RECEIVABLES PURCHASE AGREEMENT
DATED AS OF APRIL 30, 2003
BY AND AMONG
CNX FUNDING CORPORATION
as Seller
AND
CONSOL ENERGY INC.
as initial Servicer
AND
CONSOL SALES COMPANY, CONSOL OF KENTUCKY INC., CONSOL
PENNSYLVANIA COAL COMPANY, CONSOLIDATION COAL COMPANY, ISLAND
CREEK COAL COMPANY, WINDSOR COAL COMPANY, MCELROY COAL
COMPANY, KEYSTONE COAL MINING CORPORATION,EIGHTY-FOUR MINING
COMPANY, CNX GAS COMPANY LLC, CNX MARINE TERMINALS INC.
as Sub-Servicers
AND
THE CONDUIT PURCHASERS PARTY HERETO
AND
THE CONDUIT AGENTS PARTY HERETO
AND
PNC BANK, NATIONAL ASSOCIATION,
as Administrator
TABLE OF CONTENTS
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Page
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ARTICLE I. AMOUNTS AND TERMS OF THE PURCHASES............................. 1
Section 1.1 Purchase Facility........................................ 1
Section 1.2 Making Purchases......................................... 2
Section 1.3 Purchased Interest Computation........................... 3
Section 1.4 Settlement Procedures.................................... 3
Section 1.5 Fees..................................................... 6
Section 1.6 Payments and Computations, Etc........................... 6
Section 1.7 Increased Costs and Yield Protection..................... 7
Section 1.8 Requirements of Law...................................... 8
Section 1.9 Inability to Determine Euro-Rate......................... 9
ARTICLE II. REPRESENTATIONS AND WARRANTIES; COVENANTS; TERMINATION EVENTS.. 10
Section 2.1 Representations and Warranties; Covenants................ 10
Section 2.2 Termination Events....................................... 10
ARTICLE III. INDEMNIFICATION................................................ 10
Section 3.1 Indemnities by the Seller................................ 10
Section 3.2 Indemnities by the Servicer.............................. 12
Section 3.3 Notice of Claims......................................... 12
ARTICLE IV. ADMINISTRATION AND COLLECTIONS................................. 13
Section 4.1 Appointment of the Servicer.............................. 13
Section 4.2 Duties of the Servicer................................... 14
Section 4.3 Lock-Box Arrangements.................................... 15
Section 4.4 Enforcement Rights....................................... 15
Section 4.5 Responsibilities of the Seller........................... 16
Section 4.6 Servicing Fee............................................ 17
ARTICLE V................................................................... 17
Section 5.1 Appointment and Authorization............................ 17
Section 5.2 Delegation of Duties..................................... 18
Section 5.3 Exculpatory Provisions................................... 18
Section 5.4 Reliance by Administrator................................ 18
Section 5.5 Notice of Termination Events............................. 18
Section 5.6 Non-Reliance on Administrator............................ 19
Section 5.7 Administrator, Conduit Purchasers, Conduit Agents
and Affiliates........................................... 19
Section 5.8 Indemnification.......................................... 19
Section 5.9 Successor Administrator.................................. 20
ARTICLE VI. MISCELLANEOUS.................................................. 21
i
Section 6.1 Amendments, Etc.......................................... 21
Section 6.2 Notices, Etc............................................. 21
Section 6.3 Assignability............................................ 21
Section 6.4 Costs, Expenses and Taxes................................ 23
Section 6.5 No Proceedings; Limitation on Payments................... 24
Section 6.6 Confidentiality.......................................... 24
Section 6.7 GOVERNING LAW AND JURISDICTION........................... 24
Section 6.8 Execution in Counterparts................................ 25
Section 6.9 Survival of Termination.................................. 25
Section 6.10 WAIVER OF JURY TRIAL..................................... 25
Section 6.11 Entire Agreement......................................... 25
Section 6.12 Headings................................................. 26
Section 6.13 Conduit Purchasers' and Conduit Agents' Liabilities...... 26
EXHIBIT I DEFINITIONS........................................................
EXHIBIT II CONDITIONS OF PURCHASES............................................
EXHIBIT III REPRESENTATIONS AND WARRANTIES.....................................
EXHIBIT IV COVENANTS..........................................................
EXHIBIT V TERMINATION EVENTS.................................................
SCHEDULE I CREDIT AND COLLECTION POLICY.......................................
SCHEDULE II LOCK-BOX BANKS AND LOCK-BOX ACCOUNTS...............................
SCHEDULE III TRADE NAMES........................................................
SCHEDULE IV OFFICE LOCATIONS...................................................
SCHEDULE V CONDUIT PURCHASERS, CONDUIT AGENTS, ETC. ..........................
ANNEX A FORM OF INFORMATION PACKAGE.............................................
ANNEX B FORM OF PURCHASE NOTICE.................................................
ANNEX C FORM OF PAYDOWN NOTICE..................................................
ANNEX D FORM OF COMPLIANCE CERTIFICATE..........................................
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This RECEIVABLES PURCHASE AGREEMENT (as amended, supplemented or otherwise
modified from time to time, this "Agreement") is entered into as of April 30,
2003, by and among CNX FUNDING CORPORATION, a Delaware corporation, as seller
(the "Seller"), CONSOL ENERGY INC., a Delaware corporation ("CONSOL Energy"), as
initial servicer (in such capacity, together with its successors and permitted
assigns in such capacity, the "Servicer"), CONSOL SALES COMPANY, a Delaware
corporation, CONSOL OF KENTUCKY INC., a Delaware corporation, CONSOL
PENNSYLVANIA COAL COMPANY, a Delaware corporation, CONSOLIDATION COAL COMPANY, a
Delaware corporation, ISLAND CREEK COAL COMPANY, a Delaware corporation, WINDSOR
COAL COMPANY, a West Virginia corporation, MCELROY COAL COMPANY, a Delaware
corporation, KEYSTONE COAL MINING CORPORATION, a Pennsylvania corporation,
EIGHTY-FOUR MINING COMPANY, a Pennsylvania corporation, CNX MARINE TERMINALS
INC., a Delaware corporation, CNX GAS COMPANY LLC, a Virginia limited liability
company (each a "Sub-Servicer" and collectively, the "Sub-Servicers"), the
CONDUIT PURCHASERS PARTY HERETO (each, as set forth in Schedule V hereto, a
"Conduit Purchaser"), the CONDUIT AGENTS PARTY HERETO (each, as set forth in
Schedule V hereto, a "Conduit Agent"), and PNC BANK, NATIONAL ASSOCIATION, a
national banking association ("PNC"), as Conduit Agent for Market Street, and as
administrator for the Conduit Purchasers (in such capacity, together with its
successors and assigns in such capacity, the "Administrator").
PRELIMINARY STATEMENTS. Certain terms that are capitalized and used
throughout this Agreement are defined in Exhibit I. References in the Exhibits
hereto to the "Agreement" refer to this Agreement.
The Seller desires to sell, transfer and assign an undivided variable
percentage interest in a pool of receivables, and the Conduit Purchasers desire
to acquire such undivided variable percentage interest, as such percentage
interest shall be adjusted from time to time based upon, in part, reinvestment
payments that are made by the Conduit Purchasers.
In consideration of the mutual agreements, provisions and covenants
contained herein, the parties hereto agree as follows:
ARTICLE I.
AMOUNTS AND TERMS OF THE PURCHASES
Section 1.1 Purchase Facility.
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(a) On the terms and conditions hereinafter set forth, each Conduit
Purchaser hereby agrees to purchase, and make reinvestments of, undivided
percentage ownership interests with regard to the Purchased Interest from the
Seller from time to time from the date hereof to the Facility Termination Date
to the extent that, for each Conduit Purchaser, such purchase or reinvestment
would not exceed its respective commitment set forth in Schedule V hereto, and
after giving effect to all such purchases or reinvestments for all Conduit
Purchasers on such date, the aggregate outstanding Capital of the Purchased
Interest would exceed the Purchase Limit.
(b) The Seller may, upon at least 60 days' written notice to the
Administrator, terminate the purchase facility provided in this Section in whole
or, upon at least 30 days' written notice to the Administrator, from time to
time, irrevocably reduce in part the unused portion of the Purchase Limit;
provided, that each partial reduction shall be in the amount of at least
$5,000,000, or an integral multiple of $1,000,000 in excess thereof, and that,
unless terminated in whole, the Purchase Limit shall in no event be reduced
below $50,000,000.
Section 1.2 Making Purchases.
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(a) Each purchase (but not reinvestment) of undivided percentage ownership
interests with regard to the Purchased Interest hereunder shall be made upon the
Seller's irrevocable written notice in the form of Annex B (the "Purchase
Notice") delivered to the Administrator and each Conduit Agent in accordance
with Section 5.2 (which notice must be received by the Administrator and each
Conduit Agent before 11:00 a.m., New York City time) at least two Business Days
before the requested purchase date, which notice shall specify: (A) the amount
requested to be paid to the Seller with respect to each Conduit Purchaser (such
amount, which shall not be less than $250,000 for each Conduit Purchaser and
shall be in integral multiples of $100,000 in the aggregate, being the Capital
relating to the undivided percentage ownership interest then being purchased by
such Conduit Purchaser), (B) the date of such purchase (which shall be a
Business Day), and (C) the pro forma calculation of the Purchased Interest after
giving effect to the increase in Capital.
(b) On the date of each purchase (but not reinvestment) of undivided
percentage ownership interests with regard to the Purchased Interest hereunder,
each Conduit Purchaser (or the related Conduit Agent on its behalf) shall, upon
satisfaction of the applicable conditions set forth in Exhibit II, make
available to the Seller in same day funds, at PNC Bank, National Association,
account number 1017289343, ABA 043000096 or any other account designated by the
Seller, an amount equal to its Capital relating to the undivided percentage
ownership interest then being purchased.
(c) Effective on the date of each purchase pursuant to this Section and
each reinvestment pursuant to Section 1.4, the Seller hereby sells and assigns
to the Administrator (for the benefit of the Conduit Purchasers, to the extent
of each such Conduit Purchaser's undivided percentage ownership interest) an
undivided percentage ownership interest in: (i) each Pool Receivable then
existing, (ii) all Related Security with respect to such Pool Receivables, and
(iii) all Collections with respect to, and other proceeds of, such Pool
Receivables and Related Security.
(d) To secure all of the Seller's obligations (monetary or otherwise)
under this Agreement and the other Transaction Documents to which it is a party,
whether now or hereafter existing or arising, due or to become due, direct or
indirect, absolute or contingent, the Seller hereby grants to the Administrator
for the benefit of the Conduit Purchasers a security interest in all of the
Seller's right, title and interest (including any undivided interest of the
Seller) in, to and under all of the following, whether now or hereafter owned,
existing or arising: (i) all Pool
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Receivables, (ii) all Related Security with respect to such Pool Receivables,
(iii) all Collections with respect to such Pool Receivables, (iv) the Lock-Box
Accounts and all amounts on deposit therein, and all certificates and
instruments, if any, from time to time evidencing such Lock-Box Accounts and
amounts on deposit therein, (v) all rights (but none of the obligations) of the
Seller under the Sale Agreement and the CONSOL Guaranty, and (vi) all proceeds
of, and all amounts received or receivable under any or all of, the foregoing
(collectively, the "Pool Assets"). The Administrator, for the benefit of the
Conduit Purchasers, shall have, with respect to the Pool Assets, and in addition
to all the other rights and remedies available to the Administrator and the
Conduit Purchasers, all the rights and remedies of a secured party under any
applicable UCC.
Section 1.3 Purchased Interest Computation.
------------------------------
The Purchased Interest shall be initially computed on the date of the
initial purchase hereunder. Thereafter, until the Facility Termination Date, the
Purchased Interest shall be automatically recomputed (or deemed to be
recomputed) on each Business Day other than a Termination Day. The Purchased
Interest as computed (or deemed recomputed) as of the day before the Facility
Termination Date shall thereafter remain constant. The Purchased Interest shall
become zero when the Capital thereof and Discount thereon shall have been paid
in full, all the amounts owed by the Seller or the Servicer hereunder to each
Conduit Purchaser, the Administrator and any other Indemnified Party or Affected
Person are paid in full, and the Servicer shall have received the accrued
Servicing Fee thereon.
Section 1.4 Settlement Procedures.
---------------------
(a) The collection of the Pool Receivables shall be administered by the
Servicer in accordance with this Agreement. The Seller shall provide to the
Servicer on a timely basis all information needed for such administration,
including notice of the occurrence of any Termination Day and current
computations of the Purchased Interest.
(b) The Servicer shall, on each day on which Collections of Pool
Receivables are received (or deemed received) by the Seller or the Servicer:
(i) set aside and hold in trust (and shall, at the request
of the Administrator, segregate in a separate account approved by the
Administrator) for each Conduit Purchaser, out of the Conduit Purchasers' Share
of such Collections, first, an amount equal to the Conduit Purchasers' aggregate
amount of Discount accrued through such day for each Portion of Capital and not
previously set aside, second, an amount equal to the fees set forth in the Fee
Letters accrued and unpaid through such day, and third, to the extent funds are
available therefor, an amount equal to the Conduit Purchasers' Share of the
Servicing Fee accrued through such day and not previously set aside,
(ii) subject to Section 1.4(f), if such day is not a
Termination Day, remit to the Seller, on behalf of the Conduit Purchasers, the
remainder of the Conduit Purchasers' Share of such Collections. Such remainder
shall be automatically reinvested in Pool Receivables, and in the Related
Security, Collections and other proceeds with respect thereto; provided,
however, that if the Purchased Interest would exceed 100%, then the Servicer
shall not reinvest, but shall set aside and hold in trust for each Conduit
Purchaser (and shall, at the request
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of the Administrator, segregate in a separate account approved by the
Administrator) a portion of such Collections that, together with the other
Collections set aside pursuant to this paragraph, shall equal the amount
necessary to reduce the Purchased Interest to 100%,
(iii) if such day is a Termination Day, set aside, segregate
and hold in trust (and shall, at the request of the Administrator, segregate in
a separate account approved by the Administrator) for the Conduit Purchasers the
entire remainder of the Conduit Purchasers' Share of the Collections; provided,
that if amounts are set aside and held in trust on any Termination Day of the
type described in clause (a) of the definition of "Termination Day" and,
thereafter, the conditions set forth in Section 2 of Exhibit II are satisfied or
waived by the Administrator, such previously set-aside amounts shall be
reinvested in accordance with clause (ii) on the day of such subsequent
satisfaction or waiver of conditions, and
(iv) release to the Seller (subject to Section 1.4(f)) for
its own account any Collections in excess of: (x) amounts required to be
reinvested in accordance with clause (ii) or the proviso to clause (iii) plus
(y) the amounts that are required to be set aside pursuant to clause (i), the
proviso to clause (ii) and clause (iii) plus (z) the Seller's Share of the
Servicing Fee accrued and unpaid through such day .
(c) The Servicer shall deposit into each Conduit Purchaser's account (or
such other account designated by such Conduit Purchaser), on each Settlement
Date, Collections held for such Conduit Purchaser pursuant to clause (b)(i) or
(f) plus the amount of Collections then held for such Conduit Purchaser pursuant
to clauses (b)(ii) and (iii) of Section 1.4; provided, that if CONSOL Energy or
an Affiliate thereof is the Servicer, such day is not a Termination Day and the
Administrator has not notified CONSOL Energy (or such Affiliate) that such right
is revoked, CONSOL Energy (or such Affiliate) may retain the portion of the
Collections set aside pursuant to clause (b)(i) that represents the Conduit
Purchasers' Share of the Servicing Fee. On the last day of each Settlement
Period, the Conduit Purchasers will each notify the Servicer by facsimile of the
amount of Discount accrued with respect to each Portion of Capital during such
Settlement Period or portion thereof.
(d) Upon receipt of funds deposited pursuant to clause (c), each Conduit
Purchaser shall cause such funds to be distributed as follows:
(i) if such distribution occurs on a day that is not a
Termination Day and the Purchased Interest does not exceed 100%, first to such
Conduit Purchaser in payment in full of all accrued Discount and fees (other
than Servicing Fees) with respect to such Conduit Purchaser's Portion of
Capital, and second, if the Servicer has set aside amounts in respect of the
Servicing Fee pursuant to clause (b)(i) and has not retained such amounts
pursuant to clause (c), to the Servicer (payable in arrears on each Settlement
Date) in payment in full of such Conduit Purchaser's percentage interest of
accrued Servicing Fees so set aside, and
(ii) if such distribution occurs on a Termination Day or on a
day when the Purchased Interest exceeds 100%, first to such Conduit Purchaser in
payment in full of all accrued Discount with respect to such Conduit Purchaser's
percentage interest of Capital, second to such Conduit Purchaser in payment in
full of such Conduit Purchaser's percentage interest of Capital (or, if such day
is not a Termination Day, such Conduit Purchaser's percentage interest of
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the amount necessary to reduce the Purchased Interest to 100%), third, to the
Servicer in payment in full of such Conduit Purchaser's percentage interest of
all accrued Servicing Fees, and fourth, if the Capital and accrued Discount with
respect to each Conduit Purchaser's percentage interest of Capital have been
reduced to zero, and all accrued Servicing Fees payable to the Servicer have
been paid in full, to the Conduit Purchasers, the Administrator and any other
Indemnified Party or Affected Person in payment in full of any other amounts
owed thereto by the Seller hereunder.
After the Capital, Discount, fees payable pursuant to the Fee Letters and
Servicing Fees with respect to the Purchased Interest, and any other amounts
payable by the Seller and the Servicer to the Conduit Purchasers, the
Administrator or any other Indemnified Party or Affected Person hereunder, have
been paid in full, all additional Collections with respect to the Purchased
Interest shall be paid to the Seller for its own account.
(e) For the purposes of this Section 1.4:
(i) if on any day the Outstanding Balance of any Pool
Receivable is reduced or adjusted as a result of any defective, rejected,
returned, repossessed or foreclosed goods or services, or any revision,
cancellation, allowance, rebate, discount or other adjustment made by the Seller
or any Affiliate of the Seller, or any setoff or dispute between the Seller or
any Affiliate of the Seller and an Obligor, the Seller shall be deemed to have
received on such day a Collection of such Pool Receivable in the amount of such
reduction or adjustment;
(ii) if on any day any of the representations or warranties
in Section l(g) or (n) of Exhibit III is not true with respect to any Pool
Receivable, the Seller shall be deemed to have received on such day a Collection
of such Pool Receivable in full;
(iii) except as provided in clause (i) or (ii), or as
otherwise required by applicable law or the relevant Contract, all Collections
received from an Obligor of any Receivable shall be applied to the Receivables
of such Obligor in the order of the age of such Receivables, starting with the
oldest such Receivable, unless such Obligor designates in writing its payment
for application to specific Receivables; and
(iv) if and to the extent the Administrator or any Conduit
Purchaser shall be required for any reason to pay over to an Obligor (or any
trustee, receiver, custodian or similar official in any Insolvency Proceeding)
any amount received by it hereunder, such amount shall be deemed not to have
been so received by the Administrator or such Conduit Purchaser but rather to
have been retained by the Seller and, accordingly, the Administrator or such
Conduit Purchaser, as the case may be, shall have a claim against the Seller for
such amount, payable when and to the extent that any distribution from or on
behalf of such Obligor is made in respect thereof
(f) If at any time the Seller shall wish to cause the reduction of Capital
(but not to commence the liquidation, or reduction to zero, of the entire
Capital of the Purchased Interest), the Seller may do so as follows:
(i) the Seller shall give the Administrator, the Conduit
Agents and the Servicer written notice in the form of Annex C (the "Paydown
Notice") (A) at least two
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Business Days prior to the date of such reduction for any reduction of Capital
less than or equal to $20,000,000 and (B) at least five (5) Business Days' prior
to the date of such reduction for any reduction of Capital greater than
$20,000,000;
(ii) On the proposed date of the commencement of such
reduction and on each day thereafter, the Servicer shall cause Collections not
to be reinvested until the amount thereof not so reinvested shall equal the
desired amount of reduction; and
(iii) the Servicer shall hold such Collections in trust for
the Conduit Purchasers, for payment to the Conduit Agents on the next Settlement
Date immediately following the current Settlement Period or such other date
approved by the Conduit Agents, and Capital shall be deemed reduced in the
amount to be paid to the Conduit Agents only when in fact finally so paid;
provided, that the amount of any such reduction shall be not less than $300,000
and shall be an integral multiple of $100,000, and the entire Capital of the
Purchased Interest after giving effect to such reduction shall be not less than
$20,000,000 and shall be in an integral multiple of $100,000.
Section 1.5 Fees.
----
The Seller shall pay to the Administrator and the Conduit Purchasers
certain fees in the amounts and on the dates set forth in certain fee letters,
among (i) CONSOL Energy, the Seller and the Administrator dated the date hereof,
and (ii) CONSOL Energy, the Seller, and each Conduit Purchaser other than Market
Street dated as of the date such Conduit Purchaser becomes party to this
Agreement (as such letter agreements may be amended, supplemented or otherwise
modified from time to time, the "Fee Letters").
Section 1.6 Payments and Computations, Etc.
------------------------------
(a) All amounts to be paid or deposited by the Seller or the Servicer
hereunder shall he made without reduction for offset or counterclaim and shall
be paid or deposited no later than noon, New York City, New York time on the day
when due in same day funds to each Conduit Purchaser's account. All amounts
received after noon, New York City, New York time, will be deemed to have been
received on the next Business Day.
(b) The Seller or the Servicer, as the case may be, shall, to the extent
permitted by applicable law, pay interest on any amount not paid or deposited by
the Seller or the Servicer, as the case may be, when due hereunder, at an
interest rate equal to 2.0% per annum above the Base Rate, payable on demand.
(c) All computations of interest under clause (b) and all computations of
Discount, fees and other amounts hereunder shall be made on the basis of a year
of 360 (or 365 or 366, as applicable, with respect to Discount or other amounts
calculated by reference to the Base Rate) days for the actual number of days
elapsed. Whenever any payment or deposit to be made hereunder shall be due on a
day other than a Business Day, such payment or deposit shall be made on the next
Business Day and such extension of time shall be included in the computation of
such payment or deposit.
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Section 1.7 Increased Costs and Yield Protection.
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(a) If the Administrator, any Conduit Purchaser, any Conduit Agent, any
Purchaser, any other Program Support Provider or any of their respective
Affiliates (each an "Affected Person") reasonably determines that the existence
of or compliance with: (i) FIN 46 and Subsequent Statements and Interpretations
described in Section 1.7(c) below, (ii) any other law, regulation or generally
accepted accounting principle or any change therein or in the interpretation or
application thereof by a Governmental Authority or other applicable Person
charged with or having the responsibility or authority to make such
interpretations or applications, in each case adopted, issued or occurring after
the date hereof, or (iii) any request, guideline or directive from any central
bank or other Governmental Authority (whether or not having the force of law)
issued or occurring after the date of this Agreement, affects or would affect
the amount of capital required or expected to be maintained by such Affected
Person, and such Affected Person reasonably determines that the amount of such
capital is increased by or based upon the existence of any commitment to make
purchases of (or otherwise to maintain the investment in) Pool Receivables
related to this Agreement or any related liquidity facility, credit enhancement
facility and other commitments of the same type, then, upon demand by such
Affected Person (with a copy to the Administrator and the Conduit Agents), the
Seller shall promptly pay to such Affected Person, from time to time as
specified by such Affected Person, additional amounts sufficient to compensate
such Affected Person for both increased costs and maintenance of bargained for
yield in the light of such circumstances, to the extent that such Affected
Person reasonably determines such increase in capital to be allocable to the
existence of any of such commitments. A certificate as to such amounts submitted
to the Seller, the Administrator and the Conduit Agents by such Affected Person
shall be conclusive and binding for all purposes, absent manifest error. The
Affected Person shall use reasonable efforts to notify the Seller, orally or in
writing, of any event described in clauses (ii) or (iii) above (Seller is aware
of FIN 46 and Subsequent Statements and the Interpretations described in clause
(i) above and in Section 1.7(c) below) that appears likely to result in a claim
for compensation (for increased costs or maintenance of bargained for yield)
under this Section promptly after the Affected Person learns of such an event
and that it will have adverse implications upon such Affected Person, provided
that any failure to give such notice shall not preclude such Affected Person
from asserting such a claim for compensation at any time.
(b) If, due to either: (i) FIN 46 and Subsequent Statements and
Interpretations, (ii) the introduction of or any change in or in the
interpretation by a Governmental Authority or other applicable Person charged
with or having the responsibility or authority to make such changes or
interpretations after the date hereof of any other law, regulation or generally
accepted accounting standard or (iii) compliance with any guideline or request
from any central bank or other Governmental Authority (whether or not having the
force of law), there shall be any increase in the cost to any Affected Person of
agreeing to purchase or purchasing, or maintaining the ownership of, the
Purchased Interest in respect of which Discount is computed by reference to the
Euro-Rate, then, upon demand by such Affected Person (with a copy to the
Administrator and the Conduit Agents), the Seller shall promptly pay to such
Affected Person, from time to time as specified by such Affected Person,
additional amounts sufficient to compensate such Affected Person for both
increased costs and maintenance of bargained for yield. A certificate as to such
amounts submitted to the Seller, the Administrator and the Conduit Agents by
such Affected Person shall be conclusive and binding for all purposes, absent
manifest error.
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(c) For avoidance of doubt any increase in cost and/or reduction in yield
caused by regulatory capital allocation adjustments due to Financial Accounting
Standards Board's Interpretation 46 (or any future statement or interpretation
issued by the Financial Accounting Standards Board or any successor thereto)
(collectively, the "FIN 46 and Subsequent Statements and Interpretations") shall
be covered by this Section 1.7.
(d) If such increased costs affect the related Affected Person's
portfolio of financing transactions, such Affected Person shall use reasonable
averaging and attribution methods to allocate such increased costs to the
transactions contemplated by this Agreement.
(e) The Administrator and the Conduit Agents will make reasonable efforts
to cause the interest of any Affected Party (other than PNC (in its capacity as
Administrator, a Conduit Agent, a Purchaser, a Program Support Provider or
otherwise), Market Street or any of their Affiliates) that makes a claim under
this Section 1.7 to be transferred to a party that is not subject to increased
costs under this Section 1.7; provided that neither PNC nor any of its
Affiliates shall be required hereunder to itself accept such transferred
interest.
(f) Notwithstanding any language in this Section 1.7 to the contrary,
nothing in this Section 1.7 shall be construed as requiring the Seller to make
any payments attributable to or in respect of any net income, gross receipts,
franchise or similar taxes imposed upon any Affected Person or taxes required to
be withheld or deducted from any payments to any Affected Person; provided,
however, that the Seller shall be obligated to compensate an Affected Person for
any additional taxes attributable directly to any increase in capital required
or expected to be maintained as a result of an event described in any of clauses
(i) through (iii) in subsection (a), and provided further that any increase in
payments pursuant to this Section 1.7 shall be taken into account in determining
any obligation of the Seller under Sections 1.8 and 3.1.
Section 1.8 Requirements of Law.
-------------------
If any Affected Person reasonably determines that the existence of or
compliance with: (a) any law or regulation or any change therein or in the
interpretation or application thereof, in each case adopted, issued or occurring
after the date hereof, or (b) any request, guideline or directive from any
central bank or other Governmental Authority (whether or not having the force of
law) issued or occurring after the date of this Agreement:
(i) does or shall subject such Affected Person to any tax of
any kind whatsoever with respect to this Agreement, any increase in the
Purchased Interest or in the amount of Capital relating thereto, or does or
shall change the basis of taxation of payments to such Affected Person on
account of Collections, Discount or any other amounts payable hereunder
(excluding (A) taxes imposed on the overall or branch pre-tax net income or
gross receipts of such Affected Person, (B) backup withholding or other advance
payments of the taxes described in (A), and (C) franchise taxes imposed on such
Affected Person),
(ii) does or shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement against assets
held by, or deposits or other liabilities in or for the account of, purchases,
advances or loans by, or other credit extended by, or any other acquisition of
funds by, any office of such Affected Person that are not otherwise included in
the determination of the Euro-Rate or the Base Rate hereunder, or
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(iii) does or shall impose on such Affected Person any other
condition, and the result of any of the foregoing is: (A) to increase the cost
to such Affected Person of acting as Administrator, or of agreeing to purchase
or purchasing or maintaining the ownership of undivided percentage ownership
interests with regard to the Purchased Interest (or interests therein) or any
Portion of Capital, or (B) to reduce any amount receivable hereunder (whether
directly or indirectly), then, in any such case, upon demand by such Affected
Person (with a copy to the Administrator and the Conduit Agents), and subject to
Section 5.3(f) hereof, the Seller shall promptly pay to such Affected Person
additional amounts necessary to compensate such Affected Person for such
additional cost or reduced amount receivable. All such amounts shall be payable
as incurred. A certificate from such Affected Person to the Seller, the
Administrator and the Conduit Agents certifying, in reasonably specific detail,
the basis for, calculation of, and amount of such additional costs or reduced
amount receivable shall be conclusive and binding for all purposes, absent
manifest error; provided, however, that no Affected Person shall be required to
disclose any confidential or tax planning information in any such certificate.
Section 1.9 Inability to Determine Euro-Rate.
--------------------------------
(a) If the Administrator determines before the first day of any Settlement
Period (which determination shall be final and conclusive) that, by reason of
circumstances affecting the interbank eurodollar market generally, deposits in
dollars (in the relevant amounts for such Settlement Period) are not being
offered to banks in the interbank eurodollar market for such Settlement Period,
or adequate means do not exist for ascertaining the Euro-Rate for such
Settlement Period, then the Administrator shall give notice thereof to the
Seller. Thereafter, until the Administrator notifies the Seller that the
circumstances giving rise to such suspension no longer exist, (a) no Portion of
Capital shall be funded at the Alternate Rate determined by reference to the
Euro-Rate and (b) the Discount for any outstanding Portions of Capital then
funded at the Alternate Rate determined by reference to the Euro-Rate shall, on
the last day of the then current Settlement Period, be converted to the
Alternate Rate determined by reference to the Base Rate.
(b) If, on or before the first day of any Settlement Period, the
Administrator shall have been notified by any Purchaser that such Purchaser has
determined (which determination shall be final and conclusive) that any
enactment, promulgation or adoption of or any change in any applicable law, rule
or regulation, or any change in the interpretation or administration thereof by
a governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by such Purchaser with
any guideline, request or directive (whether or not having the force of law) of
any such authority, central bank or comparable agency shall make it unlawful or
impossible for such Purchaser to fund or maintain any Portion of Capital at the
Alternate Rate and based upon the Euro-Rate, the Administrator shall notify the
Seller thereof. Upon receipt of such notice, until the Administrator notifies
the Seller that the circumstances giving rise to such determination no longer
apply, (a) no Portion of Capital shall be funded at the Alternate Rate
determined by reference to the Euro-Rate and (b) the Discount for any
outstanding Portions of Capital then funded at the Alternate Rate determined by
reference to the Euro-Rate shall be converted to the Alternate Rate determined
by reference to the Base Rate either (i) on the last day of the then current
Settlement Period if such
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Purchaser may lawfully continue to maintain such Portion of Capital at the
Alternate Rate determined by reference to the Euro-Rate to such day, or (ii)
immediately, if such Purchaser may not lawfully continue to maintain such
Portion of Capital at the Alternate Rate determined by reference to the
Euro-Rate to such day.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES; COVENANTS; TERMINATION EVENTS
Section 2.1 Representations and Warranties; Covenants.
-----------------------------------------
Each of the Seller, CONSOL Energy and the Servicer hereby makes the
representations and warranties, and hereby agrees to perform and observe the
covenants, applicable to it set forth in Exhibits III and IV, respectively.
Section 2.2 Termination Events.
------------------
If any of the Termination Events set forth in Exhibit V shall occur, the
Administrator may, by notice to the Seller, declare the Facility Termination
Date to have occurred (in which case the Facility Termination Date shall be
deemed to have occurred); provided, that automatically upon the occurrence of
any event (without any requirement for the passage of time or the giving of
notice) described in paragraph (f) of Exhibit V, the Facility Termination Date
shall occur. Upon any such declaration, occurrence or deemed occurrence of the
Facility Termination Date, each Conduit Purchaser and the Administrator shall
have, in addition to the rights and remedies that they may have under this
Agreement, all other rights and remedies provided after default under the New
York UCC and under other applicable law, which rights and remedies shall be
cumulative.
ARTICLE III.
INDEMNIFICATION
Section 3.1 Indemnities by the Seller.
-------------------------
Without limiting any other rights that the Administrator, any Conduit
Purchaser, any Program Support Provider or any of their respective Affiliates,
employees, officers, directors, agents, counsel, successors, transferees or
assigns (each, an "Indemnified Party") may have hereunder or under applicable
law, the Seller hereby agrees to indemnify each Indemnified Party from and
against any and all claims, damages, expenses, costs, losses and liabilities
(including Attorney Costs) (all of the foregoing being collectively referred to
as "Indemnified Amounts") arising out of or resulting from this Agreement
(whether directly or indirectly), the use of proceeds of purchases or
reinvestments, the ownership of the Purchased Interest, or any interest therein,
or in respect of any Receivable, Related Security or Contract, excluding,
however: (a) Indemnified Amounts to the extent resulting from gross negligence
or willful misconduct on the part of such Indemnified Party or its employees,
officers, directors, agents or counsel, (b) any indemnification which has the
effect of recourse for the non-payment of the Receivables to any indemnitor
(except as otherwise specifically provided under Section 1.4 (e) and this
Section 3.1) for Receivables, or (c) any net income, gross receipts, franchise
or similar taxes imposed on such
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Indemnified Party for taxes required to be withheld or deducted from any
payments to an Indemnified Party or to any Person through which the Indemnified
Party or an affiliate of an Indemnified Party holds a direct or indirect right
to payment. Notwithstanding clause (c) above and clause (ii) of Section 6.3(f)
hereof, payments under this Section 3.1 shall be reduced by tax benefits to the
Indemnified Party and its affiliates resulting from the Indemnified Amounts and
the indemnity payment to be made pursuant to this Section 3.1 and shall be
increased to reflect increased tax liability arising from the indemnity payment
to be made pursuant to this Section 3.1 . Without limiting or being limited by
the foregoing, and subject to the exclusions set forth in the preceding
sentence, the Seller shall pay on demand (which demand shall be accompanied by
documentation of the Indemnified Amounts, in reasonable detail) to each
Indemnified Party any and all amounts necessary to indemnify such Indemnified
Party from and against any and all Indemnified Amounts relating to or resulting
from any of the following:
(i) the failure of any Receivable included in the
calculation of the Net Receivables Pool Balance as an Eligible Receivable to be
an Eligible Receivable, the failure of any information contained in an
Information Package to be true and correct, or the failure of any other
information provided to the Conduit Purchasers or the Administrator with respect
to Receivables or this Agreement to be true and correct,
(ii) the failure of any representation or warranty made or
deemed made by the Seller (or any of its officers) under this Agreement or any
other Loan Documents to have been true and correct as of the date made in all
respects when made,
(iii) the failure by the Seller to comply with any applicable
law, rule or regulation with respect to any Pool Receivable or the related
Contract, or the failure of any Pool Receivable or the related Contract to
conform to any such applicable law, rule or regulation,
(iv) the failure to vest in the Administrator a valid and
enforceable: (A) perfected undivided percentage ownership interest, to the
extent of the Purchased Interest, in the Receivables in, or purporting to be in,
the Receivables Pool and the other Pool Assets, or (B) first priority perfected
security interest in the Pool Assets, in each case, free and clear of any
Adverse Claim,
(v) the failure to have filed, or any delay in filing,
financing statements or other similar instruments or documents under the UCC of
any applicable jurisdiction or other applicable laws with respect to any
Receivables in, or purporting to be in, the Receivables Pool and the other Pool
Assets, whether at the time of any purchase or reinvestment or at any subsequent
time,
(vi) any dispute, claim, offset or defense (other than
discharge in bankruptcy of the Obligor) of the Obligor to the payment of any
Receivable in, or purporting to be in, the Receivables Pool (including a defense
based on such Receivable or the related Contract not being a legal, valid and
binding obligation of such Obligor enforceable against it in accordance with its
terms), or any other claim resulting from the sale of the goods or services
related to such Receivable or the furnishing or failure to furnish such goods or
services or relating to collection activities with respect to such Receivable
(if such collection activities were
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performed by the Seller or any of its Affiliates acting as Servicer or by any
agent or independent contractor retained by the Seller or any of its
Affiliates),
(vii) any failure of the Seller (or any of its Affiliates
acting as the Servicer) to perform its duties or obligations in accordance with
the provisions hereof or under the Contracts,
(viii) any products liability or other claim, investigation,
litigation or proceeding arising out of or in connection with merchandise,
insurance or services that are the subject of any Contract,
(ix) the commingling of Collections at any time with other
funds,
(x) the use of proceeds of purchases or reinvestments by the
Seller or Servicer, or
(xi) any reduction in Capital as a result of the distribution
of Collections pursuant to Section 1.4(d), if all or a portion of such
distributions shall thereafter be rescinded or otherwise must be returned for
any reason.
Section 3.2 Indemnities by the Servicer.
---------------------------
Without limiting any other rights that the Administrator, any Conduit
Purchaser or any other Indemnified Party may have hereunder or under applicable
law, the Servicer hereby agrees to indemnify each Indemnified Party from and
against any and all Indemnified Amounts arising out of or resulting from
(whether directly or indirectly): (a) the failure of any information contained
in an Information Package to be true and correct, or the failure of any other
information provided to any Conduit Purchaser or the Administrator by, or on
behalf of, the Servicer to be true and correct, (b) the failure of any
representation, warranty or statement made by the Servicer (or any of its
officers) under or in connection with this Agreement to have been true and
correct as of the date made in all respects when made, (c) the failure by the
Servicer to comply with any applicable law, rule or regulation with respect to
any Pool Receivable or the related Contract, (d) any dispute, claim, offset or
defense (other than as a result of discharge in bankruptcy with respect to the
Obligor) of the Obligor to the payment of any Receivable in, or purporting to be
in, the Receivables Pool resulting from or related to the collection activities
with respect to such Receivable, or (e) any failure of the Servicer to perform
its duties or obligations in accordance with the provisions hereof.
Section 3.3 Notice of Claims.
----------------
Promptly after the receipt by an Indemnified Party of a notice of the
commencement of any action, suit, proceeding, investigation or claim against
such Indemnified Party as to which it proposes to demand indemnification from
the Seller or Servicer (each, as applicable, an "Indemnifying Party") pursuant
to Section 3.1 or 3.2, as applicable, such Indemnified Party shall notify the
applicable Indemnifying Party in writing of the commencement thereof; provided
that the failure so to notify such Indemnifying Party shall not relieve such
Indemnifying Party from any liability which such Indemnifying Party may have to
such Indemnified Party pursuant to Section 3.1 or 3.2.
-12-
ARTICLE IV.
ADMINISTRATION AND COLLECTIONS
Section 4.1 Appointment of the Servicer.
---------------------------
(a) The servicing, administering and collection of the Pool Receivables
shall be conducted by the Person so designated from time to time as the Servicer
in accordance with this Section. Until and unless the Administrator gives notice
to CONSOL Energy upon the occurrence of a Termination Event (in accordance with
this Section) of the designation of a new Servicer, CONSOL Energy is hereby
designated as, and hereby agrees to perform the duties and obligations of, the
Servicer pursuant to the terms hereof. Upon the occurrence of a Termination
Event, the Administrator may designate as Servicer any Person (including itself)
to succeed CONSOL Energy or any successor Servicer, on the condition in each
case that any such Person so designated shall agree to perform the duties and
obligations of the Servicer pursuant to the terms hereof and shall (i) covenant,
for the benefit of the Seller and its affiliates, that it (and any Person other
than the Seller or any of its affiliates) with whom it contracts for the
performance of all or a portion of its duties as Servicer hereunder) shall
comply with all tax withholding and information reporting obligations imposed in
connection with any payments that it (or such Person) makes or controls the
making of in connection with its activities as the Servicer and (ii) agree to
indemnify Seller and its affiliates for any and all liabilities, obligations,
losses, damages, penalties, judgments, settlements, costs, expenses and
disbursements of any kind whatsoever arising as a result of a breach of such
covenant; provided, however, that no obligation to indemnify shall arise
hereunder for any failure to comply that is directly or indirectly attributable
to any act or omission by the Seller or any affiliate thereof.
(b) Upon the designation of a successor Servicer as set forth in clause
(a), CONSOL Energy agrees that it will terminate its activities as Servicer
hereunder in a manner that the Administrator determines will facilitate the
transition of the performance of such activities to the new Servicer, and CONSOL
Energy shall cooperate with and assist such new Servicer. Such cooperation shall
include reasonable access to and transfer of related records and use by the new
Servicer of all licenses or the obtaining of new licenses, hardware or software
necessary or desirable to collect the Pool Receivables and the Related Security.
(c) CONSOL Energy acknowledges that, in making their decision to execute
and deliver this Agreement, the Administrator and the Conduit Purchasers have
relied on CONSOL Energy's agreement to act as Servicer hereunder. Accordingly,
CONSOL Energy agrees that it will not voluntarily resign as Servicer.
(d) The Servicer may and hereby does delegate its duties and obligations
hereunder to each of the Originators (each a "Sub-Servicer" and collectively,
the "Sub-Servicers"); provided, that, in such delegation: (i) each such
Sub-Servicer hereby agrees in writing to perform the duties and obligations of
the Servicer pursuant to the terms hereof, (ii) the Servicer shall remain
primarily liable for the performance of the duties and obligations so delegated,
(iii) the Seller, the Administrator and the Conduit Purchasers shall have the
right to look solely to the Servicer for performance, and (iv) the terms of any
agreement with any Sub-Servicer shall provide that the Administrator may
terminate such agreement upon the termination of the Servicer hereunder by
giving notice of its desire to terminate such agreement to the Servicer (and the
Servicer shall
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provide appropriate notice to each such Sub-Servicer); provided, however, that
if any such delegation is to any Person other than any Originator, the
Administrator shall have consented in writing in advance to such delegation.
Section 4.2 Duties of the Servicer.
----------------------
(a) The Servicer shall take or cause to be taken all such action as may be
reasonably necessary or advisable to administer and collect each Pool Receivable
from time to time, all in accordance with this Agreement and all applicable
laws, rules and regulations, with reasonable care and diligence, and in
accordance with the Credit and Collection Policy. The Servicer shall set aside,
for the accounts of the Seller and each Conduit Purchaser, the amount of the
Collections to which each is entitled in accordance with Article I. The Servicer
may, in accordance with the applicable Credit and Collection Policy, extend the
maturity of any Pool Receivable and extend the maturity or adjust the
Outstanding Balance of any Defaulted Receivable as the Servicer may determine to
be appropriate to maximize Collections or reflect adjustments required under
applicable laws, rules or regulations or the applicable contract thereof;
provided, however, that: for the purposes of this Agreement, (i) such extension
shall not change the number of days such Pool Receivable has remained unpaid
from the date of the invoice date related to such Pool Receivable, (ii) such
extension or adjustment shall not alter the status of such Pool Receivable as a
Delinquent Receivable or a Defaulted Receivable or limit the rights of any
Conduit Purchaser or the Administrator under this Agreement and (iii) if a
Termination Event has occurred and is continuing and CONSOL Energy or an
Affiliate thereof is serving as the Servicer, CONSOL Energy or such Affiliate
may make such extension or adjustment only upon the prior approval of the
Administrator. The Seller shall deliver to the Servicer and the Servicer shall
hold for the benefit of the Seller and the Administrator (individually and for
the benefit of each Conduit Purchaser), in accordance with their respective
interests, all records and documents (including computer tapes or disks) with
respect to each Pool Receivable. Notwithstanding anything to the contrary
contained herein, following the occurrence and continuation of a Termination
Event or an Unmatured Termination Event under Exhibit V, clause (j) hereof, the
Administrator may direct the Servicer (whether the Servicer is CONSOL Energy or
any other Person) to commence or settle any legal action to enforce collection
of any Pool Receivable or to foreclose upon or repossess any Related Security.
(b) The Servicer shall, as soon as practicable following actual receipt of
collected funds, turn over to the Seller or other applicable person, the
collections of any indebtedness that is not a Pool Receivable, less, if CONSOL
Energy or an Affiliate thereof is not the Servicer, all reasonable and
appropriate out-of-pocket costs and expenses of such Servicer of servicing,
collecting and administering such collections. The Servicer, if other than
CONSOL Energy or an Affiliate thereof, shall, as soon as practicable upon
demand, deliver to the Seller all records in its possession that evidence or
relate to any indebtedness that is not a Pool Receivable, and copies of records
in its possession that evidence or relate to any indebtedness that is a Pool
Receivable.
(c) The Servicer's obligations hereunder shall terminate on the later of:
(i) the Facility Termination Date and (ii) the date on which all amounts
required to be paid to the Conduit Purchasers, the Administrator and any other
Indemnified Party or Affected Person hereunder shall have been paid in full.
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After such termination, if CONSOL Energy or an Affiliate thereof was not
the Servicer on the date of such termination, the Servicer shall promptly
deliver to the Seller all books, records and related materials that the Seller
previously provided to the Servicer, or that have been obtained by the Servicer,
in connection with this Agreement.
Section 4.3 Lock-Box Arrangements.
---------------------
Prior to the initial purchase hereunder, the Seller shall enter into
Lock-Box Agreements with all of the Lock-Box Banks and deliver original
counterparts thereof to the Administrator. Upon the occurrence of and
continuance of a Termination Event, the Administrator may at any time thereafter
give notice to each Lock-Box Bank that the Administrator is exercising its
rights under the Lock-Box Agreements to do any or all of the following: (a) to
have the exclusive ownership and control of the Lock-Box Accounts transferred to
the Administrator and to exercise exclusive dominion and control over the funds
deposited therein, (b) to have the proceeds that are sent to the respective
Lock-Box Accounts redirected pursuant to the Administrator's instructions rather
than deposited in the applicable Lock-Box Account, and (c) to take any or all
other actions permitted under the applicable Lock-Box Agreement. The Seller
hereby agrees that if the Administrator at any time takes any action set forth
in the preceding sentence, the Administrator shall have exclusive control of the
proceeds (including Collections) of all Pool Receivables and the Seller hereby
further agrees to take any other action that the Administrator may reasonably
request to transfer such control. Any proceeds of Pool Receivables received by
the Seller or the Servicer thereafter shall be sent immediately to the
Administrator. The parties hereto hereby acknowledge that if at any time the
Administrator takes control of any Lock-Box Account, the Administrator shall not
have any rights to the funds therein in excess of the unpaid amounts due to the
Administrator, the Conduit Purchasers or any other Person hereunder, and the
Administrator shall distribute or cause to be distributed such funds in
accordance with Section 4.2(b) and Article I (in each case as if such funds were
held by the Servicer thereunder).
Section 4.4 Enforcement Rights.
------------------
(a) At any time following the occurrence of and continuance of a
Termination Event:
(i) the Administrator may direct the Obligors that payment
of all amounts payable under any Pool Receivable is to be made directly to the
Administrator or its designee,
(ii) the Administrator may instruct the Seller or the
Servicer to give notice of the Conduit Purchasers' interest in Pool Receivables
to each Obligor, which notice shall direct that payments be made directly to the
Administrator or its designee, and the Seller or the Servicer, as the case may
be, shall give such notice at the expense of the Seller or the Servicer, as the
case may be; provided, that if the Seller or the Servicer, as the case may be,
fails to so notify each Obligor, the Administrator (at the Seller's or the
Servicer's, as the case may be, expense) may so notify the Obligors,
(iii) the Administrator may request the Servicer to, and upon
such request the Servicer shall: (A) assemble all of the records necessary or
desirable to collect the
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Pool Receivables and the Related Security, and transfer or license to the extent
permissible under applicable agreements to a successor Servicer the use of all
software necessary or desirable to collect the Pool Receivables and the Related
Security, and make the same available to the Administrator or its designee at a
place selected by the Administrator, and (B) segregate all cash, checks and
other instruments received by it from time to time constituting Collections in a
manner reasonably acceptable to the Administrator and, promptly upon receipt,
remit all such cash, checks and instruments, duly endorsed or with duly executed
instruments of transfer, to the Administrator or its designee, and
(iv) the Administrator may collect any amounts due from any
Originator under the Sale Agreement and/or CONSOL Energy under the CONSOL
Guaranty.
(b) The Seller hereby authorizes the Administrator, and irrevocably
appoints the Administrator as its attorney-in-fact with full power of
substitution and with full authority in the place and stead of the Seller, which
appointment is coupled with an interest, to take any and all steps in the name
of the Seller and on behalf of the Seller necessary or desirable, in the
determination of the Administrator, to collect any and all amounts or portions
thereof due under any and all Pool Assets, including endorsing the name of the
Seller on checks and other instruments representing Collections and enforcing
such Pool Assets. Notwithstanding anything to the contrary contained in this
subsection, none of the powers conferred upon such attorney-in-fact pursuant to
the preceding sentence (i) shall be exercised by attorney-in-fact prior to the
occurrence of a Termination Event, or (ii) shall subject such attorney-in-fact
to any liability provided such action is not grossly negligent or willful
misconduct if any action taken by it shall prove to be inadequate or invalid,
nor shall they confer any obligations upon such attorney-in-fact in any manner
whatsoever (except for liability arising from the Administrator's gross
negligence and or willful misconduct).
Section 4.5 Responsibilities of the Seller.
------------------------------
(a) Anything herein to the contrary notwithstanding, the Seller shall: (i)
perform all of its obligations, if any, under the Contracts related to the Pool
Receivables to the same extent as if interests in such Pool Receivables had not
been transferred hereunder, and the exercise by the Administrator or any Conduit
Purchaser of their respective rights hereunder shall not relieve the Seller from
such obligations, and (ii) pay when due any taxes, including any sales taxes
payable in connection with the Pool Receivables and their creation and
satisfaction. The Administrator and the Conduit Purchasers shall not have any
obligation or liability with respect to any Pool Asset, nor shall either of them
be obligated to perform any of the obligations of the Seller, CONSOL Energy or
any Originator thereunder.
(b) CONSOL Energy hereby irrevocably agrees that if at any time it shall
cease to be the Servicer hereunder, it shall act (if the then-current Servicer
so requests) as the data-processing agent of the Servicer and, in such capacity,
CONSOL Energy shall conduct the data-processing functions of the administration
of the Receivables and the Collections thereon in substantially the same way
that CONSOL Energy conducted such data-processing functions while it acted as
the Servicer.
-16-
Section 4.6 Servicing Fee.
-------------
(a) Subject to clause (b), the Servicer shall be paid a fee equal to .50%
per annum (the "Servicing Fee Rate") of the average aggregate Outstanding
Balance of the Pool Receivables (computed as the average of the Outstanding
Balance of the Pool Receivables at the beginning and the ending of each
Settlement Period (or the beginning and ending of the other applicable period of
measurement if the Servicing Fee is payable within a Settlement Period). The
Conduit Purchasers' Share of such fee shall be paid through the distributions
contemplated by Section 1.4(d), and the Seller's Share of such fee shall be paid
by the Seller on each Monthly Settlement Date.
(b) If the Servicer ceases to be CONSOL Energy or an Affiliate thereof,
the servicing fee shall be the greater of: (i) the amount calculated pursuant to
clause (a), and (ii) an alternative amount specified by the successor Servicer
not to exceed 110% of the aggregate reasonable costs and expenses incurred by
such successor Servicer in connection with the performance of its obligations as
Servicer.
ARTICLE V.
ADMINISTRATOR
Section 5.1 Appointment and Authorization.
-----------------------------
(a) Each Conduit Purchaser hereby irrevocably designates and appoints PNC
as the "Administrator" hereunder and authorizes the Administrator to take such
actions and to exercise such powers as are delegated to the Administrator hereby
and to exercise such other powers as are reasonably incidental thereto. The
Administrator shall hold, in its name, for the benefit of each Conduit
Purchaser, ratably, the Purchased Interest. The Administrator shall not have any
duties other than those expressly set forth herein or any fiduciary relationship
with any Conduit Purchaser, and no implied obligations or liabilities shall be
read into this Agreement, or otherwise exist, against the Administrator. The
Administrator does not assume, nor shall it be deemed to have assumed, any
obligation to, or relationship of trust or agency with, the Seller or Servicer.
Except to the extent provided in Section 5.10 hereof, notwithstanding any
provision of this Agreement or any other Transaction Document to the contrary,
in no event shall the Administrator ever be required to take any action which
exposes the Administrator to personal liability or which is contrary to the
provision of any Transaction Document or applicable law.
(b) Except as otherwise specifically provided in this Agreement, the
provisions of this Article V are solely for the benefit of the Administrator,
and none of the Seller or Servicer shall have any rights or obligations as a
third-party beneficiary or otherwise under any of the provisions of this Article
V, except that this Article V shall not affect any obligations which any Conduit
Purchaser or the Administrator may have to the Seller or the Servicer under the
other provisions of this Agreement.
(c) In performing its functions and duties hereunder, the Administrator
shall act solely as the agent of the Conduit Purchasers and does not assume nor
shall be deemed to have assumed any obligation or relationship of trust or
agency with or for the Seller or Servicer or any of their successors and
assigns,
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Section 5.2 Delegation of Duties.
--------------------
The Administrator may execute any of its duties through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Administrator shall not be responsible
for the negligence or misconduct of any agents or attorneys-in-fact selected by
it with reasonable care.
Section 5.3 Exculpatory Provisions.
----------------------
The Administrator or any of its directors, officers, agents or employees
shall not be liable for any action taken or omitted (i) with the consent or at
the direction of the Conduit Purchasers or Conduit Agents or (ii) in the absence
of such Person's gross negligence or willful misconduct. The Administrator shall
not be responsible to any Conduit Purchaser, Conduit Agent or other Person for
(i) any recitals, representations, warranties or other statements made by the
Seller, Servicer, or any of their Affiliates, (ii) the value, validity,
effectiveness, genuineness, enforceability or sufficiency of any Transaction
Document, (iii) any failure of the Seller, any Originator or any of their
Affiliates to perform any obligation or (iv) the satisfaction of any condition
specified in Exhibit II. The Administrator shall not have any obligation to any
Conduit Purchaser or Conduit Agent to ascertain or inquire about the observance
or performance of any agreement contained in any Transaction Document or to
inspect the properties, books or records of the Seller, Servicer, Originator or
any of their Affiliates.
Section 5.4 Reliance by Administrator.
-------------------------
(a) The Administrator shall in all cases be entitled to rely, and shall be
fully protected in relying, upon any document or other writing or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person and upon advice and statements of legal counsel (including
counsel to the Seller), independent accountants and other experts selected by
the Administrator. The Administrator shall in all cases be fully justified in
failing or refusing to take any action under any Transaction Document unless it
shall first receive such advice or concurrence of the Conduit Purchasers, and
assurance of its indemnification, as it deems appropriate.
(b) The Administrator shall in all cases be fully protected in acting, or
in refraining from acting, under this Agreement in accordance with a request of
the Conduit Purchasers or Conduit Agents, and such request and any action taken
or failure to act pursuant thereto shall be binding upon all Conduit Purchasers,
Conduit Agents and the Administrator.
Section 5.5 Notice of Termination Events.
----------------------------
The Administrator shall not be deemed to have knowledge or notice of the
occurrence of any Termination Event or Unmatured Termination Event unless the
Administrator and the Conduit Agents have received notice from any Conduit
Purchaser, the Servicer or the Seller stating that a Termination Event or
Unmatured Termination Event has occurred hereunder and describing such
Termination Event or Unmatured Termination Event. In the event that the
Administrator receives such a notice, it shall promptly give notice thereof to
each Conduit Purchaser and Seller. In the event that a Conduit Purchaser or
Conduit Agent receives such a notice (other than from the Administrator), it
shall promptly give notice thereof to the
-18-
Administrator and Seller. The Administrator shall take such action concerning a
Termination Event or Unmatured Termination Event as it deems advisable and in
the best interests of the Conduit Purchasers.
Section 5.6 Non-Reliance on Administrator.
-----------------------------
Each Conduit Purchaser and Conduit Agent expressly acknowledges that
neither the Administrator nor any of its respective officers, directors,
employees, agents, attorneys-in-fact or Affiliates has made any representations
or warranties to it and that no act by the Administrator hereafter taken,
including any review of the affairs of the Seller, Servicer or any Originator,
shall be deemed to constitute any representation or warranty by the
Administrator. Each Conduit Purchaser and Conduit Agent represents and warrants
to the Administrator, the other Conduit Purchasers and Conduit Agents that,
independently and without reliance upon the Administrator or any other Conduit
Purchaser or Conduit Agent and based on such documents and information as it has
deemed appropriate, it has made and will continue to make its own appraisal of
and investigation into the business, operations, property, prospects, financial
and other conditions and creditworthiness of the Seller, Servicer or the
Originators, and the Receivables and its own decision to enter into this
Agreement and to take, or omit, action under any Transaction Document. Except
for items specifically required to be delivered hereunder, the Administrator
shall not have any duty or responsibility to provide any Conduit Purchaser or
Conduit Agent with any information concerning the Seller, Servicer or the
Originators or any of their Affiliates that comes into the possession of the
Administrator or any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates.
Section 5.7 Administrator, Conduit Purchasers, Conduit Agents and
-----------------------------------------------------
Affiliates.
----------
Each of the Conduit Purchasers, Conduit Agents and the Administrator and
their Affiliates may extend credit to, accept deposits from and generally engage
in any kind of banking, trust, debt, equity or other business with the Seller,
Servicer or any Originator or any of their Affiliates and PNC may exercise or
refrain from exercising its rights and powers as if it were not the
Administrator. With respect to the acquisition of the Pool Assets pursuant to
this Agreement, the Administrator shall have the same rights and powers under
this Agreement as any Conduit Purchaser and may exercise the same as though it
were not the Administrator, and the terms "Conduit Purchaser" and "Conduit
Purchasers" shall include the Administrator in its individual capacity.
Section 5.8 Indemnification.
---------------
Each Conduit Purchaser and Conduit Agent shall indemnify and hold harmless
the Administrator (but solely in its capacity as Administrator) and its
officers, directors, employees, representatives and agents (to the extent not
reimbursed by the Seller, or Servicer and without limiting the obligation of the
Seller or Servicer to do so), ratably in accordance with its ratable share from
and against any and all liabilities, obligations, losses, damages, penalties,
judgments, settlements, costs, expenses and disbursements of any kind whatsoever
(including in connection with any investigative or threatened proceeding,
whether or not the Administrator or such Person shall be designated a party,
thereto) that may at any time be imposed on, incurred by or asserted against the
Administrator or such Person as a result of, or related to, any of the
transactions
-19-
contemplated by the Transaction Documents or the execution, delivery or
performance of the Transaction Documents or any other document furnished in
connection therewith (but excluding any such liabilities, obligations, losses,
damages, penalties. judgments, settlements, costs, expenses or disbursements
resulting solely from the gross negligence or willful misconduct of the
Administrator or such Person as finally determined by a court of competent
jurisdiction); provided, that such indemnity shall be provided solely to the
extent of amounts received by such Conduit Purchaser or Conduit Agent under this
Agreement which exceed the amounts required to repay such Conduit Purchaser's
outstanding Notes. Notwithstanding anything in this Section 5.8 to the contrary,
the Administrator, each Conduit Purchaser and Conduit Agent hereby covenants and
agrees that it shall not institute against, or join any other Person in
instituting against, any Conduit Purchaser any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding or other proceedings under any
federal or state bankruptcy or similar law, for one year and a day after the
latest maturing Note issued by such Conduit Purchaser is paid in full.
Section 5.9 Successor Administrator.
-----------------------
The Administrator may, upon at least five (5) Business Days notice to the
Seller and each Conduit Purchaser, resign as Administrator. Such resignation
shall not become effective until a successor Administrator is appointed by the
Conduit Purchasers and has accepted such appointment. Upon such acceptance of
its appointment as Administrator hereunder by a successor Administrator, such
successor Administrator shall succeed to and become vested with all the rights
and duties of the retiring Administrator, and the retiring Administrator shall
be discharged from its duties and obligations under the Transaction Documents.
After any retiring Administrator's resignation hereunder, the provisions of
Sections 3.1 and 3.2 and this Article V shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was the Administrator.
Section 5.10 Certain Tax Matters.
-------------------
The Administrator (i) covenants, for the benefit of Seller and its
affiliates, that it (and any Person other than the Seller or any affiliate
thereof with whom it contracts for the performance of all or a portion of its
duties as Servicer hereunder) shall comply with all tax withholding and
information reporting obligations imposed in connection with any payments that
it (or such Person) makes or controls the making of in connection with its
activities as Administrator and (ii) agrees to indemnify Seller and its
affiliates for any and all liabilities, obligations, losses, damages, penalties,
judgments, settlements, costs, expenses and disbursements of any kind whatsoever
arising as a result of a breach of such covenant; provided, however, that no
obligation to indemnify shall arise hereunder for any failure that is directly
or indirectly attributable to any act or omission by the Seller or any affiliate
thereof.
-20-
ARTICLE VI.
MISCELLANEOUS
Section 6.1 Amendments, Etc.
---------------
No amendment or waiver of any provision of this Agreement or any other
Transaction Document, or consent to any departure by the Seller or the Servicer
therefrom, shall be effective unless in a writing signed by the Administrator
and each Conduit Purchaser, and, in the case of any amendment, by the other
parties thereto; and then such amendment, waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given;
provided, however, that no such material amendment shall be effective until both
Moody's and Standard & Poor's have notified the respective Conduit Agent in
writing that such action will not result in a reduction or withdrawal of the
rating of any Notes to the extent required by each Conduit Purchaser's
commercial paper program. No failure on the part of any Conduit Purchaser or the
Administrator to exercise, and no delay in exercising any right hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right.
Section 6.2 Notices, Etc.
------------
All notices and other communications hereunder shall, unless otherwise
stated herein, be in writing (which shall include facsimile communication) and
be sent or delivered to each party hereto at its address set forth under its
name on the signature pages hereof or at such other address as shall be
designated by such party in a written notice to the other parties hereto.
Notices and communications by facsimile shall be effective when sent (and shall
be followed by hard copy sent by first class mail), and notices and
communications sent by other means shall be effective when received.
Section 6.3 Assignability.
-------------
(a) This Agreement and any Conduit Purchaser's rights and obligations
herein (including ownership of the Purchased Interest or an interest therein)
shall be assignable, in whole or in part, by any Conduit Purchaser and its
successors and assigns with the prior written consent of the Administrator and
the Seller; provided, however, that such consent by the Seller and the
Administrator shall not be unreasonably withheld; and provided further, that no
such consent by the Seller shall be required if the assignment is made to PNC,
any Affiliate of PNC (other than a director or officer of PNC), any Purchaser or
other Program Support Provider or any Person that is: (i) in the business of
issuing Notes and (ii) administered by PNC or any Affiliate of PNC. Each
assignor may, in connection with the assignment, disclose to the applicable
assignee (that shall have agreed to be bound by Section 5.6) any information
relating to the Servicer, the Seller or the Pool Receivables furnished to such
assignor by or on behalf of the Servicer, the Seller, any Conduit Purchaser or
the Administrator. Any Conduit Purchaser shall give prior written notice of any
assignment of the such Conduit Purchaser's rights and obligations (including
ownership of the Purchased Interest to any Person other than a Program Support
Provider).
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(b) Any Conduit Purchaser may at any time grant to one or more banks or
other institutions (each, a "Purchaser") party to the Liquidity Agreement, or to
any other Program Support Provider, participating interests in the Purchased
Interest provided that the Seller has consented to such participation, which
consent shall not be unreasonably withheld. In the event of any such grant by a
Conduit Purchaser of a participating interest to a Purchaser or other Program
Support Provider, such Conduit Purchaser shall remain responsible for the
performance of its obligations hereunder. The Seller agrees that each Purchaser
or other Program Support Provider shall be entitled to the benefits of Sections
1.7 and 1.8.
(c) This Agreement and the rights and obligations of the Administrator and
the Conduit Agents hereunder shall be assignable, in whole or in part, by the
Administrator and the Conduit Agents and their respective successors and
assigns; provided, that unless: (i) such assignment is to an Affiliate of PNC or
such Conduit Agent, (ii) it becomes unlawful for PNC to serve as the
Administrator or (iii) a Termination Event exists, the Seller has consented to
such assignment, which consent shall not be unreasonably withheld.
(d) Except as provided in Section 4.1 (d), none of the Seller, CONSOL
Energy or the Servicer may assign its rights or delegate its obligations
hereunder or any interest herein without the prior written consent of the
Administrator.
(e) Without limiting any other rights that may be available under
applicable law, the rights of any Conduit Purchaser may be enforced through it
or by its agents.
(f) Each of (A) the Conduit Purchasers and Conduit Agents, (B) its
successors and assigns, (C) any Program Support Provider, (D) any assignee under
Section 6.3(a) and (E) any recipient of a participating interest under Section
6.3(b) that, in each case, is not a United States Person (as such term is
defined in Section 7701(a)(30) of the United States Internal Revenue Code of
1986, as amended (the "Code")) for United States federal tax purposes shall, if
any amount derived by such person, directly or indirectly, in connection with
this Agreement is subject to an exemption from withholding or deduction for or
on account of United States federal income taxes, deliver to the Seller, with a
copy to the Servicer, a United Slates Internal Revenue Service Form W-8BEN or
W-8ECI (or successor form) properly completed with all required attachments and
certifying in each case that the party delivering, such form is entitled to the
relevant exemption from withholding or deduction. Each Conduit Purchaser, if
required to deliver such form, shall deliver such form on the Closing Date or on
the date upon which such Conduit Purchaser becomes party to this Agreement. A
party described in any of the foregoing clauses (B) through (E) shall deliver
such form concurrently with such party becoming described in any of such
clauses. Each party obligated to deliver a form under the first sentence of this
Section 6.3(f) shall, to the extent permitted by law, further, deliver to the
Seller, with a copy to the Servicer, a United States Internal Revenue Service
Form W-8BEN or W-8ECI (or successor form) on or before the date that any such
form expires or becomes obsolete or after, the occurrence of any event requiring
a change in the most recent form previously delivered by such party to the
Seller, properly completed and certifying in each case that the party delivering
such form is entitled, to the relevant exemption from withholding or deduction.
Each Person described in any of clauses (A) through (E) that is a United States
Person (as such term is defined in Section 7701(a)(30) of the Code) shall
deliver to the Seller, with a copy to the Servicer, a United States Internal
Revenue Service Form W-9 and shall update such form as required to ensure that
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the Seller and the Servicer have a valid Form W-9 from such Person at all times
that such Person is described in any of clauses (A) through (E). The Seller
shall not be required to pay to or on behalf of any Indemnified Party or
Affected Person, any additional amount or indemnity payment under Sections 1.8
or 3.1 hereof in respect of any taxes required to be deducted or withheld from
any payment to such party or an affiliate of such party or to any person in the
chain of payment between such party or an affiliate of such party except to the
extent that both (i) such requirement to deduct or withhold would have applied
had such party, its affiliates, each direct or indirect holder of an interest in
such party and its affiliates or in such party's rights to payments under the
Transaction Documents and each person in the chain of payment between the
Obligor and such party complied with all requirements applicable to it for
claiming an exemption from such deduction or withholding, including, without
limitation, the provision of U.S. tax forms, and (ii) subject to the second
sentence of Section 3.1 hereof, such requirement to deduct or withhold would not
have applied but for a change in treaty, law or regulation (a "Change in Law")
adopted or issued after the date on which the Indemnified Party or Affected
Person became an Indemnified Party or Affected Person; provided that (x) where a
requirement to deduct or withhold on account of taxes is imposed as a result of
a characteristic of a direct or indirect interestholder in an Indemnified Party
or Affected Person or of a person holding a direct or indirect interest in such
Indemnified Party's or Affected Person's rights to payments under any of the
Transaction Documents, such requirement will not be treated as described in
clause (ii) above to the extent that such direct or indirect interestholder
became, or increased its interest as, a direct or indirect interestholder in the
relevant Indemnified Party, Affected Person or rights to payments after the date
of the Change in Law and (y) where an Indemnified Party or Affected Person
acquires additional direct or indirect rights to payments under the Transaction
Documents after the date of the relevant Change in Law, requirements to deduct
or withhold in respect of such increased interest shall not be treated as
described in clause (ii) above.
Section 6.4 Costs, Expenses and Taxes.
-------------------------
(a) In addition to the rights of indemnification granted under Section
3.1, the Seller agrees to pay on demand (which demand shall be accompanied by
documentation thereof in reasonable detail) all reasonable costs and expenses in
connection with the preparation, execution, delivery and administration
(including periodic internal audits of Pool Receivables by the Administrator, or
by third parties at the direction of the Administrator, provided that the Seller
shall not pay for more than one audit per year unless a Termination Event has
occurred and is continuing) of this Agreement, the other Transaction Documents
and the other documents and agreements to be delivered hereunder (and all
reasonable costs and expenses in connection with any amendment, waiver or
modification of any thereof), including: (i) Attorney Costs for the
Administrator, the Conduit Purchasers and their respective Affiliates and agents
with respect thereto and with respect to advising the Administrator, the Conduit
Purchasers and their respective Affiliates and agents as to their rights and
remedies under this Agreement and the other Transaction Documents, and (ii) all
reasonable costs and expenses (including Attorney Costs), if any, of the
Administrator, the Conduit Purchasers and their respective Affiliates and agents
in connection with the enforcement of this Agreement and the other Transaction
Documents.
(b) In addition, the Seller shall pay on demand any and all stamp and
other taxes and fees payable in connection with the execution, delivery, filing
and recording of this Agreement
-23-
or the other documents or agreements to be delivered hereunder, and agrees to
save each Indemnified Party harmless from and against any liabilities with
respect to or resulting from any delay in paying or omission to pay such taxes
and fees.
Section 6.5 No Proceedings; Limitation on Payments.
--------------------------------------
Each of the Seller, CONSOL Energy, the Servicer, the Administrator, each
assignee of the Purchased Interest or any interest therein, and each Person that
enters into a commitment to purchase the Purchased Interest or interests
therein, hereby covenants and agrees that it will not institute against, or join
any other Person in instituting against, any Conduit Purchaser or Conduit Agent
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceeding, or other proceeding under any federal or state bankruptcy or similar
law, for one year and one day after the latest maturing Note issued by all
Conduit Purchasers is paid in full. The provision of this Section 5.5 shall
survive any termination of this Agreement.
Section 6.6 Confidentiality.
---------------
Each of the Seller and the Servicer agrees to maintain the confidentiality
of this Agreement and the other Transaction Documents (and all drafts thereof)
in communications with third parties and otherwise; provided, that this
Agreement may be disclosed to: (a) third parties to the extent such disclosure
is made pursuant to a written agreement of confidentiality in form and substance
reasonably satisfactory to the Administrator, (b) the Seller's legal counsel and
auditors if they agree to hold it confidential, and (c) as otherwise required by
applicable law. Unless otherwise required by applicable law, each of the
Administrator, the Conduit Agents and the Conduit Purchasers agrees to maintain
the confidentiality of non-public information regarding CONSOL Energy and its
Subsidiaries and Affiliates; provided, that such information may be disclosed
to: (i) third parties to the extent such disclosure is made pursuant to a
written agreement of confidentiality in form and substance reasonably
satisfactory to CONSOL Energy, (ii) legal counsel and auditors of any Conduit
Agent, any Conduit Purchaser or the Administrator if they agree to hold it
confidential, (iii) the rating agencies rating the Notes, (iv) any Program
Support Provider or potential Program Support Provider (if they agree to hold it
confidential), (v) any placement agent placing the Notes and (vi) any regulatory
authorities having jurisdiction over PNC, any Conduit Agent, any Conduit
Purchaser, any Program Support Provider or any Purchaser.
Section 6.7 GOVERNING LAW AND JURISDICTION.
------------------------------
(a) THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH
PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE
OF NEW YORK) EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF A SECURITY
INTEREST OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE
GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE
BROUGHT IN THE COURTS OF NEW YORK COUNTY, NEW
-24-
YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK; AND, BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE PARTIES HERETO CONSENTS,
FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF
THOSE COURTS. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES, TO THE MAXIMUM
EXTENT PERMITTED BY LAW, ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF
VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, THAT IT MAY NOW OR
HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION
IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. EACH OF THE PARTIES
HERETO WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH
SERVICE MAY BE MADE BY ANY OTHER MEANS PERMITTED BY NEW YORK LAW.
Section 6.8 Execution in Counterparts.
-------------------------
This Agreement may be executed in any number of counterparts, each of
which, when so executed, shall be deemed to be an original, and all of which,
when taken together, shall constitute one and the same agreement.
Section 6.9 Survival of Termination.
-----------------------
The provisions of Sections 1.7, 1.8, 3.1, 3.2, 6.4, 6.5, 6.6, 6.7, 6.10 and
6.13 shall survive any termination of this Agreement. Neither the Servicer nor
any other Person may waive a breach of Exhibit III, Section 1(g) or 1(j) or
Exhibit IV, Section 1(d) or 2(i) of this Agreement for so long as the Notes are
outstanding.
Section 6.10 WAIVER OF JURY TRIAL.
--------------------
EACH OF THE PARTIES HERETO WAIVES THEIR RESPECTIVE RIGHTS TO A TRIAL BY
JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY IN ANY ACTION, PROCEEDING
OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER
PARTY OR PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS OR
OTHERWISE. EACH OF THE PARTIES HERETO AGREES THAT ANY SUCH CLAIM OR CAUSE OF
ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE
FOREGOING, EACH OF THE PARTIES HERETO FURTHER AGREES THAT ITS RESPECTIVE RIGHT
TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION,
COUNTERCLAIM OR OTHER PROCEEDING THAT SEEKS, IN WHOLE OR IN PART, TO CHALLENGE
THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY PROVISION HEREOF. THIS
WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT.
Section 6.11 Entire Agreement.
----------------
This Agreement and the other Transaction Documents embody the entire
agreement and understanding between the parties hereto, and supersede all prior
or contemporaneous
-25-
agreements and understandings of such Persons, verbal or written, relating to
the subject matter hereof and thereof, except for any prior arrangements made
with respect to the payment by the Conduit Purchasers of (or any indemnification
for) any fees, costs or expenses payable to or incurred (or to be incurred) by
or on behalf of the Seller, the Servicer and the Administrator.
Section 6.12 Headings.
--------
The captions and headings of this Agreement and any Exhibit, Schedule or
Annex hereto are for convenience of reference only and shall not affect the
interpretation hereof or thereof.
Section 6.13 Conduit Purchasers' and Conduit Agents' Liabilities.
---------------------------------------------------
The obligations of each Conduit Purchaser and Conduit Agent under the
Transaction Documents are solely the corporate obligations of such Conduit
Purchaser or Conduit Agent. No recourse shall be had for any obligation or claim
arising out of or based upon any Transaction Document against any stockholder,
employee, officer, director or incorporator of any Conduit Purchaser or Conduit
Agent; 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.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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[SIGNATURE PAGE 1 OF 8 TO
RECEIVABLES PURCHASE AGREEMENT]
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.
SELLER: CNX FUNDING CORPORATION
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Address: CONSOL Plaza
Treasury Suite 125
1800 Washington Road
Pittsburgh, PA 15241
Attention: Treasurer
Telephone:
Facsimile:
INITIAL SERVICER: CONSOL ENERGY INC.
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Address: CONSOL Plaza
1800 Washington Road
Pittsburgh, PA 15241
Attention: Treasurer
Telephone: 412-831-4128
Facsimile: 412-831-4151
SUB-SERVICERS: CONSOL SALES COMPANY
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Address: CONSOL Plaza
1800 Washington Road
Pittsburgh, PA 15241
Attention: Treasurer
Telephone: 412-831-4128
Facsimile: 412-831-4151
-27-
[SIGNATURE PAGE 2 OF 8 TO
RECEIVABLES PURCHASE AGREEMENT]
CONSOL OF KENTUCKY INC.
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Address: CONSOL Plaza
1800 Washington Road
Pittsburgh, PA 15241
Attention: Treasurer
Telephone: 412-831-4128
Facsimile: 412-831-4151
CONSOL PENNSYLVANIA COAL COMPANY
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Address: CONSOL Plaza
1800 Washington Road
Pittsburgh, PA 15241
Attention: Treasurer
Telephone: 412-831-4128
Facsimile: 412-831-4151
-28-
[SIGNATURE PAGE 3 OF 8 TO
RECEIVABLES PURCHASE AGREEMENT]
CONSOLIDATION COAL COMPANY
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Address: CONSOL Plaza
1800 Washington Road
Pittsburgh, PA 15241
Attention: Treasurer
Telephone: 412-831-4128
Facsimile: 412-831-4151
ISLAND CREEK COAL COMPANY
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Address: CONSOL Plaza
1800 Washington Road
Pittsburgh, PA 15241
Attention: Treasurer
Telephone: 412-831-4128
Facsimile: 412-831-4151
-29-
[SIGNATURE PAGE 4 OF 8 TO
RECEIVABLES PURCHASE AGREEMENT]
WINDSOR COAL COMPANY
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Address: CONSOL Plaza
1800 Washington Road
Pittsburgh, PA 15241
Attention: Treasurer
Telephone: 412-831-4128
Facsimile: 412-831-4151
MCELROY COAL COMPANY
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Address: CONSOL Plaza
1800 Washington Road
Pittsburgh, PA 15241
Attention: Treasurer
Telephone: 412-831-4128
Facsimile: 412-831-4151
-30-
[SIGNATURE PAGE 5 OF 8 TO
RECEIVABLES PURCHASE AGREEMENT]
KEYSTONE COAL MINING CORPORATION
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Address: CONSOL Plaza
1800 Washington Road
Pittsburgh, PA 15241
Attention: Treasurer
Telephone: 412-831-4128
Facsimile: 412-831-4151
EIGHTY-FOUR MINING COMPANY
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Address: CONSOL Plaza
1800 Washington Road
Pittsburgh, PA 15241
Attention: Treasurer
Telephone: 412-831-4128
Facsimile: 412-831-4151
-31-
[SIGNATURE PAGE 6 OF 8 TO
RECEIVABLES PURCHASE AGREEMENT]
CNX MARINE TERMINALS INC.
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Address: CONSOL Plaza
1800 Washington Road
Pittsburgh, PA 15241
Attention: President
Telephone: 412-831-4128
Facsimile: 412-831-4151
CNX GAS COMPANY LLC
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Address: CONSOL Plaza
1800 Washington Road
Pittsburgh, PA 15241
Attention: President
Telephone: 412-831-4128
Facsimile: 412-831-4151
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[SIGNATURE PAGE 7 OF 8 TO
RECEIVABLES PURCHASE AGREEMENT]
CONDUIT PURCHASER: MARKET STREET FUNDING CORPORATION
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Address:
Market Street Funding Corporation
c/o AMACAR Group, LLC
6525 Morrison Boulevard, Suite 318
Charlotte, North Carolina 28211
Attention: Doug Johnson
Telephone No.: 704-365-0569
Facsimile No.: 704-365-1362
With a copy to:
PNC Bank, National Association
One PNC Plaza, 26th floor
249 Fifth Avenue
Pittsburgh, PA 15222
Attention: John Smathers
Telephone No.: 412-762-6440
Facsimile No.: 412-762-9184
[SIGNATURE PAGE 8 OF 8 TO
RECEIVABLES PURCHASE AGREEMENT]
ADMINISTRATOR AND CONDUIT
AGENT FOR MARKET STREET: PNC BANK, NATIONAL ASSOCIATION
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Address:
PNC Bank, National Association
One PNC Plaza, 26th floor
249 Fifth Avenue
Pittsburgh, PA 15222
Attention: John Smathers
Telephone No.: 412-762-6440
Facsimile No.: 412-762-9184
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EXHIBIT I
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DEFINITIONS
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As used in the Agreement (including its Exhibits, Schedules and Annexes),
the following terms shall have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the terms defined).
Unless otherwise indicated, all Section, Annex, Exhibit and Schedule references
in this Exhibit are to Sections of and Annexes, Exhibits and Schedules to the
Agreement.
"Administrator" has the meaning set forth in the preamble to the Agreement.
"Adverse Claim" means (i) a lien, security interest or other charge or
encumbrance, or any other type of preferential arrangement; it being understood
that any thereof in favor of, or assigned to, any Conduit Agent, Conduit
Purchaser or the Administrator (for the benefit of such Conduit Agent or Conduit
Purchaser) or PNC shall not constitute an Adverse Claim, or, (ii) when used in
connection with a Receivable or Collections or Related Rights with respect to a
Receivable, a claim or contention by or on behalf of a representative of the
estate of any Originator which may be created under Section 541 of the
Bankruptcy Code that a Receivable generated by such Originator (or Collections
or Related Rights with respect to such Receivable) which has been purchased or
accepted as a contribution by the Seller from such Originator pursuant to the
Sale Agreement constitutes property of such estate or that the transfer of such
Receivable (or Collections or Related Rights with respect to such Receivable)
should be avoided under Section 544 or 548 of the Bankruptcy Code.
"Affected Person" has the meaning set forth in Section 1.7 of the
Agreement.
"Affiliate" means, as to any Person: (a) any Person that, directly or
indirectly, is in control of, is controlled by or is under common control with
such Person, or (b) who is a director or officer: (i) of such Person or (ii) of
any Person described in clause (a), except that, with respect to any Conduit
Purchaser, Affiliate shall mean the holder(s) of its capital stock. For purposes
of this definition, control of a Person shall mean the power, direct or
indirect: (x) to vote 25% or more of the securities having ordinary voting power
for the election of directors or managers of such Person, or (y) to direct or
cause the direction of the management and policies of such Person, in either
case whether by ownership of securities, contract, proxy or otherwise.
"Agreement" has the meaning set forth in the preamble to the Agreement.
"Alternate Rate" for any Settlement Period for any Portion of Capital of
the Purchased Interest means an interest rate per annum equal to: (a) 1.75% per
annum above the Euro-Rate for such Settlement Period; provided, however, that if
(x) it shall become unlawful for any Purchaser or Program Support Provider to
obtain funds in the London interbank eurodollar market in order to make, fund or
maintain any Purchased Interest, or if such funds shall not be reasonably
available to any Purchaser or Program Support Provider, or (y) there shall not
be at least two Business Days prior to the commencement of an applicable
Settlement Period to determine a Euro-Rate in accordance with its terms, then
the "Alternate Rate" shall be equal to the Base Rate in effect for each day
during the remainder of such Settlement Period or (b) if requested by the Seller
the Base Rate for such Settlement Period; provided, however, that the "Alternate
Rate" for
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any day while a Termination Event exists shall be an interest rate equal to
2.00% per annum above the Base Rate in effect on such day.
"Attorney Costs" means and includes all reasonable fees and disbursements
of any law firm or other external counsel.
"Bankruptcy Code" means the United States Bankruptcy Reform Act of 1978 (11
U.S.C. Section 101, et seq.), as amended from time to time.
"Base Rate" means, for any day, (i) in the case of Market Street, the
Market Street Base Rate, and (ii) in the case of each other Conduit
Purchaser, the rate set forth as the Base Rate for such Conduit Purchaser
in the related Fee Letter.
"BBA" means the British Bankers' Association.
"Benefit Plan" means any employee benefit pension plan as defined in
Section 3(2) of ERISA in respect of which the Seller, any Originator, CONSOL
Energy or any ERISA Affiliate is, or at any time during the immediately
preceding six years was, an "employer" as defined in Section 3(5) of ERISA.
"Business Day" means any day (other than a Saturday or Sunday) on which:
(a) banks are not authorized or required to close in New York City, New York or
Pittsburgh, Pennsylvania and (b) if this definition of "Business Day" is
utilized in connection with the Euro-Rate, dealings are carried out in the
London interbank market.
"Capital" means the amount paid to the Seller in respect of the Purchased
Interest by the Conduit Purchasers pursuant to the Agreement, or such amount
divided or combined in order to determine the Discount applicable to any Portion
of Capital, in each case reduced from time to time by Collections distributed
and applied on account of such Capital pursuant to Section 1.4(d) of the
Agreement; provided, that if such Capital shall have been reduced by any
distribution, and thereafter all or a portion of such distribution is rescinded
or must otherwise be returned for any reason, such Capital shall be increased by
the amount of such rescinded or returned distribution as though it had not been
made.
"Change in Control" means that (a) CONSOL Energy, ceases to own, directly
or indirectly, 100% of the capital stock of the Seller free and clear of all
Adverse Claims, or (b) CONSOL Energy ceases to own, directly or indirectly, 100%
of the capital stock of the Originators.
"Closing Date" means April 30, 2003.
"Collections" means, with respect to any Pool Receivable: (a) all funds
that are received by any Originator, CONSOL Energy, the Seller or the Servicer
in payment of any amounts owed in respect of such Receivable (including purchase
price, finance charges, interest and all other charges), or applied to amounts
owed in respect of such Receivable (including insurance payments and net
proceeds of the sale or other disposition of repossessed goods or other
collateral or property of the related Obligor or any other Person directly or
indirectly liable for the payment of such Pool Receivable and available to be
applied thereon), (b) all amounts
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deemed to have been received pursuant to Section 1.4(e) of the Agreement and (c)
all other proceeds of such Pool Receivable.
"Company Notes" has the meaning set forth in Section 3.1 of the Sale
Agreement.
"Concentration Percentage" means: (a) for any Group A Obligor, 16.0%, (b)
for any Group B Obligor, 16.0%, (c) for any Group C Obligor 8.0% and (d) for any
Group D Obligor, 4.0%.
"Concentration Reserve" means, at any time: (a) the aggregate Capital at
such time multiplied by (b)(i) the Concentration Reserve Percentage, divided by
(ii) 100%, minus the Concentration Reserve Percentage.
"Concentration Reserve Percentage" means, at any time the following
expressed as a percentage (as opposed to a fraction), (a) the largest of the
following: (i) the sum of four largest Group D Obligor Receivables balances (up
to the Concentration Percentage for each Obligor), (ii) the sum of the two
largest Group C Obligor Receivables balances (up to the Concentration Percentage
for each Obligor) and (iii) the largest Group B Obligor Receivables balances (up
to the Concentration Percentage for each Obligor) or Group A Obligor Receivables
balances (up to the Concentration Percentage for each Obligor), divided by (b)
Eligible Receivables.
"Conduit Agent" has the meaning set forth in the preamble to the Agreement.
"Conduit Purchaser" has the meaning set forth in the preamble to the
Agreement.
"Conduit Purchasers' Share" of any amount means such amount multiplied by
the Purchased Interest at the time of determination.
"CONSOL Energy" has the meaning set forth in the preamble to the Agreement.
"CONSOL Guaranty" means the Agreement of Guaranty and Suretyship, dated as
of even date herewith, executed by CONSOL Energy in favor of Seller, as such
agreement may be amended, restated, supplemented or otherwise modified from time
to time.
"Contract" means, with respect to any Receivable, any and all contracts,
instruments, agreements, leases, invoices, notes or other writings pursuant to
which such Receivable arises or that evidence such Receivable or under which an
Obligor becomes or is obligated to make payment in respect of such Receivable.
"CP Rate" for any Settlement Period for any Portion of Capital means (i) in
the case of Market Street, a rate calculated by the Administrator equal to: (a)
the rate (or if more than one rate, the weighted average of the rates) at which
Notes of Market Street on each day during such period have been outstanding;
provided, that if such rate(s) is a discount rate(s), then the CP Rate shall be
the rate (or if more than one rate, the weighted average of the rates) resulting
from converting such discount rate(s) to an interest-bearing equivalent rate
plus (b) the commissions and charges charged by such placement agent or
commercial paper dealer with respect to such Notes, expressed as a percentage of
the face amount of such Notes and converted to an interest-bearing equivalent
rate per annum, and (ii) in the case of each other Conduit Purchaser, the rate
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set forth as the CP Rate for such Conduit Purchaser in the related Fee Letter.
Notwithstanding the foregoing, the "CP Rate" for any day while a Termination
Event exists shall be an interest rate equal to 2% above the Base Rate in effect
on such day.
"Credit and Collection Policy" means, as the context may require, those
receivables credit and collection policies and practices of the Originators in
effect on the date of the Agreement and described in Schedule I to the
Agreement, as modified in compliance with the Agreement.
"Cut-off Date" has the meaning set forth in the Sale Agreement.
"Days' Sales Outstanding" means, at any time, an amount computed as of the
last day of each calendar month equal to: (a) the average of the Outstanding
Balance of all Pool Receivables as of the last day of each of the three most
recent calendar months ended on the last day of such calendar month divided by
(b)(i) the aggregate credit sales made by the Originators during the three
calendar months ended on or before the last day of such calendar month divided
by (ii) 90.
"Debt" means: (a) indebtedness for borrowed money, (b) obligations
evidenced by bonds, debentures, notes or other similar instruments, (c)
obligations to pay the deferred purchase price of property or services, (d)
obligations as lessee under leases that shall have been or should be, in
accordance with generally accepted accounting principles, recorded as capital
leases, and (e) obligations under direct or indirect guaranties in respect of,
and obligations (contingent or otherwise) to purchase or otherwise acquire, or
otherwise to assure a creditor against loss in respect of, indebtedness or
obligations of others of the kinds referred to in clauses (a) through (d).
"Defaulted Receivable" means a Receivable:
(a) as to which any payment, or part thereof, remains unpaid for more than
60 days from the original due date for such payment, or
(b) without duplication (i) as to which an Insolvency Proceeding shall
have occurred with respect to the Obligor thereof or any other Person obligated
thereon or owning any Related Security with respect thereto, or (ii) that has
been written off the Seller's books as uncollectible.
"Default Ratio" means the ratio (expressed as a percentage and rounded to
the nearest 1/100 of 1%, with 5/1000th of 1% rounded upward) computed as of the
last day of each calendar month by dividing: (a) the aggregate Outstanding
Balance of all Pool Receivables that became Defaulted Receivables during such
month, by (b) the aggregate credit sales made by the Originators during the
month that is five calendar months before such month.
"Delinquency Ratio" means the ratio (expressed as a percentage and rounded
to the nearest 1/100 of 1%, with 5/1000th of 1% rounded upward) computed as of
the last day of each calendar month by dividing: (a) the aggregate Outstanding
Balance of all Pool Receivables that were Delinquent Receivables on such day by
(b) the aggregate Outstanding Balance of all Pool Receivables on such day.
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"Delinquent Receivable" means a Receivable as to which any payment, or part
thereof, remains unpaid for more than 60 days from the original due date for
such payment.
"Dilution Horizon" means, for any calendar month, the ratio (expressed as a
percentage and rounded to the nearest 1/100th of 1%, with 5/1000th of 1% rounded
upward) computed as of the last day of such calendar month of: (a) the aggregate
credit sales made by the Originators during the two most recent calendar months
to (b) the Net Receivables Pool Balance at the last day of the most recent
calendar month.
"Dilution Ratio" means the ratio (expressed as a percentage and rounded to
the nearest 1/100th of 1%, with 5/1000th of 1% rounded upward), computed as of
the last day of each calendar month by dividing: (a) the aggregate amount of
payments required to be made by the Seller pursuant to Section 1.4(e)(i) of the
Agreement (excluding any credit adjustments related to reversals of invoices
that are re-invoiced) during such calendar month by (b) the aggregate credit
sales made by the Originators during the month that is one month prior to the
current calendar month.
"Dilution Reserve" means, on any date, an amount equal to: (a) the Capital
at the close of business of the Seller on such date multiplied by (b) (i) the
Dilution Reserve Percentage on such date, divided by (ii) 100% minus the
Dilution Reserve Percentage on such date.
"Dilution Reserve Percentage" means on any date, the following expressed as
a percentage (as opposed to a fraction): the product of (i) the Dilution Horizon
multiplied by (ii) the sum of (x) 2 times the average of the Dilution Ratios for
the twelve most recent calendar months and (y) the Spike Factor.
"Discount" means with respect to any Conduit Purchaser:
(a) for the Portion of Capital for any Settlement Period to the
extent such Conduit Purchaser will be funding such Portion of Capital
during such Settlement Period through the issuance of Notes:
CPR x C x ED/360
(b) for the Portion of Capital for any Settlement Period to the
extent such Conduit Purchaser will not be funding such Portion of Capital
during such Settlement Period through the issuance of Notes:
AR x C x ED/Year + TF
where:
AR = the Alternate Rate for the Portion of Capital for such
Settlement Period with respect to such Conduit Purchaser,
C = the Portion of Capital during such Settlement Period with
respect to such Conduit Purchaser,
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CPR = the CP Rate for the Portion of Capital for such Settlement
Period with respect to such Conduit Purchaser,
ED = the actual number of days during such Settlement Period,
Year = if such Portion of Capital is funded based upon: (i) the
Euro-Rate, 360 days, and (ii) the Base Rate, 365 or 366
days, as applicable, and
TF = the Termination Fee, if any, for the Portion of Capital
for such Settlement Period with respect to such Conduit
Purchaser;
provided, that no provision of the Agreement shall require the payment or permit
the collection of Discount in excess of the maximum permitted by applicable law;
and provided further, that Discount for the Portion of Capital shall not be
considered paid by any distribution to the extent that at any time all or a
portion of such distribution is rescinded or must otherwise be returned for any
reason.
"Eligible Receivable" means, at any time, a Pool Receivable:
(a) the Obligor of which is a United States or Canadian resident,
(b) the Obligor of which is not a government or a governmental
subdivision, affiliate or agency,
(c) the Obligor of which is not subject to any action of the type
described in paragraph (f) of Exhibit V to the Agreement,
(d) the Obligor of which is not an Affiliate of CONSOL Energy or any
other Originator,
(e) the Obligor of which is not an Obligor as to which the
Administrator, in its reasonable business judgment, has notified the Seller
that such Obligor is not acceptable,
(f) that is denominated and payable only in U.S. dollars in the
United States to any Originator at a Lockbox Account and results from goods
sold and shipped from such Originator in the United States,
(g) that does not have a stated maturity which is more than 90 days
after the original invoice date of such Receivable,
(h) that arises under a duly authorized Contract for the sale and
delivery of goods and services in the ordinary course of any Originator's
business,
(i) that arises under a duly authorized Contract that is in full
force and effect and that is a legal, valid and binding obligation of the
related Obligor, enforceable against such Obligor in accordance with its
terms subject to applicable bankruptcy, fraudulent
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transfer or conveyance, insolvency, reorganization, moratorium and other
similar laws limiting the enforceability of creditor's rights generally, or
from time to time in effect,
(j) that conforms in all material respects with all applicable laws,
rulings and regulations in effect,
(k) that is not the subject of any asserted dispute, offset, hold
back defense, Adverse Claim or other claim, provided, that, with respect to
any Receivable which is subject to any such a claim, the amount of such
Receivable which shall be treated as an Eligible Receivable shall equal the
excess of the amount of such Receivable over the amount of such claim
asserted by or available to the account party or other obligor,
(l) that satisfies all applicable requirements of the applicable
Credit and Collection Policy,
(m) that has not been modified, waived or restructured since its
creation, except as permitted pursuant to Section 4.2 of the Agreement,
(n) in which the Seller owns good and marketable title, free and
clear of any Adverse Claims, and that is freely assignable by the Seller
(including without any consent of the related Obligor),
(o) for which the Administrator, for the benefit of the Conduit
Purchasers, shall have a valid and enforceable undivided percentage
ownership or security interest, to the extent of the Purchased Interest,
and a valid and enforceable first priority perfected security interest
therein and in the Related Security and Collections with respect thereto,
in each case free and clear of any Adverse Claim,
(p) that constitutes an account as defined in the UCC, and that is
not evidenced by instruments or chattel paper,
(q) that is neither a Defaulted Receivable nor a Delinquent
Receivable,
(r) for which neither any Originator thereof, the Seller nor the
Servicer has established any offset arrangements with the related Obligor,
(s) for which Defaulted Receivables of the related Obligor do not
exceed 35% of the Outstanding Balance of all such Obligor's Receivables,
and
(t) that represents amounts earned and payable by the Obligor that
are not subject to the performance of additional services by any Originator
thereof.
(u) that has not been classified as "shipped but not billed "for more
than 60 days.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute of similar import, together
with the regulations
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thereunder, in each case as in effect from time to time. References to sections
of ERISA also refer to any successor sections.
"ERISA Affiliate" means: (a) any corporation that is a member of the same
controlled group of corporations (within the meaning of Section 414(b) of the
Internal Revenue Code) as the Seller, any Originator or CONSOL Energy, (b) a
trade or business (whether or not incorporated) under common control (within the
meaning of Section 414(c) of the Internal Revenue Code) with the Seller, any
Originator or CONSOL Energy, or (c) a member of the same affiliated service
group (within the meaning of Section 414(m) of the Internal Revenue Code) as the
Seller, any Originator, any corporation described in clause (a) or any trade or
business described in clause (b).
"Euro-Rate" means with respect to any Settlement Period the interest rate
per annum determined by the Administrator by dividing (the resulting quotient
rounded upwards, if necessary, to the nearest 1/100th of 1% per annum) (i) the
rate of interest determined by the Administrator in accordance with its usual
procedures (which determination shall be conclusive absent manifest error) to be
the average of the London interbank market offered rates for U.S. dollars quoted
by the BBA as set forth on Dow Jones Markets Service (formerly known as
Telerate) (or appropriate successor or, if the BBA or its successor ceases to
provide display page 3750 (or such other display page on the Dow Jones Markets
Service system as may replace display page 3750) at or about 11:00 a.m. (London
time) on the Business Day which is two (2) Business Days prior to the first day
of such Settlement Period for an amount comparable to the Portion of Capital to
be funded at the Alternate Rate and based upon the Euro-Rate during such
Settlement Period by (ii) a number equal to 1.00 minus the Euro-Rate Reserve
Percentage. The Euro-Rate may also be expressed by the following formula:
Euro-Rate = Average of London interbank offered rates quoted
by BBA as shown on Dow Jones Markets Service
display page 3750 or appropriate successor
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1.00 - Euro-Rate Reserve Percentage
where "Euro-Rate Reserve Percentage" means, the maximum effective percentage in
effect on such day as prescribed by the Board of Governors of the Federal
Reserve System (or any successor) for determining the reserve requirements
(including without limitation, supplemental, marginal, and emergency reserve
requirements) with respect to eurocurrency funding (currently referred to as
"Eurocurrency Liabilities"). The Euro-Rate shall be adjusted with respect to any
Portion of Capital funded at the Alternate Rate and based upon the Euro-Rate
that is outstanding on the effective date of any change in the Euro-Rate Reserve
Percentage as of such effective date. The Administrator shall give prompt notice
to the Seller of the Euro-Rate as determined or adjusted in accordance herewith
(which determination shall be conclusive absent manifest error).
"Excess Concentration" means the sum of (i) the amounts by which the
Outstanding Balance of Eligible Receivables of each Obligor then in the
Receivables Pool exceeds an amount equal to: (a) the Concentration Percentage
for such Obligor multiplied by (b) the Outstanding Balance of all Eligible
Receivables then in the Receivables Pool, plus (ii) the amount by which the sum
of all Eligible Receivables the Obligors of which are Canadian residents exceeds
10% of
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all Eligible Receivables, plus (iii) the amount by which the sum of all Eligible
Receivables with a stated maturity of more than 60 days but less than or equal
to 90 days exceeds 5% of all Eligible Receivables, plus (iv) the amount by which
the sum of all Eligible Receivables classified as "shipped but not billed" for
more than 30 days but less than or equal to 60 days exceeds 20% of all Eligible
Receivables.
"Facility Termination Date" means the earliest to occur of: (a) April 30,
2006, (b) the date determined pursuant to Section 2.2 of the Agreement, (c) the
date the Purchase Limit reduces to zero pursuant to Section 1.1(b) of the
Agreement, (d) the date that the commitments of the Purchasers terminate under
the Liquidity Agreement, and (e) any Conduit Purchaser or any Conduit Agent
shall fail to cause the amendment or modification of any Transaction Document or
related opinion as required by Moody's or Standard and Poor's, and such failure
shall continue for 30 days after such amendment is initially requested.
"Federal Funds Rate" means, for any day, the per annum rate set forth in
the weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Board (including any such
successor, "H.15(519)") for such day opposite the caption "Federal Funds
(Effective)." If on any relevant day such rate is not yet published in H.
15(519), the rate for such day will be the rate set forth in the daily
statistical release designated as the Composite 3:30 p.m. Quotations for U.S.
Government Securities, or any successor publication, published by the Federal
Reserve Bank of New York (including any such successor, the "Composite 3:30 p.m.
Quotations") for such day under the caption "Federal Funds Effective Rate." If
on any relevant day the appropriate rate is not yet published in either
H.15(519) or the Composite 3:30 p.m. Quotations, the rate for such day will be
the arithmetic mean as determined by the Administrator of the rates for the last
transaction in overnight Federal funds arranged before 9:00 a.m. (New York time)
on that day by each of three leading brokers of Federal funds transactions in
New York City selected by the Administrator.
"Federal Reserve Board" means the Board of Governors of the Federal Reserve
System, or any entity succeeding to any of its principal functions.
"Fee Letters" has the meaning set forth in Section 1.5 of the Agreement.
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any body or entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, including any court, and any Person owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"Group A Obligor" means any Obligor with a short-term rating of at least:
(a) "A-l" by Standard & Poor's, or if such Obligor does not have a short-term
rating from Standard & Poor's, a rating of "A+" or better by Standard & Poor's
on its long-term senior unsecured and uncredit-enhanced debt securities, and
(except with respect to the Special Obligor) (b) "P-1" by Moody's, or if such
Obligor does not have a short-term rating from Moody's, "Al" or better by
Moody's on its long-term senior unsecured and uncredit-enhanced debt securities.
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"Group B Obligor" means an Obligor, not a Group A Obligor, with a
short-term rating of at least: (a) "A-2" by Standard & Poor's, or if such
Obligor does not have a short-term rating from Standard & Poor's, a rating of
"BBB+" to "A" by Standard & Poor's on its long-term senior unsecured and
uncredit-enhanced debt securities, and (except with respect to the Special
Obligor) (b) "P-2" by Moody's, or if such Obligor does not have a short-term
rating from Moody's, "Baal" to "A2" by Moody's on its long-term senior unsecured
and uncredit-enhanced debt securities.
"Group C Obligor" means an Obligor, not a Group A Obligor or a Group B
Obligor, with a short-term rating of at least: (a) "A-3" by Standard & Poor's,
or if such Obligor does not have a short-term rating from Standard & Poor's, a
rating of "BBB-" to "BBB" by Standard & Poor's on its long-term senior unsecured
and uncredit-enhanced debt securities, and (except with respect to the Special
Obligor) (b) "P-3" by Moody's, or if such Obligor does not have a short-term
rating from Moody's, "Baa3" to "Baa2" by Moody's on its long-term senior
unsecured and uncredit-enhanced debt securities.
"Group D Obligor" means any Obligor that is not a Group A Obligor, Group B
Obligor or Group C Obligor.
"Indemnified Amounts" has the meaning set forth in Section 3.1 of the
Agreement.
"Indemnified Party" has the meaning set forth in Section 3.1 of the
Agreement.
"Independent Director" has the meaning set forth in paragraph 3(c) of
Exhibit IV to the Agreement.
"Information Package" means a report, in substantially the form of Annex A
to the Agreement, furnished to the Administrator pursuant to the Agreement.
"Insolvency Proceeding" means: (a) any case, action or proceeding before
any court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution, winding-up
or relief of debtors, or (b) any general assignment for the benefit of creditors
of a Person, composition, marshaling of assets for creditors of a Person, or
other, similar arrangement in respect of its creditors generally or any
substantial portion of its creditors, in each of cases (a) and (b) undertaken
under U.S. Federal, state or foreign law, including the Bankruptcy Code.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as amended
from time to time, and any successor statute of similar import, together with
the regulations thereunder, in each case as in effect from time to time.
References to sections of the Internal Revenue Code also refer to any successor
sections.
"Liquidity Agent" means each of the banks acting as agent for the various
liquidity banks under each Liquidity Agreement.
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"Liquidity Agreement" means any agreement entered into in connection with
this Agreement pursuant to which a Liquidity Provider agrees to make purchases
or advances to, or purchase assets from, any Conduit Purchaser in order to
provide liquidity for such Conduit Purchaser's Purchases.
"Lock-Box Account" means an account in the name of the Seller and
maintained by the Seller at a bank or other financial institution for the
purpose of receiving Collections, either by check deposit or wire or ACH
transfer.
"Lock-Box Agreement" means an agreement, in form and substance satisfactory
to the Administrator, among the Seller, the Servicer, the Administrator, and a
Lock-Box Bank.
"Lock-Box Bank" means any of the banks or other financial institutions
holding one or more Lock-Box Accounts.
"Loss Reserve" means, on any date, an amount equal to: (a) the Capital at
the close of business of the Seller on such date multiplied by (b)(i) the Loss
Reserve Percentage on such date divided by (ii) 100% minus the Loss Reserve
Percentage on such date.
"Loss Reserve Percentage" means, on any date, the following expressed as a
percentage (as opposed to a fraction):
(2.0) *(ADR) * (ACS)
-----------------------------------
Net Receivables Pool Balance
As used herein:
"ADR" means the highest average of the Default Ratios for any three
consecutive calendar months during the twelve most recent calendar months times,
"ACS" means the aggregate credit sales made by the Originators (or
Receivables of such Originators otherwise created) during the six most recent
calendar months.
"Market Street" means Market Street Funding Corporation, a Delaware
corporation.
"Market Street Base Rate" means, for any day, a fluctuating interest rate
per annum as shall be in effect from time to time, which rate shall be at all
times equal to the higher of:
(a) the rate of interest in effect for such day as publicly announced from
time to time by PNC in Pittsburgh, Pennsylvania as its "prime rate." Such "prime
rate" is set by PNC based upon various factors, including PNC's costs and
desired return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above or below
such announced rate, and
(b) 0.50% per annum above the latest Federal Funds Rate.
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"Material Adverse Effect" means with respect to any event or circumstance,
a material adverse effect on:
(a) the assets, operations, business or financial condition of (i)
the Seller, or (ii) CONSOL Energy or its Subsidiaries,
(b) the ability of any of the Originators, the Servicer, any of the
Sub-Servicers, or the Seller to perform its obligations under the Agreement
or any other Transaction Document to which it is a party,
(c) the validity or enforceability of the Agreement or any other
Transaction Document, or the validity, enforceability or collectibility of
a material portion of the Pool Receivables, or
(d) the status, perfection, enforceability or priority of the
Administrator's or any Conduit Purchaser's or the Seller's interest in the
Pool Assets.
"Monthly Settlement Date" means the twenty-third day of each calendar month
(or the next succeeding Business Day if such day is not a Business Day),
beginning May 23, 2003.
"Moody's" means Moody's Investors Service, Inc.
"Net Receivables Pool Balance" means, at anytime: (a) the Outstanding
Balance of Eligible Receivables then in the Receivables Pool minus (b) Excess
Concentration.
"Notes" means short-term promissory notes issued, or to be issued, by each
Conduit Purchaser to fund its investments in accounts receivable or other
financial assets.
"Obligor" means, with respect to any Receivable, the Person obligated to
make payments pursuant to the Contract relating to such Receivable.
"Originator" has the meaning set forth in the Sale Agreement.
"Originator Assignment Certificate" means the assignment by each
Originator, in substantially the form of Exhibit C to the Sale Agreement,
evidencing Seller's ownership of the Receivables generated by the Originators,
as the same may be amended, supplemented, amended and restated, or otherwise
modified from time to time in accordance with the Sale Agreement.
"Outstanding Balance" of any Receivable at any time means the then
outstanding principal balance thereof.
"Paydown Notice" has the meaning set forth in Section 1.4(f)(i) of the
Agreement.
"Payment Date" has the meaning set forth in Section 2.1 of the Sale
Agreement.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, joint
venture, limited liability company or other entity, or a government or any
political subdivision or agency thereof.
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"PNC" has the meaning set forth in the preamble to the Agreement.
"Pool Assets" has the meaning set forth in Section 1.2(d) of the Agreement.
"Pool Receivable" means a Receivable in the Receivables Pool.
"Portion of Capital" means with respect to any Conduit Purchaser and its
related Capital, the portion of such Capital being funded or maintained by such
Conduit Purchaser(or its successors or permitted assigns) by reference to a
particular interest rate basis. In addition, at any time when the Capital of the
Purchased Interest is not divided into two or more such portions, "Portion of
Capital" means 100% of the Capital.
"Program Support Agreement" means and includes any Liquidity Agreement and
any other agreement entered into by any Program Support Provider providing for:
(a) the issuance of one or more letters of credit for the account of any Conduit
Purchaser in connection with such Conduit Purchaser's Receivables securitization
program, (b) the issuance of one or more surety bonds in connection with such
Conduit Purchaser's Receivables securitization program for which any Conduit
Purchaser is obligated to reimburse the applicable Program Support Provider for
any drawings thereunder, (c) the sale by any Conduit Purchaser to any Program
Support Provider of the Purchased Interest (or portions thereof) and/or (d) the
making of loans and/or other extensions of credit to any Conduit Purchaser in
connection with such Conduit Purchaser's Receivables-securitization program
contemplated in the Agreement, together with any letter of credit, surety bond
or other instrument issued thereunder (but excluding any discretionary advance
facility provided by the Administrator).
"Program Support Provider" means and includes any Purchaser and any other
Person (other than any customer of the related Conduit Purchaser) now or
hereafter extending credit or having a commitment to extend credit to or for the
account of, or to make purchases from, any Conduit Purchaser pursuant to any
Program Support Agreement.
"Purchase Notice" has the meaning set forth in Section 1.2(a) of the
Agreement.
"Purchase and Sale Indemnified Amounts" has the meaning set forth in
Section 9.1 of the Sale Agreement.
"Purchase and Sale Indemnified Party" has the meaning set forth in Section
9.1 of the Sale Agreement.
"Purchase and Sale Termination Date" has the meaning set forth in Section
1.4 of the Sale Agreement.
"Purchase and Sale Termination Event" has the meaning set forth in Section
8.1 of the Sale Agreement.
"Purchase Facility" has the meaning set forth in Section 1.1 of the Sale
Agreement.
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"Purchase Limit" means $125,000,000, as such amount may be reduced pursuant
to Section 1.1 (b) of the Agreement. References to the unused portion of the
Purchase Limit shall mean, at any time, the Purchase Limit minus the then
outstanding Capital.
"Purchase Price" has the meaning set forth in Section 2.1 of the Sale
Agreement.
"Purchase Report" has the meaning set forth in Section 2.1 of the Sale
Agreement.
"Purchased Interest" means, at any time, the undivided percentage ownership
interest of all Conduit Purchasers, collectively, in: (a) each and every Pool
Receivable now existing or hereafter arising, (b) all Related Security with
respect to such Pool Receivables and (c) all Collections with respect to, and
other proceeds of, such Pool Receivables and Related Security. Such undivided
percentage interest shall be computed as:
Capital + Total Reserves
--------------------------------
Net Receivables Pool Balance
The Purchased Interest shall be determined from time to time pursuant to Section
1.3 of the Agreement.
"Purchaser" has the meaning set forth in Section 5.3(b) of the Agreement.
"Receivable" means any indebtedness and other obligations owed to the
Seller (as assignee of each Originator) or any Originator by, or any right of
the Seller or any Originator to payment from or on behalf of, an Obligor,
whether constituting an account, chattel paper, instrument or general
intangible, arising in connection with the sale of goods or the rendering of
services by any Originator, and includes the obligation to pay any finance
charges, fees and other charges with respect thereto. Indebtedness and other
obligations arising from any one transaction, including indebtedness and other
obligations represented by an individual invoice or agreement, shall constitute
a Receivable separate from a Receivable consisting of the indebtedness and other
obligations arising from any other transaction.
"Receivables Pool" means, at any time, all of the then outstanding
Receivables purchased by the Seller pursuant to the Sale Agreement prior to the
Facility Termination Date.
"Reference Bank" means PNC.
"Related Rights" has the meaning set forth in Section 1.1 of the Sale
Agreement.
"Related Security" means, with respect to any Receivable:
(a) all of the Seller's and each Originator's interest in any goods
(including returned goods), and documentation of title evidencing the
shipment or storage of any goods (including returned goods), relating to
any sale giving rise to such Receivable,
(b) all instruments and chattel paper that may evidence such
Receivable,
I-14
(c) all other security interests or liens and property subject
thereto from time to time purporting to secure payment of such Receivable,
whether pursuant to the Contract related to such Receivable or otherwise,
together with all UCC financing statements or similar filings relating
thereto, and
(d) all of the Seller's and each Originator's rights, interests and
claims under the Contracts and all guaranties, indemnities, insurance and
other agreements (including the related Contract) or arrangements of
whatever character from time to time supporting or securing payment of such
Receivable or otherwise relating to such Receivable, whether pursuant to
the Contract related to such Receivable or otherwise.
"Sale Agreement" means the Purchase and Sale Agreement, dated as of even
date herewith, between the Seller and the Originators, as such agreement may be
amended, restated, supplemented or otherwise modified from time to time.
"Seller" has the meaning set forth in the preamble to the Agreement.
"Seller's Share" of any amount means the greater of: (a) $0 and (b) such
amount minus the Conduit Purchasers' Share.
"Servicer" has the meaning set forth in the preamble to the Agreement.
"Servicing Fee" shall mean the fee referred to in Section 4.6 of the
Agreement.
"Servicing Fee Rate" shall mean the rate referred to in Section 4.6 of the
Agreement.
"Settlement Date" means with respect to any Portion of Capital for any
Settlement Period, (i) prior to the Facility Termination Date, the Monthly
Settlement Date and (ii) on and after the Facility Termination Date, each day
selected from time to time by the Administrator (it being understood that the
Administrator may select such Settlement Date to occur as frequently as daily),
or, in the absence of such selection, the Monthly Settlement Date.
"Settlement Period" means: (a) before the Facility Termination Date: (i)
initially the period commencing on the date of the initial purchase pursuant to
Section 1.2 of the Agreement (or in the case of any fees payable hereunder,
commencing on the Closing Date) and ending on (but not including) the next
Monthly Settlement Date, and (ii) thereafter, each period commencing on such
Monthly Settlement Date and ending on (but not including) the next Monthly
Settlement Date, and (b) on and after the Facility Termination Date: such period
(including a period of one day) as shall be selected from time to time by the
Administrator or, in the absence of any such selection, each period of 30 days
from the last day of the preceding Settlement Period.
"Solvent" means, with respect to any Person at any time, a condition under
which:
(i) the fair value and present fair saleable value of such Person's
total assets is, on the date of determination, greater than such Person's
total liabilities (including contingent and unliquidated liabilities) at
such time;
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(ii) the fair value and present fair saleable value of such Person's
assets is greater than the amount that will be required to pay such
Person's probable liability on its existing debts as they become absolute
and matured ("debts," for this purpose, includes all legal liabilities,
whether matured or unmatured, liquidated or unliquidated, absolute, fixed,
or contingent);
(iii) such Person is and shall continue to be able to pay all of its
liabilities as such liabilities mature; and
(iv) such Person does not have unreasonably small capital with which
to engage in its current and in its anticipated business.
For purposes of this definition:
(A) the amount of a Person's contingent or unliquidated liabilities
at any time shall be that amount which, in light of all the facts and
circumstances then existing, represents the amount which can reasonably be
expected to become an actual or matured liability;
(B) the "fair value" of an asset shall be the amount which may be
realized within a reasonable time either through collection or sale of such
asset at its regular market value;
(C) the "regular market value" of an asset shall be the amount which
a capable and diligent business person could obtain for such asset from an
interested buyer who is willing to Purchase such asset under ordinary
selling conditions; and
(D) the "present fair saleable value" of an asset means the amount
which can be obtained if such asset is sold with reasonable promptness in
an arm's-length transaction in an existing and not theoretical market.
"Special Obligor" means Ontario Power Generation, Inc., for so long as such
corporation has debt securities which are rated by Standard & Poor's and its
debt securities are not rated by Moody's.
"Spike Factor" means, for any calendar month, (a) the positive difference,
if any, between: (i) the highest Dilution Ratio for any one calendar month
during the twelve most recent calendar months and (ii) the arithmetic average of
the Dilution Ratios for such twelve months times (b) (i) the highest Dilution
Ratio for any one calendar month during the twelve most recent calendar months
divided by (ii) the arithmetic average of the Dilution Ratios for such twelve
months.
"Standard & Poor's" means Standard & Poor's, a division of The McGraw-Hill
Companies, Inc.
"Subsidiary" means, as to any Person, a corporation, partnership, limited
liability company or other entity of which shares of stock of each class or
other interests having ordinary voting power (other than stock or other
interests having such power only by reason of the
I-16
happening of a contingency) to elect a majority of the Board of Directors or
other managers of such entity are at the time owned, or management of which is
otherwise controlled: (a) by such Person, (b) by one or more Subsidiaries of
such Person or (c) by such Person and one or more Subsidiaries of such Person.
"Termination Day" means: (a) each day on which the conditions set forth in
Section 2 of Exhibit II to the Agreement are not satisfied or (b) each day that
occurs on or after the Facility Termination Date.
"Termination Event" has the meaning specified in Exhibit V to the
Agreement.
"Termination Fee" means, for any Settlement Period during which a
Termination Day occurs, with respect to any Conduit Purchaser, the amount, if
any, by which: (a) the additional Discount (calculated without taking into
account any Termination Fee or any shortened duration of such Settlement Period
pursuant to the definition thereof) that would have accrued during such
Settlement Period on the reductions of Capital relating to such Settlement
Period had such reductions not been made, exceeds (b) the income, if any,
received by the Conduit Purchasers from investing the proceeds of such
reductions of Capital, as determined by the Administrator, which determination
shall be binding and conclusive for all purposes, absent manifest error.
"Total Reserves" means, at any time the sum of: (a) the Yield Reserve, plus
(b) the greater of (i) the Loss Reserve or (ii) the Concentration Reserve, plus
(c) the Dilution Reserve.
"Transaction Documents" means the Agreement, the Lock-Box Agreements, the
Fee Letters, the Sale Agreement, the CONSOL Guaranty, and all other
certificates, instruments, UCC financing statements, reports, notices,
agreements and documents executed or delivered under or in connection with the
Agreement, in each case as the same may be amended, supplemented or otherwise
modified from time to time in accordance with the Agreement.
"UCC" means the Uniform Commercial Code as from time to time in effect in
the applicable jurisdiction.
"Unmatured Purchase and Sale Termination Event" means any event which, with
the giving of notice or lapse of time, or both, would become a Purchase and Sale
Termination Event.
"Unmatured Termination Event" means an event that, with the giving of
notice or lapse of time, or both, would constitute a Termination Event.
"Yield Reserve" means, on any date, an amount equal to: (a) the Capital at
the close of business of the Seller on such date multiplied by (b)(i) the Yield
Reserve Percentage on such date divided by (ii) 100% minus the Yield Reserve
Percentage on such date.
"Yield Reserve Percentage" means at any time:
(BR+SFR) x l.5 x DSO
------
360
where:
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BR = the Base Rate computed for the most recent Settlement Period,
DSO = Days' Sales Outstanding, and
SFR = the Servicing Fee Rate
Other Terms. All accounting terms not specifically defined herein shall be
construed in accordance with generally accepted accounting principles. All terms
used in Article 9 of the UCC in the State of New York, and not specifically
defined herein, are used herein as defined in such Article 9. Unless the context
otherwise requires, "or" means "and/or," and "including" (and with correlative
meaning "include" and "includes") means including without limiting the
generality of any description preceding such term.
I-18
EXHIBIT II
CONDITIONS OF PURCHASES
1. Conditions Precedent to Initial Purchase. The Initial Purchase under
this Agreement is subject to the following conditions precedent that the
Administrator shall have received on or before the date of such purchase, each
in form and substance (including the date thereof) satisfactory to the
Administrator:
(a) A counterpart of the Agreement and the other Transaction Documents
duly executed by the parties thereto.
(b) Certified copies of: (i) the resolutions of the Board of Directors of
each of the Seller, CONSOL Energy and each Originator authorizing the execution,
delivery and performance by the Seller, CONSOL Energy and each Originator, as
the case may be, of the Agreement and the other Transaction Documents to which
it is a party; (ii) all documents evidencing other necessary corporate or
organizational action and governmental approvals, if any, with respect to the
Agreement and the other Transaction Documents and (iii) the certificate of
incorporation and by-laws or limited liability company agreement, as applicable,
of the Seller, CONSOL Energy and each Originator.
(c) A certificate of the Secretary or Assistant Secretary of the Seller,
each Originator and CONSOL Energy certifying the names and true signatures of
its officers who are authorized to sign the Agreement and the other Transaction
Documents. Until the Administrator receives a subsequent incumbency certificate
from the Seller, any Originator, or CONSOL Energy, as the case may be, the
Administrator shall be entitled to rely on the last such certificate delivered
to it by the Seller, such Originator, or CONSOL Energy, as the case may be.
(d) Proper financing statements, on or before the date of such initial
purchase suitable for filing under the UCC of all jurisdictions that the
Administrator may deem necessary or desirable in order to perfect the interests
of the Seller and the Administrator contemplated by the Agreement and the Sale
Agreement.
(e) Proper financing statements (Form UCC-3), suitable for filing under
the UCC of all jurisdictions that the Administrator may deem, if any, necessary
or desirable to release all security interests and other rights of any Person in
the Receivables, Contracts or Related Security previously granted by the
Originators or the Seller.
(f) Completed UCC search reports, dated on or shortly before the date of
the initial purchase hereunder, listing the financing statements filed in all
applicable jurisdictions referred to in subsection (e) above that name the
Originators or the Seller as debtor, together with copies of such other
financing statements, and similar search reports with respect to judgment liens,
federal tax liens and liens of the Pension Benefit Guaranty Corporation in such
jurisdictions, as the Administrator may request, showing no Adverse Claims on
any Pool Assets other than such Adverse Claims as to which those financing
statements (Form UCC-3) referred to in Subsection (e) above shall terminate.
II-1
(g) Favorable opinions, in form and substance reasonably satisfactory to
the Administrator, of Morgan, Lewis & Bockius LLP, counsel for the Seller,
CONSOL Energy, the Originators, and the Servicer.
(h) Satisfactory results of a review, field examination and audit
(performed by representatives of the Administrator or by third parties at the
direction of the Administrator) of the Servicer's collection, operating and
reporting systems, the Credit and Collection Policy of the Originators,
historical receivables data and accounts, including satisfactory results of a
review of the Servicer's operating location(s) and satisfactory review and
approval of the Eligible Receivables in existence on the date of the initial
purchase under the Agreement.
(i) A pro forma Information Package representing the performance of the
Receivables Pool for the calendar month before closing.
(j) Evidence of payment by the Seller of all accrued and unpaid fees
(including those contemplated by the Fee Letters), costs and expenses to the
extent then due and payable on the date thereof, including any such costs, fees
and expenses arising under or referenced in Section 5.4 of the Agreement and the
Fee Letters.
(k) The Fee Letters duly executed by the Seller and the Servicer and the
other parties thereto.
(l) Good standing certificates with respect to each of the Seller, CONSOL
Energy, each Originator, and the Servicer issued by the Secretary of State (or
similar official) of the state of each such Person's organization or formation
and chief executive office.
(m) Each Liquidity Agreement and all other Transaction Documents duly
executed by the parties thereto including the lenders participating in such
Liquidity Agreement.
(n) All information with respect to the Receivables as the Administrator
or the Conduit Purchasers may reasonably request.
(o) Satisfactory review of the Three Year Credit Agreement, dated as of
September 16, 2002, as amended (the "Three Year Credit Agreement") and the
364-day Credit Agreement dated as of September 16, 2002, as amended (the
"364-Day Credit Agreement"), among CONSOL Energy, (the "Borrower"), the banks,
financial institutions and other lenders that are parties thereto, Salomon Smith
Barney Inc., as sole lead arranger, and Citibank, N.A., as administrative agent
and the other parties thereto and an appropriate waiver or amendment to such
Three Year Credit Agreement and such 364-Day Credit Agreement and confirmation
to the satisfaction of the Administrator and the Conduit Purchasers that there
exist no conflicts between the Transaction Documents and such Three Year Credit
Agreement and such 364-Day Credit Agreement and any intercreditor issues shall
have been resolved to the satisfaction of the Administrator and the Conduit
Purchasers.
(p) Such other approvals, opinions or documents as the Administrator or
the Conduit Purchasers may reasonably request.
II-2
2. Conditions Precedent to All Purchases and Reinvestments. Each purchase
(except as to clause (a), including the initial purchase) and each reinvestment
shall be subject to the further conditions precedent that:
(a) in the case of each purchase, the Servicer shall have delivered to the
Administrator and each Conduit Agent on or before such purchase, in form and
substance satisfactory to the Administrator, a completed pro forma Information
Package to reflect the level of Capital and related reserves and the calculation
of the Purchased Interest after such subsequent purchase and a completed
Purchase Notice in the form of Annex B; and
(b) on the date of such purchase or reinvestment the following statements
shall be true (and acceptance of the proceeds of such purchase or reinvestment
shall be deemed a representation and warranty by the Seller that such statements
are then true):
(i) the representations and warranties contained in Exhibit III to
the Agreement are true and correct in all material respects on and as of
the date of such purchase or reinvestment as though made on and as of such
date;
(ii) no event has occurred and is continuing, or would result from
such purchase or reinvestment, that constitutes a Termination Event or an
Unmatured Termination Event; and
(iii) the Capital does not exceed the Purchase Limit.
II-3
EXHIBIT III
REPRESENTATIONS AND WARRANTIES
1. Representations and Warranties of the Seller. The Seller represents and
warrants as follows:
(a) The Seller is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, and is duly qualified to
do business and is in good standing as a foreign corporation in every
jurisdiction where the nature of its business requires it to be so qualified,
except where the failure to be so qualified would not have a Material Adverse
Effect.
(b) The execution, delivery and performance by the Seller of the Agreement
and the other Transaction Documents to which it is a party, including its use of
the proceeds of purchases and reinvestments: (i) are within its organizational
powers; (ii) have been duly authorized by all necessary organizational action;
(iii) do not contravene or result in a default under or conflict with: (A) its
certificate of incorporation, formation, limited liability company agreement or
any other organizational document of the Seller, (B) any law, rule or regulation
applicable to it, (C) any indenture, loan agreement, mortgage, deed of trust or
other material agreement or instrument to which it is a party or by which it is
bound, or (D) any order, writ, judgment, award, injunction or decree binding on
or affecting it or any of its property; and (iv) do not result in or require the
creation of any Adverse Claim upon or with respect to any of its properties. The
Agreement and the other Transaction Documents to which it is a party have been
duly executed and delivered by the Seller.
(c) No authorization, approval or other action by, and no notice to or
filing with, any Governmental Authority or other Person is required for its due
execution, delivery and performance by the Seller of its obligations under the
Agreement or any other Transaction Document to which it is a party, other than
the Uniform Commercial Code filings referred to in Exhibit II to the Agreement,
all of which shall have been filed on or before the date of the first purchase
hereunder.
(d) Each of the Agreement and the other Transaction Documents to which the
Seller is a party constitutes (assuming due authorization and execution by the
other parties thereto) its legal, valid and binding obligation enforceable
against the Seller in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization or other similar laws from
time to time in effect 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.
(e) There is no pending or, to Seller's knowledge, threatened action or
proceeding affecting Seller or any of its properties before any Governmental
Authority or arbitrator.
(f) No proceeds of any purchase or reinvestment will be used to acquire
any equity security of a class that is registered pursuant to Section 12 of the
Securities Exchange Act of 1934.
III-1
(g) The Seller is the legal and beneficial owner of, and has good and
marketable title to, the Pool Receivables, the Lock-Box Accounts (and related
lock-boxes) and Related Security, free and clear of any Adverse Claim. Upon each
purchase or reinvestment, the Administrator or the Conduit Purchasers shall
acquire pro rata valid and enforceable perfected undivided percentage ownership
or security interests, to the extent of each Conduit Purchaser's percentage
interest of the Purchased Interest, in each Pool Receivable then existing or
thereafter arising and in the Related Security, Collections and other proceeds
with respect thereto, free and clear of any Adverse Claim. The Agreement creates
a valid and continuing security interest (as defined in the applicable UCC) in
favor of the Administrator in the Pool Assets and the Lock-Box Accounts (and
related lock-boxes), which security interest is prior to all Adverse Claims, and
is enforceable as such against creditors of and purchases from the Seller. The
Pool Assets constitute "accounts", "general intangibles" or "tangible chattel
paper" within the meaning of the applicable UCC. Each Lock-Box Account
constitutes a "deposit account" within the meaning of the applicable UCC. The
Seller has caused or will have caused, within ten (10) days, the filing of all
appropriate UCC financing statements in the proper filing offices in the
appropriate jurisdictions under applicable laws in order to perfect the security
interest in the Pool Assets and the Lock-Box Accounts (and related lock-boxes)
granted to the Administrator hereunder. Other than the security interest granted
to the Administrator pursuant to this Agreement, Seller has not pledged,
assigned, sold, granted a security interest in, or otherwise conveyed any of the
Pool Assets or the Lock-Box Accounts (and related lock-boxes). Seller has not
authorized the filing of and is not aware of any UCC financing statements
against Seller that include a description of collateral covering the Pool
Assets, other than any UCC financing statement relating to the security interest
granted to the Administrator hereunder or that has been terminated. Seller is
not aware of any judgment, ERISA or tax lien filings against the Seller. With
respect to any Pool Receivable that constitutes "tangible chattel paper", the
Servicer is in possession of the original copies of the tangible chattel paper
that constitutes or evidences such Pool Receivables, and the Seller has filed or
has caused to be filed within ten (10) days after the date hereof the financing
statements described in this section above, each of which will contain a
statement that "A purchase of or a grant of a security interest in any property
described in this financing statement will violate the rights of the Conduit
Purchasers." The Pool Receivables to the extent they are evidenced by "tangible
chattel paper" do not have any marks or notations indicating that they have been
pledged, assigned or otherwise conveyed to any Person other than the Seller or
the Conduit Purchasers.
(h) Each Information Package (if prepared by the Seller or one of its
Affiliates, or to the extent that information contained therein is supplied by
the Seller or an Affiliate), exhibit, financial statement, document, book,
record or report furnished or to be furnished at any time by or on behalf of the
Seller to the Administrator in connection with the Agreement or any other
Transaction Document to which it is a party is or will be complete and accurate
in all material respects as of its date or (except as otherwise disclosed to the
Administrator at such time) as of the date so furnished,
(i) The Seller's principal place of business, chief executive office and
state of formation (as such terms are used in the UCC) and the office where it
keeps its records concerning the Receivables are located at the address referred
to in Sections l(b) and 2(b) of Exhibit IV to the Agreement.
III-2
(j) The names and addresses of all the Lock-Box Banks, together with the
account numbers of the Lock-Box Accounts at such Lock-Box Banks, are specified
in Schedule II to the Agreement (or at such other Lock-Box Banks and/or with
such other Lock-Box Accounts as have been notified to the Administrator in
accordance with the Agreement) and all Lock-Box Accounts are subject to Lock-Box
Agreements. With respect to all Lock-Box Accounts (and related lock-boxes), the
Seller has delivered to the Administrator a fully executed Lock-Box Agreement
pursuant to which the applicable Lock-Box Bank has agreed, following the
occurrence and continuation of a Termination Event, to comply with all
instructions given by the Administrator with respect to all funds on deposit in
such Lock-Box Account (and all funds sent to the respective lock-box), without
further consent by the Seller or the Servicer. None of the Lock-Box Accounts
(and the related lock-boxes) are in the name of any Person other than the
Seller, the Administrator or the Conduit Purchasers. The Seller has not
consented to any Lock-Box Bank's complying with instructions of any person other
than the Administrator.
(k) The Seller is not in violation of any order of any court, arbitrator
or Governmental Authority.
(l) Neither the Seller nor any of its Affiliates has any direct or
indirect ownership or other financial interest in any Conduit Purchaser.
(m) No proceeds of any purchase or reinvestment will be used for any
purpose that violates any applicable law, rule or regulation, including
Regulations T, U or X of the Federal Reserve Board.
(n) Each Pool Receivable included as an Eligible Receivable in the
calculation of the Net Receivables Pool Balance is an Eligible Receivable.
(o) No event has occurred and is continuing, or would result from a
purchase in respect of, or reinvestment in respect of, the Purchased Interest or
from the application of the proceeds therefrom, that constitutes a Termination
Event or an Unmatured Termination Event.
(p) The Seller has accounted for each sale of undivided percentage
ownership interests in Receivables in its books and financial statements as
sales, consistent with generally accepted accounting principles.
(q) The Seller has complied in all material respects with the Credit and
Collection Policy of the Originators with regard to each Receivable originated
by the Originators.
(r) The Seller has complied in all material respects with all of the
terms, covenants and agreements contained in the Agreement and the other
Transaction Documents that are applicable to it.
(s) The Seller's complete organizational name is set forth in the preamble
to the Agreement, and it does not use and has not during the last six years used
any other organizational name, trade name, doing-business name or fictitious
name, except as set forth on Schedule II to the Agreement and except for names
first used after the date of the Agreement and set forth in a notice delivered
to the Administrator pursuant to Section 1(1)(iv) of Exhibit IV to the
Agreement.
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(t) The Seller 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 Seller 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.
2. Representations and Warranties of CONSOL Energy (including in its
capacity as the Servicer). CONSOL Energy, individually and in its capacity as
the Servicer, represents and warrants as follows:
(a) CONSOL Energy is a corporation duly formed, validly existing and in
good standing under the laws of the State of Delaware, and is duly qualified to
do business and is in good standing as a foreign corporation in every
jurisdiction where the nature of its business requires it to be so qualified,
except where the failure to be so qualified would not have a Material Adverse
Effect.
(b) The execution, delivery and performance by CONSOL Energy of its
obligations under the Agreement and the other Transaction Documents to which it
is a party, including the Servicer's use for the benefit of the Seller of the
proceeds of purchases and reinvestments: (i) are within its organizational
powers; (ii) have been duly authorized by all necessary organizational action;
(iii) do not contravene or result in a default under or conflict with: (A) its
certificate of incorporation, formation, limited liability company agreement or
any other organizational document of CONSOL Energy, (B) any law, rule or
regulation applicable to it, (C) any indenture, loan agreement, mortgage, deed
of trust or other material agreement or instrument to which it is a party or by
which it is bound, or (D) any order, writ, judgment, award, injunction or decree
binding on or affecting it or any of its property; and (iv) do not result in or
require the creation of any Adverse Claim upon or with respect to any of its
properties. The Agreement and the other Transaction Documents to which CONSOL
Energy is a party have been duly executed and delivered by CONSOL Energy.
(c) No authorization, approval or other action by, and no notice to or
filing with any Governmental Authority or other Person, is required for the due
execution, delivery and performance by CONSOL Energy of the Agreement or any
other Transaction Document to which it is a party.
(d) Each of the Agreement and the other Transaction Documents to which
CONSOL Energy is a party constitutes the legal, valid and binding obligation of
CONSOL Energy enforceable (assuming the due authorization and execution of the
other parties thereto) against CONSOL Energy in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization or other similar laws from time to time in effect 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.
(e) The balance sheets of CONSOL Energy and its consolidated Subsidiaries
as at December 31, 2002, and the related statements of income and retained
earnings for the fiscal year then ended, copies of which have been furnished to
the Administrator, fairly present the financial condition of CONSOL Energy and
its consolidated Subsidiaries as at such date and the
III-4
results of the operations of CONSOL Energy and its Subsidiaries for the period
ended on such date, all in accordance with generally accepted accounting
principles consistently applied, and since December 31, 2002, there has been no
event or circumstances which have had a Material Adverse Effect.
(f) There is no pending or, to its best knowledge, threatened action or
proceeding affecting it or any of its Subsidiaries before any Governmental
Authority or arbitrator that could reasonably be expected to have a Material
Adverse Effect.
(g) No proceeds of any purchase or reinvestment will be used to acquire
any equity security of a class that is registered pursuant to Section 12 of the
Securities Exchange Act of 1934. No proceeds of any purchase or reinvestment
will be used for any purpose that violates any applicable law, rule or
regulation, including Regulations T, U or X of the Federal Reserve Board.
(h) Each Information Package (if prepared by CONSOL Energy or one of its
Affiliates, or to the extent that information contained therein is supplied by
CONSOL Energy or an Affiliate), exhibit, financial statement, document, book,
record or report furnished or to be furnished at any time by or on behalf of
CONSOL Energy to the Administrator in connection with the Agreement is or will
be complete and accurate in all material respects as of its date or (except as
otherwise disclosed to the Administrator at such time) as of the date so
furnished.
(i) The principal place of business, chief executive office and state of
formation (as such terms are used in the UCC) of CONSOL Energy and the office
where it keeps its records concerning the Receivables are located at the address
referred to in Section 2(b) of Exhibit IV to the Agreement.
(j) CONSOL Energy is not in violation of any order of any court,
arbitrator or Governmental Authority, which is reasonably likely to have a
Material Adverse Effect.
(k) Neither CONSOL Energy nor any of its Affiliates has any direct or
indirect ownership or other financial interest in any Conduit Purchaser.
(l) CONSOL Energy has complied in all material respects with the Credit
and Collection Policy of the Originators with regard to each Receivable
originated by the Originators.
(m) CONSOL Energy has complied in all material respects with all of the
terms, covenants and agreements contained in the Agreement and the other
Transaction Documents that are applicable to it.
(n) CONSOL Energy 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, CONSOL Energy 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.
III-5
EXHIBIT IV
COVENANTS
1. Covenants of the Seller. 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 all other amounts owed by the Seller
under the Agreement to the Conduit Purchasers, the Administrator and any other
Indemnified Party or Affected Person shall be paid in full:
(a) Compliance with Laws, Etc. The Seller shall comply in all material
respects with all applicable laws, rules, regulations and orders, and preserve
and maintain its organizational existence, rights, franchises, qualifications
and privileges, except to the extent that the failure so to comply with such
laws, rules, regulations or orders or the failure so to preserve and maintain
such rights, franchises, qualifications and privileges would not have a Material
Adverse Effect.
(b) Offices, Records and Books of Account, Etc. The Seller: (i) shall keep
its principal place of business, chief executive office and state of formation
(as such terms or similar terms are used in the UCC) and the office where it
keeps its records concerning the Receivables at the address of the Seller set
forth on Schedule IV or, pursuant to clause (1)(iv) below, at any other
locations in jurisdictions where all actions reasonably requested by the
Administrator to protect and perfect the interest of the Administrator in the
Receivables and related items (including the Pool Assets) have been taken and
completed and (ii) shall provide the Administrator with at least 30 days'
written notice before making any change in the Seller's name or making any other
change in the Seller's identity or organizational structure (including a Change
in Control) that could render any UCC financing statement filed in connection
with this Agreement "seriously misleading" as such term (or similar term) is
used in the UCC; each notice to the Administrator pursuant to this sentence
shall set forth the applicable change and the effective date thereof. The Seller
also will maintain and implement (or cause the Servicer to maintain and
implement) administrative and operating procedures (including an ability to
recreate records evidencing Receivables and related Contracts in the event of
the destruction of the originals thereof), and keep and maintain (or cause the
Servicer to keep and maintain) all documents, books, records, computer tapes and
disks and other information reasonably necessary or advisable for the collection
of all Receivables (including records adequate to permit the daily
identification of each Receivable and all Collections of and adjustments to each
existing Receivable). Notwithstanding the above, in no event shall the Seller
have or maintain, or be a partner in any partnership that has or maintains, its
jurisdiction of organization, principal place of business or principal assets in
any of the states of Colorado, Kansas, New Mexico, Oklahoma, Utah or Wyoming.
(c) Performance and Compliance with Contracts and Credit and Collection
Policy. The Seller shall (and shall cause the Servicer to), at its expense,
timely and fully perform and comply with all material provisions, covenants and
other promises required to be observed by it under the Contracts related to the
Receivables, and timely and fully comply in all material respects with the
applicable Credit and Collection Policy with regard to each Receivable and the
related Contract.
(d) Ownership Interest, Etc. The Seller shall (and shall cause the
Servicer to), at its expense, take all action necessary or desirable to
establish and maintain a valid and enforceable
IV-1
undivided percentage ownership or security interest, to the extent of the
Purchased Interest, in the Pool Receivables, the Related Security and
Collections with respect thereto, and a first priority perfected security
interest in the Pool Assets, in each case free and clear of any Adverse Claim,
in favor of the Administrator (on behalf of each Conduit Purchaser), including
taking such action to perfect, protect or more fully evidence the interest of
each Conduit Purchaser as a Conduit Purchaser, through the Administrator, may
reasonably request. The Seller shall from time to time and within the time
limits established by law prepare and present to the Administrator for the
Administrator's authorization and approval all financing statements, amendments,
continuations or initial financing statements in lieu of a continuation
statement, or other filings necessary to continue, maintain and perfect the
Administrator's security interest in the Pool Assets as a first-priority
interest. The Administrator's approval of such filings shall authorize the
Seller to file such financing statements under the UCC without the signature of
the Seller or the Administrator where allowed by applicable law. Notwithstanding
anything else in the Transaction Documents to the contrary, neither the Seller,
the Servicer nor any other Person shall have any authority to file a
termination, partial termination, release or partial release or any amendment
that deletes the name of a debtor or excludes collateral of any such financing
statements without the prior written consent of the Administrator.
(e) Sales, Liens, Etc. The Seller shall not sell, assign (by operation of
law or otherwise) or otherwise dispose of, or create or suffer to exist any
Adverse Claim upon or with respect to, any or all of its right, title or
interest in, to or under any Pool Assets (including the Seller's undivided
interest in any Receivable, Related Security or Collections, or upon or with
respect to any account to which any Collections of any Receivables are sent), or
assign any right to receive income in respect of any items contemplated by this
paragraph.
(f) Extension or Amendment of Receivables. Except as provided in the
Credit and Collection Policy, the Seller shall not, and shall not permit the
Servicer to, extend the maturity or adjust the Outstanding Balance or otherwise
modify the terms of any Pool Receivable in any material respect, or amend,
modify or waive, in any material respect, any term or condition of any related
Contract (which term or condition relates to payments under, or the enforcement
of, such Contract).
(g) Change in Business or Credit and Collection Policy. The Seller shall
not make (or permit the Originator to make) any material change in the character
of its business or in any Credit and Collection Policy, or any change in any
Credit and Collection Policy that would have a Material Adverse Effect with
respect to the Receivables. The Seller shall not make (or permit the Originator
to make) any other change in any Credit and Collection Policy without giving 30
days' prior written notice thereof to the Administrator.
(h) Audits. The Seller shall (and shall cause the Originators to), from
time to time during regular business hours as reasonably requested in advance
(unless a Termination Event or Unmatured Termination Event exists) by the
Administrator, permit the Administrator, or its agents or representatives: (i)
to examine and make copies of and abstracts from all books, records and
documents (including computer tapes and disks) in the possession or under the
control of the Seller (or the Originators) relating to Receivables and the
Related Security, including the related Contracts, (ii) to visit the offices and
properties of the Seller and each Originator for the purpose of examining such
materials described in clause (i) above, and to
IV-2
discuss matters relating to Receivables and the Related Security or the
Seller's, CONSOL Energy's or each Originator's performance under the Transaction
Documents or under the Contracts with any of the officers, employees, agents or
contractors of the Seller, CONSOL Energy or any Originator having knowledge of
such matters and (iii) without limiting the clauses (i) and (ii) above, to
engage certified public accountants or other auditors acceptable to the Seller
and the Administrator to conduct, at the Seller's reasonable expense (such
review shall not be at the Seller's expense if the Administrator has previously
conducted a review within the current fiscal year, unless a Termination Event
has occurred and is continuing (in which case such review shall be at the
Seller's expense)), a review of the Seller's books and records with respect to
such Receivables.
(i) Change in Lock-Box Banks, Lock-Box Accounts and Payment Instructions
to Obligors. The Seller shall not, and shall not permit the Servicer or the
Originators to, add or terminate any bank as a Lock-Box Bank or any account as a
Lock-Box Account from those listed in Schedule II to the Agreement, or make any
change in its instructions to Obligors regarding payments to be made to the
Seller, the Originators, the Servicer or any Lock-Box Account (or related post
office box), unless the Administrator shall have consented thereto in writing
and the Administrator shall have received copies of all agreements and documents
(including Lock-Box Agreements) that it may request in connection therewith.
(j) Deposits to Lock-Box Accounts. The Seller shall (or shall cause the
Servicer to): (i) instruct all Obligors to make payments of all Receivables to
one or more Lock-Box Accounts or to post office boxes to which only Lock-Box
Banks have access (and shall instruct the Lock-Box Banks to cause all items and
amounts relating to such Receivables received in such post office boxes to be
removed and deposited into a Lock-Box Account on a daily basis), and (ii)
deposit, or cause to be deposited, any Collections received by it, the Servicer
or the Originators into Lock-Box Accounts not later than two Business Days after
receipt thereof. Each Lock-Box Account shall at all times be subject to a
Lock-Box Agreement. The Seller will not (and will not permit the Servicer to)
deposit or otherwise credit, or cause or permit to be so deposited or credited,
to any Lock-Box Account cash or cash proceeds other than Collections.
(k) Identifying of Records. At its expense, the Seller shall: (i) identify
(or cause the Servicer to identify) its master data processing records relating
to Pool Receivables and related Contracts with a legend placed on a separate
"declaration page" which indicates that the Receivables associated with certain
company account numbers (which company account numbers shall be listed on such
"declaration page") have been sold in accordance with the Agreement, and (ii)
cause each Originator so to identify its master data processing records with a
legend placed on a separate "declaration page" pursuant to the Sale Agreement.
(l) Reporting Requirements. The Seller will provide to the Administrator
(in multiple copies, if requested by the Administrator) the following:
(i) as soon as available and in any event within 120 days after the
end of each fiscal year of the Seller, a copy of the annual report for such
year for the Seller, containing unaudited financial statements for such
year certified as to accuracy by the senior financial officer or treasurer
of the Seller;
IV-3
(ii) as soon as possible and in any event within five (5) Business
Days after becoming aware of the occurrence of each Termination Event or
Unmatured Termination Event, a statement of the senior financial officer or
Treasurer of the Seller setting forth details of such Termination Event or
Unmatured Termination Event and the action that the Seller has taken and
proposes to take with respect thereto;
(iii) promptly after the filing or receiving thereof, copies of all
reports and notices that the Seller or any Affiliate files under ERISA
with the Internal Revenue Service, the Pension Benefit Guaranty Corporation
or the U.S. Department of Labor or that the Seller or any Affiliate
receives from any of the foregoing or from any multiemployer plan (within
the meaning of Section 400l(a)(3) of ERISA) to which the Seller or any of
its Affiliates is or was, within the preceding five years, a contributing
employer, in each case in respect of the assessment of withdrawal liability
or an event or condition that could, in the aggregate, result in the
imposition of liability on the Seller and/or any such Affiliate;
(iv) at least thirty days before any change in the Seller's name or
any other change requiring the amendment of UCC financing statements, a
notice setting forth such changes and the effective date thereof;
(v) promptly after the Seller obtains knowledge thereof, notice of
any: (A) material litigation, investigation or proceeding that may exist at
any time between the Seller and any Person or (B) material litigation or
proceeding relating to any Transaction Document;
(vi) promptly after becoming aware of the occurrence thereof, notice
of a material adverse change in the business, operations, property or
financial or other condition of the Seller, the Servicer or any Originator;
and
(vii) such other information respecting the Receivables or the
condition or operations, financial or otherwise, of the Seller or any of
its Affiliates as the Administrator may from time to time reasonably
request.
(m) Certain Agreements. Without the prior written consent of the
Administrator, the Seller will not (and will not permit the Originators to)
amend, modify, waive, revoke or terminate any Transaction Document to which it
is a party or any provision of Seller's certificate of formation, limited
liability company agreement or other organizational document of the Seller.
(n) Restricted Payments.
(i) Except pursuant to clause (ii) below, the Seller will not: (A)
purchase or redeem any shares of its capital stock, (B) declare or pay any
dividend or set aside any funds for any such purpose, (C) prepay, purchase
or redeem any Debt, (D) lend or advance any funds or (E) repay any loans or
advances to, for or from any of its Affiliates (the amounts described in
clauses (A) through (E) being referred to as "Restricted Payments").
IV-4
(ii) Subject to the limitations set forth in clause (iii) below, the
Seller may make Restricted Payments so long as such Restricted Payments are
made only in one or more of the following ways: (A) the Seller may make
cash payments (including prepayments) on the Company Notes in accordance
with their terms, and (B) if no amounts are then outstanding under the
Company Notes, the Seller may declare and pay distributions.
(iii) The Seller may make Restricted Payments only out of the funds
it receives pursuant to Sections 1.4(b)(ii) and (iv) of the Agreement.
Furthermore, the Seller shall not pay, make or declare: (A) any
distributions if, after giving effect thereto, the Seller's tangible net
worth would be less than $10,000,000, or (B) any Restricted Payment
(including any dividend) if, after giving effect thereto, any Termination
Event or Unmatured Termination Event shall have occurred and be continuing.
(o) Other Business. The Seller will not: (i) engage in any business other
than the transactions contemplated by the Transaction Documents; (ii) create,
incur or permit to exist any Debt of any kind (or cause or permit to be issued
for its account any letters of credit or bankers' acceptances) other than
pursuant to this Agreement or the Company Notes; or (iii) form any Subsidiary or
make any investments in any other Person; provided, however, that the Seller
shall be permitted to incur minimal obligations to the extent necessary for the
day-to-day operations of the Seller (such as expenses for stationery, audits,
maintenance of legal status, etc.).
(p) Use of Seller's Share of Collections. The Seller shall apply the
Seller's Share of Collections to make payments in the following order of
priority: (i) the payment of its expenses (including all obligations payable to
the Conduit Purchasers and the Administrator under the Agreement and under the
Fee Letters); (ii) the payment of accrued and unpaid interest on the Company
Notes; and (iii) other legal and valid organizational purposes.
(q) Tangible Net Worth. The Seller will not permit its tangible net worth,
at any time, to be less than $10,000,000.
2. Covenants of the Servicer and CONSOL Energy. 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 all other
amounts owed by the Seller under the Agreement to the Conduit Purchasers, the
Administrator and any other Indemnified Party or Affected Person shall be paid
in full:
(a) Compliance with Laws, Etc. The Servicer and, to the extent that it
ceases to be the Servicer, CONSOL Energy shall comply (and shall cause the
Originators to comply) in all material respects with all applicable laws, rules,
regulations and orders, and preserve and maintain its organizational existence,
rights, franchises, qualifications and privileges, except to the extent that the
failure so to comply with such laws, rules, regulations or orders or the failure
so to preserve and maintain such existence, rights, franchises, qualifications
and privileges would not have a Material Adverse Effect.
(b) Offices, Records and Books of Account, Etc. The Servicer and, to the
extent that it ceases to be the Servicer, CONSOL Energy, shall keep (and shall
cause the Originators to
IV-5
keep) its principal place of business, chief executive office and state of
formation (as such terms or similar terms are used in the applicable UCC) and
the office where it keeps its records concerning the Receivables at the
address(es) set forth on Schedule IV or, upon at least 30 days' prior written
notice of a proposed change to the Administrator, at any other locations in
jurisdictions where all actions reasonably requested by the Administrator to
protect and perfect the interest of the Administrator and the Conduit Purchasers
in the Receivables and related items (including the Pool Assets) have been taken
and completed. The Servicer and, to the extent that it ceases to be the
Servicer, CONSOL Energy, also will (and will cause the Originators to) maintain
and implement administrative and operating procedures (including an ability to
recreate records evidencing Receivables and related Contracts in the event of
the destruction of the originals thereof), and keep and maintain all documents,
books, records, computer tapes and disks and other information reasonably
necessary or advisable for the collection of all Receivables (including records
adequate to permit the daily identification of each Receivable and all
Collections of and adjustments to each existing Receivable).
(c) Performance and Compliance with Contracts and Credit and Collection
Policy. The Servicer and, to the extent that it ceases to be the Servicer,
CONSOL Energy, shall (and shall cause the Originators to), at its expense,
timely and fully perform and comply with all material provisions, covenants and
other promises required to be observed by it under the Contracts related to the
Receivables, and timely and fully comply in all material respects with the
Credit and Collection Policy with regard to each Receivable and the related
Contract.
(d) Extension or Amendment of Receivables. Except as provided in the
Credit and Collection Policy, the Servicer and, to the extent that it ceases to
be the Servicer, CONSOL Energy, shall not extend (and shall not permit the
Originators to extend), the maturity or adjust the Outstanding Balance or
otherwise modify the terms of any Pool Receivable in any material respect, or
amend, modify or waive, in any material respect, any term or condition of any
related Contract (which term or condition relates to payments under, or the
enforcement of, such Contract).
(e) Change in Business or Credit and Collection Policy. The Servicer and,
to the extent that it ceases to be the Servicer, CONSOL Energy, shall not make
(and shall not permit the Originators to make) any material change without the
consent of the Administrator in its business or in any Credit and Collection
Policy, or any change in any Credit and Collection Policy that would have a
Material Adverse Effect. The Servicer and, to the extent that it ceases to be
the Servicer, CONSOL Energy, shall not make (and shall not permit the
Originators to make) any other change in any Credit and Collection Policy
without giving prior written notice thereof to the Administrator.
(f) Audits. The Servicer and, to the extent that it ceases to be the
Servicer, CONSOL Energy, shall (and shall cause the Originators to), from time
to time during regular business hours as reasonably requested in advance (unless
a Termination Event or Unmatured Termination Event exists) by the Administrator,
permit the Administrator, or its agents or representatives: (i) to examine and
make copies of and abstracts from all books, records and documents (including
computer tapes and disks) in its possession or under its control relating to
Receivables and the Related Security, including the related Contracts; (ii) to
visit its offices and properties for the purpose of examining such materials
described in clause (i) above, and to
IV-6
discuss matters relating to Receivables and the Related Security or its
performance hereunder or under the Contracts with any of its officers,
employees, agents or contractors having knowledge of such matters and (iii),
without limiting the clauses (i) and (ii) above, to engage certified public
accountants or other auditors acceptable to the Servicer and the Administrator
to conduct, at the Servicer's reasonable expense (such review shall not be at
the Servicer's expense if the Administrator has previously conducted a review
within the current fiscal year unless a Termination Event has occurred and is
continuing (in which case such review shall be at the Seller's expense)), a
review of the Servicer's books and records with respect to such Receivables.
(g) Change in Lock-Box Banks, Lock-Box Accounts and Payment Instructions
to Obligors. The Servicer and, to the extent that it ceases to be the Servicer,
CONSOL Energy, shall not (and shall not permit the Originators to) add or
terminate any bank as a Lock-Box Bank or any account as a Lock-Box Account from
those listed in Schedule II to the Agreement, or make any change in its
instructions to Obligors regarding payments to be made to the Servicer or any
Lock-Box Account (or related post office box), unless the Administrator shall
have consented thereto in writing and the Administrator shall have received
copies of all agreements and documents (including Lock-Box Agreements) that it
may request in connection therewith.
(h) Deposits to Lock-Box Accounts. The Servicer shall: (i) instruct all
Obligors to make payments of all Receivables to one or more Lock-Box Accounts or
to post office boxes to which only Lock-Box Banks have access (and shall
instruct the Lock-Box Banks to cause all items and amounts relating to such
Receivables received in such post office boxes to be removed and deposited into
a Lock-Box Account on a daily basis); and (ii) deposit, or cause to be
deposited, any Collections received by it into Lock-Box Accounts not later than
one Business Day after receipt thereof. Each Lock-Box Account shall at all times
be subject to a Lock-Box Agreement.
(i) Preservation of Security Interest. The Servicer shall (and shall cause
the Seller to) take any and all action as the Administrator may require to
preserve and maintain the perfection and priority of the security interest of
the Administrator in the Pool Assets pursuant to this Agreement.
(j) Identifying of Records. At its expense, the Servicer shall identify
its master data processing records relating to Pool Receivables and related
Contracts with a legend placed on a separate "declaration page" which indicates
that the Receivables associated with certain company account numbers (which
company account numbers shall be listed on such "declaration page") have been
sold in accordance with the Agreement.
(k) Reporting Requirements. CONSOL Energy shall provide to the
Administrator (in multiple copies, if requested by the Administrator) the
following:
(i) as soon as available and in any event within 60 days after the
end of the first three quarters of each fiscal year of CONSOL Energy,
balance sheets of CONSOL Energy and the consolidated Subsidiaries of CONSOL
Energy as of the end of such quarter and statements of income, retained
earnings and cash flow of CONSOL Energy and consolidated Subsidiaries of
CONSOL Energy for the period commencing at the end
IV-7
of the previous fiscal year and ending with the end of such quarter,
certified by the senior financial officer or treasurer of such Person;
(ii) as soon as available and in any event within 120 days after the
end of each fiscal year of CONSOL Energy, a copy of the annual report for
such year for CONSOL Energy and its consolidated Subsidiaries, containing
financial statements for such year audited by independent certified public
accountants of nationally recognized standing;
(iii) together with the financial statements required in (i) and (ii)
above, a compliance certificate in substantially the form of Annex D signed
by the senior financial officer or treasurer of the Seller or CONSOL
Energy, or such other Person as may be acceptable to the Administrator;
(iv) as to the Servicer only, as soon as available and in any event
not later than two (2) Business Days prior to the Monthly Settlement Date,
an Information Package as of the most recently completed calendar month or,
if in the opinion of the Administrator reasonable grounds for insecurity
exist with respect to the collectibility of the Pool Receivables or with
respect to the Seller or Servicer's performance or ability to perform its
obligations under the Agreement, within six Business Days of a request by
the Administrator, supplemental interim information relating to the
Receivables to the extent that such information is reasonably obtainable
for such periods as is specified by the Administrator (but in no event more
frequently than weekly);
(v) as soon as possible and in any event within five Business days
after becoming aware of the occurrence of each Termination Event or
Unmatured Termination Event, a statement of the chief financial officer of
CONSOL Energy setting forth details of such Termination Event or Unmatured
Termination Event and the action that such Person has taken and proposes to
take with respect thereto;
(vi) promptly after the sending or filing thereof, copies of all
reports that CONSOL Energy sends to any of its security holders, and copies
of all reports and registration statements that CONSOL Energy or any
Subsidiary files with the Securities and Exchange Commission or any
national securities exchange; provided, that any filings with the
Securities and Exchange Commission that have been granted "confidential"
treatment shall be provided promptly after such filings have become
publicly available;
(vii) promptly after the filing or receiving thereof notice of and,
upon the request of the Administrator, copies of all reports and notices
that CONSOL Energy or any Affiliate of CONSOL Energy files under ERISA with
the Internal Revenue Service, the Pension Benefit Guaranty Corporation or
the U.S. Department of Labor or that such Person or any of its Affiliates
receives from any of the foregoing or from any multiemployer plan (within
the meaning of Section 4001(a)(3) of ERISA) to which such Person or any
Affiliate of CONSOL Energy is or was, within the preceding five years, a
contributing employer, in each case in respect of the assessment of
withdrawal liability or an event or condition that could, in the aggregate,
result in the imposition of material liability on CONSOL Energy and/or any
such Affiliate;
IV-8
(viii) at least thirty days before any change in CONSOL Energy's or
any Originator's name or any other change requiring the amendment of UCC
financing statements, a notice setting forth such changes and the effective
date thereof;
(ix) promptly after CONSOL Energy obtains knowledge thereof, notice
of any: (A) litigation, investigation or proceeding which is reasonably
expected to result in liability to CONSOL Energy or its Subsidiaries that
may exist at any time between CONSOL Energy or any of its Subsidiaries and
any Governmental Authority that, if not cured or if adversely determined,
as the case may be, would have a Material Adverse Effect; (B) litigation or
proceeding adversely affecting such Person or any of its Subsidiaries in
which the amount involved is $10,000,000 or more and not covered by
insurance or in which injunctive or similar relief is sought; or (C)
litigation or proceeding relating to any Transaction Document;
(x) promptly after becoming aware of the occurrence thereof, notice
of a material adverse change in the business, operations, property or
financial or other condition of CONSOL Energy or any of its Subsidiaries;
(xi) the occurrence of a default or any event of default under any
other financing arrangement evidencing $25,000,000 or more of indebtedness
pursuant to which CONSOL Energy or any Originator is a debtor or an
obligor; and
(xii) such other information respecting the Receivables or the
condition or operations, financial or otherwise, of CONSOL Energy or any of
its Affiliates as the Administrator may from time to time reasonably
request.
All reports required to be delivered pursuant to clauses (i), (ii) or (vi) shall
be deemed to have been delivered on the date on which the senior financial
officer or treasurer of CONSOL Energy notifies the Administrator that such
report is posted on the SEC's website at www.sec.gov (notice of the financial
statements to be delivered under clauses (i) and (ii) may be contained in the
compliance certificate referred to in clause (iii) above) and such posting shall
be deemed to satisfy the reporting requirements of clauses (i), (ii), and (vi),
provided that CONSOL Energy shall provide a paper of the certification set forth
in paragraph (i).
3. Separate Existence. Each of the Seller and CONSOL Energy hereby
acknowledges that the Purchasers, the Conduit Purchasers and the Administrator
are entering into the transactions contemplated by this Agreement and the other
Transaction Documents in reliance upon the Seller's identity as a legal entity
separate from CONSOL Energy and its Affiliates. Therefore, from and after the
date hereof, each of the Seller and CONSOL Energy shall take all steps
specifically required by the Agreement or reasonably required by the
Administrator to continue the Seller's identity as a separate legal entity and
to make it apparent to third Persons that the Seller is an entity with assets
and liabilities distinct from those of CONSOL Energy and any other Person, and
is not a division of CONSOL Energy, 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, each of the Seller and CONSOL Energy shall
take such actions as shall be required in order that:
IV-9
(a) The Seller will be a limited purpose corporation whose primary
activities are restricted in its certificate of incorporation to: (i) purchasing
or otherwise acquiring from the Originators (or their Affiliates), owning,
holding, granting security interests or selling interests in Pool Assets (or
other receivables originated by the Originators or their Affiliates, and certain
related assets), (ii) entering into agreements for the selling and servicing of
the Receivables Pool (or other receivables pools originated by the Originators
or their Affiliates), and (iii) conducting such other activities as it deems
necessary or appropriate to carry out its primary activities;
(b) The Seller shall not engage in any business or activity, or incur any
indebtedness or liability, other than as expressly permitted by the Transaction
Documents;
(c) Not less than one member of the Seller's Directors (the "Independent
Director") shall be an individual who is not a direct, indirect or beneficial
stockholder, officer, director, employee, affiliate, associate or supplier of
CONSOL Energy or any of its Affiliates. The certificate of incorporation of the
Seller shall provide that: (i) the Seller's Board of Directors shall not
approve, or take any other action to cause the filing of, a voluntary bankruptcy
petition with respect to the Seller unless the Independent Director shall
approve the taking of such action in writing before the taking of such action,
and (ii) such provision cannot be amended without the prior written consent of
the Independent Director;
(d) The Independent Director shall not at any time serve as a trustee in
bankruptcy for the Seller, CONSOL Energy or any Affiliate thereof;
(e) Any employee, consultant or agent of the Seller will be compensated
from the Seller's funds for services provided to the Seller. The Seller will not
engage any agents other than its attorneys, auditors and other professionals,
and a servicer and any other agent contemplated by the Transaction Documents for
the Receivables Pool, which servicer will be fully compensated for its services
by payment of the Servicing Fee, and a manager, which manager will be fully
compensated from the Seller's funds;
(f) The Seller will contract with the Servicer to perform for the Seller
all operations required on a daily basis to service the Receivables Pool. The
Seller will pay the Servicer the Servicing Fee pursuant hereto. The Seller will
not incur any material indirect or overhead expenses for items shared with
CONSOL Energy (or any other Affiliate thereof) that are not reflected in the
Servicing Fee. To the extent, if any, that the Seller (or any Affiliate thereof)
shares items of expenses not reflected in the Servicing Fee or the manager's
fee, such as legal, auditing and other professional services, such expenses will
be allocated to the extent practical on the basis of actual use or the value of
services rendered, and otherwise on a basis reasonably related to the actual use
or the value of services rendered; it being understood that CONSOL Energy shall
pay all expenses relating to the preparation, negotiation, execution and
delivery of the Transaction Documents, including legal, agency and other fees;
(g) The Seller's operating expenses will not be paid by CONSOL Energy or
any other Affiliate thereof;
(h) All of the Seller's business correspondence and other communications
shall be conducted in the Seller's own name and on its own separate stationery;
IV-10
(i) The Seller's books and records will be maintained separately from
those of CONSOL Energy and any other Affiliate thereof;
(j) All financial statements of CONSOL Energy or any Affiliate thereof
that are consolidated to include Seller will contain detailed notes clearly
stating that: (i) a special purpose corporation exists as a Subsidiary of CONSOL
Energy, and (ii) the Originators have 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;
(k) The Seller's assets will be maintained in a manner that facilitates
their identification and segregation from those of CONSOL Energy or any
Affiliate thereof;
(l) The Seller will strictly observe organizational formalities in its
dealings with CONSOL Energy or any Affiliate thereof, and funds or other assets
of the Seller will not be commingled with those of CONSOL Energy or any
Affiliate thereof except as permitted by the Agreement in connection with
servicing the Pool Receivables. The Seller shall not maintain joint bank
accounts or other depository accounts to which CONSOL Energy or any Affiliate
thereof has independent access. The Seller is not named, and has not entered
into any agreement to be named, directly or indirectly, as a direct or
contingent beneficiary or loss payee on any insurance policy with respect to any
loss relating to the property of CONSOL Energy or any Subsidiary or other
Affiliate of CONSOL Energy. The Seller will pay to the appropriate Affiliate the
marginal increase or, in the absence of such increase, the market amount of its
portion of the premium payable with respect to any insurance policy that covers
the Seller and such Affiliate;
(m) The Seller will maintain arm's-length relationships with CONSOL Energy
(and any Affiliate thereof). Any Person that renders or otherwise furnishes
services to the Seller will be compensated by the Seller at market rates for
such services it renders or otherwise furnishes to the Seller. Neither the
Seller nor CONSOL Energy will be or will hold itself out to be responsible for
the debts of the other or the decisions or actions respecting the daily business
and affairs of the other. The Seller and CONSOL Energy will immediately correct
any known misrepresentation with respect to the foregoing, and they will not
operate or purport to operate as an integrated single economic unit with respect
to each other or in their dealing with any other entity;
(n) CONSOL Energy shall not pay the salaries of Seller's employees, if
any;
(o) The Seller does not and will not hold itself responsible for the
obligations of any other Person, and shall not guarantee or become liable for
the debts of any other Person;
(p) The Seller will conduct its business in its own name and shall hold
itself out as a separate entity from any other Person;
(q) The Seller shall maintain a sufficient number of employees and a
dequate capital in light of its contemplated business activities;
(r) The Seller shall not acquire the obligations or securities of any of
its shareholders; and
IV-11
(s) The Seller shall not pledge its assets for the benefit of any other
Person or make any loans or advances to any other Person, except pursuant to the
Transaction Documents.
IV-12
EXHIBIT V
TERMINATION EVENTS
Each of the following shall be a "Termination Event":
(a) (i) the Seller, CONSOL Energy, any Originator or the Servicer (if
CONSOL Energy or any of its Affiliates) shall fail to perform or observe any
term, covenant or agreement under the Agreement or any other Transaction
Document and, except as otherwise provided herein, such failure shall continue
for thirty calendar days after knowledge or notice thereof, (ii) the Seller or
the Servicer shall fail to make when due any payment or deposit to be made by it
under the Agreement and such failure shall continue unremedied for one Business
Day or (iii) CONSOL Energy shall resign as Servicer, and no successor Servicer
reasonably satisfactory, to the Administrator shall have been appointed;
(b) CONSOL Energy (or any Affiliate thereof) shall fail to transfer to any
successor Servicer when required any rights pursuant to the Agreement that
CONSOL Energy (or such Affiliate) then has as Servicer;
(c) any representation or warranty made or deemed made by the Seller,
CONSOL Energy or Originator (or any of their respective officers) under or in
connection with the Agreement or any other Transaction Document, or any
information or report delivered by the Seller, CONSOL Energy or Originator or
the Servicer pursuant to the Agreement or any other Transaction Document, shall
prove to have been incorrect or untrue in any material respect when made or
deemed made or delivered and shall remain incorrect or untrue for thirty
calendar days after knowledge or notice thereof (if the warranty is of a type
that is capable of being cured);
(d) the Seller or the Servicer shall fail to deliver the Information
Package pursuant to the Agreement, and such failure shall remain unremedied for
two Business Days;
(e) the Agreement or any purchase or reinvestment pursuant to the
Agreement shall for any reason: (i) cease to create, or the Purchased Interest
shall for any reason cease to be, a valid and enforceable perfected undivided
percentage ownership or security interest to the extent of the Purchased
Interest in each Pool Receivable, the Related Security and Collections with
respect thereto, free and clear of any Adverse Claim, or (ii) cease to create
with respect to the Pool Assets, or the interest of the Conduit Purchasers with
respect to such Pool Assets shall cease to be, a valid and enforceable first
priority perfected security interest, free and clear of any Adverse Claim;
(f) the Seller, CONSOL Energy, or any Originator shall generally not pay
its debts as such debts become due, or shall admit in writing its inability to
pay its debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against the Seller,
CONSOL Energy, or any Originator seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee, custodian or other similar official for it or for any substantial part
of its property and, in the case of any such proceeding instituted against it
(but not instituted
V-1
by it), either such proceeding shall remain undismissed or unstayed for a period
of 60 days, or any of the actions sought in such proceeding (including the entry
of an order for relief against, or the appointment of a receiver, trustee,
custodian or other similar official for, it or for any substantial part of its
property) shall occur; or the Seller, CONSOL Energy, or any Originator shall
take any corporate or organizational action to authorize any of the actions set
forth above in this paragraph;
(g) (i) the (A) Default Ratio shall exceed 5.0% or (B) the Delinquency
Ratio shall exceed 6.0% or (ii) the average for three consecutive calendar
months of: (A) the Default Ratio shall exceed 3.0%, (B) the Delinquency Ratio
shall exceed 5.0% or (C) the Dilution Ratio shall exceed 3.0%;
(h) at any time the Days' Sales Outstanding shall exceed 45 days;
(i) a Change in Control shall occur;
(j) at any time (i) the sum of (A) the Capital plus (B) the Total
Reserves, exceeds (ii) the sum of (A) the Net Receivables Pool Balance at such
time plus (B) the Conduit Purchasers' Share of the amount of Collections then on
deposit in the Lock-Box Accounts (other than amounts set aside therein
representing Discount and fees), and such circumstance shall not have been cured
within five Business Days after knowledge thereof by the Seller, CONSOL Energy,
the Servicer or any Originator; provided that each month upon the due date for
the Information Package, such parties shall be deemed to have knowledge thereof
(regardless of whether or not such parties had such knowledge or whether or not
the Information Package due to be delivered on such date was delivered to the
Administrator);
(k) (i) CONSOL Energy or any Originator shall fail to pay any principal of
or premium or interest on any of its Debt that is outstanding in a principal
amount of at least $25,000,000 in the aggregate when the same becomes due and
payable (whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise), and such failure shall continue after the applicable grace
period, if any, specified in the agreement, mortgage, indenture or instrument
relating to such Debt (and shall have not been waived); or (ii) any other event
shall occur or condition shall exist under any agreement, mortgage, indenture or
instrument relating to any such Debt and shall continue after the applicable
grace period, if any, specified in such agreement, mortgage, indenture or
instrument (and shall have not been waived), if, in either case: (a) the effect
of such non-payment, event or condition is to give the applicable debtholders
the right (whether acted upon or not) to accelerate the maturity of such Debt,
or (b) any such Debt shall be declared to be due and payable, or required to be
prepaid (other than by a regularly scheduled required prepayment), redeemed,
purchased or defeased, or an offer to repay, redeem, purchase or defease such
Debt shall be required to be made, in each case before the stated maturity
thereof; or
(l) either: (i) a contribution failure shall occur with respect to any
Benefit Plan sufficient to give rise to a lien under Section 302(f) of ERISA,
(ii) the Internal Revenue Service shall file a notice of lien asserting a claim
or claims pursuant to the Internal Revenue Code with regard to any of the assets
of Seller, any Originator, CONSOL Energy or any ERISA Affiliate and such lien
shall have been filed and not released within 10 days, or (iii) the Pension
Benefit
V-2
Guaranty Corporation shall, or shall indicate its intention in writing to the
Seller, any Originator, CONSOL Energy or any ERISA Affiliate to, either file a
notice of lien asserting a claim pursuant to ERISA with regard to any assets of
the Seller, any Originator, CONSOL Energy, or any ERISA Affiliate or terminate
any Benefit Plan that has unfunded benefit liabilities, or any steps shall have
been taken to terminate any Benefit Plan subject to Title IV of ERISA so as to
result in any material liability and such lien shall have been filed and not
released within 10 days.
V-3
SCHEDULE I
CREDIT AND COLLECTION POLICY
Schedule I-1
SCHEDULE II
LOCK-BOX BANKS AND LOCK-BOX ACCOUNTS
Lock-Box Bank Lock-Box Account P.O. Box
- --------------------------- --------------------------------------
PNC Bank 643391 1017285895 P.O. Box 643391
Pittsburgh, PA 15264-3391
532786 1017285895 P.O. Box 532786
Atlanta, GA 30353-2786
Mellon Bank 360003 127-7247 P.O. Box 360003M
Pittsburgh, PA 15251-6003
40234 127-7247 P.O. Box 40234M
Atlanta, GA 31192-0234
360428 197-4798 P.O. Box 360428M
Pittsburgh, PA 15251-6428
Schedule II-1
SCHEDULE III
TRADE NAMES
Organizational Name Trade Names / Fictitious Names
- ------------------- ------------------------------
CONSOL Energy Inc.
Consol Sales Company
CONSOL of Kentucky Inc.
Consol Pennsylvania Coal Company
Consolidation Coal Company
Island Creek Coal Company
Windsor Coal Company
McELROY COAL COMPANY
Keystone Coal Mining Corporation
Eighty-Four Mining Company
CNX Gas Company LLC f/a/k/a Pocahontas Gas Partnership and Buchanan Production
Company
CNX Marine Terminals Inc. f/a/k/a Consolidation Coal Sales Company
Schedule III-1
SCHEDULE IV
OFFICE LOCATIONS
The Principal Place of Business, Chief Executive Office and State of Formation
of the Seller is:
CONSOL Plaza
Treasury Suite 125
1800 Washington Road
Pittsburgh, PA 15241
Delaware Corporation
The Seller maintains its master books and records relating to Receivables at:
CONSOL Plaza
Treasury Suite 125
1800 Washington Road
Pittsburgh, PA 15241
The Principal Place of Business, Chief Executive Office and State of Formation
of the Servicer:
1800 Washington Road
Pittsburgh, PA 15241
Delaware Corporation
The Servicer maintains its master books and records relating to the Receivables
at:
1800 Washington Road
Pittsburgh, PA 15241
Schedule IV-1
SCHEDULE V
CONDUIT PURCHASERS
Name Commitment Undivided % Ownership Conduit
Interest Agent
Market Street $ 125,000,000 100% PNC
Schedule V-1
ANNEX A
to Receivables Purchase Agreement
FORM OF INFORMATION PACKAGE
Annex A-1
ANNEX B
to Receivables Purchase Agreement
FORM OF PURCHASE NOTICE
Annex B-1
FORM OF PURCHASE NOTICE
____________, [200_]
PNC Bank, National Association, as Administrator
One PNC Plaza, 26th Floor
249 Fifth Avenue
Pittsburgh, PA 15222-2707
Ladies and Gentlemen:
Reference is hereby made to the Receivables Purchase Agreement, dated as of
April 30, 2003 (as heretofore amended or supplemented, the "Receivables Purchase
Agreement"), among CNX Funding Corporation, ("Seller"), CONSOL Energy Inc., as
Servicer, Consol Sales Company, CONSOL of Kentucky Inc., Consol Pennsylvania
Coal Company, Consolidation Coal Company, Island Creek Coal Company, Windsor
Coal Company, McELROY COAL COMPANY, Keystone Coal Mining Corporation,
Eighty-Four Mining Company, CNX Gas Company LLC, CNX Marine Terminals Inc., as
the Sub-Servicers, the Conduit Purchasers party thereto, the Conduit Agents
party thereto, and PNC Bank, National Association, (the "Administrator").
Capitalized terms used in this Purchase Notice and not otherwise defined herein
shall have the meanings assigned thereto in the Receivables Purchase Agreement.
This letter constitutes a Purchase Notice pursuant to Section 1.2(a) of the
Receivables Purchase Agreement. Seller desires to sell an undivided variable
interest in a pool of receivables on _______________, [200_], for a purchase
price of $_______________. Subsequent to this Purchase, the aggregate
outstanding Capital will be $_______________. Each Conduit Purchaser's Share of
such Purchase and resulting aggregate Capital is set forth on a schedule
attached hereto.
Seller hereby represents and warrants as of the date hereof, and as of the
date of Purchase, as follows:
(i) the representations and warranties contained in Exhibit III of the
Receivables Purchase Agreement are correct on and as of such dates as though
made on and as of such dates and shall be deemed to have been made on such
dates;
(ii) no Termination Event or Unmatured Termination Event has occurred and
is continuing, or would result from such purchase;
(iii) after giving effect to the purchase proposed hereby, the aggregate
outstanding Capital of the Purchased Interest will not exceed 100% and the
Capital will not exceed the Purchase Limit; and
(iv) the Facility Termination Date shall not have occurred.
IN WITNESS WHEREOF, the undersigned has caused this Purchase Notice to be
executed by its duly authorized officer as of the date first above written.
CNX FUNDING CORPORATION
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
S-1
ANNEX C
to Receivables Purchase Agreement
FORM OF PAYDOWN NOTICE
Annex C-1
FORM OF PAYDOWN NOTICE
___________,______
PNC Bank, National Association, as Administrator
One PNC Plaza, 26th floor
249 Fifth Avenue
Pittsburgh, Pennsylvania 15222-2707
Ladies and Gentlemen:
Reference is hereby made to the Receivables Purchase Agreement, dated as of
April 30, 2003 (as amended, supplemented or otherwise modified, the "Receivables
Purchase Agreement"), among CNX Funding Corporation, as Seller, CONSOL Energy
Inc., as Servicer, Consol Sales Company, CONSOL of Kentucky Inc., Consol
Pennsylvania Coal Company, Consolidation Coal Company, Island Creek Coal
Company, Windsor Coal Company, McELROY COAL COMPANY, Keystone Coal Mining
Corporation, Eighty-Four Mining Company, CNX Gas Company LLC, CNX Marine
Terminals Inc., as the Sub-Servicers, the Conduit Purchasers party thereto, the
Conduit Agents party thereto, and PNC Bank, National Association, as
Administrator. Capitalized terms used in this paydown notice and not otherwise
defined herein shall have the meanings assigned thereto in the Receivables
Purchase Agreement.
This letter constitutes a paydown notice pursuant to Section 1.4(f)(i) of
the Receivables Purchase Agreement. The Seller desires to reduce the Capital on
_______________, _____1 by the application of $_______________ in cash to pay
Capital and Discount to accrue (until such cash can be used to pay commercial
paper notes) with respect to such Capital, together with all costs related to
such reduction of Capital. Each Conduit Purchaser's Share of such reduction and
resulting aggregate Capital is set forth on a schedule attached hereto.
- ----------
Annex C-1
IN WITNESS WHEREOF, the undersigned has caused this paydown notice to be
executed by its duly authorized officer as of the date first above written.
CNX FUNDING CORPORATION
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Annex C-2
ANNEX D
to Receivables Purchase Agreement
FORM OF COMPLIANCE CERTIFICATE
To: PNC Bank, National Association, as Administrator
This Compliance Certificate is furnished pursuant to that certain
Receivables Purchase Agreement, dated as of April 30, 2003 (as amended,
supplemented or otherwise modified, the "Receivables Purchase Agreement"), among
CNX Funding Corporation, as Seller (the "Seller"), CONSOL Energy Inc., as
Servicer (the "Servicer"), Consol Sales Company, CONSOL of Kentucky Inc., Consol
Pennsylvania Coal Company, Consolidation Coal Company, Island Creek Coal
Company, Windsor Coal Company, McELROY COAL COMPANY, Keystone Coal Mining
Corporation, Eighty-Four Mining Company, CNX Gas Company LLC, CNX Marine
Terminals Inc., as the Sub-Servicers, the Conduit Purchasers party thereto, the
Conduit Agents party thereto, and PNC Bank, National Association, as
Administrator (the "Administrator") (the "Agreement"). Capitalized terms used
herein and not otherwise defined herein shall have the meanings assigned to them
in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected ____________________ of Seller.
2. I have reviewed the terms of the Agreement and I have made, or
have caused to be made under my supervision, a detailed review of the
transactions and condition of Seller during the accounting period covered by the
attached financial statements.
3. The examinations described in paragraph 2 did not disclose, and I
have no knowledge of, the existence of any condition or event which constitutes
a Termination Event or an Unmatured Termination Event, as each such term is
defined under the Agreement, during or at the end of the accounting period
covered by the attached financial statements or as of the date of this
Certificate, except as set forth in paragraph 5 below.
4. Schedule I attached hereto sets forth (i) financial data and
computations evidencing the compliance with certain covenants of the Agreement
(and the Three Year Credit Agreement and 364-DayCredit Agreement), all of which
data and computations are true, complete and correct, and (ii) notice to the
Administrator that the financial statements of CONSOL Energy and its
Subsidiaries for the period referenced on Schedule I hereto are available on the
SEC's website.
5. Described below are the exceptions, if any, to paragraph 3 by
listing, in detail, the nature of the condition or event, the period during
which it has existed and the action which Seller has taken, is taking, or
proposes to take with respect to each such condition or event:
The foregoing certifications, together with the computations set forth in
Schedule I hereto and the financial statements delivered with this Certificate
in support hereof, are made and delivered this _____ day of____________, 20___.
CNX FUNDING CORPORATION
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
S-1
SCHEDULE I TO COMPLIANCE CERTIFICATE
A. Schedule of Compliance as of ____________________, 20__ with
Section(s) _____ of the Agreement. Unless otherwise defined herein, the terms
used in this Compliance Certificate have the meanings ascribed thereto in the
Agreement.
This schedule relates to the month ended:
B. The financial statements of CONSOL Energy and its Subsidiaries
for the period ending on _________________, 200_, are available on the SEC's
website.
S-1