Exhibit 10-2
PSNH FUNDING LLC,
as Issuer
and
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
as Servicer
SERVICING AGREEMENT
Dated as of April 25, 2001
Article 1 DEFINITIONS
Section 1.01. Definitions
Section 1.02. Other Definitional Provisions
Article 2 APPOINTMENT AND AUTHORIZATION
Section 2.01. Appointment of Servicer; Acceptance of Appointment
Section 2.02. Authorization
Section 2.03. Dominion and Control Over the RRB Property
Article 3 BILLING SERVICES
Section 3.01. Duties of Servicer
Section 3.02. Servicing and Maintenance Standards
Section 3.03. Certificate of Compliance
Section 3.04. Annual Report by Independent Public Accountants
Article 4 SERVICES RELATED TO PERIODIC ADJUSTMENTS; REMITTANCES
Section 4.01. Periodic Adjustments
Section 4.02. Limitation of Liability
Section 4.03. Remittances
Article 5 THE RRB PROPERTY
Section 5.01. Custody of RRB Property Records
Section 5.02. Duties of Servicer as Custodian
Section 5.03. Instructions; Authority to Act
Section 5.04. Effective Period and Termination
Section 5.05. Monitoring of Third Party Suppliers
Article 6 THE SERVICER
Section 6.01. Representations and Warranties of Servicer
Section 6.02. Indemnities of Servicer
Section 6.03. Limitation on Liability of Servicer and Others
Section 6.04. Merger or Consolidation of, or Assumption of the
Obligations of, Servicer
Section 6.05. Public Service Company of New Hampshire Not to Resign
as Servicer
Section 6.06. Servicing Compensation
Section 6.07. Compliance with Applicable Law
Section 6.08. Access to Certain Records and Information Regarding
RRB Property
Section 6.09. Appointments
Section 6.10. No Servicer Advances
Section 6.11. Maintenance of Operations
Article 7 DEFAULT
Section 7.01. Servicer Default
Section 7.02. Appointment of Successor
Section 7.03. Waiver of Past Defaults
Section 7.04. Notice of Servicer Default
Article 8 MISCELLANEOUS PROVISIONS
Section 8.01. Amendment
Section 8.02. Maintenance of Accounts and Records
Section 8.03. Notices
Section 8.04. Assignment
Section 8.05. Limitations on Rights of Third Parties
Section 8.06. Severability
Section 8.07. Separate Counterparts
Section 8.08. Headings
Section 8.09. Governing Law
Section 8.10. Assignment to Trustee
Section 8.11. Nonpetition Covenants
This SERVICING AGREEMENT, dated as of April 25, 2001, is between PSNH
Funding LLC, a Delaware limited liability company (together with any
successor thereto permitted under the Indenture, as hereinafter defined, the
"Issuer"), and Public Service Company of New Hampshire, a New Hampshire
corporation.
RECITALS
WHEREAS, pursuant to the Statute and the Finance Order, the Seller and
the Issuer are concurrently entering into the Sale Agreement pursuant to
which the Seller is selling to the Issuer the RRB Property created pursuant
to the Statute and the Finance Order.
WHEREAS, in connection with its ownership of the RRB Property and in
order to collect the RRB Charge, the Issuer desires to engage the Servicer to
carry out the functions described herein. The Servicer currently performs
similar functions for itself with respect to its own charges to its
customers. In addition, the Issuer desires to engage the Servicer to act on
its behalf in obtaining Periodic Adjustments from the NHPUC. The Servicer
desires to perform all of these activities on behalf of the Issuer.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.01. Definitions. Whenever used in this Agreement, the
following words and phrases shall have the following meanings:
"Advice Letter" means any filing made with the NHPUC by the Servicer on
behalf of the Issuer to set or adjust the RRB Charge, including the Issuance
Advice Letter, a Routine Semiannual True-Up Letter, a Routine True-Up Letter
or a Non-Routine True-Up Letter.
"Agreement" means this Servicing Agreement, together with all Exhibits,
Schedules and Annexes hereto, as the same may be amended and supplemented
from time to time.
"Annual Accountant's Report" has the meaning set forth in Annual Report
by Independent Public Accountants..
"Applicable TPS" means, with respect to each customer, the TPS, if any,
billing the RRB Charge to that customer.
"Bills" means each of the regular monthly bills, summary bills and other
bills issued to customers or TPSs by Public Service Company of New Hampshire
on its own behalf and in its capacity as Servicer.
"Certificate of Compliance" has the meaning set forth in Certificate of
Compliance. The Servicer shall deliver to the Issuer, the Trustee and the
Rating Agencies on or before March 31 of each year, commencing March 31, 2002
to and including the March 31 succeeding the Retirement of the Bonds, an
Officer's Certificate substantially in the form of Exhibit A hereto (a
"Certificate of Compliance"), stating that: (i) a review of the activities
of the Servicer during the twelve months ended the preceding December 31 (or,
in the case of the first Certificate of Compliance to be delivered on or
before March 31, 2002, the period of time from the date of this Agreement
until December 31, 2001) and of its performance under this Agreement has been
made under such Responsible Officer's supervision, and (ii) to such
Responsible Officer's knowledge, based on such review, the Servicer has
fulfilled all of its obligations in all material respects under this
Agreement throughout such twelve months (or, in the case of the Certificate
of Compliance to be delivered on or before March 31, 2002, the period of time
from the date of this Agreement until December 31, 2001), or, if there has
been a default in the fulfillment of any such material obligation, specifying
each such material default known to such Responsible Officer and the nature
and status thereof..
"Closing Date" means April 25 2001.
"Expected Amortization Schedule" means Schedule 4.01(a) hereto.
"Finance Order" means the order of the NHPUC, DE 99-099, issued on
September 8, 2000 (Order No. 23,550).
"Indemnified Person" has the meaning assigned to such term in
Indemnities of Servicer..
"Insolvency Event" means, with respect to a specified Person, (a) the
filing of a decree or order for relief by a court having jurisdiction in the
premises in respect of such Person or any substantial part of its property in
an involuntary case under any applicable Federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official for such Person or for any substantial part of its property, or
ordering the winding-up or liquidation of such Person's affairs, and such
decree or order shall remain unstayed and in effect for a period of 60
consecutive days; or (b) the commencement by such Person of a voluntary case
under any applicable Federal or state bankruptcy, insolvency or other similar
law now or hereafter in effect, or the consent by such Person to the entry of
an order for relief in an involuntary case under any such law, or the consent
by such Person to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official
for such Person or for any substantial part of its property, or the making by
such Person of any general assignment for the benefit of creditors, or the
failure by such Person generally to pay its debts as such debts become due.
"Indenture" means the Indenture dated as of the date hereof between the
Issuer and the Trustee, as the same may be amended and supplemented from time
to time.
"Issuer" has the meaning set forth in the preamble to this Agreement.
"Issuance Advice Letter" means the initial Issuance Advice Letter, dated
April 23, 2001, filed with the NHPUC pursuant to the Finance Order.
"Lien" means a security interest, lien, charge, pledge or encumbrance of
any kind.
"Losses" has the meaning assigned to that term in The Servicer shall
indemnify the Issuer and the Bondholders (each an "Indemnified Person" for
purposes of Sections 6.02 (b) and (d)) for, and defend and hold harmless each
such Person from and against, any and all liabilities, obligations, losses,
damages, payments, claims, costs or expenses of any kind whatsoever
(collectively, "Losses") that may be imposed on, incurred by or asserted
against any such Person as a result of (i) the Servicer's willful misconduct
or negligence in the performance of its duties or observance of its covenants
under this Agreement (including the Servicer's willful misconduct or
negligence relating to the maintenance and custody by the Servicer, as
custodian, of the RRB Property Records) or (ii) the Servicer's breach in any
material respect of any of its representations or warranties in this
Agreement; provided, however, that the Servicer shall not be liable for any
Losses resulting from the willful misconduct or gross negligence of any such
Indemnified Person; and, provided, further, that the Bondholders shall be
entitled to enforce their rights and remedies against the Servicer under this
solely through a cause of action
brought for their benefit by the Trustee; and, provided, further, that the
Servicer shall not be liable for any Losses, regardless of when incurred,
after the Bonds have been paid in full, except as provided in The Servicer
shall indemnify and hold harmless the Trustee, the State of New Hampshire,
the Treasurer of the State of New Hampshire, agencies of the State of New
Hampshire and any of their respective affiliates, officials, officers,
directors, employees, consultants, counsel and agents (each an "Indemnified
Person" for purposes of Section 6.02(c) and (d)) for, and defend and hold
harmless each such Person from and against, any and all Losses imposed on,
incurred by or asserted against any of such Indemnified Persons as a result
of: (i) the Servicer's willful misconduct or negligence in the performance
of its duties or observance of its covenants under this Agreement (including
the Servicer's willful misconduct or negligence relating to the maintenance
and custody by the Servicer, as custodian, of the RRB Property Records) or
(ii) the Servicer's breach in any material respect of any of its
representations or warranties in this Agreement; provided, however, that the
Servicer shall not be liable for any Losses resulting from the willful
misconduct or gross negligence of such Indemnified Person or resulting from a
breach of a representation or warranty made by such Indemnified Person in any
of the Basic Documents that gives rise to the Servicer's breach...
"Monthly Servicer Certificate" has the meaning assigned to that term in
Monthly Servicer Certificate. So long as any Bonds are outstanding, not
later than fifteen (15) days after the end of each month after the Bonds are
issued (excluding April, 2001), or if such day is not a Servicer Business
Day, the next succeeding Servicer Business Day, the Servicer shall deliver a
written report substantially in the form of Exhibit C hereto (the "Monthly
Servicer Certificate") to the Issuer, the Trustee and the Rating Agencies..
"NHPUC" means the New Hampshire Public Utilities Commission and any
successor thereto.
"NHPUC Regulations" means all regulations, rules, tariffs and laws
applicable to public utilities or TPSs, as the case may be, and promulgated
by, enforced by or otherwise within the jurisdiction of the NHPUC.
"Non-Routine Periodic Adjustment" has the meaning set forth in Whenever
the Servicer determines that the existing model for calculating the RRB
Charge should be amended or revised, subject to the consent of the Issuer
under the conditions set forth in Section 3.18 of the Indenture, the Servicer
shall file a Non-Routine True-Up Letter with the NHPUC designating the
adjustments to such model and any corresponding adjustments to the RRB Charge
(collectively, a "Non-Routine Periodic Adjustment"), subject to the review
and approval of the NHPUC pursuant to the Finance Order..
"Non-Routine True-Up Letter" means a letter filed with the NHPUC in
accordance with the Finance Order with respect to any Non-Routine Periodic
Adjustment, pursuant to which the related Non-Routine Periodic Adjustment
will become effective within 60 days after filing of the Non-Routine True-Up
Letter, subject to the review and approval of the NHPUC.
"Officer's Certificate" means a certificate of the Servicer signed by a
Responsible Officer.
"Opinion of Counsel" means one or more written opinions of counsel who
may be an employee of or counsel to the party providing such opinion(s) of
counsel, which counsel shall be reasonably acceptable to the party receiving
such opinion(s) of counsel.
"Periodic Adjustment" means each adjustment to the RRB Charge made
pursuant to the terms of the Finance Order and in accordance with Periodic
Adjustments. From time to time, until the Retirement of the Bonds, the
Servicer shall identify the need for Periodic Adjustments and shall take all
reasonable action to obtain and implement such Periodic Adjustments, all in
accordance with the following: hereof.
"Principal Balance" means, as of any Payment Date, the sum of the
outstanding principal amount of the Bonds.
"Projected Principal Balance" means, as of any Payment Date, the sum of
the projected outstanding principal amount of the Bonds for such Payment Date
set forth in the Expected Amortization Schedule.
"Quarterly Servicer Certificate" has the meaning assigned to that term
in Quarterly Servicer Certificate. So long as any Bonds are outstanding, not
later than 11:00 a.m. (New York City time) on the Servicer Business Day
immediately preceding each Payment Date, the Servicer shall deliver a written
report substantially in the form of Exhibit D hereto (the "Quarterly Servicer
Certificate") to the Issuer, the Trustee and the Rating Agencies..
"Remittance" means each remittance pursuant to Remittances. of RRB
Charge Payments by the Servicer to the Trustee.
"Remittance Date" means each Servicer Business Day on which a Remittance
is to be made by the Servicer pursuant to Remittances..
"Remittance Period" means, in each year, each successive six-month
period commencing on April 25 and ending on October 24 and commencing on
October 25 and ending on April 24; provided, however, that the initial
Remittance Period shall commence on the Closing Date and end on October 24,
2001.
"Required Debt Service" means, for any Remittance Period, the total
dollar amount calculated by the Servicer in accordance with Routine
Semiannual Periodic Adjustments and Filings. For the purpose of preparing a
Routine Semiannual True-Up Letter, the Servicer shall: (A) update the
assumptions underlying the calculation of the RRB Charge, including energy
usage volume, the rate of charge-offs and estimated expenses and fees of the
Issuer to the extent not fixed, for the Remittance Period beginning on April
25 or October 25 (whichever is next to occur) of each year; (B) determine the
Required Debt Service for such Remittance Period based upon such updated
assumptions; and (C) determine the RRB Charge to be charged during such
Remittance Period based upon such Required Debt Service. The Servicer shall
file a Routine Semiannual True-Up Letter with the NHPUC no later than 30 days
prior to April 25 and October 25 of each year. as necessary to be remitted to
the Collection Account during such Remittance Period (after giving effect to
(a) the allocation and distribution of amounts on deposit in the Reserve
Subaccount at the time of calculation and which are available for payments on
the Bonds, (b) any shortfalls in Required Debt Service for any prior
Remittance Period and (c) any Remittances based upon the RRB Charge in effect
in the prior Remittance Period that are expected to be realized in such
Remittance Period) in order to ensure that, as of the Payment Date
immediately following the end of such period, (i) all accrued and unpaid
interest on the Bonds then due shall have been paid in full, (ii) the
Principal Balance of the Bonds is equal to the Projected Principal Balance of
the Bonds for that Payment Date, (iii) the balance on deposit in the Interest
Reserve Subaccount equals the aggregate Required Interest Reserve Level, (iv)
the balance on deposit in the Capital Subaccount equals the aggregate
Required Capital Level, (v) the balance on deposit in the
Overcollateralization Subaccount equals the aggregate Required
Overcollateralization Level and (vi) all other fees, expenses and indemnities
due and owing and required or allowed to be paid under Section 8.02 of the
Indenture as of such date shall have been paid in full; provided, however,
that, with respect to any Periodic Adjustment occurring after the last
Scheduled Maturity Date for any Bonds, the Required Debt Service shall be
calculated to ensure that sufficient amounts will be collected to retire such
Bonds in full as of the earlier of (x) the next Payment Date and (y) the
Final Maturity Date for such Bonds.
"Responsible Officer" means the chief executive officer, the president,
the chairman or vice chairman of the board, the any vice president, the
treasurer, any assistant treasurer, the secretary, the clerk, any assistant
secretary, and assistant clerk, the controller or the finance manager of the
Servicer.
"Retirement of the Bonds" means the day on which the final payment is
made to the Trustee in respect of the last outstanding Bond.
"Routine Semiannual True-Up Letter" means a letter filed with the NHPUC,
substantially in the form of Exhibit B hereto, not later than 30 days prior
to April 25 and October 25 in each year, in respect of a semiannual Periodic
Adjustment. Absent manifest error in the Routine Semiannual True-Up Letter,
the resulting upward or downward adjustments to the RRB Charge will be
effective on the ensuing April 25 or October 25.
"Routine True-Up Letter" means a letter filed with the NHPUC,
substantially in the form of Exhibit B hereto, as frequently as monthly, in
respect of a Periodic Adjustment. Absent manifest error in the Routine True-
Up Letter, the resulting upward or downward adjustments to the RRB Charge
will be effective immediately upon the filing of such Routine True-Up Letter.
"RRB Charge" means the portion (which may become all) of the Seller's
"stranded cost recovery charge" designated pursuant to the Finance Order and
RSA 369-B:2, XIII as the RRB Charge, as the same may be adjusted from time to
time as provided in the Finance Order.
"RRB Charge Collections" means the RRB Charge Payments remitted to the
Collection Account.
"RRB Charge Payments" means the actual payments received by the
Servicer, directly or indirectly (including through a TPS), from or on behalf
of customers, multiplied by the percentage of such collections which is
calculated in accordance with Annex II hereto to have been received in
respect of the RRB Charge.
"RRB Property" means the RRB Property that exists under Approval Nos. 20
to 22 of the Finance Order and is sold by the Seller to the Issuer under the
Sale Agreement.
"RRB Property Records" has the meaning assigned to that term in Custody
of RRB Property Records. To assure uniform quality in servicing the RRB
Property and to reduce administrative costs, the Issuer hereby revocably
appoints the Servicer, and the Servicer hereby accepts such appointment, to
act as the agent of the Issuer and the Trustee as custodian of any and all
documents and records that the Servicer shall keep on file, in accordance
with its customary procedures, relating to the RRB Property, including copies
of the Finance Order and Advice Letters relating thereto and all documents
filed with the NHPUC in connection with any Periodic Adjustment or Non-
Routine Periodic Adjustment and computational records relating thereto
(collectively, the "RRB Property Records"), which are hereby constructively
delivered to the Trustee, as pledgee of the Issuer with respect to all RRB
Property..
"Sale Agreement" means the Purchase and Sale Agreement dated as of the
date hereof between Public Service Company of New Hampshire, as Seller, and
the Issuer, as the same may be amended and supplemented from time to time.
"Seller" means Public Service Company of New Hampshire, a New Hampshire
corporation, and its permitted successors and assigns under the Sale
Agreement.
"Servicer" means Public Service Company of New Hampshire, as the
servicer of the RRB Property, or each successor (in the same capacity)
pursuant to Merger or Consolidation of, or Assumption of the Obligations of,
Servicer. Any Person (a) into which the Servicer may be merged or
consolidated, (b) which may result from any merger or consolidation to which
the Servicer shall be a party or (c) which may succeed to the properties and
assets of the Servicer substantially as a whole, which Person in any of the
foregoing cases executes an agreement of assumption to perform every
obligation of the Servicer hereunder, shall be the successor to the Servicer
under this Agreement without further act on the part of any of the parties to
this Agreement; provided, however, that (i) immediately after giving effect
to such transaction, no Servicer Default and no event which, after notice or
lapse of time, or both, would become a Servicer Default shall have occurred
and be continuing, (ii) the Servicer shall have delivered to the Issuer and
the Trustee an Officers' Certificate stating that such consolidation, merger
or succession and such agreement of assumption comply with this Section and
that all conditions precedent provided for in this Agreement relating to such
transaction have been complied with, (iii) the Servicer shall have delivered
to the Issuer and the Trustee an Opinion of Counsel stating that, in the
opinion of such counsel (A) such consolidation, merger or succession and such
agreement of assumption comply with this Section and that all conditions
precedent provided for in this Agreement relating to such transaction have
been complied with and (B) either (1) all filings to be made by the Servicer,
including filings with the NHPUC pursuant to the Statute and filings under
the applicable Uniform Commercial Code, have been executed and filed that are
necessary to preserve and protect fully the interests of the Issuer and the
Trustee in the RRB Property and reciting the details of such filings or (2)
no such action shall be necessary to preserve and protect such interests and
(iv) the Rating Agencies shall have received prior written notice of such
transaction. When any Person acquires the properties and assets of the
Servicer substantially as a whole and becomes the successor to the Servicer
in accordance with the terms of this then upon satisfaction of all of the
other conditions of this, the Servicer shall automatically and without
further notice be released from all its obligations hereunder or Appointment
of Successor..
"Servicer Business Day" means any Business Day on which the Servicer's
offices in the State of New Hampshire are open for business.
"Servicer Default" means an event specified in Servicer Default. If any
one of the following events (each a "Servicer Default") shall occur and be
continuing:.
"Servicing Fee" has the meaning set forth in In consideration for its
services hereunder, until the Retirement of the Bonds, the Servicer shall
receive an annual fee (the "Servicing Fee") in an amount equal to (i) one-
quarter of one percent (0.25%) of the outstanding principal balance of the
Bonds for so long as the Servicer is Public Service Company of New Hampshire
or any successor Servicer that bills the RRB Charge concurrently with other
charges for services or (ii) up to one and one-half percent (1.5%) of the
outstanding principal balance of the Bonds for so long as the Servicer is a
successor Servicer that bills the RRB Charge separately to customers (which
amount shall be determined by a separate agreement between the Issuer and the
Servicer). The Servicing Fee shall be payable in quarterly installments on
each Payment Date. The Servicer also shall be entitled to retain as
additional compensation (i) any interest earnings on RRB Charge Payments
received by the Servicer and invested by the Servicer pursuant to Section
6(c) of Annex I hereto prior to remittance to the Collection Account and (ii)
all late payment charges, if any, collected from customers or TPSs..
"Statute" means RSA Chapter 369-B.
"Termination Notice" has the meaning assigned to that term in Servicer
Default. If any one of the following events (each a "Servicer Default")
shall occur and be continuing:.
"TPS" means a third party supplier of energy who has entered into a TPS
Service Agreement with the Servicer.
"TPS Service Agreement" means an agreement between a third party
supplier of energy and the Servicer pursuant to which such third party
supplier of energy bills and collects the RRB Charge to and from customers in
accordance with NHPUC Regulations, the Finance Order and the guidelines
described in Schedule A to Annex I.
Section 1.02. Other Definitional Provisions.
(a) Capitalized terms used herein and not otherwise defined herein
have the meanings assigned to them in the Indenture.
(b) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(c) The words "hereof," "herein," "hereunder" and words of similar
import, when used in this Agreement, shall refer to this Agreement as a whole
and not to any particular provision of this Agreement; Section, Schedule,
Exhibit and Annex references contained in this Agreement are references to
Sections, Schedules, Exhibits and Annexes in or to this Agreement unless
otherwise specified; and the term "including" shall mean "including without
limitation."
(d) The definitions contained in this Agreement are applicable to
the singular as well as the plural forms of such terms and to the masculine
as well as to the feminine and neuter forms of such terms.
ARTICLE 2
APPOINTMENT AND AUTHORIZATION
Section 2.01. Appointment of Servicer; Acceptance of Appointment.
Subject to Public Service Company of New Hampshire Not to Resign as Servicer.
Subject to the provisions of Merger or Consolidation of, or Assumption of the
Obligations of, Servicer. Any Person (a) into which the Servicer may be
merged or consolidated, (b) which may result from any merger or consolidation
to which the Servicer shall be a party or (c) which may succeed to the
properties and assets of the Servicer substantially as a whole, which Person
in any of the foregoing cases executes an agreement of assumption to perform
every obligation of the Servicer hereunder, shall be the successor to the
Servicer under this Agreement without further act on the part of any of the
parties to this Agreement; provided, however, that (i) immediately after
giving effect to such transaction, no Servicer Default and no event which,
after notice or lapse of time, or both, would become a Servicer Default shall
have occurred and be continuing, (ii) the Servicer shall have delivered to
the Issuer and the Trustee an Officers' Certificate stating that such
consolidation, merger or succession and such agreement of assumption comply
with this Section and that all conditions precedent provided for in this
Agreement relating to such transaction have been complied with, (iii) the
Servicer shall have delivered to the Issuer and the Trustee an Opinion of
Counsel stating that, in the opinion of such counsel (A) such consolidation,
merger or succession and such agreement of assumption comply with this
Section and that all conditions precedent provided for in this Agreement
relating to such transaction have been complied with and (B) either (1) all
filings to be made by the Servicer, including filings with the NHPUC pursuant
to the Statute and filings under the applicable Uniform Commercial Code, have
been executed and filed that are necessary to preserve and protect fully the
interests of the Issuer and the Trustee in the RRB Property and reciting the
details of such filings or (2) no such action shall be necessary to preserve
and protect such interests and (iv) the Rating Agencies shall have received
prior written notice of such transaction. When any Person acquires the
properties and assets of the Servicer substantially as a whole and becomes
the successor to the Servicer in accordance with the terms of this
then upon satisfaction of all of the other conditions of this the Servicer
shall automatically and without further notice be released from all its
obligations hereunder., Public Service Company of New Hampshire shall not
resign from the obligations and duties hereby imposed on it as Servicer under
this Agreement except upon either (a) a determination that the performance of
its duties under this Agreement shall no longer be permissible under
applicable law or (b) satisfaction of the following: (i) the Rating Agency
Condition shall have been satisfied (except that with respect to Xxxxx'x it
shall be sufficient to provide ten days prior notice) and (ii) the NHPUC
shall have approved such resignation. Notice of any such determination
permitting the resignation of Public Service Company of New Hampshire shall
be communicated to the Issuer, the Trustee and the Rating Agencies at the
earliest practicable time (and, if such communication is not in writing,
shall be confirmed in writing at the earliest practicable time) and any such
determination that the performance of Public Service Company of New
Hampshire's duties under this Agreement shall no longer be permissible under
applicable law shall be evidenced by an Opinion of Counsel to such effect
delivered by Public Service Company of New Hampshire to the Issuer and the
Trustee concurrently with or promptly after such notice. No such resignation
shall become effective until a successor Servicer shall have assumed the
responsibilities and obligations of Public Service Company of New Hampshire
in accordance with Appointment of Successor.. and DEFAULT, the Issuer hereby
appoints the Servicer, and the Servicer hereby accepts such appointment, to
perform the Servicer's obligations pursuant to this Agreement on behalf of
and for the benefit of the Issuer or any assignee thereof in accordance with
the terms of this Agreement and applicable law. This appointment and the
Servicer's acceptance thereof may not be revoked except in accordance with
the express terms of this Agreement.
Section 2.02. Authorization. With respect to all or any portion of the
RRB Property, the Servicer shall be, and hereby is, authorized and empowered
by the Issuer to (a) execute and deliver, on behalf of itself and/or the
Issuer, as the case may be, any and all instruments, documents or notices,
and (b) on behalf of itself and/or the Issuer, as the case may be, make any
filing and participate in proceedings of any kind with any governmental
authorities, including with the NHPUC. The Issuer shall execute and/or
furnish the Servicer with such documents as have been prepared by the
Servicer for execution by the Issuer, and with such other documents as may be
in the Issuer's possession, as the Servicer may determine to be necessary or
appropriate to enable it to carry out its servicing and administrative duties
hereunder. Upon the Servicer's written request, the Issuer shall furnish the
Servicer with any powers of attorney or other documents necessary or
appropriate to enable the Servicer to carry out its duties hereunder.
Section 2.03. Dominion and Control Over the RRB Property.
Notwithstanding any other provision herein, the Issuer shall have dominion
and control over the RRB Property, and the Servicer, in accordance with the
terms hereof, is acting solely as the servicing agent and custodian for the
Issuer with respect to the RRB Property and the RRB Property Records. The
Servicer shall not take any action that is not authorized by this Agreement
or that shall impair the rights of the Issuer or the Trustee in the RRB
Property, in each case unless such action is required by applicable law.
ARTICLE 3
BILLING SERVICES
Section 3.01. Duties of Servicer. The Servicer, as agent for the
Issuer, shall have the following duties:
(a) Duties of Servicer Generally.
(1) General Duties. The Servicer's duties in general shall
include management, servicing and administration of the RRB Property;
obtaining meter reads, calculating electricity usage (including usage by
customers of any TPS), billing, collection and posting of all payments in
respect of the RRB Property; responding to inquiries by customers, the NHPUC,
or any federal, local or other state governmental authorities with respect to
the RRB Property; delivering Bills to customers and TPSs, investigating and
handling delinquencies, processing and depositing collections and making
periodic remittances; furnishing periodic reports to the Issuer, the Trustee
and the Rating Agencies; and taking all necessary action in connection with
Periodic Adjustments as set forth herein. Certain of the duties set forth
above may be performed by TPSs pursuant to TPS Service Agreements. Without
limiting the generality of this,
in furtherance of the foregoing, the Servicer hereby agrees that it shall
also have, and shall comply with, the duties and responsibilities relating to
data acquisition, usage and xxxx calculation, billing, customer service
functions, collection, payment processing and remittance set forth in Annex I
hereto.
(2) NHPUC Regulations Control. Notwithstanding anything to
the contrary in this Agreement, the duties of the Servicer set forth in this
Agreement shall be qualified in their entirety by any NHPUC Regulations as in
effect at the time such duties are to be performed.
(b) Reporting Functions.
(1) Notification of Laws and Regulations. The Servicer shall
promptly notify the Issuer, the Trustee and the Rating Agencies in writing of
any laws or NHPUC Regulations hereafter promulgated that have a material
adverse effect on the Servicer's ability to perform its duties under this
Agreement.
(2) Other Information. Upon the reasonable request of the
Issuer, the Trustee or any Rating Agency, the Servicer shall provide to such
Issuer, Trustee or the Rating Agencies, as the case may be, any public
financial information in respect of the Servicer, or any material information
regarding the RRB Property to the extent it is reasonably available to the
Servicer, as may be reasonably necessary and permitted by law for the Issuer,
the Trustee , or the Rating Agencies to monitor the Servicer's performance
hereunder.
(3) Preparation of Reports to be Filed with the SEC. The
Servicer shall prepare or cause to be prepared any reports required to be
filed by the Issuer under the securities laws, including a copy of each
Quarterly Servicer Certificate described in Quarterly Servicer Certificate.
So long as any Bonds are outstanding, not later than 11:00 a.m. (New York
City time) on the Servicer Business Day immediately preceding each Payment
Date, the Servicer shall deliver a written report substantially in the form
of Exhibit D hereto (the "Quarterly Servicer Certificate") to the Issuer, the
Trustee and the Rating Agencies., the annual Certificate of Compliance
described in Certificate of Compliance. The Servicer shall deliver to the
Issuer, the Trustee and the Rating Agencies on or before March 31 of each
year, commencing March 31, 2002 to and including the March 31 succeeding the
Retirement of the Bonds, an Officer's Certificate substantially in the form
of Exhibit A hereto (a "Certificate of Compliance"), stating that: (i) a
review of the activities of the Servicer during the twelve months ended the
preceding December 31 (or, in the case of the first Certificate of Compliance
to be delivered on or before March 31, 2002, the period of time from the date
of this Agreement until December 31, 2001) and of its performance under this
Agreement has been made under such Responsible Officer's supervision, and
(ii) to such Responsible Officer's knowledge, based on such review, the
Servicer has fulfilled all of its obligations in all material respects under
this Agreement throughout such twelve months (or, in the case of the
Certificate of Compliance to be delivered on or before March 31, 2002, the
period of time from the date of this Agreement until December 31, 2001), or,
if there has been a default in the fulfillment of any such material
obligation, specifying each such material default known to such Responsible
Officer and the nature and status thereof. and the Annual Accountant's Report
described in Annual Report by Independent Public Accountants..
Section 3.02. Servicing and Maintenance Standards. On behalf of the
Issuer, the Servicer shall (a) manage, service, administer and make
collections in respect of the RRB Property with reasonable care and in
accordance with applicable law, including all applicable NHPUC Regulations
and guidelines, using the same degree of care and diligence that the Servicer
exercises with respect to similar assets for its own account and, if
applicable, for others; (b) follow customary standards, policies and
procedures for the industry in performing its duties as Servicer; (c) use all
reasonable efforts, consistent with its customary servicing procedures, to
xxxx and collect the RRB Charge; (d) file all filings under the applicable
Uniform Commercial Code or the Statute necessary or desirable to maintain the
perfected ownership interest and security interest of the Issuer and the
Trustee in the RRB Property; and (e) comply in all material respects with all
laws and regulations applicable to and binding on it relating to the RRB
Property. The Servicer shall follow such customary and usual practices and
procedures as it shall deem necessary or advisable in its servicing of all or
any portion of the RRB Property, which, in the Servicer's judgment, may
include the taking of legal action, at the Issuer's expense.
Section 3.03. Certificate of Compliance. The Servicer shall deliver to
the Issuer, the Trustee and the Rating Agencies on or before March 31 of each
year, commencing March 31, 2002 to and including the March 31 succeeding the
Retirement of the Bonds, an Officer's Certificate substantially in the form
of Exhibit A hereto (a "Certificate of Compliance"), stating that: (i) a
review of the activities of the Servicer during the twelve months ended the
preceding December 31 (or, in the case of the first Certificate of Compliance
to be delivered on or before March 31, 2002, the period of time from the date
of this Agreement until December 31, 2001) and of its performance under this
Agreement has been made under such Responsible Officer's supervision, and
(ii) to such Responsible Officer's knowledge, based on such review, the
Servicer has fulfilled all of its obligations in all material respects under
this Agreement throughout such twelve months (or, in the case of the
Certificate of Compliance to be delivered on or before March 31, 2002, the
period of time from the date of this Agreement until December 31, 2001), or,
if there has been a default in the fulfillment of any such material
obligation, specifying each such material default known to such Responsible
Officer and the nature and status thereof.
Section 3.04. Annual Report by Independent Public Accountants.
(a) The Servicer, at the Issuer's expense, shall cause a firm of
independent certified public accountants (which may provide other services to
the Servicer) to prepare, and the Servicer shall deliver to the Issuer, the
Trustee and the Rating Agencies, a report addressed to the Servicer (the
"Annual Accountant's Report"), which may be included as part of the
Servicer's customary auditing activities, for the information and use of the
Issuer, the Trustee and the Rating Agencies, on or before March 31 each year,
beginning March 31, 2002 to and including the March 31 succeeding the
Retirement of the Bonds, to the effect that such firm has performed certain
procedures, agreed between the Servicer and such accountants, in connection
with the Servicer's compliance with its obligations under this Agreement
during the preceding twelve months ended December 31 (or, in the case of the
first Annual Accountant's Report to be delivered on or before March 31, 2002,
the period of time from the date of this Agreement until December 31, 2001),
identifying the results of such procedures and including any exceptions
noted.
(b) The Annual Accountant's Report shall also indicate that the
accounting firm providing such report is independent of the Servicer within
the meaning of the Code of Professional Ethics of the American Institute of
Certified Public Accountants.
ARTICLE 4
SERVICES RELATED TO PERIODIC ADJUSTMENTS;
REMITTANCES
Section 4.01. Periodic Adjustments. From time to time, until the
Retirement of the Bonds, the Servicer shall identify the need for Periodic
Adjustments and shall take all reasonable action to obtain and implement such
Periodic Adjustments, all in accordance with the following:
(a) Expected Amortization Schedule. The Expected Amortization
Schedule is attached hereto as Schedule 4.01(a).
(b) Routine Periodic Adjustments and Semiannual Filings.
(1) Routine Semiannual Periodic Adjustments and Filings. For
the purpose of preparing a Routine Semiannual True-Up Letter, the Servicer
shall: (A) update the assumptions underlying the calculation of the RRB
Charge, including energy usage volume, the rate of charge-offs and estimated
expenses and fees of the Issuer to the extent not fixed, for the Remittance
Period beginning on April 25 or October 25 (whichever is next to occur) of
each year; (B) determine the Required Debt Service for such Remittance Period
based upon such updated assumptions; and (C) determine the RRB Charge to be
charged during such Remittance Period based upon such Required Debt Service.
The Servicer shall file a Routine Semiannual True-Up Letter with the NHPUC no
later than 30 days prior to April 25 and October 25 of each year.
(2) Routine Periodic Adjustments. The Servicer shall file a
Routine True-Up Letter at least 15 days before the end of any calendar month,
at each such time as the Servicer may reasonably determine is necessary to
meet the Required Debt Service for the then current Remittance Period.
(3) The Servicer shall take all reasonable actions and make
all reasonable efforts to secure any Periodic Adjustments.
(c) Non-Routine Periodic Adjustments.
(1) Whenever the Servicer determines that the existing model
for calculating the RRB Charge should be amended or revised, subject to the
consent of the Issuer under the conditions set forth in Section 3.18 of the
Indenture, the Servicer shall file a Non-Routine True-Up Letter with the
NHPUC designating the adjustments to such model and any corresponding
adjustments to the RRB Charge (collectively, a "Non-Routine Periodic
Adjustment"), subject to the review and approval of the NHPUC pursuant to the
Finance Order.
(2) The Servicer shall take all reasonable actions and make
all reasonable efforts to secure any Non-Routine Periodic Adjustments.
(3) The Servicer shall implement any resulting adjustments to
the model and any resulting revised RRB Charge as of the effective date of
the Non-Routine True-Up Letter.
(d) Reports.
(1) Notification of Advice Letter Filings and Periodic
Adjustments. Whenever the Servicer files an Advice Letter with the NHPUC,
the Servicer shall send a copy of such filing to the Issuer, the Trustee and
the Rating Agencies concurrently therewith. If any Periodic Adjustment
requested in any such Advice Letter filing does not become effective on the
applicable date as provided by the Finance Order, the Servicer shall notify
the Issuer, the Trustee and the Rating Agencies by the end of the second
Servicer Business Day after such applicable date.
(2) Monthly Servicer Certificate. So long as any Bonds are
outstanding, not later than fifteen (15) days after the end of each month
after the Bonds are issued (excluding April, 2001), or if such day is not a
Servicer Business Day, the next succeeding Servicer Business Day, the
Servicer shall deliver a written report substantially in the form of Exhibit
C hereto (the "Monthly Servicer Certificate") to the Issuer, the Trustee and
the Rating Agencies.
(3) Quarterly Servicer Certificate. So long as any Bonds are
outstanding, not later than 11:00 a.m. (New York City time) on the Servicer
Business Day immediately preceding each Payment Date, the Servicer shall
deliver a written report substantially in the form of Exhibit D hereto (the
"Quarterly Servicer Certificate") to the Issuer, the Trustee and the Rating
Agencies.
(4) TPS Reports. The Servicer shall provide to the Rating
Agencies, upon request, any publicly available reports filed by the Servicer
with the NHPUC (or otherwise made publicly available by the Servicer)
relating to TPSs and any other non-confidential and non-proprietary
information relating to TPSs reasonably requested by the Rating Agencies.
(e) Uniformity of RRB Charge. The Servicer shall not take any
action to implement any Periodic Adjustment that would cause the RRB Charge
to vary among customer classes unless the Rating Agency Condition shall have
been satisfied.
Section 4.02. Limitation of Liability.
(a) The Issuer and the Servicer expressly agree and acknowledge
that:
(1) In connection with any Periodic Adjustment, the Servicer
is acting solely in its capacity as the servicing agent hereunder.
(2) Neither the Servicer nor the Issuer shall be responsible
in any manner for, and shall have no liability whatsoever as a result of, any
action, decision, ruling or other determination made or not made, or any
delay (other than any delay resulting from the Servicer's failure to file for
Periodic Adjustments or Non-Routine Periodic Adjustments required by Periodic
Adjustments. From time to time, until the Retirement of the Bonds, the
Servicer shall identify the need for Periodic Adjustments and shall take all
reasonable action to obtain and implement such Periodic Adjustments, all in
accordance with the following: in a timely and correct manner or other
material breach by the Servicer of its duties under this Agreement that
materially and adversely affects any Periodic Adjustments or Non-Routine
Periodic Adjustments), by the NHPUC (or, in connection with any Non-Routine
Periodic Adjustment, by the Rating Agencies) in any way related to the RRB
Property or in connection with any Periodic Adjustment or Non-Routine
Periodic Adjustment, the subject of any filings under Periodic Adjustments.
From time to time, until the Retirement of the Bonds, the Servicer shall
identify the need for Periodic Adjustments and shall take all reasonable
action to obtain and implement such Periodic Adjustments, all in accordance
with the following:, any proposed Periodic Adjustment or Non-Routine Periodic
Adjustment, or the approval of the RRB Charge and the adjustments thereto.
(3) The Servicer shall have no liability whatsoever relating
to the calculation of the RRB Charge and the adjustments thereto (including
any Non-Routine Periodic Adjustment), including as a result of any inaccuracy
of any of the assumptions made in such calculation regarding expected energy
usage volume, the rate of charge-offs, estimated expenses and fees of the
Issuer, so long as the Servicer has not acted in a negligent manner in
connection therewith, nor shall the Servicer have any liability whatsoever as
a result of any Person, including the Bondholders, not receiving any payment,
amount or return anticipated or expected in respect of any Bond generally,
except only to the extent that the Servicer is liable under Indemnities of
Servicer. of this Agreement.
(b) Notwithstanding the foregoing, this Limitation of Liability.
shall not relieve the Servicer of any liability under Indemnities of
Servicer. for any misrepresentation by the Servicer under Representations and
Warranties of Servicer. The Servicer makes the following representations and
warranties, as of the Closing Date, on which the Issuer is deemed to have
relied in entering into this Agreement relating to the servicing of the RRB
Property. or for any breach by the Servicer of its obligations under this
Agreement.
Section 4.03. Remittances.
(a) Pursuant to the remittance methodology more fully described in
Annex II hereto, starting with collections that are received on the first
Servicer Business Day that is at least 45 days after the first day on which
Public Service Company of New Hampshire imposes the RRB Charge, the Servicer
will remit to the Trustee on each Servicer Business Day, within two Servicer
Business Days after receipt, by wire transfer of immediately available funds
to the General Subaccount of the Collection Account, an amount equal to the
RRB Charge Payments (as calculated in accordance with Annex II hereto)
received on such Servicer Business Day and on any prior day that was not a
Servicer Business Day for which a Remittance has not previously been made.
Prior to or simultaneous with each Remittance to the General Subaccount of
the Collection Account pursuant to this Section, the Servicer shall provide
written notice to the Trustee of each such Remittance (including the exact
dollar amount to be remitted).
(b) The Servicer may elect to make Remittances less frequently
than on a daily basis, and shall be permitted to do so, but in any event
shall make Remittances within one calendar month of collection thereof,
provided that the Servicer shall send written notice of such election to the
Issuer and the Trustee, together with (i) an Officer's Certificate stating
that no Servicer Default has occurred and is continuing under this Servicing
Agreement, (ii) evidence that the Rating Agency Condition has been satisfied,
(iii) evidence of the delivery by the Servicer to the Issuer or the Trustee,
as applicable, of any credit enhancement which may be required by the Rating
Agencies in connection therewith in form and substance satisfactory to the
Issuer and the Trustee, as applicable, the cost of which credit enhancement
shall be borne solely by the Servicer, and (iv) an executed copy of any
appropriate amendment hereto or to the Indenture or any other Basic Agreement
as reasonably requested by the Servicer, the Issuer or the Trustee in
connection therewith.
(c) The Servicer agrees and acknowledges that it will remit RRB
Charge Payments in accordance with this Remittances. without any surcharge,
fee, offset, charge or other deduction except for late fees permitted by
Servicing Compensation..
ARTICLE 5
THE RRB PROPERTY
Section 5.01. Custody of RRB Property Records. To assure uniform
quality in servicing the RRB Property and to reduce administrative costs, the
Issuer hereby revocably appoints the Servicer, and the Servicer hereby
accepts such appointment, to act as the agent of the Issuer and the Trustee
as custodian of any and all documents and records that the Servicer shall
keep on file, in accordance with its customary procedures, relating to the
RRB Property, including copies of the Finance Order and Advice Letters
relating thereto and all documents filed with the NHPUC in connection with
any Periodic Adjustment or Non-Routine Periodic Adjustment and computational
records relating thereto (collectively, the "RRB Property Records"), which
are hereby constructively delivered to the Trustee, as pledgee of the Issuer
with respect to all RRB Property.
Section 5.02. Duties of Servicer as Custodian.
(a) Safekeeping. The Servicer shall hold the RRB Property Records
on behalf of the Issuer and the Trustee and maintain such accurate and
complete accounts, records and computer systems pertaining to the RRB
Property Records on behalf of the Issuer and the Trustee as shall enable the
Issuer to comply with this Agreement and the Indenture. In performing its
duties as custodian the Servicer shall act with reasonable care, using that
degree of care and diligence that the Servicer exercises with respect to
comparable assets that the Servicer services for itself or, if applicable,
for others. The Servicer shall promptly report to the Issuer and the Trustee
any failure on its part to hold the RRB Property Records and maintain its
accounts, records and computer systems as herein provided and promptly take
appropriate action to remedy any such failure. Nothing herein shall be
deemed to require an initial review or any periodic review by the Issuer or
the Trustee of the RRB Property Records. The Servicer's duties to hold the
RRB Property Records on behalf of the Issuer set forth in this Duties of
Servicer as Custodian., to the extent such RRB Property Records have not been
previously transferred to a successor Servicer pursuant to DEFAULT, shall
terminate one year and one day after the earlier of the date on which (i) the
Servicer is succeeded by a successor Servicer in accordance with DEFAULT and
(ii) no Bonds are outstanding.
(b) Maintenance of and Access to Records. The Servicer shall
maintain at all times records and accounts that permit the Servicer to
identify RRB Charges billed. The Servicer shall maintain the RRB Property
Records in Manchester, New Hampshire, Berlin, Connecticut or at such other
office in the United States as shall be specified to the Issuer and the
Trustee by written notice at least 30 days prior to any change in location.
The Servicer shall make available for inspection to the Issuer, the Trustee,
the NHPUC or their respective duly authorized representatives, attorneys or
auditors the RRB Property Records at such times during normal business hours
as the Issuer, the Trustee or the NHPUC shall reasonably request and which do
not unreasonably interfere with the Servicer's normal operations. Nothing in
this shall affect the obligation
of the Servicer to observe any applicable law (including any NHPUC
Regulations) prohibiting disclosure of information regarding the customers,
and the failure of the Servicer to provide access to such information as a
result of such obligation shall not constitute a breach of this.
(c) Release of Documents. Upon instruction from the Trustee in
accordance with the Indenture, the Servicer shall release any RRB Property
Records to the Trustee, the Trustee's agent or the Trustee's designee, as the
case may be, at such place or places as the Trustee may designate, as soon as
practicable.
(d) Defending RRB Property Against Claims. The Servicer shall
institute any action or proceeding necessary to compel performance by the
NHPUC or the State of New Hampshire of any of their obligations or duties
under the Statute, the Finance Order or any Advice Letter, and the Servicer
agrees to take such legal or administrative actions, including defending
against or instituting and pursuing legal actions and appearing or testifying
at hearings or similar proceedings, as may be reasonably necessary to block
or overturn any attempts to cause a repeal of, modification of or supplement
to the Statute or the Finance Order or the rights of holders of RRB Property
by executive action, legislative enactment or constitutional amendment or (if
such means become available in the future) referendum or initiative petition
that would be adverse to Bondholders, the Issuer or the Trustee. The costs
of any such action shall be payable from RRB Charge Collections as an
Operating Expense in accordance with the priorities set forth in Section
8.02(d) of the Indenture. The Servicer's obligations pursuant to this Duties
of Servicer as Custodian. shall survive and continue notwithstanding the fact
that the payment of Operating Expenses pursuant to Section 8.02(d) of the
Indenture may be delayed, it being understood that the Servicer may be
required to advance its own funds to satisfy its obligations hereunder. If
the Servicer must incur costs to satisfy its obligations hereunder and is
required hereunder to advance its own funds with respect to such costs but is
unable to do so, the Servicer shall, in accordance with the provisions of
Section 8.02(j) of the Indenture, make written request to the Trustee to pay
such costs from amounts on deposit in the Servicer Advance Subaccount.
Amounts so paid by the Trustee from amounts on deposit in the Servicer
Advance Subaccount in accordance with the provisions of Section 8.02(j) of
the Indenture shall remain payable as Operating Expenses advanced by the
Servicer in accordance with this Defending RRB Property Against Claims. The
Servicer shall institute any action or proceeding necessary to compel
performance by the NHPUC or the State of New Hampshire of any of their
obligations or duties under the Statute, the Finance Order or any Advice
Letter, and the Servicer agrees to take such legal or administrative actions,
including defending against or instituting and pursuing legal actions and
appearing or testifying at hearings or similar proceedings, as may be
reasonably necessary to block or overturn any attempts to cause a repeal of,
modification of or supplement to the Statute or the Finance Order or the
rights of holders of RRB Property by executive action, legislative enactment
or constitutional amendment or (if such means become available in the future)
referendum or initiative petition that would be adverse to Bondholders, the
Issuer or the Trustee. The costs of any such action shall be payable from
RRB Charge Collections as an Operating Expense in accordance with the
priorities set forth in Section 8.02(d) of the Indenture. The Servicer's
obligations pursuant to this Duties of Servicer as Custodian. shall survive
and continue notwithstanding the fact that the payment of Operating Expenses
pursuant to Section 8.02(d) of the Indenture may be delayed, it being
understood that the Servicer may be required to advance its own funds to
satisfy its obligations hereunder. If the Servicer must incur costs to
satisfy its obligations hereunder and is required hereunder to advance its
own funds with respect to such costs but is unable to do so, the Servicer
shall, in accordance with the provisions of Section 8.02(j) of the Indenture,
make written request to the Trustee to pay such costs from amounts on deposit
in the Servicer Advance Subaccount. and Section 8.02(j) of the Indenture.
Section 5.03. Instructions; Authority to Act. For so long as any Bonds
remain outstanding, the Servicer shall be deemed to have received proper
instructions with respect to the RRB Property Records upon its receipt of
written instructions signed by a Responsible Officer (as defined in the
Indenture) of the Trustee.
Section 5.04. Effective Period and Termination. The Servicer's
appointment as custodian shall become effective as of the Closing Date and
shall continue in full force and effect until terminated pursuant to this
If any Servicer shall resign as
Servicer in accordance with the provisions of this Agreement or if all of the
rights and obligations of any Servicer shall have been terminated under
Servicer Default. If any one of the following events (each a "Servicer
Default") shall occur and be continuing:, the appointment of such Servicer as
custodian shall terminate upon appointment of a successor Servicer, subject
to the approval of the NHPUC, and acceptance by such successor Servicer of
such appointment.
Section 5.05. Monitoring of Third Party Suppliers. From time to time,
until the Retirement of the Bonds, the Servicer shall, using the same degree
of care and diligence that it exercises with respect to payments owed to it
for its own account, implement such procedures and policies as are necessary
to properly enforce the obligations of each TPS to remit RRB Charges, in
accordance with the terms and provisions of the Finance Order, the TPS
Service Agreement and Schedule A to Annex I hereto.
ARTICLE 6
THE SERVICER
Section 6.01. Representations and Warranties of Servicer. The Servicer
makes the following representations and warranties, as of the Closing Date,
on which the Issuer is deemed to have relied in entering into this Agreement
relating to the servicing of the RRB Property.
(a) Organization and Good Standing. The Servicer is duly
organized and validly existing as a corporation in good standing under the
laws of the State of New Hampshire, with the requisite corporate power and
authority to own its properties as such properties are currently owned and to
conduct its business as such business is now conducted by it, and has the
requisite corporate power and authority to service the RRB Property and to
hold the RRB Property Records as custodian.
(b) Due Qualification. The Servicer is duly qualified to do
business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals, in all jurisdictions in which the ownership
or lease of property or the conduct of its business (including the servicing
of the RRB Property as required by this Agreement) shall require such
qualifications, licenses or approvals (except where the failure to so qualify
or obtain such licenses and approvals would not be reasonably likely to have
a material adverse effect on the Servicer's business, operations, assets,
revenues or properties or adversely affect the servicing of the RRB
Property).
(c) Power and Authority. The Servicer has the requisite corporate
power and authority to execute and deliver this Agreement and to carry out
its terms; and the execution, delivery and performance of this Agreement have
been duly authorized by all necessary corporate action on the part of the
Servicer.
(d) Binding Obligation. This Agreement constitutes a legal, valid
and binding obligation of the Servicer enforceable against it in accordance
with its terms, subject to applicable insolvency, reorganization, moratorium,
fraudulent transfer and other laws relating to or affecting creditors' rights
generally from time to time in effect and to general principles of equity
(including concepts of materiality, reasonableness, good faith and fair
dealing), regardless of whether considered in a proceeding in equity or at
law.
(e) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof do
not: (i) conflict with or result in any breach of any of the terms and
provisions of, nor constitute (with or without notice or lapse of time) a
default under, the articles of organization or by-laws of the Servicer, or
any material indenture, agreement or other instrument to which the Servicer
is a party or by which it is bound; (ii) result in the creation or imposition
of any Lien upon any of the Servicer's properties pursuant to the terms of
any such indenture, agreement or other instrument; nor violate any existing
law or any existing order, rule or regulation applicable to the Servicer of
any court or of any federal or state regulatory body, administrative agency
or other governmental instrumentality having jurisdiction over the Servicer
or its properties, so as to adversely affect the Servicer, the Issuer or the
Bondholders.
(f) No Proceedings. There are no proceedings pending and, to the
Servicer's knowledge, there are no proceedings threatened and, to the
Servicer's knowledge, there are no investigations pending or threatened,
before any court, federal or state regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over the Servicer or
its properties involving or relating to the Servicer or the Issuer or, to the
Servicer's knowledge, any other Person: (i) asserting the invalidity of this
Agreement; (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement; or (iii) seeking any
determination or ruling that might materially and adversely affect the
performance by the Servicer of its obligations under, or the validity or
enforceability of, this Agreement.
(g) Approvals. No approval, authorization, consent, order or
other action of, or filing with, any court, federal or state regulatory body,
administrative agency or other governmental instrumentality is required in
connection with the execution and delivery by the Servicer of this Agreement,
the performance by the Servicer of the transactions contemplated hereby or
the fulfillment by the Servicer of the terms hereof, except those that have
been obtained or made and those that the Servicer is required to make in the
future pursuant to BILLING SERVICES or SERVICES RELATED TO PERIODIC
ADJUSTMENTS;
REMITTANCES and post-closing filings in connection therewith.
Section 6.02. Indemnities of Servicer.
(a) The Servicer shall be liable in accordance herewith only to
the extent of the obligations specifically undertaken by the Servicer and as
expressly provided under this Indemnities of Servicer..
(b) The Servicer shall indemnify the Issuer and the Bondholders
(each an "Indemnified Person" for purposes of Sections 6.02 (b) and (d)) for,
and defend and hold harmless each such Person from and against, any and all
liabilities, obligations, losses, damages, payments, claims, costs or
expenses of any kind whatsoever (collectively, "Losses") that may be imposed
on, incurred by or asserted against any such Person as a result of (i) the
Servicer's willful misconduct or negligence in the performance of its duties
or observance of its covenants under this Agreement (including the Servicer's
willful misconduct or negligence relating to the maintenance and custody by
the Servicer, as custodian, of the RRB Property Records) or (ii) the
Servicer's breach in any material respect of any of its representations or
warranties in this Agreement; provided, however, that the Servicer shall not
be liable for any Losses resulting from the willful misconduct or gross
negligence of any such Indemnified Person; and, provided, further, that the
Bondholders shall be entitled to enforce their rights and remedies against
the Servicer under this solely
through a cause of action brought for their benefit by the Trustee; and,
provided, further, that the Servicer shall not be liable for any Losses,
regardless of when incurred, after the Bonds have been paid in full, except
as provided in The Servicer shall indemnify and hold harmless the Trustee,
the State of New Hampshire, the Treasurer of the State of New Hampshire,
agencies of the State of New Hampshire and any of their respective
affiliates, officials, officers, directors, employees, consultants, counsel
and agents (each an "Indemnified Person" for purposes of Section 6.02(c) and
(d)) for, and defend and hold harmless each such Person from and against, any
and all Losses imposed on, incurred by or asserted against any of such
Indemnified Persons as a result of: (i) the Servicer's willful misconduct or
negligence in the performance of its duties or observance of its covenants
under this Agreement (including the Servicer's willful misconduct or
negligence relating to the maintenance and custody by the Servicer, as
custodian, of the RRB Property Records) or (ii) the Servicer's breach in any
material respect of any of its representations or warranties in this
Agreement; provided, however, that the Servicer shall not be liable for any
Losses resulting from the willful misconduct or gross negligence of such
Indemnified Person or resulting from a breach of a representation or warranty
made by such Indemnified Person in any of the Basic Documents that gives rise
to the Servicer's breach..
(c) The Servicer shall indemnify and hold harmless the Trustee,
the State of New Hampshire, the Treasurer of the State of New Hampshire,
agencies of the State of New Hampshire and any of their respective
affiliates, officials, officers, directors, employees, consultants, counsel
and agents (each an "Indemnified Person" for purposes of Section 6.02(c) and
(d)) for, and defend and hold harmless each such Person from and against, any
and all Losses imposed on, incurred by or asserted against any of such
Indemnified Persons as a result of: (i) the Servicer's willful misconduct or
negligence in the performance of its duties or observance of its covenants
under this Agreement (including the Servicer's willful misconduct or
negligence relating to the maintenance and custody by the Servicer, as
custodian, of the RRB Property Records) or (ii) the Servicer's breach in any
material respect of any of its representations or warranties in this
Agreement; provided, however, that the Servicer shall not be liable for any
Losses resulting from the willful misconduct or gross negligence of such
Indemnified Person or resulting from a breach of a representation or warranty
made by such Indemnified Person in any of the Basic Documents that gives rise
to the Servicer's breach.
(d) The Servicer shall not be required to indemnify an Indemnified
Person for any amount paid or payable by such Indemnified Person pursuant to
The Servicer shall indemnify the Issuer and the Bondholders (each an
"Indemnified Person" for purposes of Sections 6.02 (b) and (d)) for, and
defend and hold harmless each such Person from and against, any and all
liabilities, obligations, losses, damages, payments, claims, costs or
expenses of any kind whatsoever (collectively, "Losses") that may be imposed
on, incurred by or asserted against any such Person as a result of (i) the
Servicer's willful misconduct or negligence in the performance of its duties
or observance of its covenants under this Agreement (including the Servicer's
willful misconduct or negligence relating to the maintenance and custody by
the Servicer, as custodian, of the RRB Property Records) or (ii) the
Servicer's breach in any material respect of any of its representations or
warranties in this Agreement; provided, however, that the Servicer shall not
be liable for any Losses resulting from the willful misconduct or gross
negligence of any such Indemnified Person; and, provided, further, that the
Bondholders shall be entitled to enforce their rights and remedies against
the Servicer under this solely
through a cause of action brought for their benefit by the Trustee; and,
provided, further, that the Servicer shall not be liable for any Losses,
regardless of when incurred, after the Bonds have been paid in full, except
as provided in The Servicer shall indemnify and hold harmless the Trustee,
the State of New Hampshire, the Treasurer of the State of New Hampshire,
agencies of the State of New Hampshire and any of their respective
affiliates, officials, officers, directors, employees, consultants, counsel
and agents (each an "Indemnified Person" for purposes of Section 6.02(c) and
(d)) for, and defend and hold harmless each such Person from and against, any
and all Losses imposed on, incurred by or asserted against any of such
Indemnified Persons as a result of: (i) the Servicer's willful misconduct or
negligence in the performance of its duties or observance of its covenants
under this Agreement (including the Servicer's willful misconduct or
negligence relating to the maintenance and custody by the Servicer, as
custodian, of the RRB Property Records) or (ii) the Servicer's breach in any
material respect of any of its representations or warranties in this
Agreement; provided, however, that the Servicer shall not be liable for any
Losses resulting from the willful misconduct or gross negligence of such
Indemnified Person or resulting from a breach of a representation or warranty
made by such Indemnified Person in any of the Basic Documents that gives rise
to the Servicer's breach.. or The Servicer shall indemnify and hold harmless
the Trustee, the State of New Hampshire, the Treasurer of the State of New
Hampshire, agencies of the State of New Hampshire and any of their respective
affiliates, officials, officers, directors, employees, consultants, counsel
and agents (each an "Indemnified Person" for purposes of Section 6.02(c) and
(d)) for, and defend and hold harmless each such Person from and against, any
and all Losses imposed on, incurred by or asserted against any of such
Indemnified Persons as a result of: (i) the Servicer's willful misconduct or
negligence in the performance of its duties or observance of its covenants
under this Agreement (including the Servicer's willful misconduct or
negligence relating to the maintenance and custody by the Servicer, as
custodian, of the RRB Property Records) or (ii) the Servicer's breach in any
material respect of any of its representations or warranties in this
Agreement; provided, however, that the Servicer shall not be liable for any
Losses resulting from the willful misconduct or gross negligence of such
Indemnified Person or resulting from a breach of a representation or warranty
made by such Indemnified Person in any of the Basic Documents that gives rise
to the Servicer's breach. in the settlement of any action, proceeding or
investigation without the written consent of the Servicer, which consent
shall not be unreasonably withheld. Promptly after receipt by an Indemnified
Person of notice of its involvement in any action, proceeding or
investigation, such Indemnified Person shall, if a claim for indemnification
in respect thereof is to be made against the Servicer under The Servicer
shall indemnify the Issuer and the Bondholders (each an "Indemnified Person"
for purposes of Sections 6.02 (b) and (d)) for, and defend and hold harmless
each such Person from and against, any and all liabilities, obligations,
losses, damages, payments, claims, costs or expenses of any kind whatsoever
(collectively, "Losses") that may be imposed on, incurred by or asserted
against any such Person as a result of (i) the Servicer's willful misconduct
or negligence in the performance of its duties or observance of its covenants
under this Agreement (including the Servicer's willful misconduct or
negligence relating to the maintenance and custody by the Servicer, as
custodian, of the RRB Property Records) or (ii) the Servicer's breach in any
material respect of any of its representations or warranties in this
Agreement; provided, however, that the Servicer shall not be liable for any
Losses resulting from the willful misconduct or gross negligence of any such
Indemnified Person; and, provided, further, that the Bondholders shall be
entitled to enforce their rights and remedies against the Servicer under this
solely through a cause of action
brought for their benefit by the Trustee; and, provided, further, that the
Servicer shall not be liable for any Losses, regardless of when incurred,
after the Bonds have been paid in full, except as provided in The Servicer
shall indemnify and hold harmless the Trustee, the State of New Hampshire,
the Treasurer of the State of New Hampshire, agencies of the State of New
Hampshire and any of their respective affiliates, officials, officers,
directors, employees, consultants, counsel and agents (each an "Indemnified
Person" for purposes of Section 6.02(c) and (d)) for, and defend and hold
harmless each such Person from and against, any and all Losses imposed on,
incurred by or asserted against any of such Indemnified Persons as a result
of: (i) the Servicer's willful misconduct or negligence in the performance
of its duties or observance of its covenants under this Agreement (including
the Servicer's willful misconduct or negligence relating to the maintenance
and custody by the Servicer, as custodian, of the RRB Property Records) or
(ii) the Servicer's breach in any material respect of any of its
representations or warranties in this Agreement; provided, however, that the
Servicer shall not be liable for any Losses resulting from the willful
misconduct or gross negligence of such Indemnified Person or resulting from a
breach of a representation or warranty made by such Indemnified Person in any
of the Basic Documents that gives rise to the Servicer's breach.. or The
Servicer shall indemnify and hold harmless the Trustee, the State of New
Hampshire, the Treasurer of the State of New Hampshire, agencies of the State
of New Hampshire and any of their respective affiliates, officials, officers,
directors, employees, consultants, counsel and agents (each an "Indemnified
Person" for purposes of Section 6.02(c) and (d)) for, and defend and hold
harmless each such Person from and against, any and all Losses imposed on,
incurred by or asserted against any of such Indemnified Persons as a result
of: (i) the Servicer's willful misconduct or negligence in the performance
of its duties or observance of its covenants under this Agreement (including
the Servicer's willful misconduct or negligence relating to the maintenance
and custody by the Servicer, as custodian, of the RRB Property Records) or
(ii) the Servicer's breach in any material respect of any of its
representations or warranties in this Agreement; provided, however, that the
Servicer shall not be liable for any Losses resulting from the willful
misconduct or gross negligence of such Indemnified Person or resulting from a
breach of a representation or warranty made by such Indemnified Person in any
of the Basic Documents that gives rise to the Servicer's breach., notify the
Servicer in writing of such involvement. Failure by an Indemnified Person to
so notify the Servicer shall relieve the Servicer from the obligation to
indemnify and hold harmless such Indemnified Person under The Servicer shall
indemnify the Issuer and the Bondholders (each an "Indemnified Person" for
purposes of Sections 6.02 (b) and (d)) for, and defend and hold harmless each
such Person from and against, any and all liabilities, obligations, losses,
damages, payments, claims, costs or expenses of any kind whatsoever
(collectively, "Losses") that may be imposed on, incurred by or asserted
against any such Person as a result of (i) the Servicer's willful misconduct
or negligence in the performance of its duties or observance of its covenants
under this Agreement (including the Servicer's willful misconduct or
negligence relating to the maintenance and custody by the Servicer, as
custodian, of the RRB Property Records) or (ii) the Servicer's breach in any
material respect of any of its representations or warranties in this
Agreement; provided, however, that the Servicer shall not be liable for any
Losses resulting from the willful misconduct or gross negligence of any such
Indemnified Person; and, provided, further, that the Bondholders shall be
entitled to enforce their rights and remedies against the Servicer under this
solely through a cause of action
brought for their benefit by the Trustee; and, provided, further, that the
Servicer shall not be liable for any Losses, regardless of when incurred,
after the Bonds have been paid in full, except as provided in The Servicer
shall indemnify and hold harmless the Trustee, the State of New Hampshire,
the Treasurer of the State of New Hampshire, agencies of the State of New
Hampshire and any of their respective affiliates, officials, officers,
directors, employees, consultants, counsel and agents (each an "Indemnified
Person" for purposes of Section 6.02(c) and (d)) for, and defend and hold
harmless each such Person from and against, any and all Losses imposed on,
incurred by or asserted against any of such Indemnified Persons as a result
of: (i) the Servicer's willful misconduct or negligence in the performance
of its duties or observance of its covenants under this Agreement (including
the Servicer's willful misconduct or negligence relating to the maintenance
and custody by the Servicer, as custodian, of the RRB Property Records) or
(ii) the Servicer's breach in any material respect of any of its
representations or warranties in this Agreement; provided, however, that the
Servicer shall not be liable for any Losses resulting from the willful
misconduct or gross negligence of such Indemnified Person or resulting from a
breach of a representation or warranty made by such Indemnified Person in any
of the Basic Documents that gives rise to the Servicer's breach.. or The
Servicer shall indemnify and hold harmless the Trustee, the State of New
Hampshire, the Treasurer of the State of New Hampshire, agencies of the State
of New Hampshire and any of their respective affiliates, officials, officers,
directors, employees, consultants, counsel and agents (each an "Indemnified
Person" for purposes of Section 6.02(c) and (d)) for, and defend and hold
harmless each such Person from and against, any and all Losses imposed on,
incurred by or asserted against any of such Indemnified Persons as a result
of: (i) the Servicer's willful misconduct or negligence in the performance
of its duties or observance of its covenants under this Agreement (including
the Servicer's willful misconduct or negligence relating to the maintenance
and custody by the Servicer, as custodian, of the RRB Property Records) or
(ii) the Servicer's breach in any material respect of any of its
representations or warranties in this Agreement; provided, however, that the
Servicer shall not be liable for any Losses resulting from the willful
misconduct or gross negligence of such Indemnified Person or resulting from a
breach of a representation or warranty made by such Indemnified Person in any
of the Basic Documents that gives rise to the Servicer's breach., as
applicable, only to the extent that the Servicer suffers actual prejudice as
a result of such failure. With respect to any action, proceeding or
investigation brought by a third party for which indemnification may be
sought under The Servicer shall indemnify the Issuer and the Bondholders
(each an "Indemnified Person" for purposes of Sections 6.02 (b) and (d)) for,
and defend and hold harmless each such Person from and against, any and all
liabilities, obligations, losses, damages, payments, claims, costs or
expenses of any kind whatsoever (collectively, "Losses") that may be imposed
on, incurred by or asserted against any such Person as a result of (i) the
Servicer's willful misconduct or negligence in the performance of its duties
or observance of its covenants under this Agreement (including the Servicer's
willful misconduct or negligence relating to the maintenance and custody by
the Servicer, as custodian, of the RRB Property Records) or (ii) the
Servicer's breach in any material respect of any of its representations or
warranties in this Agreement; provided, however, that the Servicer shall not
be liable for any Losses resulting from the willful misconduct or gross
negligence of any such Indemnified Person; and, provided, further, that the
Bondholders shall be entitled to enforce their rights and remedies against
the Servicer under this Error! Not a valid bookmark self-reference. solely
through a cause of action brought for their benefit by the Trustee; and,
provided, further, that the Servicer shall not be liable for any Losses,
regardless of when incurred, after the Bonds have been paid in full, except
as provided in The Servicer shall indemnify and hold harmless the Trustee,
the State of New Hampshire, the Treasurer of the State of New Hampshire,
agencies of the State of New Hampshire and any of their respective
affiliates, officials, officers, directors, employees, consultants, counsel
and agents (each an "Indemnified Person" for purposes of Section 6.02(c) and
(d)) for, and defend and hold harmless each such Person from and against, any
and all Losses imposed on, incurred by or asserted against any of such
Indemnified Persons as a result of: (i) the Servicer's willful misconduct or
negligence in the performance of its duties or observance of its covenants
under this Agreement (including the Servicer's willful misconduct or
negligence relating to the maintenance and custody by the Servicer, as
custodian, of the RRB Property Records) or (ii) the Servicer's breach in any
material respect of any of its representations or warranties in this
Agreement; provided, however, that the Servicer shall not be liable for any
Losses resulting from the willful misconduct or gross negligence of such
Indemnified Person or resulting from a breach of a representation or warranty
made by such Indemnified Person in any of the Basic Documents that gives rise
to the Servicer's breach.. or The Servicer shall indemnify and hold harmless
the Trustee, the State of New Hampshire, the Treasurer of the State of New
Hampshire, agencies of the State of New Hampshire and any of their respective
affiliates, officials, officers, directors, employees, consultants, counsel
and agents (each an "Indemnified Person" for purposes of Section 6.02(c) and
(d)) for, and defend and hold harmless each such Person from and against, any
and all Losses imposed on, incurred by or asserted against any of such
Indemnified Persons as a result of: (i) the Servicer's willful misconduct or
negligence in the performance of its duties or observance of its covenants
under this Agreement (including the Servicer's willful misconduct or
negligence relating to the maintenance and custody by the Servicer, as
custodian, of the RRB Property Records) or (ii) the Servicer's breach in any
material respect of any of its representations or warranties in this
Agreement; provided, however, that the Servicer shall not be liable for any
Losses resulting from the willful misconduct or gross negligence of such
Indemnified Person or resulting from a breach of a representation or warranty
made by such Indemnified Person in any of the Basic Documents that gives rise
to the Servicer's breach., the Servicer shall be entitled to assume the
defense of any such action, proceeding or investigation. Upon assumption by
the Servicer of the defense of any such action, proceeding or investigation,
the Indemnified Person shall have the right to participate in such action or
proceeding and to retain its own counsel. The Servicer shall be entitled to
appoint counsel of the Servicer's choice at the Servicer's expense to
represent the Indemnified Person in any action, proceeding or investigation
for which a claim of indemnification is made against the Servicer under The
Servicer shall indemnify the Issuer and the Bondholders (each an "Indemnified
Person" for purposes of Sections 6.02 (b) and (d)) for, and defend and hold
harmless each such Person from and against, any and all liabilities,
obligations, losses, damages, payments, claims, costs or expenses of any kind
whatsoever (collectively, "Losses") that may be imposed on, incurred by or
asserted against any such Person as a result of (i) the Servicer's willful
misconduct or negligence in the performance of its duties or observance of
its covenants under this Agreement (including the Servicer's willful
misconduct or negligence relating to the maintenance and custody by the
Servicer, as custodian, of the RRB Property Records) or (ii) the Servicer's
breach in any material respect of any of its representations or warranties in
this Agreement; provided, however, that the Servicer shall not be liable for
any Losses resulting from the willful misconduct or gross negligence of any
such Indemnified Person; and, provided, further, that the Bondholders shall
be entitled to enforce their rights and remedies against the Servicer under
this solely through a cause of
action brought for their benefit by the Trustee; and, provided, further, that
the Servicer shall not be liable for any Losses, regardless of when incurred,
after the Bonds have been paid in full, except as provided in The Servicer
shall indemnify and hold harmless the Trustee, the State of New Hampshire,
the Treasurer of the State of New Hampshire, agencies of the State of New
Hampshire and any of their respective affiliates, officials, officers,
directors, employees, consultants, counsel and agents (each an "Indemnified
Person" for purposes of Section 6.02(c) and (d)) for, and defend and hold
harmless each such Person from and against, any and all Losses imposed on,
incurred by or asserted against any of such Indemnified Persons as a result
of: (i) the Servicer's willful misconduct or negligence in the performance
of its duties or observance of its covenants under this Agreement (including
the Servicer's willful misconduct or negligence relating to the maintenance
and custody by the Servicer, as custodian, of the RRB Property Records) or
(ii) the Servicer's breach in any material respect of any of its
representations or warranties in this Agreement; provided, however, that the
Servicer shall not be liable for any Losses resulting from the willful
misconduct or gross negligence of such Indemnified Person or resulting from a
breach of a representation or warranty made by such Indemnified Person in any
of the Basic Documents that gives rise to the Servicer's breach.. or The
Servicer shall indemnify and hold harmless the Trustee, the State of New
Hampshire, the Treasurer of the State of New Hampshire, agencies of the State
of New Hampshire and any of their respective affiliates, officials, officers,
directors, employees, consultants, counsel and agents (each an "Indemnified
Person" for purposes of Section 6.02(c) and (d)) for, and defend and hold
harmless each such Person from and against, any and all Losses imposed on,
incurred by or asserted against any of such Indemnified Persons as a result
of: (i) the Servicer's willful misconduct or negligence in the performance
of its duties or observance of its covenants under this Agreement (including
the Servicer's willful misconduct or negligence relating to the maintenance
and custody by the Servicer, as custodian, of the RRB Property Records) or
(ii) the Servicer's breach in any material respect of any of its
representations or warranties in this Agreement; provided, however, that the
Servicer shall not be liable for any Losses resulting from the willful
misconduct or gross negligence of such Indemnified Person or resulting from a
breach of a representation or warranty made by such Indemnified Person in any
of the Basic Documents that gives rise to the Servicer's breach. (in which
case the Servicer shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the Indemnified Person except as
set forth below); provided, however, that such counsel shall be reasonably
satisfactory to the Indemnified Person. Notwithstanding the Servicer's
election to appoint counsel to represent the Indemnified Person in an action,
proceeding or investigation, the Indemnified Person shall have the right to
employ separate counsel (including local counsel), and the Servicer shall
bear the reasonable fees, costs and expenses of such separate counsel if (i)
the use of counsel chosen by the Servicer to represent the Indemnified Person
would present such counsel with a conflict of interest, (ii) the actual or
potential defendants in, or targets of, any such action include both the
Indemnified Person and the Servicer and the Indemnified Person shall have
reasonably concluded that there may be legal defenses available to it that
are different from or additional to those available to the Servicer, (iii)
the Servicer shall not have employed counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person within a reasonable
time after notice of the institution of such action or (iv) the Servicer
shall authorize the Indemnified Person to employ separate counsel at the
expense of the Servicer. Notwithstanding the foregoing, the Servicer shall
not be obligated to pay for the fees, costs and expenses of more than one
separate counsel for the Indemnified Persons (in addition to local counsel).
The Servicer will not, without the prior written consent of the Indemnified
Person, settle or compromise or consent to the entry of any judgment with
respect to any pending or threatened claim, action, suit or proceeding in
respect of which indemnification may be sought under The Servicer shall
indemnify the Issuer and the Bondholders (each an "Indemnified Person" for
purposes of Sections 6.02 (b) and (d)) for, and defend and hold harmless each
such Person from and against, any and all liabilities, obligations, losses,
damages, payments, claims, costs or expenses of any kind whatsoever
(collectively, "Losses") that may be imposed on, incurred by or asserted
against any such Person as a result of (i) the Servicer's willful misconduct
or negligence in the performance of its duties or observance of its covenants
under this Agreement (including the Servicer's willful misconduct or
negligence relating to the maintenance and custody by the Servicer, as
custodian, of the RRB Property Records) or (ii) the Servicer's breach in any
material respect of any of its representations or warranties in this
Agreement; provided, however, that the Servicer shall not be liable for any
Losses resulting from the willful misconduct or gross negligence of any such
Indemnified Person; and, provided, further, that the Bondholders shall be
entitled to enforce their rights and remedies against the Servicer under this
solely through a cause of action
brought for their benefit by the Trustee; and, provided, further, that the
Servicer shall not be liable for any Losses, regardless of when incurred,
after the Bonds have been paid in full, except as provided in The Servicer
shall indemnify and hold harmless the Trustee, the State of New Hampshire,
the Treasurer of the State of New Hampshire, agencies of the State of New
Hampshire and any of their respective affiliates, officials, officers,
directors, employees, consultants, counsel and agents (each an "Indemnified
Person" for purposes of Section 6.02(c) and (d)) for, and defend and hold
harmless each such Person from and against, any and all Losses imposed on,
incurred by or asserted against any of such Indemnified Persons as a result
of: (i) the Servicer's willful misconduct or negligence in the performance
of its duties or observance of its covenants under this Agreement (including
the Servicer's willful misconduct or negligence relating to the maintenance
and custody by the Servicer, as custodian, of the RRB Property Records) or
(ii) the Servicer's breach in any material respect of any of its
representations or warranties in this Agreement; provided, however, that the
Servicer shall not be liable for any Losses resulting from the willful
misconduct or gross negligence of such Indemnified Person or resulting from a
breach of a representation or warranty made by such Indemnified Person in any
of the Basic Documents that gives rise to the Servicer's breach.. or The
Servicer shall indemnify and hold harmless the Trustee, the State of New
Hampshire, the Treasurer of the State of New Hampshire, agencies of the State
of New Hampshire and any of their respective affiliates, officials, officers,
directors, employees, consultants, counsel and agents (each an "Indemnified
Person" for purposes of Section 6.02(c) and (d)) for, and defend and hold
harmless each such Person from and against, any and all Losses imposed on,
incurred by or asserted against any of such Indemnified Persons as a result
of: (i) the Servicer's willful misconduct or negligence in the performance
of its duties or observance of its covenants under this Agreement (including
the Servicer's willful misconduct or negligence relating to the maintenance
and custody by the Servicer, as custodian, of the RRB Property Records) or
(ii) the Servicer's breach in any material respect of any of its
representations or warranties in this Agreement; provided, however, that the
Servicer shall not be liable for any Losses resulting from the willful
misconduct or gross negligence of such Indemnified Person or resulting from a
breach of a representation or warranty made by such Indemnified Person in any
of the Basic Documents that gives rise to the Servicer's breach., as
applicable, (whether or not the Indemnified Person is an actual or potential
party to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of the Indemnified Person from all
liability arising out of such claim, action, suit or proceeding.
(e) Indemnification under The Servicer shall indemnify the Issuer
and the Bondholders (each an "Indemnified Person" for purposes of Sections
6.02 (b) and (d)) for, and defend and hold harmless each such Person from and
against, any and all liabilities, obligations, losses, damages, payments,
claims, costs or expenses of any kind whatsoever (collectively, "Losses")
that may be imposed on, incurred by or asserted against any such Person as a
result of (i) the Servicer's willful misconduct or negligence in the
performance of its duties or observance of its covenants under this Agreement
(including the Servicer's willful misconduct or negligence relating to the
maintenance and custody by the Servicer, as custodian, of the RRB Property
Records) or (ii) the Servicer's breach in any material respect of any of its
representations or warranties in this Agreement; provided, however, that the
Servicer shall not be liable for any Losses resulting from the willful
misconduct or gross negligence of any such Indemnified Person; and, provided,
further, that the Bondholders shall be entitled to enforce their rights and
remedies against the Servicer under this reference. solely through a cause
of action brought for their benefit by the
Trustee; and, provided, further, that the Servicer shall not be liable for
any Losses, regardless of when incurred, after the Bonds have been paid in
full, except as provided in The Servicer shall indemnify and hold harmless
the Trustee, the State of New Hampshire, the Treasurer of the State of New
Hampshire, agencies of the State of New Hampshire and any of their respective
affiliates, officials, officers, directors, employees, consultants, counsel
and agents (each an "Indemnified Person" for purposes of Section 6.02(c) and
(d)) for, and defend and hold harmless each such Person from and against, any
and all Losses imposed on, incurred by or asserted against any of such
Indemnified Persons as a result of: (i) the Servicer's willful misconduct or
negligence in the performance of its duties or observance of its covenants
under this Agreement (including the Servicer's willful misconduct or
negligence relating to the maintenance and custody by the Servicer, as
custodian, of the RRB Property Records) or (ii) the Servicer's breach in any
material respect of any of its representations or warranties in this
Agreement; provided, however, that the Servicer shall not be liable for any
Losses resulting from the willful misconduct or gross negligence of such
Indemnified Person or resulting from a breach of a representation or warranty
made by such Indemnified Person in any of the Basic Documents that gives rise
to the Servicer's breach.. and The Servicer shall indemnify and hold harmless
the Trustee, the State of New Hampshire, the Treasurer of the State of New
Hampshire, agencies of the State of New Hampshire and any of their respective
affiliates, officials, officers, directors, employees, consultants, counsel
and agents (each an "Indemnified Person" for purposes of Section 6.02(c) and
(d)) for, and defend and hold harmless each such Person from and against, any
and all Losses imposed on, incurred by or asserted against any of such
Indemnified Persons as a result of: (i) the Servicer's willful misconduct or
negligence in the performance of its duties or observance of its covenants
under this Agreement (including the Servicer's willful misconduct or
negligence relating to the maintenance and custody by the Servicer, as
custodian, of the RRB Property Records) or (ii) the Servicer's breach in any
material respect of any of its representations or warranties in this
Agreement; provided, however, that the Servicer shall not be liable for any
Losses resulting from the willful misconduct or gross negligence of such
Indemnified Person or resulting from a breach of a representation or warranty
made by such Indemnified Person in any of the Basic Documents that gives rise
to the Servicer's breach. shall survive the resignation or removal of the
Trustee and the termination of this Agreement and shall include reasonable
fees and out-of-pocket expenses of investigation and litigation (including
reasonable attorneys' fees and expenses), except as otherwise provided in
this Agreement.
(f) For purposes of The Servicer shall indemnify the Issuer and
the Bondholders (each an "Indemnified Person" for purposes of Sections 6.02
(b) and (d)) for, and defend and hold harmless each such Person from and
against, any and all liabilities, obligations, losses, damages, payments,
claims, costs or expenses of any kind whatsoever (collectively, "Losses")
that may be imposed on, incurred by or asserted against any such Person as a
result of (i) the Servicer's willful misconduct or negligence in the
performance of its duties or observance of its covenants under this Agreement
(including the Servicer's willful misconduct or negligence relating to the
maintenance and custody by the Servicer, as custodian, of the RRB Property
Records) or (ii) the Servicer's breach in any material respect of any of its
representations or warranties in this Agreement; provided, however, that the
Servicer shall not be liable for any Losses resulting from the willful
misconduct or gross negligence of any such Indemnified Person; and, provided,
further, that the Bondholders shall be entitled to enforce their rights and
remedies against the Servicer under this solely through a cause of action
brought for their benefit by the
Trustee; and, provided, further, that the Servicer shall not be liable for
any Losses, regardless of when incurred, after the Bonds have been paid in
full, except as provided in The Servicer shall indemnify and hold harmless
the Trustee, the State of New Hampshire, the Treasurer of the State of New
Hampshire, agencies of the State of New Hampshire and any of their respective
affiliates, officials, officers, directors, employees, consultants, counsel
and agents (each an "Indemnified Person" for purposes of Section 6.02(c) and
(d)) for, and defend and hold harmless each such Person from and against, any
and all Losses imposed on, incurred by or asserted against any of such
Indemnified Persons as a result of: (i) the Servicer's willful misconduct or
negligence in the performance of its duties or observance of its covenants
under this Agreement (including the Servicer's willful misconduct or
negligence relating to the maintenance and custody by the Servicer, as
custodian, of the RRB Property Records) or (ii) the Servicer's breach in any
material respect of any of its representations or warranties in this
Agreement; provided, however, that the Servicer shall not be liable for any
Losses resulting from the willful misconduct or gross negligence of such
Indemnified Person or resulting from a breach of a representation or warranty
made by such Indemnified Person in any of the Basic Documents that gives rise
to the Servicer's breach.. and The Servicer shall indemnify and hold harmless
the Trustee, the State of New Hampshire, the Treasurer of the State of New
Hampshire, agencies of the State of New Hampshire and any of their respective
affiliates, officials, officers, directors, employees, consultants, counsel
and agents (each an "Indemnified Person" for purposes of Section 6.02(c) and
(d)) for, and defend and hold harmless each such Person from and against, any
and all Losses imposed on, incurred by or asserted against any of such
Indemnified Persons as a result of: (i) the Servicer's willful misconduct or
negligence in the performance of its duties or observance of its covenants
under this Agreement (including the Servicer's willful misconduct or
negligence relating to the maintenance and custody by the Servicer, as
custodian, of the RRB Property Records) or (ii) the Servicer's breach in any
material respect of any of its representations or warranties in this
Agreement; provided, however, that the Servicer shall not be liable for any
Losses resulting from the willful misconduct or gross negligence of such
Indemnified Person or resulting from a breach of a representation or warranty
made by such Indemnified Person in any of the Basic Documents that gives rise
to the Servicer's breach., in the event of the termination of the rights and
obligations of Public Service Company of New Hampshire (or any successor
thereto pursuant to Merger or Consolidation of, or Assumption of the
Obligations of, Servicer. Any Person (a) into which the Servicer may be
merged or consolidated, (b) which may result from any merger or consolidation
to which the Servicer shall be a party or (c) which may succeed to the
properties and assets of the Servicer substantially as a whole, which Person
in any of the foregoing cases executes an agreement of assumption to perform
every obligation of the Servicer hereunder, shall be the successor to the
Servicer under this Agreement without further act on the part of any of the
parties to this Agreement; provided, however, that (i) immediately after
giving effect to such transaction, no Servicer Default and no event which,
after notice or lapse of time, or both, would become a Servicer Default shall
have occurred and be continuing, (ii) the Servicer shall have delivered to
the Issuer and the Trustee an Officers' Certificate stating that such
consolidation, merger or succession and such agreement of assumption comply
with this Section and that all conditions precedent provided for in this
Agreement relating to such transaction have been complied with, (iii) the
Servicer shall have delivered to the Issuer and the Trustee an Opinion of
Counsel stating that, in the opinion of such counsel (A) such consolidation,
merger or succession and such agreement of assumption comply with this
Section and that all conditions precedent provided for in this Agreement
relating to such transaction have been complied with and (B) either (1) all
filings to be made by the Servicer, including filings with the NHPUC pursuant
to the Statute and filings under the applicable Uniform Commercial Code, have
been executed and filed that are necessary to preserve and protect fully the
interests of the Issuer and the Trustee in the RRB Property and reciting the
details of such filings or (2) no such action shall be necessary to preserve
and protect such interests and (iv) the Rating Agencies shall have received
prior written notice of such transaction. When any Person acquires the
properties and assets of the Servicer substantially as a whole and becomes
the successor to the Servicer in accordance with the terms of this then upon
satisfaction of all of the other conditions of this,the Servicer
shall automatically and without further notice be released from all its
obligations hereunder.) as Servicer pursuant to Servicer Default. If any one
of the following events (each a "Servicer Default") shall occur and be
continuing:, or a resignation by such Servicer pursuant to this Agreement,
such Servicer shall be deemed to be the Servicer pending appointment of a
successor Servicer pursuant to Appointment of Successor.
Section 6.03. Limitation on Liability of Servicer and Others. Except
as otherwise provided under this Agreement, neither the Servicer nor any of
the directors, officers, employees or agents of the Servicer shall be liable
to the Issuer or any other Person for any action taken or for refraining from
the taking of any action pursuant to this Agreement or for errors in
judgment; provided, however, that this provision shall not protect the
Servicer or any director, officer, employee or agent of the Servicer against
any liability that would otherwise be imposed by reason of willful misconduct
or negligence in the performance of duties under this Agreement. The
Servicer and any director, officer, employee or agent of the Servicer may
rely in good faith on the advice of counsel reasonably acceptable to the
Trustee or on any document of any kind, prima facie properly executed and
submitted by any Person, respecting any matters arising under this Agreement.
Except as provided in this Agreement, the Servicer shall not be under any
obligation to appear in, prosecute or defend any legal action relating to the
RRB Property.
Section 6.04. Merger or Consolidation of, or Assumption of the
Obligations of, Servicer. Any Person (a) into which the Servicer may be
merged or consolidated, (b) which may result from any merger or consolidation
to which the Servicer shall be a party or (c) which may succeed to the
properties and assets of the Servicer substantially as a whole, which Person
in any of the foregoing cases executes an agreement of assumption to perform
every obligation of the Servicer hereunder, shall be the successor to the
Servicer under this Agreement without further act on the part of any of the
parties to this Agreement; provided, however, that (i) immediately after
giving effect to such transaction, no Servicer Default and no event which,
after notice or lapse of time, or both, would become a Servicer Default shall
have occurred and be continuing, (ii) the Servicer shall have delivered to
the Issuer and the Trustee an Officers' Certificate stating that such
consolidation, merger or succession and such agreement of assumption comply
with this Section and that all conditions precedent provided for in this
Agreement relating to such transaction have been complied with, (iii) the
Servicer shall have delivered to the Issuer and the Trustee an Opinion of
Counsel stating that, in the opinion of such counsel (A) such consolidation,
merger or succession and such agreement of assumption comply with this
Section and that all conditions precedent provided for in this Agreement
relating to such transaction have been complied with and (B) either (1) all
filings to be made by the Servicer, including filings with the NHPUC pursuant
to the Statute and filings under the applicable Uniform Commercial Code, have
been executed and filed that are necessary to preserve and protect fully the
interests of the Issuer and the Trustee in the RRB Property and reciting the
details of such filings or (2) no such action shall be necessary to preserve
and protect such interests and (iv) the Rating Agencies shall have received
prior written notice of such transaction. When any Person acquires the
properties and assets of the Servicer substantially as a whole and becomes
the successor to the Servicer in accordance with the terms of this Error! Not
a valid bookmark self-reference., then upon satisfaction of all of the other
conditions of this Error! Not a valid bookmark self-reference., the Servicer
shall automatically and without further notice be released from all its
obligations hereunder.
Section 6.05. Public Service Company of New Hampshire Not to Resign as
Servicer. Subject to the provisions of Merger or Consolidation of, or
Assumption of the Obligations of, Servicer. Any Person (a) into which the
Servicer may be merged or consolidated, (b) which may result from any merger
or consolidation to which the Servicer shall be a party or (c) which may
succeed to the properties and assets of the Servicer substantially as a
whole, which Person in any of the foregoing cases executes an agreement of
assumption to perform every obligation of the Servicer hereunder, shall be
the successor to the Servicer under this Agreement without further act on the
part of any of the parties to this Agreement; provided, however, that (i)
immediately after giving effect to such transaction, no Servicer Default and
no event which, after notice or lapse of time, or both, would become a
Servicer Default shall have occurred and be continuing, (ii) the Servicer
shall have delivered to the Issuer and the Trustee an Officers' Certificate
stating that such consolidation, merger or succession and such agreement of
assumption comply with this Section and that all conditions precedent
provided for in this Agreement relating to such transaction have been
complied with, (iii) the Servicer shall have delivered to the Issuer and the
Trustee an Opinion of Counsel stating that, in the opinion of such counsel
(A) such consolidation, merger or succession and such agreement of assumption
comply with this Section and that all conditions precedent provided for in
this Agreement relating to such transaction have been complied with and (B)
either (1) all filings to be made by the Servicer, including filings with the
NHPUC pursuant to the Statute and filings under the applicable Uniform
Commercial Code, have been executed and filed that are necessary to preserve
and protect fully the interests of the Issuer and the Trustee in the RRB
Property and reciting the details of such filings or (2) no such action shall
be necessary to preserve and protect such interests and (iv) the Rating
Agencies shall have received prior written notice of such transaction. When
any Person acquires the properties and assets of the Servicer substantially
as a whole and becomes the successor to the Servicer in accordance with the
terms of this then upon satisfaction of all of the other conditions of the
Servicer shall automatically and without further notice be released from all
its obligations hereunder., Public
Service Company of New Hampshire shall not resign from the obligations and
duties hereby imposed on it as Servicer under this Agreement except upon
either (a) a determination that the performance of its duties under this
Agreement shall no longer be permissible under applicable law or (b)
satisfaction of the following: (i) the Rating Agency Condition shall have
been satisfied (except that with respect to Xxxxx'x it shall be sufficient to
provide ten days prior notice) and (ii) the NHPUC shall have approved such
resignation. Notice of any such determination permitting the resignation of
Public Service Company of New Hampshire shall be communicated to the Issuer,
the Trustee and the Rating Agencies at the earliest practicable time (and,
if such communication is not in writing, shall be confirmed in writing at the
earliest practicable time) and any such determination that the performance of
Public Service Company of New Hampshire's duties under this Agreement shall
no longer be permissible under applicable law shall be evidenced by an
Opinion of Counsel to such effect delivered by Public Service Company of New
Hampshire to the Issuer and the Trustee concurrently with or promptly after
such notice. No such resignation shall become effective until a successor
Servicer shall have assumed the responsibilities and obligations of Public
Service Company of New Hampshire in accordance with Appointment of
Successor..
Section 6.06. Servicing Compensation.
(a) In consideration for its services hereunder, until the
Retirement of the Bonds, the Servicer shall receive an annual fee (the
"Servicing Fee") in an amount equal to (i) one-quarter of one percent (0.25%)
of the outstanding principal balance of the Bonds for so long as the Servicer
is Public Service Company of New Hampshire or any successor Servicer that
bills the RRB Charge concurrently with other charges for services or (ii) up
to one and one-half percent (1.5%) of the outstanding principal balance of
the Bonds for so long as the Servicer is a successor Servicer that bills the
RRB Charge separately to customers (which amount shall be determined by a
separate agreement between the Issuer and the Servicer). The Servicing Fee
shall be payable in quarterly installments on each Payment Date. The
Servicer also shall be entitled to retain as additional compensation (i) any
interest earnings on RRB Charge Payments received by the Servicer and
invested by the Servicer pursuant to Section 6(c) of Annex I hereto prior to
remittance to the Collection Account and (ii) all late payment charges, if
any, collected from customers or TPSs.
(b) The Servicing Fee set forth in In consideration for its
services hereunder, until the Retirement of the Bonds, the Servicer shall
receive an annual fee (the "Servicing Fee") in an amount equal to (i) one-
quarter of one percent (0.25%) of the outstanding principal balance of the
Bonds for so long as the Servicer is Public Service Company of New Hampshire
or any successor Servicer that bills the RRB Charge concurrently with other
charges for services or (ii) up to one and one-half percent (1.5%) of the
outstanding principal balance of the Bonds for so long as the Servicer is a
successor Servicer that bills the RRB Charge separately to customers (which
amount shall be determined by a separate agreement between the Issuer and the
Servicer). The Servicing Fee shall be payable in quarterly installments on
each Payment Date. The Servicer also shall be entitled to retain as
additional compensation (i) any interest earnings on RRB Charge Payments
received by the Servicer and invested by the Servicer pursuant to Section
6(c) of Annex I hereto prior to remittance to the Collection Account and (ii)
all late payment charges, if any, collected from customers or TPSs. and
expenses provided for in The Issuer shall pay all expenses incurred by the
Servicer in connection with its activities hereunder (including any
reasonable fees to and disbursements by accountants, counsel, or any other
Person, any taxes imposed on the Servicer (other than taxes based on the
Servicer's net income) and any expenses incurred in connection with reports
to Bondholders, subject to the priorities set forth in Section 8.02(d) of the
Indenture). shall be paid to the Servicer by the Trustee, on each Payment
Date in accordance with the priorities set forth in Section 8.02(d) of the
Indenture, by wire transfer of immediately available funds from the
Collection Account to an account designated by the Servicer. Any portion of
the Servicing Fee not paid on such date shall be added to the Servicing Fee
payable on the subsequent Payment Date.
(c) The Issuer shall pay all expenses incurred by the Servicer in
connection with its activities hereunder (including any reasonable fees to
and disbursements by accountants, counsel, or any other Person, any taxes
imposed on the Servicer (other than taxes based on the Servicer's net income)
and any expenses incurred in connection with reports to Bondholders, subject
to the priorities set forth in Section 8.02(d) of the Indenture).
Section 6.07. Compliance with Applicable Law. The Servicer covenants
and agrees, in servicing the RRB Property, to comply in all material respects
with all laws applicable to, and binding upon, the Servicer and relating to
such RRB Property the noncompliance with which would have a material adverse
effect on the value of the RRB Property; provided, however, that the
foregoing is not intended to, and shall not, impose any liability on the
Servicer for noncompliance with any law that the Servicer is contesting in
good faith in accordance with its customary standards and procedures.
Section 6.08. Access to Certain Records and Information Regarding RRB
Property. The Servicer shall provide to the Bondholders, the Issuer and the
Trustee access to the RRB Property Records in such cases where the
Bondholders, the Issuer or the Trustee shall be required by applicable law to
be provided access to such records. Access shall be afforded without charge,
but only upon reasonable request and during normal business hours at the
respective offices of the Servicer. Nothing in this Section shall affect the
obligation of the Servicer to observe any applicable law (including any NHPUC
Regulation) prohibiting disclosure of information regarding the customers,
and the failure of the Servicer to provide access to such information as a
result of such obligation shall not constitute a breach of this Section.
Section 6.09. Appointments.
(a) The Servicer may at any time appoint any Person to perform all
or any portion of its obligations as Servicer hereunder; provided, however,
that the Rating Agency Condition shall have been satisfied in connection
therewith (except that with respect to Xxxxx'x it shall be sufficient to
provide ten days prior notice); and, provided, further, that the Servicer
shall remain obligated and be liable under this Agreement for the servicing
and administering of the RRB Property in accordance with the provisions
hereof without diminution of such obligation and liability by virtue of the
appointment of such Person and to the same extent and under the same terms
and conditions as if the Servicer alone were servicing and administering the
RRB Property; and, provided, further, however, that nothing herein (including
the Rating Agency Condition) shall preclude the execution by the Servicer of
a TPS Service Agreement with any TPS pursuant to applicable NHPUC
Regulations. The fees and expenses of any such Person shall be as agreed
between the Servicer and such Person from time to time and none of the
Issuer, the Trustee, the Bondholders or any other Person shall have any
responsibility therefor or right or claim thereto. Any such appointment
shall not constitute a Servicer resignation under Public Service Company of
New Hampshire Not to Resign as Servicer. Subject to the provisions of Merger
or Consolidation of, or Assumption of the Obligations of, Servicer. Any
Person (a) into which the Servicer may be merged or consolidated, (b) which
may result from any merger or consolidation to which the Servicer shall be a
party or (c) which may succeed to the properties and assets of the Servicer
substantially as a whole, which Person in any of the foregoing cases executes
an agreement of assumption to perform every obligation of the Servicer
hereunder, shall be the successor to the Servicer under this Agreement
without further act on the part of any of the parties to this Agreement;
provided, however, that (i) immediately after giving effect to such
transaction, no Servicer Default and no event which, after notice or lapse of
time, or both, would become a Servicer Default shall have occurred and be
continuing, (ii) the Servicer shall have delivered to the Issuer and the
Trustee an Officers' Certificate stating that such consolidation, merger or
succession and such agreement of assumption comply with this Section and that
all conditions precedent provided for in this Agreement relating to such
transaction have been complied with, (iii) the Servicer shall have delivered
to the Issuer and the Trustee an Opinion of Counsel stating that, in the
opinion of such counsel (A) such consolidation, merger or succession and such
agreement of assumption comply with this Section and that all conditions
precedent provided for in this Agreement relating to such transaction have
been complied with and (B) either (1) all filings to be made by the Servicer,
including filings with the NHPUC pursuant to the Statute and filings under
the applicable Uniform Commercial Code, have been executed and filed that are
necessary to preserve and protect fully the interests of the Issuer and the
Trustee in the RRB Property and reciting the details of such filings or (2)
no such action shall be necessary to preserve and protect such interests and
(iv) the Rating Agencies shall have received prior written notice of such
transaction. When any Person acquires the properties and assets of the
Servicer substantially as a whole and becomes the successor to the Servicer
in accordance with the terms of this, then upon satisfaction of all of the
other conditions of this the Servicer shall automatically
and without further notice be released from all its obligations hereunder,
Public Service Company of New Hampshire shall not resign from the obligations
and duties hereby imposed on it as Servicer under this Agreement except upon
either (a) a determination that the performance of its duties under this
Agreement shall no longer be permissible under applicable law or (b)
satisfaction of the following: (i) the Rating Agency Condition shall have
been satisfied (except that with respect to Xxxxx'x it shall be sufficient to
provide ten days prior notice) and (ii) the NHPUC shall have approved such
resignation. Notice of any such determination permitting the resignation of
Public Service Company of New Hampshire shall be communicated to the Issuer,
the Trustee and the Rating Agencies at the earliest practicable time (and,
if such communication is not in writing, shall be confirmed in writing at the
earliest practicable time) and any such determination that the performance of
Public Service Company of New Hampshire's duties under this Agreement shall
no longer be permissible under applicable law shall be evidenced by an
Opinion of Counsel to such effect delivered by Public Service Company of New
Hampshire to the Issuer and the Trustee concurrently with or promptly after
such notice. No such resignation shall become effective until a successor
Servicer shall have assumed the responsibilities and obligations of Public
Service Company of New Hampshire in accordance with Appointment of
Successor.
(b) The Servicer has no employees. Therefore, in carrying out the
foregoing duties or any of its other obligations under this Agreement, the
Servicer may enter into transactions with or otherwise deal with any of its
Affiliates to obtain the services of employees of such Affiliates as is its
current practice; provided, however, that the terms of any such transactions
or dealings shall be no less favorable to the Issuer than would be available
from unaffiliated parties or that would be available if the Servicer were to
hire its own employees to perform such services.
Section 6.10. No Servicer Advances. The Servicer shall not make any
advances of interest on or principal of the Bonds.
Section 6.11. Maintenance of Operations. The Servicer agrees to
continue to operate its distribution system to provide service to its
customers so long as it is acting as the Servicer under this Agreement.
ARTICLE 7
DEFAULT
Section 7.01. Servicer Default. If any one of the following events
(each a "Servicer Default") shall occur and be continuing:
(a) any failure by the Servicer to remit to the Collection Account
on behalf of the Issuer any required Remittance that shall continue
unremedied for a period of five (5) Business Days after written notice of
such failure is received by the Servicer from the Issuer or the Trustee; or
(b) any failure on the part of the Servicer duly to observe or to
perform in any material respect any other covenants or agreements of the
Servicer set forth in this Agreement, which failure shall (a) materially and
adversely affect the rights of the Bondholders and (ii) continue unremedied
for a period of 60 days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given (A) to the
Servicer by the Issuer or (B) to the Servicer by the Trustee or by the
Holders of Bonds evidencing not less than 25 percent of the Outstanding
Amount of the Bonds; or
(c) any representation or warranty made by the Servicer in this
Agreement shall prove to have been incorrect in any material respect when
made, which has a material adverse effect on the Bondholders and which
material adverse effect continues unremedied for a period of 60 days after
written notice of such failure is received by the Servicer from the Issuer or
the Trustee; or
(d) an Insolvency Event occurs with respect to the Servicer;
then, and in each and every case, so long as the Servicer Default shall not
have been remedied, either the Trustee, or the Holders of Bonds evidencing
not less than 25 percent of the Outstanding Amount of the Bonds, by notice
then given in writing to the Servicer (and to the Trustee if given by the
Bondholders) (a "Termination Notice") may terminate all the rights and
obligations (other than the obligations set forth in Indemnities of
Servicer.) of the Servicer under this Agreement. In addition, upon a
Servicer Default described in any failure by the Servicer to remit to the
Collection Account on behalf of the Issuer any required Remittance that shall
continue unremedied for a period of five (5) Business Days after written
notice of such failure is received by the Servicer from the Issuer or the
Trustee; or, each of the following shall be entitled to apply to the NHPUC
for sequestration and payment of revenues arising with respect to the RRB
Property in accordance with RSA 369-B:7, VI and VIII: (1) the Bondholders or
the Trustee; (2) the Issuer or its assignees; or (3) pledgees or transferees
of the RRB Property. On or after the receipt by the Servicer of a
Termination Notice, and subject to the approval of the NHPUC, all authority
and power of the Servicer under this Agreement, whether with respect to the
Bonds, the RRB Property, the RRB Charge or otherwise, shall, without further
action, pass to and be vested in such successor Servicer as may be appointed
under Appointment of Successor.; and, without limitation, the Trustee is
hereby authorized and empowered to execute and deliver, on behalf of the
predecessor Servicer, as attorney-in-fact or otherwise, any and all documents
and other instruments, and to do or accomplish all other acts or things
necessary or appropriate to effect the purposes of such Termination Notice,
whether to complete the transfer of the RRB Property Records and related
documents, or otherwise. The predecessor Servicer shall cooperate with the
successor Servicer, the Issuer and the Trustee in effecting the termination
of the responsibilities and rights of the predecessor Servicer under this
Agreement, including the transfer to the successor Servicer for
administration by it of all cash amounts that shall at the time be held by
the predecessor Servicer for remittance, or shall thereafter be received by
it with respect to the RRB Property or the RRB Charge. In case a successor
Servicer is appointed as a result of a Servicer Default, all reasonable costs
and expenses (including reasonable attorneys' fees and expenses) incurred in
connection with transferring the RRB Property Records to the successor
Servicer and amending this Agreement to reflect such succession as Servicer
pursuant to this Section shall be paid by the predecessor Servicer upon
presentation of reasonable documentation of such costs and expenses. All
other reasonable costs and expenses incurred in transferring servicing
responsibilities to a successor servicer shall constitute Operating Expenses
of the Issuer.
Section 7.02. Appointment of Successor.
(a) Upon the Servicer's receipt of a Termination Notice pursuant
to Servicer Default. If any one of the following events (each a "Servicer
Default") shall occur and be continuing: or the Servicer's resignation or
removal in accordance with the terms of this Agreement, the predecessor
Servicer shall continue to perform its functions as Servicer under this
Agreement, and shall be entitled to receive the requisite portion of the
Servicing Fee and reimbursement of expenses as provided herein, until a
successor Servicer shall have assumed in writing the obligations of the
Servicer hereunder as described below. In the event of the Servicer's
termination hereunder, the Issuer shall appoint, subject to the approval of
the NHPUC, a successor Servicer with the Trustee's prior written consent
thereto (which consent shall not be unreasonably withheld), and the successor
Servicer shall accept its appointment by a written assumption in form
reasonably acceptable to the Issuer and the Trustee. If within 30 days after
the delivery of the Termination Notice, the Issuer shall not have obtained
such a new Servicer, the Trustee may appoint (subject to the approval of the
NHPUC) or petition the NHPUC or a court of competent jurisdiction to appoint
a successor Servicer under this Agreement. A Person shall qualify as a
successor Servicer only if (i) such Person is permitted under NHPUC
Regulations to perform the duties of the Servicer, (ii) the Rating Agency
Condition shall have been satisfied and (iii) such Person assumes in writing
the obligations of the Servicer hereunder or enters into a servicing
agreement with the Issuer having substantially the same provisions as this
Agreement.
(b) Upon appointment, the successor Servicer shall be the
successor in all respects to the predecessor Servicer and shall be subject to
all the responsibilities, duties and liabilities arising thereafter relating
thereto placed on the predecessor Servicer and shall be entitled to the
Servicing Fee and all the rights granted to the predecessor Servicer by the
terms and provisions of this Agreement.
Section 7.03. Waiver of Past Defaults. The Holders of Bonds evidencing
not less than a majority of the Outstanding Amount of the Bonds may, on
behalf of all Bondholders, waive in writing any default by the Servicer in
the performance of its obligations hereunder and its consequences, except a
default in making any required Remittances to the Collection Account in
accordance with this Agreement. Upon any such waiver of a past default, such
default shall cease to exist, and any Servicer Default arising therefrom
shall be deemed to have been remedied for every purpose of this Agreement.
No such waiver shall extend to any subsequent or other default or impair any
right consequent thereto.
Section 7.04. Notice of Servicer Default. The Servicer shall deliver
to the Issuer, the Trustee and the Rating Agencies, promptly after any of its
Responsible Officers having obtained actual knowledge thereof, but in no
event later than five Business Days thereafter, written notice in an
Officers' Certificate of any event which with the giving of notice or lapse
of time, or both, would become a Servicer Default under any failure by the
Servicer to remit to the Collection Account on behalf of the Issuer any
required Remittance that shall continue unremedied for a period of five (5)
Business Days after written notice of such failure is received by the
Servicer from the Issuer or the Trustee; or or any failure on the part of the
Servicer duly to observe or to perform in any material respect any other
covenants or agreements of the Servicer set forth in this Agreement, which
failure shall (a) materially and adversely affect the rights of the
Bondholders and (ii) continue unremedied for a period of 60 days after the
date on which written notice of such failure, requiring the same to be
remedied, shall have been given (A) to the Servicer by the Issuer or (B) to
the Servicer by the Trustee or by the Holders of Bonds evidencing not less
than 25 percent of the Outstanding Amount of the Bonds; or.
ARTICLE 8
MISCELLANEOUS PROVISIONS
Section 8.01. Amendment.
(a) This Agreement may be amended in writing by the Servicer and
the Issuer with ten Business Days' prior written notice given to the Rating
Agencies and the prior written consent of the Trustee (which consent shall
not be unreasonably withheld), but without the consent of any of the
Bondholders, to cure any ambiguity, to correct or supplement any provisions
in this Agreement or for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions in this Agreement or of
modifying in any manner the rights of the Bondholders; provided, however,
that such action shall not, as evidenced by an Officer's Certificate
delivered to the Issuer and the Trustee, adversely affect in any material
respect the interests of any Bondholder.
(b) This Agreement may also be amended in writing from time to
time by the Servicer and the Issuer with ten Business Days' prior written
notice given to the Rating Agencies and the prior written consent of the
Trustee (which consent shall not be unreasonably withheld) and the prior
written consent of the Holders of Bonds evidencing not less than a majority
of the Outstanding Amount of the Bonds, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions
of this Agreement or of modifying in any manner the rights of the
Bondholders; provided, however, that any amendment of the provisions of
Periodic Adjustments. From time to time, until the Retirement of the Bonds,
the Servicer shall identify the need for Periodic Adjustments and shall take
all reasonable action to obtain and implement such Periodic Adjustments, all
in accordance with the following: or Remittances. shall satisfy the Rating
Agency Condition.
(c) If the written consent of Bondholders is required in
connection with an amendment hereof, approval by Bondholders of the substance
of any proposed amendment or consent shall constitute sufficient consent of
the Bondholders pursuant to this Section, and it shall not be necessary that
Bondholders approve of the particular form of any amendment or consent.
(d) Promptly after the execution thereof, the Issuer shall provide
each of the Rating Agencies with a copy of any amendment to this Agreement.
(e) Prior to its consent to any amendment to this Agreement, the
Trustee shall be entitled to receive and conclusively rely upon an Opinion of
Counsel stating that such amendment is authorized or permitted by this
Agreement. The Trustee may, but shall not be obligated to, enter into any
such amendment which affects the Trustee's own rights, duties or immunities
under this Agreement or otherwise.
Section 8.02. Maintenance of Accounts and Records.
(a) The Servicer shall maintain accounts and records as to the RRB
Property accurately and in accordance with its standard accounting
procedures.
(b) The Servicer shall permit the Issuer and the Trustee and its
agents at any time during normal business hours, upon reasonable notice to
the Servicer and to the extent it does not unreasonably interfere with the
Servicer's normal operations, to inspect, audit and make copies of and
abstracts from the Servicer's records regarding the RRB Property and the RRB
Charge. Nothing in this shall affect the obligation of the Servicer to
observe any applicable law (including any NHPUC Regulation) prohibiting
disclosure of information regarding the customers, and the failure of the
Servicer to provide access to such information as a result of such obligation
shall not constitute a breach.
Section 8.03. Notices. Unless otherwise specifically provided herein,
all notices, directions, consents and waivers required under the terms and
provisions of this Agreement shall be in English and in writing, and any such
notice, direction, consent or waiver may be given by United States mail,
courier service, facsimile transmission or electronic mail (confirmed by
telephone, United States mail or courier service in the case of notice by
facsimile transmission or electronic mail) or any other customary means of
communication, and any such notice, direction, consent or waiver shall be
effective when delivered, or if mailed, three days after deposit in the
United States mail with proper postage for ordinary mail prepaid:
(a) if to the Servicer, to
Public Service Company of New Hampshire
0000 Xxx Xxxxxx
Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
E-Mail: xxxxxxx@xx.xxx (email)
with a copy to:
Public Service Company of New Hampshire
c/o Northeast Utilities Service Company
if by U.S. Mail:
X.X. Xxx 000
Xxxxxxxx, XX 00000-0000
if by courier:
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Assistant Treasurer - Finance
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
E-Mail: xxxxxxx@xx.xxx
(b) if to the Issuer, to
PSNH Funding LLC
c/o Public Service Company of New Hampshire
0000 Xxx Xxxxxx
Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
E-Mail: xxxxxxx@xx.xxx (email)
with a copy to:
Public Service Company of New Hampshire
c/o Northeast Utilities Service Company
if by U.S. Mail:
X.X. Xxx 000
Xxxxxxxx, XX 00000-0000
if by courier:
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Assistant Treasurer - Finance
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
E-Mail: xxxxxxx@xx.xxx
(c) if to the Trustee, to
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxxxx 00 Xxxx
Xxx Xxxx, XX 00000
Attention: ABS Unit
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
(d) if to Moody's, to
Xxxxx'x Investors Service, Inc.
00 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: ABS Monitoring Department
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
(e) if to S&P, to
Standard & Poor's
00 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Asset Backed Surveillance Department
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
(f) if to Fitch, to
Fitch, Inc.
Xxx Xxxxx Xxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: ABS Surveillance
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
E-mail: xxxx@xxxxxxxxxxxx.xxx
(g) as to each of the foregoing, at such other address as shall be
designated by written notice to the other parties.
Section 8.04. Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Merger or Consolidation of, or
Assumption of the Obligations of, Servicer. Any Person (a) into which the
Servicer may be merged or consolidated, (b) which may result from any merger
or consolidation to which the Servicer shall be a party or (c) which may
succeed to the properties and assets of the Servicer substantially as a
whole, which Person in any of the foregoing cases executes an agreement of
assumption to perform every obligation of the Servicer hereunder, shall be
the successor to the Servicer under this Agreement without further act on the
part of any of the parties to this Agreement; provided, however, that (i)
immediately after giving effect to such transaction, no Servicer Default and
no event which, after notice or lapse of time, or both, would become a
Servicer Default shall have occurred and be continuing, (ii) the Servicer
shall have delivered to the Issuer and the Trustee an Officers' Certificate
stating that such consolidation, merger or succession and such agreement of
assumption comply with this Section and that all conditions precedent
provided for in this Agreement relating to such transaction have been
complied with, (iii) the Servicer shall have delivered to the Issuer and the
Trustee an Opinion of Counsel stating that, in the opinion of such counsel
(A) such consolidation, merger or succession and such agreement of assumption
comply with this Section and that all conditions precedent provided for in
this Agreement relating to such transaction have been complied with and (B)
either (1) all filings to be made by the Servicer, including filings with the
NHPUC pursuant to the Statute and filings under the applicable Uniform
Commercial Code, have been executed and filed that are necessary to preserve
and protect fully the interests of the Issuer and the Trustee in the RRB
Property and reciting the details of such filings or (2) no such action shall
be necessary to preserve and protect such interests and (iv) the Rating
Agencies shall have received prior written notice of such transaction. When
any Person acquires the properties and assets of the Servicer substantially
as a whole and becomes the successor to the Servicer in accordance with the
terms then upon satisfaction of all of the other conditions of the this,
Servicer shall automatically and without further notice be released from
all its obligations hereunder. and as provided in the provisions of this
Agreement concerning the resignation of the Servicer, this Agreement
may not be assigned by the Servicer.
Section 8.05. Limitations on Rights of Third Parties. The provisions
of this Agreement are solely for the benefit of the Servicer, the Issuer, the
Bondholders, the Trustee, the State of New Hampshire, the Treasurer of the
State of New Hampshire, agencies of the State of New Hampshire and the other
Persons expressly referred to herein and such Persons shall have the right to
enforce the relevant provisions of this Agreement, except that the
Bondholders shall be entitled to enforce their rights against the Servicer
under this Agreement solely through a cause of action brought for their
benefit by the Trustee. Nothing in this Agreement, whether express or
implied, shall be construed to give to any other Person any legal or
equitable right, remedy or claim in the RRB Property or under or in respect
of this Agreement or any covenants, conditions or provisions contained
herein.
Section 8.06. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
Section 8.07. Separate Counterparts. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
Section 8.08. Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
Section 8.09. Governing Law. This Agreement shall be construed in
accordance with the substantive laws of the State of New Hampshire, without
giving effect to its conflict of law or other principles that would cause the
application of the laws of another jurisdiction, and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws.
Section 8.10. Assignment to Trustee. The Servicer hereby acknowledges
and consents to the collateral assignment or pledge of, or grant of a
security interest in, any or all of the Issuer's rights and obligations
hereunder to the Trustee for the benefit of the holders of the Bonds.
Section 8.11. Nonpetition Covenants. Notwithstanding any prior
termination of this Agreement or the Indenture, but subject to the NHPUC's
right to order the sequestration and payment of revenues arising with respect
to the RRB Property notwithstanding any bankruptcy, reorganization or other
insolvency proceedings with respect to the debtor, pledgor or transferor of
the RRB Property pursuant to RSA 369-B:7, VI and RSA 369-B:7, VIII, the
Servicer shall not, prior to the date which is one year and one day after the
termination of the Indenture with respect to the Issuer, petition or
otherwise invoke or cause the Issuer to invoke the process of any court or
governmental authority for the purpose of commencing or sustaining a case
against the Issuer under any federal or state bankruptcy, insolvency or
similar law or appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of the Issuer or any
substantial part of the property of the Issuer, or ordering the winding up or
liquidation of the affairs of the Issuer.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this Servicing
Agreement to be duly executed by their respective officers as of the day and
year first above written.
PSNH FUNDING LLC,
Issuer
By: /s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: President
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE,
Servicer
By: /s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: Assistant Treasurer - Finance
EXHIBIT A
CERTIFICATE OF COMPLIANCE
The undersigned hereby certifies that he/she is the duly elected and
acting [________] of Public Service Company of New Hampshire, as servicer
(the "Servicer") under the Servicing Agreement, dated as of April 25, 2001
(the "Servicing Agreement"), between the Servicer and PSNH Funding LLC (the
"Issuer"), and further certifies on behalf of the Servicer that:
1. A review of the activities of the Servicer and of its performance
under the Servicing Agreement during the __________ months ended December 31,
20[_] has been made under the supervision of the undersigned pursuant to
Section 3.03 of the Servicing Agreement; and
2. To the undersigned's knowledge, based on such review, the Servicer
has fulfilled all of its material obligations in all material respects under
the Servicing Agreement throughout the __________ months ended December 31,
20[_], except as listed on Annex A hereto.
Executed as of this _______ day of ___________, 20__ .
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE,
Servicer
By:_____________________________________
Name:
Title:
ANNEX A TO EXHIBIT A
LIST OF SERVICER DEFAULTS
Nature of Default Status
EXHIBIT B
FORM OF ROUTINE TRUE-UP LETTER
[date]
ADVICE
NEW HAMPSHIRE PUBLIC UTILITIES COMMISSION (THE "COMMISSION")
SUBJECT: Periodic RRB Charge True-Up Mechanism Advice Filing
Pursuant to the order of the Commission, DE 99-099 , issued on September 8,
2000 (Order No. 23,550) (the "Finance Order"), Public Service Company of New
Hampshire ("PSNH"), as servicer of the RRBs or any successor Servicer and on
behalf of the RRB trustee as assignee of the special purpose entity (the
"SPE"), shall apply for adjustment to the RRB Charge not later than 30 days
prior to each semiannual anniversary of the RRB transaction closing and at
such additional intervals, if necessary, as may be provided for in the
Finance Order. Any capitalized terms not defined herein shall have the
meanings ascribed thereto in the Finance Order.
PURPOSE
This filing establishes the revised RRB Charge to be assessed and collected
from retail users of PSNH's distribution system within PSNH's service
territory, whether or not energy is purchased from PSNH or third party
supplier, and whether or not such distribution system is being operated by
PSNH or a successor distribution company. The RRB Charge is a usage-based
component of the stranded cost recovery charge on each retail user's monthly
xxxx until the Total RRB Payment Requirements are discharged in full. In the
Finance Order, the Commission authorized PSNH to file Routine True-Up Letters
not later than 30 days prior to each semiannual anniversary of the RRB
transaction closing and at such additional intervals, if necessary, as may be
provided for in the Finance Order. The purpose of such filings and resulting
adjusted RRB Charges is to ensure the timely recovery of revenues sufficient
to provide for the payment of an amount equal to the sum of the Periodic RRB
Payment Requirements for the upcoming period, which may include indemnity
obligations of the SPE in the RRB transaction documents for SPE officers and
directors, trustee fees and other liabilities of the SPE.
Using the methodology approved by the Commission in the Finance Order, this
filing modifies the variables used in the RRB Charge calculation and provides
the resulting modified RRB Charge. Table I shows the revised assumptions for
each of the variables used in calculating the RRB Charge for customers. The
assumptions underlying the current RRB Charges were filed in an Issuance
Advice Letter, dated ______________.
Table I below shows the current assumptions for each of the variables used in
the RRB Charge calculation.
TABLE I
INPUT VALUES FOR RRB CHARGE
Forecasted retail kWh sales for the period:
January:________________________
February:________________________
March:________________________
April:________________________
May:________________________
June:________________________
July:________________________
August:________________________
September:________________________
October:________________________
November:________________________
December:________________________
Percent of billed amounts expected to be charged-off:________
Weighted average days sales outstanding:_____
(calculated as follows)
Percent of billed amounts collected in current month:_____
Percent of billed amounts collected in second month after billing:_____
Percent of billed amounts collected in third month after billing:_____
Percent of billed amounts collected in fourth month after billing:_____
Percent of billed amounts collected in fifth month after billing:_____
Forecasted ongoing interest and transaction expenses (including any already
accrued but unpaid for the period):_____
Current Interest Reserve Subaccount balance:______
Scheduled Interest Reserve Subaccount balance at the end of the period:______
Current Overcollateralization Subaccount balance:______
Scheduled Overcollateralization Subaccount balance at the end of the
period:______
Current Capital Subaccount balance:______
Initial Capital Subaccount balance:______
Current RRB outstanding balance:_____
Scheduled RRB outstanding balance at the end of the period:______
Current Reserve Subaccount balance:______
The adjusted RRB Charge calculated for retail users is as follows:____ /kWh
EFFECTIVE DATE
In accordance with the Finance Order, Routine True-Up Letters for semiannual
RRB Charge adjustments shall be filed not later than 30 days prior to each
semiannual anniversary of the RRB transaction closing, with the resulting
upward or downward adjustments to the RRB Charge to be effective - absent
manifest error in the Routine True-Up Letters - on the ensuing semiannual
anniversary. In accordance with the Finance Order, Routine True-Up Letters
may also be filed as frequently as monthly, with the resulting upward or
downward adjustments to the RRB Charge to be effective - absent manifest
error in the Routine True-Up Letters - immediately upon the filing of the on
the Routine True-Up Letters. No approval by the Commission is required.
Therefore, these RRB Charges shall be effective as of ___________.
NOTICE
Copies of this filing are being furnished to the parties on the attached
service list. Notice to the public is hereby given by filing and keeping
this filing open for public inspection at PSNH's corporate headquarters.
Enclosures
EXHIBIT C
FORM OF MONTHLY SERVICER CERTIFICATE
Pursuant to Section 4.01(d)(2) of the Servicing Agreement, dated as of
April 25, 2001 (the "Agreement"), between Public Service Company of New
Hampshire, as servicer (the "Servicer"), and PSNH Funding LLC, the Servicer
does hereby certify as follows:
Capitalized terms used herein have their respective meanings as set
forth in the Agreement.
For the Monthly Period:_____________
1. Xxxxxxxx:
a) Monthly kWh Consumption:
b) Applicable RRB Charge:
c) Total RRB Charge Amount Billed this Month:
d) Cumulative RRB Charge Amount Billed this
Remittance Period:
2. Remittances:
a) Total Amount Remitted this Month:
b) Cumulative Amount Remitted this Remittance Period:
c) "RRB %" (calculated in accordance with Annex II to
the Agreement) for this Remittance Period:
3. Draws on Subaccounts:
a) Reserve Subaccount Draw Amount this Month:
b) Cumulative Reserve Subaccount Draw Amount this
Remittance Period (net of funding):
c) Overcollateralization Subaccount Draw Amount this
Month:
d) Cumulative Overcollateralization Subaccount Draw
Amount this Remittance Period (net of funding):
e) Capital Subaccount Draw Amount this Month:
f) Cumulative Capital Subaccount Draw Amount this
Remittance Period (net of funding):
g) Interest Reserve Subaccount Draw Amount this
Month:
h) Cumulative Interest Reserve Subaccount Draw Amount
this Remittance Period (net of funding):
i) Servicer Advance Subaccount Draw Amount this
Month:
j) Cumulative Servicer Advance Subaccount Draw Amount
this Remittance Period:
Executed as of this _____________ day of ___________.
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE,
Servicer
By:_____________________________________
Name:
Title:
EXHIBIT D
FORM OF QUARTERLY SERVICER CERTIFICATE
Pursuant to Section 4.01(d)(3) of the Servicing Agreement, dated as of
April 25, 2001 (the "Agreement"), between Public Service Company of New
Hampshire, as servicer (the "Servicer"), and PSNH Funding LLC, the Servicer
does hereby certify, for the current Payment Date (__________, __ 20[ ])
(the "Current Payment Date"), as follows:
Capitalized terms used herein have their respective meanings as set
forth in the Agreement. References herein to certain sections and
subsections are references to the respective sections of the Agreement.
1. RRB Charge Collections and Aggregate Amounts Available for
the Current Payment Date:
i. Amount Remitted [Month] [Year]
ii. Amount Remitted [Month] [Year]
iii. Amount Remitted [Month] [Year]
iv. Amount Remitted [Month] [Year]
v. Amount Remitted [Month] [Year]
vi. Amount Remitted [Month] [Year]
vii. Amount Remitted [Month] [Year]
viii. Amount Remitted [Month] [Year]
ix. Total Amount Remitted for this Period (sum of
i. through viii. above):
x. Net Earnings on Collection Account:
xi. Expenses Paid to Date:
xii General Subaccount Balance (sum of ix. and x.
above minus xi.):
xiii. Reserve Subaccount Balance
xiv Overcollateralization Subaccount Balance
xv. Capital Subaccount Balance
xvi Interest Reserve Subaccount Balance
xvii Servicer Advance Subaccount Balance
xviii Collection Account Balance (sum of xii.
through xvii. above):
2. Outstanding Principal Balance as of Prior Payment
Date by Tranche:
i. Class A-1 Principal Balance Outstanding Bond:
ii. Class A-2 Principal Balance Outstanding Bond:
iii Class A-3 Principal Balance Outstanding Bond:
iv. Total Bond Principal Balance:
3. Required Funding/Payments as of Current Payment
Date
a) Projected Principal Balances and Payments
Projected Quarterly
Principal Principal
Balance Due
i. Class A-1 Bond
ii. Class A-2 Bond
iii. Class A-3 Bond
iv. Total Projected
Principal Amount:
b) Required Interest Payments
Bond Days in Interest
Interest Applicable Due
Rate Period
i. Class A-1 Bond
ii. Class A-2 Bond
iii. Class A-3 Bond
iv. Total Required
Interest Amount:
c) Projected Subaccount Payments and Levels
Subaccount Projected Funding
Level Required
i Interest Reserve
Subaccount:
ii Capital
Subaccount:
iii Overcollateralization
Subaccount:
iv. Servicer Advance N/A
Subaccount:
v. Total Subaccount
Payments and
Levels:
4. Allocation of Remittances as of Current Payment Date Pursuant
to Section 8.02(d) of Indenture:
a) Quarterly Expenses
Net Expense Amount (Payable on Current Payment Date)
i. Trustee Fees and Expenses:
ii. Quarterly Servicing Fee:
iii Quarterly Administration Fee:
iv Operating Expenses (subject to $100,000
cap):
v. Total Expenses:
b) Quarterly Interest
Per $1000 of Aggregate
Original Principal
Amount
i. Class A-1 Bond
ii Class A-2 Bond
iii Class A-3 Bond
iv. Total Quarterly
Interest:
c) Quarterly Principal
Per $1000 of Aggregate
Original Principal
Amount
i. Class A-1 Bond
ii Class A-2 Bond
iii Class A-3 Bond
iv Total Quarterly
Principal:
d) Other Payments
i. Operating Expenses (in
excess of $100,000):
ii Funding of Interest
Reserve Subaccount (to
required level):
iii Funding of Capital
Subaccount (to required
amount):
iv Funding of
Overcollateralization
Subaccount (to required
level):
v. Deposits to Reserve
Subaccount:
vi. Interest earnings on
Capital Subaccount
Released to Issuer:
vii Interest earnings on
Servicer Advance
Subaccount Released to
Issuer:
viiiOperating Expenses Paid
From Servicer Advance
Subaccount at Request of
Servicer:
e) Aggregate Payments Pursuant to Section 8.02(d)(i) of
Indenture
i. To Trustee:
ii To other Persons
indemnified under
Indenture or Fee and
Indemnity Agreement:
5. Outstanding Principal Balance and Collection Account Balance
as of Current Payment Date (after giving effect to payments
to be made on such distribution date):
a) Principal Balance Outstanding:
i. Class A-1 Principal Balance Outstanding
Bond:
ii Class A-2 Principal Balance Outstanding
Bond:
iii Class A-3 Principal Balance Outstanding
Bond:
iv. Total Bond Principal Balance:
b) Collection Account Balances Outstanding:
i. Interest Reserve Subaccount:
ii Capital Subaccount:
.
ii Overcollateralization Subaccount:
i.
iv Reserve Subaccount:
.
v. Servicer Advance Subaccount
vi Total Subaccount Amount:
.
6. Subaccount Draws as of Current Payment Date (if applicable,
pursuant to Section 8.02(e) or 8.02(j) of Indenture):
i. Interest Reserve Subaccount:
ii Capital Subaccount:
iii Overcollateralization Subaccount:
iv Reserve Subaccount:
v. Servicer Advance Subaccount:
vi Total Subaccount Draws:
7. Shortfalls in Interest and Principal Payments as of Current
Payment Date (if applicable):
a) Quarterly Interest Shortfall
i Class A-1 Bond
ii Class A-2 Bond
iii Class A-3 Bond
iv Total Quarterly Interest Shortfall:
b) Quarterly Principal Shortfall
i Class A-1 Bond
ii Class A-2 Bond
iii Class A-3 Bond
iv Total Quarterly Principal Shortfall:
8 Shortfalls in Required Subaccount Levels as of Current
Distribution Date:
i Interest Reserve Subaccount
ii Capital Subaccount
iii Overcollateralization Subaccount:
iv Total Subaccount Shortfalls:
IN WITNESS WHEREOF, the undersigned has duly executed and delivered this
Quarterly Servicer Certificate this ___ day of ____, ____.
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE,
Servicer
By:_____________________________________
Name:
Title:
SCHEDULE 4.01(a)
Expected Amortization Schedule
Outstanding
Principal
Amount
Class Class Class
Payment Date X-0 X-0 X-0
Closing $75,211,483 $214,649,395 $235,139,122
11/1/01 57,592,606 214,649,395 235,139,122
2/1/02 43,797,063 214,649,395 235,139,122
5/1/02 28,368,117 214,649,395 235,139,122
8/1/02 20,697,824 214,649,395 235,139,122
11/1/02 14,392,034 214,649,395 235,139,122
2/1/03 7,780,415 214,649,395 235,139,122
5/1/03 (0) 214,649,395 235,139,122
8/1/03 0 206,917,868 235,139,122
11/1/03 0 197,869,570 235,139,122
2/1/04 0 189,598,432 235,139,122
5/1/04 0 180,590,351 235,139,122
8/1/04 0 172,246,415 235,139,122
11/1/04 0 162,796,874 235,139,122
2/1/05 0 154,148,908 235,139,122
5/1/05 0 144,473,833 235,139,122
8/1/05 0 135,568,653 235,139,122
11/1/05 0 125,605,470 235,139,122
2/1/06 0 116,266,274 235,139,122
5/1/06 0 106,175,553 235,139,122
8/1/06 0 96,723,253 235,139,122
11/1/06 0 86,167,370 235,139,122
2/1/07 0 76,211,779 235,139,122
5/1/07 0 65,563,711 235,139,122
8/1/07 0 55,515,784 235,139,122
11/1/07 0 44,346,853 235,139,122
2/1/08 0 33,748,007 235,139,122
5/1/08 0 22,498,547 235,139,122
8/1/08 0 11,818,671 235,139,122
11/1/08 0 0 235,139,122
2/1/09 0 0 223,861,093
5/1/09 0 0 211,970,981
8/1/09 0 0 200,623,964
11/1/09 0 0 188,113,319
2/1/10 0 0 176,150,999
5/1/10 0 0 163,545,614
8/1/10 0 0 151,478,734
11/1/10 0 0 138,246,734
2/1/11 0 0 125,549,313
5/1/11 0 0 112,194,918
8/1/11 0 0 99,366,197
11/1/11 0 0 85,367,758
2/1/12 0 0 71,905,110
5/1/12 0 0 57,742,177
8/1/12 0 0 44,103,087
11/1/12 0 0 29,294,415
2/1/13 0 0 14,974,162
5/1/13 0 0 0
ANNEX I
SERVICING PROCEDURES
The Servicer agrees to comply with the following servicing procedures:
SECTION 1. DEFINITIONS
(a) Capitalized terms used herein and not otherwise defined herein
shall have the meanings set forth in the Agreement.
(b) Whenever used in this Annex I, the following words and phrases
shall have the following meanings:
"Billed RRB Charges" means the dollar amounts billed to customers or the
Applicable TPS in respect of the RRB Charge, whether billed to customers or
the Applicable TPS by the Servicer or to customers by a TPS pursuant to a TPS
Service Agreement.
"Servicer Policies and Practices" means, with respect to the Servicer's
duties under this Annex I, the policies and practices of the Servicer
applicable to such duties that the Servicer follows with respect to
comparable assets that it services for itself or others, as in effect from
time to time and in accordance with NHPUC Regulations. The Servicer shall
provide ten days' prior written notice to the Rating Agencies of any
amendment to the Servicer Policies and Practices that would adversely affect
in any material respect the Bondholders.
SECTION 2. DATA ACQUISITION
(a) Installation and Maintenance of Meters. Except to the extent that
a TPS is responsible for such services pursuant to a TPS Service Agreement,
the Servicer shall cause to be installed, replaced and maintained meters in
accordance with the Servicer Policies and Practices.
(b) Meter Reading. In accordance with the Servicer Policies and
Practices, the Servicer shall obtain usage measurements for each customer;
provided, however, that the Servicer may determine any customer's usage on
the basis of estimates in accordance with applicable NHPUC Regulations; and,
provided, further, that the Servicer may obtain usage measurements from the
Applicable TPS for customers receiving meter reading services from such TPS
if the applicable TPS Service Agreement so provides.
(c) Cost of Metering. The Issuer shall not be obligated to pay any
costs associated with the metering duties set forth in this Section 2,
including the costs of installing, replacing and maintaining meters, nor
shall the Issuer be entitled to any credit against the Servicing Fee for any
cost savings realized by the Servicer or any TPS as a result of new metering
and/or billing technologies.
SECTION 3. USAGE AND XXXX CALCULATION
The Servicer shall obtain a calculation of each customer's usage (which
may be based on data obtained from such customer's meter read or on usage
estimates determined in accordance with applicable NHPUC Regulations) in
accordance with the Servicer Policies and Practices and shall determine
therefrom Billed RRB Charges; provided, however, that in the case of
customers served by a TPS pursuant to a TPS Service Agreement, the Servicer
may obtain usage measurements from the Applicable TPS for customers receiving
meter reading services from such TPS if the applicable TPS Service Agreement
so provides and shall determine therefrom Billed RRB Charges.
SECTION 4. BILLING
(a) The Servicer shall implement the RRB Charge as of the Closing Date
and shall thereafter xxxx each customer or the Applicable TPS for each
customer's Billed RRB Charges in accordance with the provisions of this
Section 4.
(b) Frequency of Bills; Billing Practices. In accordance with the
Servicer Policies and Practices, the Servicer shall generate and issue a Xxxx
to each customer, or, in the case of a customer who is being billed by a TPS,
to the Applicable TPS with respect to such customer's Billed RRB Charges. In
the event that the Servicer makes any material modification to the Servicer
Policies and Practices, it shall notify the Issuer, the Trustee and the
Rating Agencies as soon as practicable, and in no event later than 60
Servicer Business Days after such modification goes into effect; provided,
however, that the Servicer may not make any modification that will materially
adversely affect the Bondholders.
(c) Format.
(i) Each Xxxx to a customer shall contain a stranded cost recovery
charge that shall include the RRB Charge owed by such customer for the
applicable billing period.
(ii) Each Xxxx in which the stranded cost recovery charge is listed
as a line item shall contain a statement (as a footnote) to the effect that
all or a portion of the stranded cost recovery charge is owned by the Issuer
and not the Seller.
(iii) The Servicer shall conform to such requirements in
respect of the format, structure and text of Bills delivered to customers and
TPSs as applicable NHPUC Regulations shall from time to time prescribe. To
the extent that Xxxx format, structure and text are not prescribed by
applicable law or by applicable NHPUC Regulations, the Servicer shall,
subject to clauses (i) and (ii) of this subsection (c), determine the format,
structure and text of all Bills in accordance with its reasonable business
judgment, the Servicer Policies and Practices and historical practice.
(d) Delivery. Except as provided in the next sentence, the Servicer
shall deliver all Bills to customers (i) by United States mail in such class
or classes as are consistent with the Servicer Policies and Practices or (ii)
by any other means, whether electronic or otherwise, that the Servicer may
from time to time use in accordance with the Servicer Policies and Practices.
In the case of customers that have elected to be billed by a TPS, the
Servicer shall deliver all Bills to the Applicable TPSs by such means as are
mutually agreed upon by the Servicer and the Applicable TPS in the TPS
Service Agreement and which are consistent with NHPUC Regulations. The
Servicer or a TPS, as applicable, shall pay from its own funds all costs of
issuance and delivery of all Bills that it renders, including printing and
postage costs as the same may increase or decrease from time to time.
SECTION 5. CUSTOMER SERVICE FUNCTIONS
The Servicer or a TPS to the extent provided in the applicable TPS
Service Agreement shall handle all customer inquiries and other customer
service matters according to the Servicer Policies and Practices.
SECTION 6. COLLECTIONS; PAYMENT PROCESSING; REMITTANCE
(a) Collection Efforts, Policies, Procedures.
(i) The Servicer shall collect Billed RRB Charges from customers
and TPSs as and when the same become due in accordance with such collection
procedures as it follows with respect to comparable assets that it services
for itself or others, including the following:
(A) The Servicer shall prepare and deliver overdue notices to
customers and TPSs in accordance with applicable NHPUC Regulations and the
Servicer Policies and Practices.
(B) The Servicer shall deliver past-due and shut-off notices in
accordance with applicable NHPUC Regulations and the Servicer Policies and
Practices.
(C) The Servicer shall adhere to and carry out disconnection
policies and termination of billing by a TPS pursuant to a TPS Service
Agreement in accordance with RSA 369-B:4, IV, the Finance Order, applicable
NHPUC Regulations and the Servicer Policies and Practices.
(D) The Servicer may employ the assistance of collection agents in
accordance with applicable NHPUC Regulations and the Servicer Policies and
Practices.
(E) The Servicer shall apply customer and TPS deposits to the
payment of delinquent accounts in accordance with applicable NHPUC
Regulations and the Servicer Polices and Practices.
(ii) The Servicer shall not waive any late payment charge or any
other fee or charge relating to delinquent payments, if any, or waive, vary
or modify any terms of payment of any amounts payable by a customer, in each
case unless such waiver or action: (A) would be in accordance with the
Servicer Policies and Practices, (B) would not materially adversely affect
the Bondholders, and (B) would comply in all material respects with
applicable law.
(iii) The Servicer shall accept payment from customers in
respect of Billed RRB Charges in such forms and methods and at such times and
places in accordance with the Servicer Policies and Practices. The Servicer
shall accept payment from TPSs in respect of Billed RRB Charges in such forms
and methods and at such times and places as the Servicer and each TPS shall
mutually agree in accordance with the applicable TPS Service Agreement and
applicable NHPUC Regulations.
(b) Payment Processing, Allocation, Priority of Payments. The Servicer
shall post all payments received to customer or TPS accounts as promptly as
practicable, and, in any event, substantially all payments shall be posted no
later than one Servicer Business Day after receipt.
(c) Investment of RRB Charge Payments Received. Prior to remittance on
the applicable Remittance Date, the Servicer may invest RRB Charge Payments
at its own risk and for its own benefit, and such investments and funds shall
not be required to be segregated from the other investments and funds of the
Servicer. The Servicer shall be entitled to retain as additional
compensation any interest earnings on RRB Charge Payments invested by it.
(d) Calculation of RRB Charge Payments; Remittances. In accordance
with Section 4.03(a) of the Agreement, the Servicer shall remit to the
Trustee for deposit in the Collection Account an amount equal to the RRB
Charge Payments calculated in accordance with the methodology described in
Annex II attached to the Agreement.
(e) Remittances.
(i) The Issuer shall cause to be established the Collection
Account in the name of the Trustee in accordance with Section 8.02 of the
Indenture.
(ii) The Servicer shall make or cause to be made Remittances to the
Collection Account in accordance with Section 4.03 of the Agreement.
(iii) Any change of account or change of institution affecting
the Collection Account shall not take effect until the Issuer has provided at
least fifteen (15) Servicer Business Days written notice thereof to the
Servicer.
SECTION 7. TPSs
In the event a TPS performs services pursuant to a TPS Service
Agreement, the Servicer shall comply with the procedures set forth in
Schedule A to this Annex I.
SCHEDULE A
TO ANNEX I
Additional Servicing Procedures Applicable to TPSs
1. Establishing TPS Relationship
In addition to any actions required by the NHPUC or by applicable law,
for each TPS that is responsible for collecting Billed RRB Charges, the
Servicer shall take the following steps:
(a) Maintain adequate records of the payment arrangement applicable to
such TPS;
(b) Maintain copies of all customer requests to convert to billing by a
TPS;
(c) Verify with the NHPUC that each TPS is licensed to supply
electricity in New Hampshire;
(d) Obtain information from the TPS including, but not limited to:
name, contact, address, telephone facsimile transmission number and
internet address;
(e) Maintain and update records of customers to permit prompt reversion
to dual-billing;
(f) Maintain estimates of one month's maximum RRB Charge Payments for
each TPS required to post a bond, letter of credit or cash deposit
pursuant to the applicable TPS Service Agreement; and
(g) Comply with credit conditions set out in the Finance Order and
applicable TPS Service Agreement.
2. Monitoring TPS Obligations
(a) The Servicer shall require each TPS to pay all undisputed and all
disputed Billed RRB Charges or make a financial arrangement for such
payment according to the applicable TPS Service Agreement; and
(b) For all TPSs subject to any remittance option where such TPS is
liable for all amounts billed in respect of customers served thereby
regardless of the amounts received therefrom, the Servicer shall monitor
payment compliance and take all actions permitted by the NHPUC and the
Finance Order in the event of a default in payment.
3. Enforcing TPS Obligations
The Servicer shall promptly take all actions specified by the Finance
Order with respect to amounts not remitted to the Servicer in accordance with
the payment terms specified by the Finance Order, in addition to any other
remedies available at law.
ANNEX II
REMITTANCE METHODOLOGY
