator shall indemnify
each Purchase and Sale Indemnified Party for Purchase and Sale Indemnified
Amounts relating to or resulting from:
(a) the transfer by the Originator of an interest in any Receivable
to any Person other than the Company;
(b) the breach of any representation or warranty made by the
Originator (or any of its officers) under or in connection with this Agreement
or any other Transaction Document, or any written information or report
delivered by the Originator pursuant hereto or thereto, which shall have been
false or incorrect in any respect when made or deemed made;
(c) the failure by the Originator to comply with any applicable law,
rule or regulation with respect to any Receivable generated by the Originator or
the related Contract, or the nonconformity of any Receivable generated by the
Originator or the related Contract with any such applicable law, rule or
regulation;
(d) the failure to vest and maintain vested in the Company an
ownership interest in the Receivables generated by the Originator free and clear
of any Adverse Claim, other than an Adverse Claim arising solely as a result of
an act of the Company, the Issuer or the Administrator whether existing at the
time of the purchase or contribution of such Receivables or at any time
thereafter;
(e) 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
20
applicable laws with respect to any Receivables or purported Receivables
generated by the Originator, whether at the time of any purchase or contribution
or at any subsequent time;
(f) any dispute, claim, offset or defense (other than discharge in
bankruptcy) of the Obligor to the payment of any Receivable or purported
Receivable generated by the Originator (including, without limitation, a defense
based on such Receivable's or the related Contract's 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 services related to any such
Receivable or the furnishing of or failure to furnish such services;
(g) any product liability claim arising out of or in connection with
services that are the subject of any Receivable generated by the Originator; and
(h) any tax or governmental fee or charge (other than any tax
excluded pursuant to clause (iii) in the proviso to the preceding sentence), all
interest and penalties thereon or with respect thereto, and all out-of-pocket
costs and expenses, including the reasonable fees and expenses of counsel in
defending against the same, which may arise by reason of the purchase or
ownership of the Receivables generated by the Originator or any Related Security
connected with any such Receivables.
If for any reason the indemnification provided above in this Section 9.1 is
unavailable to a Purchase and Sale Indemnified Party or is insufficient to hold
such Purchase and Sale Indemnified Party harmless, then the Originator,
severally and for itself, shall contribute to the amount paid or payable by such
Purchase and Sale Indemnified Party to the maximum extent permitted under
applicable law.
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Amendments, etc.
(a) The provisions of this Agreement may from time to time be
amended, modified or waived, if such amendment, modification or waiver is in
writing and executed by the Company and the Originator (with the prior written
consent of the Administrator).
(b) No failure or delay on the part of the Company, the Servicer,
the Originator or any third party beneficiary in exercising any power or right
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power or right preclude any other or further exercise
thereof or the exercise of any other power or right. No notice to or demand on
the Company, the Servicer or the Originator in any case shall entitle it to any
notice or demand in similar or other circumstances. No waiver or approval by the
Company or the Servicer under this Agreement shall, except as may otherwise be
stated in such waiver or approval, be applicable to subsequent transactions. No
waiver or approval under this Agreement shall require any similar or dissimilar
waiver or approval thereafter to be granted hereunder.
(c) The Transaction Documents contain a final and complete
integration of all prior expressions by the parties hereto with respect to the
subject matter thereof and shall
21
constitute the entire agreement among the parties hereto with respect to the
subject matter thereof, superseding all prior oral or written understandings.
SECTION 10.2 Notices, etc. All notices and other communications provided
for hereunder shall, unless otherwise stated herein, be in writing (including
facsimile communication) and shall be personally delivered or sent by certified
mail, postage prepaid, via nationally recognized courier, or by facsimile, to
the intended party at the mailing address or facsimile number of such party set
forth under its name on the signature pages hereof or at such other address or
facsimile number as shall be designated by such party in a written notice to the
other parties hereto. All such notices and communications shall be effective (i)
if personally delivered, when received, (ii) if sent by certified mail three (3)
Business Days after having been deposited in the mail, postage prepaid, (iii) if
transmitted by facsimile, when sent, receipt confirmed by telephone or
electronic means (and shall be followed by a hard copy sent by first class
mail), and (iv) if by nationally recognized overnight courier, the next Business
Day.
SECTION 10.3 No Waiver; Cumulative Remedies. The remedies herein provided
are cumulative and not exclusive of any remedies provided by law. Without
limiting the foregoing, the Originator hereby authorizes the Company, at any
time and from time to time, to the fullest extent permitted by law, to set off,
against any obligations of the Originator to the Company arising in connection
with the Transaction Documents (including, without limitation, amounts payable
pursuant to Section 9.1) that are then due and payable or that are not then due
and payable but are accruing in respect of the then current Settlement Period,
any and all indebtedness at any time owing by the Company to or for the credit
or the account of the Originator.
SECTION 10.4 Binding Effect; Assignability. This Agreement shall be
binding upon and inure to the benefit of the Company and the Originator and
their respective successors and permitted assigns. The Originator may not assign
any of its rights hereunder or any interest herein without the prior written
consent of the Company, except as otherwise herein specifically provided. This
Agreement shall create and constitute the continuing obligations of the parties
hereto in accordance with its terms, and shall remain in full force and effect
until such time as the parties hereto shall agree in writing. The rights and
remedies with respect to any breach of any representation and warranty made by
the Originator pursuant to Article V and the indemnification and payment
provisions of Article IX and Section 10.6 shall be continuing and shall survive
any termination of this Agreement.
SECTION 10.5 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 10.6 Costs, Expenses and Taxes. In addition to the obligations of
the Originator under Article IX, the Originator, agrees to pay on demand:
(a) to the Company (and any successor and permitted assigns thereof)
all reasonable costs and expenses incurred by such Person in connection with the
enforcement of this Agreement and the other Transaction Documents; and
22
(b) all stamp and other taxes and fees payable or determined to be
payable in connection with the execution, delivery, filing and recording of this
Agreement or the other Transaction Documents to be delivered hereunder, and
agrees to indemnify each Purchase and Sale Indemnified Party against any
liabilities with respect to or resulting from any delay in paying or omission to
pay such taxes and fees.
SECTION 10.7 SUBMISSION TO JURISDICTION. EACH PARTY HERETO HEREBY
IRREVOCABLY (a) SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE STATE OF NEW
YORK OR THE FEDERAL COURT OF THE UNITED STATES FOR SOUTHERN DISTRICT OF NEW
YORK, NEW YORK OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY
TRANSACTION DOCUMENT; (b) AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH STATE OR UNITED STATES FEDERAL
COURT; (c) WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, THE DEFENSE
OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING; (d)
IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES OF SUCH PROCESS TO SUCH PERSON AT ITS
ADDRESS SPECIFIED IN SECTION 10.2; AND (e) AGREES THAT A FINAL JUDGMENT IN ANY
SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
NOTHING IN THIS SECTION 10.7 SHALL AFFECT THE COMPANY'S RIGHT TO SERVE LEGAL
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING ANY ACTION OR
PROCEEDING AGAINST THE ORIGINATOR OR ITS PROPERTY IN THE COURTS OF ANY OTHER
JURISDICTIONS.
SECTION 10.8 WAIVER OF JURY TRIAL. EACH PARTY HERETO WAIVES ANY RIGHT TO A
TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER
OR RELATING TO THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT, OR ANY AMENDMENT,
INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE
DELIVERED IN CONNECTION HEREWITH OR ARISING FROM ANY RELATIONSHIP EXISTING IN
CONNECTION WITH THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT, AND AGREES
THAT (a) ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT
BEFORE A JURY AND (b) ANY PARTY HERETO (OR ANY ASSIGNEE OR THIRD PARTY
BENEFICIARY OF THIS AGREEMENT) MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF
THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF ANY OTHER
PARTY OR PARTIES HERETO TO WAIVER OF ITS OR THEIR RIGHT TO TRIAL BY JURY.
SECTION 10.9 Captions and Cross References; Incorporation by Reference.
The various captions (including, without limitation, the table of contents) in
this Agreement are included for convenience only and shall not affect the
meaning or interpretation of any provision of this Agreement. References in this
Agreement to any underscored Section or Exhibit are to such Section or Exhibit
of this Agreement, as the case may be. The Exhibits hereto are hereby
incorporated by reference into and made a part of this Agreement.
23
SECTION 10.10 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.
SECTION 10.11 Acknowledgment and Agreement. By execution below, the
Originator expressly acknowledges and agrees that all of the Company's rights,
title, and interests in, to, and under this Agreement (but not its obligations),
shall be assigned by the Company pursuant to the Receivables Purchase Agreement,
and the Originator consents to such assignment. Each of the parties hereto
acknowledges and agrees that the Administrator, and the Issuer are third party
beneficiaries of the rights of the Company arising hereunder and under the other
Transaction Documents to which the Originator is a party.
SECTION 10.12 No Proceeding. The Originator hereby agrees that it will not
institute against, or cause to be instituted against, the Issuer, or join any
other Person in instituting against the Issuer, any insolvency proceeding
(namely, any proceeding of the type referred to in the definition of Insolvency
Proceeding) so long as any Notes shall be outstanding or there shall have
elapsed less than one year plus two days since the last day on which any such
Notes shall have been outstanding.
SECTION 10.13 Limited Recourse. Except as explicitly set forth herein, the
obligations of the Company and the Originator under this Agreement or any other
Transaction Documents to which each is a party are solely the obligations of the
Company and each Originator. No recourse under any Transaction Document shall be
had against, and no liability shall attach to, any officer, employee, director,
or beneficiary, whether directly or indirectly, of the Company or the
Originator; provided, however, that this Section shall not relieve any such
Person of any liability it might otherwise have for its own gross negligence or
willful misconduct.
[Signature Page Follows]
24
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.
ENERGY SERVICES FUNDING CORPORATION
By:___________________________________________
Name:____________________________________
Title:___________________________________
Address: Energy Services Funding Corporation
460 North Gulph Road, Suite 200
King of Prussia, PA 19406-2815
Attention: Robert W. Krick
Telephone: (610) 337-1000 ext. 3141
Facsimile: (610) 992-3259
UGI ENERGY SERVICES, INC.
By:___________________________________________
Name:____________________________________
Title:___________________________________
Address: UGI Energy Services, Inc.
1100 Berkshire Boulevard, Suite 305
Wyomissing, PA 19610
Attention: Joseph L. Hartz
Telephone: (610) 373-7999 ext. 106
Facsimile: (610) 374-4288
S-1 Purchase and Sale Agreement
(UGI)
Schedule 5.6
PROCEEDINGS
Complaint of GASMARK against Columbia Gas of Pennsylvania, Inc.
("Columbia"), filed with the Public Utility Commission on July 19, 2001,
regarding (i) the imposition of Operational Flow Orders and Operational Matching
Orders, (ii) the imposition of penalties for the failure to deliver gas to
Columbia's local market areas, and (iii) certain of Columbia's tariff provisions
and business practices; Answer and new matter of Columbia filed on August 13,
2001, seeking unspecified sanctions against GASMARK for failure to honor its
delivery obligations as a licensed supplier on the Columbia system.
Schedule 5.6-2
Schedule 5.14A
CHIEF EXECUTIVE OFFICE OF THE ORIGINATOR
JURISDICTION OF
ORGANIZATION AND ORGANIZATIONAL
TYPE OF CHIEF EXECUTIVE IDENTIFICATION
ORIGINATOR ORGANIZATION OFFICE NUMBER
---------- ------------ ------ ------
UGI Energy Services, Inc. Pennsylvania corporation 1100 Berkshire Blvd 2627451
Suite 305
Wyomissing, PA 19610
Schedule 5.14A-1
Schedule 5.14B
LOCATION OF BOOKS AND RECORDS OF THE ORIGINATOR
ORIGINATOR LOCATION OF BOOKS AND RECORDS
- ---------- -----------------------------
UGI Energy Services, Inc. 460 North Gulph Road
King of Prussia, Pennsylvania 19406-2815
100 Kachel Boulevard
Suite 400
Reading, Pennsylvania 19607
1100 Berkshire Boulevard
Suite 305
Wyomissing, Pennsylvania 19610
Schedule 5.14B-1
Schedule 5.15
TRADE NAMES
LEGAL NAME TRADE NAMES
- ---------- -----------
UGI Energy Services, Inc. GASMARK
POWERMARK
Schedule 5.15-1
Exhibit A
FORM OF PURCHASE REPORT
Originator:
Purchaser: Energy Services Funding Corporation
Payment Date:
1. Outstanding Balance of Receivables Purchased:
2. Fair Market Value Discount:
1 / {1+ [(Prime Rate + 0.25%) x Turnover Rate]}
_____________
12
Where:
Prime Rate = __________
Turnover Rate = ___________
3. Purchase Price (1 x 2) = $ __________
Exhibit A-1
Exhibit B
FORM OF SUBORDINATED COMPANY NOTE
__________
_________, 200__
FOR VALUE RECEIVED, the undersigned, Energy Services Funding Corporation,
a Delaware corporation ("Company"), promises to pay to UGI Energy Services Inc.,
a Pennsylvania corporation (the "Originator"), on the terms and subject to the
conditions set forth herein and in the Purchase and Sale Agreement referred to
below, the aggregate unpaid Purchase Price of all Receivables purchased by the
Company from the Originator pursuant to such Purchase and Sale Agreement, as
such unpaid Purchase Price is shown in the records of the Servicer.
1. Purchase and Sale Agreement. This Company Note is one of the Company
Notes described in, and is subject to the terms and conditions set forth in,
that certain Purchase and Sale Agreement of even date herewith (as the same may
be amended, supplemented, amended and restated or otherwise modified in
accordance with its terms, the "Purchase and Sale Agreement"), between the
Company and the Originator. Reference is hereby made to the Purchase and Sale
Agreement for a statement of certain other rights and obligations of the Company
and the Originator.
2. Definitions. Capitalized terms used (but not defined) herein have the
meanings assigned thereto in Exhibit I to the Receivables Purchase Agreement (as
defined in the Purchase and Sale Agreement). In addition, as used herein, the
following terms have the following meanings:
"Bankruptcy Proceedings" has the meaning set forth in clause (b) of
paragraph 9 hereof.
"Final Maturity Date" means the Payment Date immediately following the
date that falls one hundred twenty one (121) days after the Purchase and Sale
Termination Date.
"Interest Period" means the period from and including a Settlement Date
(or, in the case of the first Interest Period, the date hereof) to but excluding
the next Settlement Date.
"Prime Rate" has the meaning assigned thereto in the Purchase and Sale
Agreement.
"Receivables Purchase Agreement" means the Receivables Purchase Agreement,
dated as of November 30, 2001, entered into among Energy Services Funding
Corporation, UGI Energy Services, Inc., Market Street Funding Corporation and
PNC Bank, National Association, as may be amended, amended and restated,
supplemented or otherwise modified from time to time.
"Senior Interests" means, collectively, (i) all accrued and unpaid
Discount, (ii) all fees payable by the Company to the Senior Interest Holders
pursuant to the Receivables Purchase Agreement, (iii) all amounts payable
pursuant to Section 1.7 and 1.8 of the Receivables Purchase Agreement, (iv) the
aggregate Capital and (v) all other obligations owed by the Company to the
Exhibit B-1
Senior Interest Holders under the Receivables Purchase Agreement and other
Transaction Documents that are due and payable, together with any and all
interest and Discount accruing on any such amount after the commencement of any
Bankruptcy Proceedings, notwithstanding any provision or rule of law that might
restrict the rights of any Senior Interest Holder, as against the Company or
anyone else, to collect such interest.
"Senior Interest Holders" means, collectively, the Issuer, the
Administrator and the Indemnified Parties.
"Subordination Provisions" means, collectively, clauses (a) through (l) of
paragraph 9 hereof.
"One-Month LIBOR Rate" means, for any Interest Period, the rate set forth
for "one month" under "London Interbank Offered Rates (Libor):" as published in
the Wall Street Journal on the first day of such Interest Period.
3. Interest. Subject to the Subordination Provisions set forth below, the
Company promises to pay interest on this Company Note as follows:
(a) Prior to the Final Maturity Date, the aggregate unpaid Purchase
Price from time to time outstanding during any Interest Period shall bear
interest at a rate per annum equal to the One-Month LIBOR Rate for such Interest
Period as determined by the Servicer; and
(b) From (and including) the Final Maturity Date to (but excluding)
the date on which the entire aggregate unpaid Purchase Price payable to the
Originator is fully paid, such aggregate unpaid Purchase Price from time to time
outstanding shall bear interest at a rate per annum equal to the Prime Rate.
4. Interest Payment Dates. Subject to the Subordination Provisions set
forth below, the Company shall pay accrued interest on this Company Note on each
Settlement Date, and shall pay accrued interest on the amount of each principal
payment made in cash on a date other than a Settlement Date at the time of such
principal payment.
5. Basis of Computation. Interest accrued hereunder that is computed by
reference to the One-Month LIBOR Rate shall be computed for the actual number of
days elapsed on the basis of a 360-day year, and interest accrued hereunder that
is computed by reference to the rate described in paragraph 3(b) of this Company
Note shall be computed for the actual number of days elapsed on the basis of a
365- or 366-day year.
6. Principal Payment Dates. Subject to the Subordination Provisions set
forth below, payments of the principal amount of this Company Note shall be made
as follows:
(a) The principal amount of this Company Note shall be reduced by an
amount equal to each payment deemed made pursuant to Section 3.3 of the Purchase
and Sale Agreement; and
Exhibit B-2
(b) The entire remaining unpaid Purchase Price of all Receivables
purchased by the Company from the Originator pursuant to the Purchase and Sale
Agreement shall be due and payable on the Final Maturity Date.
Subject to the Subordination Provisions set forth below, the principal
amount of and accrued interest on this Company Note may be prepaid on any
Business Day without premium or penalty.
7. Payment Mechanics. All payments of principal and interest hereunder are
to be made in lawful money of the United States of America.
8. Enforcement Expenses. In addition to and not in limitation of the
foregoing, but subject to the Subordination Provisions set forth below and to
any limitation imposed by applicable law, the Company agrees to pay all
expenses, including reasonable attorneys' fees and legal expenses, incurred by
the Originator in seeking to collect any amounts payable hereunder which are not
paid when due.
9. Subordination Provisions. The Company covenants and agrees, and the
Originator and any other holder of this Company Note (collectively, the
Originator and any such other holder are called the "Holder"), by its acceptance
of this Company Note, likewise covenants and agrees on behalf of itself and any
holder of this Company Note, that the payment of the principal amount of and
interest on this Company Note is hereby expressly subordinated in right of
payment to the payment and performance of the Senior Interests to the extent and
in the manner set forth in the following clauses of this paragraph 9:
(a) No payment or other distribution of the Company's assets of any
kind or character, whether in cash, securities, or other rights or property,
shall be made on account of this Company Note except to the extent such payment
or other distribution is (i) permitted under paragraph 1(n) of Exhibit IV of the
Receivables Purchase Agreement or (ii) made pursuant to clause (a) or (b) of
paragraph 6 of this Company Note;
(b) In the event of any dissolution, winding up, liquidation,
readjustment, reorganization or other similar event relating to the Company,
whether voluntary or involuntary, partial or complete, and whether in
bankruptcy, insolvency or receivership proceedings, or upon an assignment for
the benefit of creditors, or any other marshalling of the assets and liabilities
of the Company or any sale of all or substantially all of the assets of the
Company other than as permitted by the Purchase and Sale Agreement (such
proceedings being herein collectively called "Bankruptcy Proceedings"), the
Senior Interests shall first be paid and performed in full and in cash before
the Originator shall be entitled to receive and to retain any payment or
distribution in respect of this Company Note. In order to implement the
foregoing during any Bankruptcy Proceeding: (i) all payments and distributions
of any kind or character in respect of this Company Note to which Holder would
be entitled except for this clause (b) shall be made directly to the
Administrator (for the benefit of the Senior Interest Holders); (ii) Holder
shall promptly file a claim or claims, in the form required in any Bankruptcy
Proceedings, for the full outstanding amount of this Company Note, and shall use
commercially reasonable efforts to cause said claim or claims to be approved and
all payments and other distributions in respect thereof to be made directly to
the Administrator (for the benefit of the Senior Interest Holders)
Exhibit B-3
until the Senior Interests shall have been paid and performed in full and in
cash; and (iii) Holder hereby irrevocably agrees that the Issuer (or the
Administrator acting on the Issuer's behalf), in the name of Holder or
otherwise, may demand, sue for, collect, receive and receipt for any and all
such payments or distributions, and file, prove and vote or consent in any such
Bankruptcy Proceedings with respect to any and all claims of Holder relating to
this Company Note, in each case until the Senior Interests shall have been paid
and performed in full and in cash;
(c) In the event that Holder receives any payment or other
distribution of any kind or character from the Company or from any other source
whatsoever, in respect of this Company Note, other than as expressly permitted
by the terms of this Company Note, such payment or other distribution shall be
received in trust for the Senior Interest Holders and shall be turned over by
Holder to the Administrator (for the benefit of the Senior Interest Holders)
forthwith. Holder will mark its books and records so as clearly to indicate that
this Company Note is subordinated in accordance with the terms hereof. All
payments and distributions received by the Administrator in respect of this
Company Note, to the extent received in or converted into cash, may be applied
by the Administrator (for the benefit of the Senior Interest Holders) first to
the payment of any and all expenses (including reasonable attorneys' fees and
legal expenses) paid or incurred by the Senior Interest Holders in enforcing
these Subordination Provisions, or in endeavoring to collect or realize upon
this Company Note, and any balance thereof shall, solely as between the
Originator and the Senior Interest Holders, be applied by the Administrator (in
the order of application set forth in Section 1.4(d)(ii) of the Receivables
Purchase Agreement) toward the payment of the Senior Interests; but as between
the Company and its creditors, no such payments or distributions of any kind or
character shall be deemed to be payments or distributions in respect of the
Senior Interests;
(d) Notwithstanding any payments or distributions received by the
Senior Interest Holders in respect of this Company Note, while any Bankruptcy
Proceedings are pending Holder shall not be subrogated to the then existing
rights of the Senior Interest Holders in respect of the Senior Interests until
the Senior Interests have been paid and performed in full and in cash. If no
Bankruptcy Proceedings are pending, Holder shall only be entitled to exercise
any subrogation rights that it may acquire (by reason of a payment or
distribution to the Senior Interest Holders in respect of this Company Note) to
the extent that any payment arising out of the exercise of such rights would be
permitted under paragraph 1(n) of Exhibit IV of the Receivables Purchase
Agreement;
(e) These Subordination Provisions are intended solely for the
purpose of defining the relative rights of Holder, on the one hand, and the
Senior Interest Holders on the other hand. Nothing contained in these
Subordination Provisions or elsewhere in this Company Note is intended to or
shall impair, as between the Company, its creditors (other than the Senior
Interest Holders) and Holder, the Company's obligation, which is unconditional
and absolute, to pay Holder the principal of and interest on this Company Note
as and when the same shall become due and payable in accordance with the terms
hereof or to affect the relative rights of Holder and creditors of the Company
(other than the Senior Interest Holders);
(f) Holder shall not, until the Senior Interests have been paid and
performed in full and in cash, (i) cancel, waive, forgive, transfer or assign,
or commence legal proceedings to enforce or collect, or subordinate to any
obligation of the Company, howsoever created,
Exhibit B-4
arising or evidenced, whether direct or indirect, absolute or contingent, or now
or hereafter existing, or due or to become due, other than the Senior Interests,
this Company Note or any rights in respect hereof or (ii) convert this Company
Note into an equity interest in the Company, unless Holder shall have received
the prior written consent of the Administrator and the Issuer in each case;
(g) Holder shall not, without the advance written consent of the
Administrator and the Issuer, commence, or join with any other Person in
commencing, any Bankruptcy Proceedings with respect to the Company until at
least one year and one day shall have passed since the Senior Interests shall
have been paid and performed in full and in cash;
(h) If, at any time, any payment (in whole or in part) of any Senior
Interest is rescinded or must be restored or returned by a Senior Interest
Holder (whether in connection with Bankruptcy Proceedings or otherwise), these
Subordination Provisions shall continue to be effective or shall be reinstated,
as the case may be, as though such payment had not been made;
(i) Each of the Senior Interest Holders may, from time to time, at
its sole discretion, without notice to Holder, and without waiving any of its
rights under these Subordination Provisions, take any or all of the following
actions: (i) retain or obtain an interest in any property to secure any of the
Senior Interests; (ii) retain or obtain the primary or secondary obligations of
any other obligor or obligors with respect to any of the Senior Interests; (iii)
extend or renew for one or more periods (whether or not longer than the original
period), alter or exchange any of the Senior Interests, or release or compromise
any obligation of any nature with respect to any of the Senior Interests; (iv)
amend, supplement, amend and restate, or otherwise modify any Transaction
Document; and (v) release its security interest in, or surrender, release or
permit any substitution or exchange for all or any part of any rights or
property securing any of the Senior Interests, or extend or renew for one or
more periods (whether or not longer than the original period), or release,
compromise, alter or exchange any obligations of any nature of any obligor with
respect to any such rights or property;
(j) Holder hereby waives: (i) notice of acceptance of these
Subordination Provisions by any of the Senior Interest Holders; (ii) notice of
the existence, creation, non-payment or non-performance of all or any of the
Senior Interests; and (iii) all diligence in enforcement, collection or
protection of, or realization upon, the Senior Interests, or any thereof, or any
security therefor;
(k) Each of the Senior Interest Holders may, from time to time, on
the terms and subject to the conditions set forth in the Transaction Documents
to which such Persons are party, but without notice to Holder, assign or
transfer any or all of the Senior Interests, or any interest therein; and,
notwithstanding any such assignment or transfer or any subsequent assignment or
transfer thereof, such Senior Interests shall be and remain Senior Interests for
the purposes of these Subordination Provisions, and every immediate and
successive assignee or transferee of any of the Senior Interests or of any
interest of such assignee or transferee in the Senior Interests shall be
entitled to the benefits of these Subordination Provisions to the same extent as
if such assignee or transferee were the assignor or transferor; and
Exhibit B-5
(l) These Subordination Provisions constitute a continuing offer
from the holder of this Company Note to all Persons who become the holders of,
or who continue to hold, Senior Interests; and these Subordination Provisions
are made for the benefit of the Senior Interest Holders, and the Administrator
may proceed to enforce such provisions on behalf of each of such Persons.
10. General. No failure or delay on the part of the Originator in
exercising any power or right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such power or right preclude any
other or further exercise thereof or the exercise of any other power or right.
No amendment, modification or waiver of, or consent with respect to, any
provision of this Company Note shall in any event be effective unless (i) the
same shall be in writing and signed and delivered by the Company and Holder and
(ii) all consents required for such actions under the Transaction Documents
shall have been received by the appropriate Persons.
11. Maximum Interest. Notwithstanding anything in this Company Note to the
contrary, the Company shall never be required to pay unearned interest on any
amount outstanding hereunder and shall never be required to pay interest on the
principal amount outstanding hereunder at a rate in excess of the maximum
interest rate that may be contracted for, charged or received under applicable
federal or state law (such maximum rate being herein called the "Highest Lawful
Rate"). If the effective rate of interest which would otherwise by payable under
this Company Note would exceed the Highest Lawful Rate, or if the holder of this
Company Note shall receive any unearned interest or shall receive monies that
are deemed to constitute interest which would increase the effective rate of
interest payable by the Company under this Company Note to a rate in excess of
the Highest Lawful Rate, then (i) the amount of interest which would otherwise
by payable by the Company under this Company Note shall be reduced to the amount
allowed by applicable law, and (ii) any unearned interest paid by the Company or
any interest paid by the Company in excess of the Highest Lawful Rate shall be
refunded to the Company. Without limitation of the foregoing, all calculations
of the rate of interest contracted for, charged or received by the Originator
under this Company Note that are made for the purpose of determining whether
such rate exceeds the Highest Lawful Rate applicable to the Originator (such
Highest Lawful Rate being herein called the "Originator's Maximum Permissible
Rate") shall be made, to the extent permitted by usury laws applicable to the
Originator (now or hereafter enacted), by amortizing, prorating and spreading in
equal parts during the actual period during which any amount has been
outstanding hereunder all interest at any time contracted for, charged or
received by the Originator in connection herewith. If at any time and from time
to time (i) the amount of interest payable to the Originator on any date shall
be computed at the Originator's Maximum Permissible Rate pursuant to the
provisions of the foregoing sentence and (ii) in respect of any subsequent
interest computation period the amount of interest otherwise payable to the
Originator would be less than the amount of interest payable to the Originator
computed at the Originator's Maximum Permissible Rate, then the amount of
interest payable to the Originator in respect of such subsequent interest
computation period shall continue to be computed at the Originator's Maximum
Permissible Rate until the total amount of interest payable to the Originator
shall equal the total amount of interest which would have been payable to the
Originator if the total amount of interest had been computed without giving
effect to the provisions of the foregoing sentence.
Exhibit B-6
12. No Negotiation. This Company Note is not negotiable except that is may
be assigned to any Affiliate of the Originator.
13. GOVERNING LAW. THIS COMPANY NOTE HAS BEEN DELIVERED IN THE STATE OF
NEW YORK, AND SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE
INTERNAL LAWS OF THE STATE OF NEW YORK.
14. Captions. Paragraph captions used in this Company Note are for
convenience only and shall not affect the meaning or interpretation of any
provision of this Company Note.
[signature page follows]
Exhibit B-7
ENERGY SERVICES FUNDING
CORPORATION
By:________________________________
Name:___________________________
Title:__________________________
Exhibit B-8
Exhibit C
FORM OF ORIGINATOR ASSIGNMENT CERTIFICATE
ORIGINATOR ASSIGNMENT CERTIFICATE
Reference is made to the Purchase and Sale Agreement of even date herewith
(as the same may be amended, supplemented, amended and restated or otherwise
modified from time to time, the "Purchase and Sale Agreement") between the
undersigned and Energy Services Funding Corporation (the "Company"). Unless
otherwise defined herein, capitalized terms used herein have the meanings
provided in the Purchase and Sale Agreement or in Exhibit I to the Receivables
Purchase Agreement (as defined in the Purchase and Sale Agreement), as
applicable.
The undersigned hereby sells, assigns and transfers unto the Company and
its successors and assigns all right, title and interest of the undersigned in
and to:
(a) each Receivable of the undersigned that existed and was owing to
the undersigned as of the Cut-off Date other than Receivables contributed
pursuant to Section 3.1 of the Purchase and Sale Agreement;
(b) each Receivable generated by the undersigned from and including
the Cut-off Date to and including the Purchase and Sale Termination Date
(other than any Receivable later contributed pursuant to the second
sentence of Section 3.1(a) of the Purchase and Sale Agreement);
(c) all rights of the undersigned to, but not the obligations under,
all Related Security;
(d) all monies due or to become due to the undersigned with respect
to any of the foregoing;
(e) all books and records of the undersigned related to any of the
foregoing, and all rights, remedies, powers, privileges, title and
interest of the undersigned in each lock-box and related lock-box address
and account to which Collections are sent, all amounts on deposit therein,
all certificates and instruments, if any, from time to time evidencing
such accounts and amounts on deposit therein, and all related agreements
between the undersigned and each Lock-Box Bank; and
(f) all collections and other proceeds and products of any of the
foregoing (as defined in the applicable UCC) that are or were received by
the undersigned on or after the Cut-off Date, including, without
limitation, all funds which either are received by the undersigned, the
Company or the Servicer from or on behalf of the Obligors in payment of
any amounts owed (including, without limitation, invoice price, finance
charges, interest and all other charges) in respect of Receivables, or are
applied to such amounts owed by the Obligors (including, without
limitation, insurance payments that the undersigned or the Servicer
applies in the ordinary course of its business to amounts
Exhibit C-1
owed in respect of any Receivable, and net proceeds of sale or other disposition
of repossessed goods or other collateral or property of the Obligors in respect
of Receivables or any other parties directly or indirectly liable for payment of
such Receivables).
This Originator Assignment Certificate is made without recourse but on the
terms and subject to the conditions set forth in the Transaction Documents to
which the undersigned is a party. The undersigned acknowledges and agrees that
the Company and its successors and assigns are accepting this Originator
Assignment Certificate in reliance on the representations, warranties and
covenants of the undersigned contained in the Transaction Documents to which the
undersigned is a party.
THIS ORIGINATOR ASSIGNMENT CERTIFICATE SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE PURCHASE AND SALE AGREEMENT AND THE INTERNAL LAWS OF THE
STATE OF NEW YORK.
[signature page follows]
Exhibit C-2
IN WITNESS WHEREOF, the undersigned has caused this Originator Assignment
Certificate to be duly executed and delivered by its duly authorized officer
this ___ day of _____________, 200__.
[ORIGINATOR]
By:________________________________
Name:___________________________
Title:__________________________
Exhibit C-3
Exhibit D
FORM OF JOINDER AGREEMENT
THIS JOINDER AGREEMENT, dated as of ___________, 20__ (this "Agreement")
is executed by__________, a corporation organized under the laws of __________
(the "Additional Seller"), with its principal place of business located at
__________.
BACKGROUND:
A. Energy Services Funding Corporation (the "Buyer") and UGI Energy
Services, Inc. (the "Seller") have entered into that certain Purchase and Sale
Agreement, dated as of November 30, 2001 (as amended through the date hereof,
and as it may be further amended from time to time, the "Purchase and Sale
Agreement").
B. The Additional Seller desires to become a Seller pursuant to Section
4.3 of the Purchase and Sale Agreement.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Additional Seller hereby agrees as follows:
SECTION 1. Definitions. Capitalized terms used in this Agreement and not
otherwise defined herein shall have the meanings assigned thereto in the
Purchase and Sale Agreement or in the Receivables Purchase Agreement (as defined
in the Purchase and Sale Agreement).
SECTION 2. Transaction Documents. The Additional Seller hereby agrees that
it shall be bound by all of the terms, conditions and provisions of, and shall
be deemed to be a party to (as if it were an original signatory to), the
Purchase and Sale Agreement and each of the other relevant Transaction
Documents. From and after the later of the date hereof and the date that the
Additional Seller has complied with all of the requirements of Section 4.3 of
the Purchase and Sale Agreement, the Additional Seller shall be a Seller for all
purposes of the Purchase and Sale Agreement and all other Transaction Documents.
The Additional Seller hereby acknowledges that it has received copies of the
Purchase and Sale Agreement and the other Transaction Documents.
SECTION 3. Representations and Warranties. The Additional Seller hereby
makes all of the representations and warranties set forth in Article V (to the
extent applicable) of the Purchase and Sale Agreement as of the date hereof
(unless such representations or warranties relate to an earlier date, in which
as of such earlier date), as if such representations and warranties were fully
set forth herein. The Additional Seller hereby represents and warrants that the
chief place of business and chief executive office of the Additional Seller, and
the offices where the Additional Seller keeps all of its Records and Related
Security is as follows:
_________________________________
_________________________________
_________________________________
Exhibit D-1
The Additional Seller hereby represents and warrants that it is a
[CORPORATION], [LIMITED LIABILITY COMPANY] [LIMITED PARTNERSHIP] organized in
__________ and its organizational number is ___________________.
SECTION 4. Miscellaneous. This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of New York. This
Agreement is executed by the Additional Seller for the benefit of the Buyer, and
its assigns, and each of the foregoing parties may rely hereon. This Agreement
shall be binding upon, and shall inure to the benefit of, the Additional Seller
and its successors and permitted assigns.
[Signature Page Follows]
Exhibit D-2
IN WITNESS WHEREOF, the undersigned has caused this Agreement to be
executed by its duly authorized officer as of the date and year first above
written.
[NAME OF ADDITIONAL SELLER]
By:________________________________
Name:___________________________
Title:__________________________
Consented to
ENERGY SERVICES FUNDING CORPORATION
By:________________________________
Name:___________________________
Title:__________________________
PNC BANK, NATIONAL ASSOCIATION,
as Administrator
By:________________________________
Name:___________________________
Title:__________________________
Exhibit D-3
TABLE OF CONTENTS
Page
ARTICLE I
AGREEMENT TO PURCHASE AND SELL
SECTION 1.1 Agreement To Purchase and Sell.................................. 1
SECTION 1.2 Timing of Purchases............................................. 2
SECTION 1.3 Consideration for Purchases..................................... 3
SECTION 1.4 Purchase and Sale Termination Date.............................. 3
SECTION 1.5 Intention of the Parties........................................ 3
ARTICLE II
PURCHASE REPORT; CALCULATION OF PURCHASE PRICE
SECTION 2.1 Purchase Report................................................. 3
SECTION 2.2 Calculation of Purchase Price................................... 4
ARTICLE III
PAYMENT OF PURCHASE PRICE
SECTION 3.1 Contribution of Receivables and Initial Purchase Price Payment.. 4
SECTION 3.2 Subsequent Purchase Price Payments.............................. 5
SECTION 3.3 Settlement as to Specific Receivables and Dilution.............. 5
SECTION 3.4 Reconveyance of Receivables..................................... 6
ARTICLE IV
CONDITIONS OF PURCHASES
SECTION 4.1 Conditions Precedent to Initial Purchase........................ 6
SECTION 4.2 Certification as to Representations and Warranties.............. 8
SECTION 4.3 Additional Originators.......................................... 8
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE ORIGINATOR
SECTION 5.1 Organization and Valid Subsistence.............................. 9
SECTION 5.2 Due Qualification............................................... 9
SECTION 5.3 Power and Authority; Due Authorization.......................... 9
SECTION 5.4 Valid Sale; Binding Obligations................................. 9
SECTION 5.5 No Violation.................................................... 9
SECTION 5.6 Proceedings..................................................... 10
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TABLE OF CONTENTS
(continued)
Page
SECTION 5.7 Bulk Sales Acts................................................. 10
SECTION 5.8 Government Approvals............................................ 10
SECTION 5.9 Financial Condition............................................. 10
SECTION 5.10 Licenses, Contingent Liabilities, and Labor Controversies....... 10
SECTION 5.11 Margin Regulations.............................................. 11
SECTION 5.12 Quality of Title................................................ 11
SECTION 5.13 Accuracy of Information......................................... 11
SECTION 5.14 Offices......................................................... 11
SECTION 5.15 Trade Names..................................................... 11
SECTION 5.16 Taxes........................................................... 12
SECTION 5.17 Compliance with Applicable Laws................................. 12
SECTION 5.18 Reliance on Separate Legal Identity............................. 12
SECTION 5.19 Investment Company.............................................. 12
SECTION 5.20 Valid Contracts................................................. 12
ARTICLE VI
COVENANTS OF THE ORIGINATOR
SECTION 6.1 Affirmative Covenants........................................... 12
SECTION 6.2 Reporting Requirements.......................................... 14
SECTION 6.3 Negative Covenants.............................................. 14
SECTION 6.4 Substantive Consolidation....................................... 15
ARTICLE VII
ADDITIONAL RIGHTS AND OBLIGATIONS IN RESPECT OF RECEIVABLES
SECTION 7.1 Rights of the Company........................................... 17
SECTION 7.2 Responsibilities of the Originator.............................. 17
SECTION 7.3 Further Action Evidencing Purchases............................. 18
SECTION 7.4 Application of Collections...................................... 19
ARTICLE VIII
PURCHASE AND SALE TERMINATION EVENTS
SECTION 8.1 Purchase and Sale Termination Events............................ 19
SECTION 8.2 Remedies........................................................ 19
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TABLE OF CONTENTS
(continued)
Page
ARTICLE IX
INDEMNIFICATION
SECTION 9.1 Indemnities by the Originator................................... 20
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Amendments, etc................................................. 21
SECTION 10.2 Notices, etc.................................................... 22
SECTION 10.3 No Waiver; Cumulative Remedies.................................. 22
SECTION 10.4 Binding Effect; Assignability................................... 22
SECTION 10.5 Governing Law................................................... 22
SECTION 10.6 Costs, Expenses and Taxes....................................... 22
SECTION 10.7 SUBMISSION TO JURISDICTION...................................... 23
SECTION 10.8 WAIVER OF JURY TRIAL............................................ 23
SECTION 10.9 Captions and Cross References; Incorporation by Reference....... 23
SECTION 10.10 Execution in Counterparts....................................... 24
SECTION 10.11 Acknowledgment and Agreement.................................... 24
SECTION 10.12 No Proceeding................................................... 24
SECTION 10.13 Limited Recourse................................................ 24
SCHEDULES
Schedule 5.6 Proceedings
Schedule 5.14A Chief Executive Office of the Originator
Schedule 5.14B Location of Books and Records of the Originator
Schedule 5.15 Trade Names
EXHIBITS
Exhibit A Form of Purchase Report
Exhibit B Form of Subordinated Company Note
Exhibit C Form of Originator Assignment Certificate
Exhibit D Form of Joinder Agreement
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