P&D Draft
5/3/01
TRANSITION PROPERTY PURCHASE AND SALE AGREEMENT
between
WMECO FUNDING LLC
Note Issuer
and
WESTERN MASSACHUSETTS ELECTRIC COMPANY
Seller
Dated as of May 17, 2001
This TRANSITION PROPERTY PURCHASE AND SALE AGREEMENT, dated as of May
17, 2001, is between WMECO Funding LLC, a Delaware limited liability company
(the "NOTE ISSUER"), and Western Massachusetts Electric Company, a Massachusetts
corporation (together with its successors in interest to the extent permitted
hereunder, the "SELLER").
RECITALS
WHEREAS, the Note Issuer desires to purchase the Transition Property
(as defined herein) created pursuant to the Statute and the Financing Order
(each as defined herein); and
WHEREAS, the Seller is willing to sell the Transition Property to the
Note 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:
"ADMINISTRATION AGREEMENT" means the Administration Agreement dated as
of May 17, 2001 between Western Massachusetts Electric Company, as
Administrator, and the Note Issuer, as amended and supplemented from time to
time.
"AGENCIES" means, collectively, the Massachusetts Development Finance
Agency and the Massachusetts Health and Educational Facilities Authority.
"AGREEMENT" means this Transition Property Purchase and Sale Agreement,
as amended and supplemented from time to time.
"AUTHORIZED OFFICER" means an officer of the Seller listed on the list
of Authorized Officers delivered by the Seller to the Note Trustee and the
Certificate Trustee on the date of issuance of the Certificates (as such list
may be modified or supplemented by the Seller from time to time).
"BACK-UP SECURITY INTEREST" has the meaning specified in Section 2.01.
"BASIC DOCUMENTS" means, collectively, this Agreement, the Note
Indenture, the Declaration of Trust, the Certificate Indenture, the Servicing
Agreement, the Administration Agreement, the Note Purchase Agreement, the
Underwriting Agreement and the Fee and Indemnity Agreement.
"BUSINESS DAY" means any day other than a Saturday, a Sunday or a day
on which banking institutions or trust companies in New York, New York, Boston,
Massachusetts, Hartford, Connecticut or Wilmington, Delaware are authorized or
obligated by law, regulation or executive order to remain closed.
"CAPITAL SUBACCOUNT" has the meaning specified in Section 8.02(a) of
the Note Indenture.
"CERTIFICATE INDENTURE" means the Certificate Indenture dated as of May
17, 2001, between the Certificate Issuer and the Certificate Trustee, as amended
and supplemented from time to time.
"CERTIFICATE TRUSTEE" means the Person acting as trustee under the
Certificate Indenture.
"CERTIFICATEHOLDERS" has the meaning specified in Section 1.01(a) of
the Certificate Indenture.
"CERTIFICATES" means the Massachusetts RRB Special Purpose Trust
WMECO-1 Rate Reduction Certificates issued under the Certificate Indenture.
"CLOSING DATE" means May 17, 2001.
"COLLECTION ACCOUNT" has the meaning specified in Section 8.02(a) of
the Note Indenture.
"CORPORATE TRUST OFFICE" has the meaning specified in Section 1.01(a)
of the Note Indenture.
"CUSTOMERS" means all of Seller's customers or ratepayers taking the
delivery, transmission, distribution, back-up, maintenance, emergency and any
other delivery or energy service provided by Seller to customers within the
territory in which it serves customers, regardless of any such customer's source
of electric power.
"DATE OF BREACH" means, with respect to the repurchase obligation
specified in Section 5.01(b), the date of a breach of a representation or
warranty that triggers such repurchase obligation.
"DECLARATION OF TRUST" means the Declaration of Trust dated as of May
15, 2001, among the Agencies and the Delaware Trustee, as amended and
supplemented from time to time.
"DELAWARE TRUSTEE" means the Person acting as trustee under the
Declaration of Trust.
"DTE" means the Massachusetts Department of Telecommunications and
Energy and any successor thereto.
"DTE REGULATIONS" has the meaning specified in Section 1.01 of the
Servicing Agreement.
"FEE AND INDEMNITY AGREEMENT" means the Fee and Indemnity Agreement
dated as of May 17, 2001 among the Note Issuer, the Delaware Trustee, the
Certificate Trustee, the Trust and the Agencies, as amended and supplemented
from time to time.
"FINANCING ORDER" means the order of the DTE, DTE-00-40 , issued on
February 7, 2001.
"FITCH" means Fitch, Inc. or its successor.
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"GRANT" means mortgage, pledge, collaterally assign and xxxxx x xxxx
upon and a security interest in. A Grant of any agreement or instrument shall
include all rights, powers and options (but none of the obligations) of the
Granting Person thereunder, the immediate and continuing right to claim for,
collect, receive and give receipts for payments in respect of and all other
monies payable thereunder, to give and receive notices and other communications,
to make waivers or other agreements, to exercise all rights and options, to
bring proceedings in the name of the Granting Person or otherwise, and generally
to do and receive anything that the Granting Person is or may be entitled to do
or receive thereunder with respect thereto.
"INDEMNIFIED PERSON" has the meaning specified in Section 5.01(c),
Section 5.01(d), Section 5.01(e) or in Section 5.01(h), for the purposes set
forth therein.
"INDEPENDENT" has the meaning specified in Section 1.01(a) of the Note
Indenture.
"ISSUANCE ADVICE LETTER" means the initial Issuance Advice Letter,
dated May 2001, filed with the DTE by the Seller pursuant to the Financing
Order.
"ISSUANCE DATE" has the meaning specified in Section 2.01(c)(i) of the
Note Indenture.
"LIEN" means a security interest, lien, charge, pledge or encumbrance
of any kind.
"LOSSES" has the meaning specified in Section 5.01(e).
"MOODY'S" means Xxxxx'x Investors Service, Inc. or its successor.
"NOTE INDENTURE" means the Note Indenture dated as of May 17, 2001,
between the Note Issuer and the Note Trustee, as amended and supplemented from
time to time.
"NOTE ISSUER" has the meaning set forth in the preamble of this
Agreement.
"NOTE PURCHASE AGREEMENT" means the Note Purchase Agreement dated as of
May 17, 2001 between the Note Issuer and the Trust, as amended and supplemented
from time to time.
"NOTE REGISTER" has the meaning specified in Section 2.05 of the Note
Indenture.
"NOTE TRUSTEE" means the Person acting as trustee under the Note
Indenture.
"NOTEHOLDER" or "HOLDER" means the Person in whose name a Note is
registered on the Note Register.
"NOTES" means the WMECO Funding LLC Notes issued under the Note
Indenture.
"OFFICER'S CERTIFICATE" means a certificate signed by the chairman of
the board, the chief executive officer, the president, the vice chairman of the
board, any vice president, the treasurer, any assistant treasurer, the clerk,
any assistant clerk, the controller or the finance manager of the Seller.
"OPERATING EXPENSE" has the meaning specified in Section 1.01(a) of the
Note Indenture.
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"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 of counsel,
which counsel shall be reasonably acceptable to the party receiving such opinion
of counsel.
"OUTSTANDING AMOUNT" has the meaning specified in Section 1.01(a) of
the Note Indenture.
"OVERCOLLATERALIZATION SUBACCOUNT" has the meaning specified in Section
8.02(a) of the Note Indenture.
"PERSON" means any individual, corporation, limited liability company,
estate, partnership, joint venture, association, joint stock company, trust
(including any beneficiary thereof), unincorporated organization or government
or any agency or political subdivision thereof.
"RATING AGENCIES" means, collectively, S&P, Xxxxx'x and Fitch.
"REPURCHASE DATE" means the date that is five Business Days after the
date that is (i) if the terms of Section 5.01(b)(i)(A) and Section
5.01(b)(i)(B)(2) are applicable, two Business Days after the Date of Breach if
the Seller fails to make the deposit required by Section 5.01(b)(i)(B)(2) or 90
days after the Date of Breach if the Seller makes the deposit required by
Section 5.01(b)(i)(B)(2); (ii) if the terms of Section 5.01(b)(ii) are
applicable, 90 days after the Date of Breach; and (iii) if the terms of Section
5.01(b)(i)(A) and Section 5.01(b)(i)(B)(1) are applicable, 90 days after the
Date of Breach.
"REPURCHASE PRICE" has the meaning specified in Section 5.01(b)(i).
"REQUIRED OVERCOLLATERALIZATION LEVEL" has the meaning specified in
Section 1.01(a) of the Note Indenture.
"RTC CHARGE" means the portion (which may become all) of the Seller's
Transition Charge designated pursuant to the Financing Order as the RTC Charge,
as the same may be adjusted from time to time as provided in the Financing
Order, and may in the future include a pro rata component of any exit fee
collected pursuant to Section 1G(g) of Chapter 164 of the Massachusetts General
Laws.
"RTC CHARGE COLLECTIONS" has the meaning specified in Section 1.01 of
the Servicing Agreement.
"SELLER" has the meaning set forth in the preamble of this Agreement.
"SERVICER DEFAULT" means an event specified in Section 7.01 of the
Servicing Agreement.
"SERVICING AGREEMENT" means the Transition Property Servicing Agreement
dated as of May 17, 2001 between Western Massachusetts Electric Company, as
Servicer, and the Note Issuer, as amended and supplemented from time to time.
"S&P" means Standard & Poor's Ratings Services, a division of The
McGraw Hill Companies, Inc. or its successor.
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"STATUTE" means Chapter 164 of the Massachusetts Acts of 1997, entitled
An Act Relative to Restructuring the Electric Utility Industry in the
Commonwealth, Regulating the Provision of Electricity and Other Services, and
Promoting Enhanced Consumer Protections Therein.
"TRANSITION CHARGE" means the "Transition Charge" as defined in the
Statute and referred to as the Seller's "Transition Charge" in Western
Massachusetts Electric Company's Restructuring Order, DTE Docket No. 97-120 and
subsequent filings with the DTE pursuant thereto.
"TRANSITION PROPERTY" means the transition property that exists under
Order 7 of the Financing Order.
"TRUST" or "CERTIFICATE ISSUER" means Massachusetts RRB Special Purpose
Trust WMECO-1, a Delaware business trust.
"UCC" means, unless the context otherwise requires, the Uniform
Commercial Code, as in effect in the relevant jurisdiction, as amended from time
to time.
"UNDERWRITING AGREEMENT" means the Underwriting Agreement dated as of
May [__], 2001 among Western Massachusetts Electric Company, the Note Issuer and
the underwriters named therein.
Section 1.02. OTHER DEFINITIONAL PROVISIONS.
(a) 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.
(b) 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
and Exhibit references contained in this Agreement are references to Sections,
Schedules and Exhibits in or to this Agreement unless otherwise specified; and
the term "including" shall mean "including without limitation".
(c) The definitions contained in this Agreement are
applicable to the singular as well as the plural forms of such terms.
ARTICLE 2
CONVEYANCE OF TRANSITION PROPERTY
Section 2.01. CONVEYANCE OF TRANSITION PROPERTY. In consideration of
the Note Issuer's delivery to or upon the order of the Seller of $__________,
the Seller does hereby irrevocably sell, transfer, assign, set over and
otherwise convey to the Note Issuer, WITHOUT RECOURSE OR WARRANTY, except as
specifically set forth herein, all right, title and interest of the Seller in
and to the Transition Property (such sale, transfer, assignment, setting over
and conveyance of the Transition Property includes, to the fullest extent
permitted by the Statute, the assignment of all revenues, collections, claims,
payments, money or proceeds of or arising from the RTC Charge pursuant to the
Financing Order) and copies of all books and records related thereto.
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Such sale, transfer, assignment, setting over and conveyance is hereby expressly
stated to be a sale and, pursuant to Section 1H(f)(1) of Chapter 164 of the
Massachusetts General Laws, shall be treated as an absolute transfer of all of
the Seller's right, title and interest in (as in a true sale), and not as a
pledge or other financing of, the Transition Property. If such sale, transfer,
assignment, setting over and conveyance is held by any court of competent
jurisdiction not to be a true sale as provided in Section 1H(f)(1) of Chapter
164 of the Massachusetts General Laws, then such sale, transfer, assignment,
setting over and conveyance shall be treated as the creation of a security
interest in the Transition Property and, without prejudice to its position that
it has absolutely transferred all of its rights in the Transition Property to
the Note Issuer, the Seller hereby Grants to the Note Issuer a security interest
in the Transition Property (including, to the fullest extent permitted by the
Statute, the assignment of all revenues, collections, claims, payments, money or
proceeds of or arising from the RTC Charge pursuant to the Financing Order) to
secure a payment obligation incurred by the Seller in respect of the amount paid
by the Note Issuer to the Seller pursuant to this Agreement (the "Back-Up
Security Interest"). Such sale, transfer, assignment, setting over and
conveyance of the Transition Property includes the right to use the Seller's
computer software system to access and create copies of all books and records
related to the Transition Property.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER
Subject to Section 3.09 hereof, the Seller makes the following
representations and warranties, as of the Closing Date, on which the Note Issuer
has relied in acquiring the Transition Property.
Section 3.01. ORGANIZATION AND GOOD STANDING. The Seller is duly
organized and validly existing as a corporation in good standing under the laws
of The Commonwealth of Massachusetts, 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 own the Transition Property.
Section 3.02. DUE QUALIFICATION. The Seller 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 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 Seller's business, operations, assets, revenues
or properties).
Section 3.03. POWER AND AUTHORITY. The Seller 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
Seller.
Section 3.04. BINDING OBLIGATION. This Agreement constitutes a legal,
valid and binding obligation of the Seller enforceable against it in accordance
with its terms, subject to applicable insolvency, reorganization, moratorium,
fraudulent transfer and other laws relating to or affecting creditors' or
secured parties' rights generally from time to time in effect and to general
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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.
Section 3.05. 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 Seller, or any material indenture,
agreement or other instrument to which the Seller is a party or by which it is
bound; (ii) result in the creation or imposition of any Lien upon any of the
Seller's properties pursuant to the terms of any such indenture, agreement or
other instrument (other than any Lien that may be granted under the Basic
Documents or any Lien created pursuant to Section 1H(e) of Chapter 164 of the
Massachusetts General Laws); or (iii) violate any existing law or any existing
order, rule or regulation applicable to the Seller of any court or of any
federal or state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Seller or its properties.
Section 3.06. NO PROCEEDINGS. There are no proceedings pending and,
to the Seller's knowledge, there are no proceedings threatened and, to the
Seller'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 Seller or its
properties involving or relating to the Seller or the Note Issuer or, to the
Seller's knowledge, any other Person: (i) asserting the invalidity of this
Agreement, any of the other Basic Documents, the Notes, the Certificates, the
Statute or the Financing Order, (ii) seeking to prevent the issuance of the
Notes or the Certificates or the consummation of any of the transactions
contemplated by this Agreement or any of the other Basic Documents, (iii)
seeking any determination or ruling that might materially and adversely affect
the performance by the Seller of its obligations under, or the validity or
enforceability of, this Agreement, any of the other Basic Documents, the Notes
or the Certificates or (iv) seeking to adversely affect the federal or state
income tax classification of the Notes or the Certificates as debt.
Section 3.07. 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 Seller of this Agreement, the
performance by the Seller of the transactions contemplated hereby or the
fulfillment by the Seller of the terms hereof, except those that have been
obtained or made and those that the Seller, in its capacity as Servicer under
the Servicing Agreement, is required to make in the future pursuant to the
Servicing Agreement and post closing filings required under federal securities
law in connection therewith.
Section 3.08. THE TRANSITION PROPERTY.
(a) TITLE. It is the intention of the parties hereto that
the transfer and assignment herein contemplated constitute a sale of the
Transition Property from the Seller to the Note Issuer and that no interest in,
or title to, the Transition Property shall be part of the Seller's estate in the
event of the filing of a bankruptcy petition by or against the Seller under any
bankruptcy law. No portion of the Transition Property has been sold,
transferred, assigned or pledged by the Seller to any Person other than the Note
Issuer. On the Closing Date, immediately upon the sale hereunder, the Seller has
transferred, sold and conveyed the
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Transition Property to the Note Issuer, free and clear of all Liens (except for
any Liens created pursuant to Section 1H(e) of Chapter 164 of the Massachusetts
General Laws and any Liens that may be granted under the Basic Documents), and
pursuant to Section 1H(f)(1) of Chapter 164 of the Massachusetts General Laws
such transfer shall be treated as an absolute transfer of all of the Seller's
right, title and interest (as in a true sale), and not as a pledge or other
financing of, the Transition Property.
(b) TRANSFER FILINGS. On the Closing Date, immediately upon
the sale hereunder, the Transition Property has been validly transferred and
sold to the Note Issuer, the Note Issuer shall own all such Transition Property
free and clear of all Liens (excluding any Lien created pursuant to Section
1H(e) of Chapter 164 of the Massachusetts General Laws and any Lien that may be
Granted under the Basic Documents) and all filings to be made by the Seller
(including filings with the DTE under the Statute) necessary in any jurisdiction
to Grant the Note Issuer a valid first priority perfected ownership interest
(subject to any Lien created pursuant to Section 1H(e) of Chapter 164 of the
Massachusetts General Laws and any Lien that may be Granted under the Basic
Documents) in, and to Grant the Note Trustee a valid first priority perfected
security interest (subject to any Lien created pursuant to Section 1H(e) of
Chapter 164 of the Massachusetts General Laws and any Lien that may be granted
under the Basic Documents) in, the Transition Property have been made. No
further action is required to maintain the Note Issuer's first priority
perfected ownership interest or the Note Trustee's first priority perfected
security interest (in each case, subject to any Lien created pursuant to Section
1H(e) of Chapter 164 of the Massachusetts General Laws and any Lien that may be
Granted under the Basic Documents). Filings have also been made to the extent
required in any jurisdiction to perfect the Back-Up Security Interest granted by
the Seller to the Note Issuer (subject to any Lien created pursuant to Section
1H(e) of Chapter 164 of the Massachusetts General Laws and any Lien that may be
Granted under the Basic Documents).
(c) FINANCING ORDER AND ISSUANCE ADVICE LETTER; OTHER
APPROVALS. On the Closing Date, under the laws of The Commonwealth of
Massachusetts and the United States in effect on the Closing Date, (i) the
Financing Order pursuant to which the Transition Property has been created is in
full force and effect; (ii) the Certificateholders are entitled to the
protections of the Statute and, accordingly, the Financing Order is not
revocable by the DTE; (iii) The Commonwealth of Massachusetts may not alter the
provisions of the Statute that make the RTC Charge irrevocable and binding,
limit or alter the Transition Charge, the Transition Property, or the Financing
Order and all rights thereunder, in a manner that would substantially impair the
rights of the Certificateholders, absent a demonstration by The Commonwealth of
Massachusetts that an impairment is narrowly-tailored and is necessary to
advance an important public interest, such as responding to a "great public
calamity" until the Certificates, together with interest thereon, are fully met
and discharged; (iv) except for periodic adjustments to the RTC Charge required
under the Statute, the DTE does not have authority, either by rescinding,
altering or amending the Financing Order or otherwise, to revalue or revised for
ratemaking purposes the Transition Costs, determine that the reimbursable
transition costs amounts or Transition Charges are unjust or unreasonable or in
any way to reduce or impair the value of Transition Property either directly or
indirectly by taking the reimbursable transition costs amounts into account when
setting other rates for the Seller; nor are the amount of revenues arising with
respect thereto subject to reduction, impairment, postponement or termination;
(v) the process by which the Financing Order was adopted and approved, and the
Financing Order and Issuance Advice
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Letter themselves, comply with all applicable laws, rules and regulations; (vi)
the Issuance Advice Letter has been filed in accordance with the Financing
Order; (vii) no other 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
creation or sale of the Transition Property, except those that have been
obtained or made [and post closing filings required in connection therewith and
those that the Seller, in its capacity as Servicer under the Servicing
Agreement, is required to make in the future pursuant to the Servicing
Agreement; and (viii) The Commonwealth of Massachusetts, in the exercise of its
executive or legislative powers, may not repeal or amend the Statute or the
Financing Order, or take any action in contravention of the pledge by The
Commonwealth of Massachusetts in Section 1H(b)(3) of the Statute, without paying
just compensation to the Certificateholders, as determined by a court of
competent jurisdiction, if this action would constitute a permanent
appropriation of a substantial property interest of Certificateholders in the
Transition Property and deprive the Certifcateholders of their reasonable
expectations arising from their investments in the Certificates.
(d) ASSUMPTIONS. On the Closing Date, based upon the
information available to the Seller on the Closing Date, the assumptions used in
calculating the initial RTC Charge are reasonable and are made in good faith.
Notwithstanding the foregoing, the Seller makes no representation or warranty
that the assumptions used in calculating such RTC Charge will in fact be
realized.
(e) CREATION OF TRANSITION PROPERTY. Upon the effectiveness
of the Financing Order and the Issuance Advice Letter: (i) all of the Transition
Property constitutes an existing property right; (ii) the Transition Property
includes the right, title and interest in and to all revenues, collections,
claims, payments, money, or proceeds of or arising from the RTC Charge, as
adjusted from time to time pursuant to the Financing Order, and all rights to
obtain adjustments to the RTC Charge pursuant to the Financing Order; and (iii)
subject to the cap on the Seller's Transition Charge set forth in the Financing
Order, the owner of the Transition Property is legally entitled to collect
payments in respect of the RTC Charge in the aggregate sufficient to pay the
interest on and principal of the Notes, to pay the fees and expenses of
servicing the Notes and the Certificates, to replenish the Capital Subaccount to
the Required Capital Level and to fund the Overcollateralization Subaccount to
the Required Overcollateralization Level and to enforce all other material
rights conferred in the Financing Order and the Statute until the Notes and the
Certificates are paid in full. Notwithstanding the foregoing, the Seller makes
no representation or warranty that any amounts actually collected in respect of
the RTC Charge will in fact be sufficient to meet payment obligations with
respect to the Notes and the Certificates.
(f) PROSPECTUS. As of the date hereof, the information
describing the Seller in "The Seller and Servicer" section of the prospectus
dated May [__], 2001 offering the Notes and the Certificates is correct in all
material respects.
Section 3.09. LIMITATIONS ON REPRESENTATIONS AND WARRANTIES.
Notwithstanding any other provisions of this Agreement, the Seller will not be
in breach of any representation or warranty as a result of a change in law by
means of a legislative enactment, constitutional amendment or voter initiative.
Notwithstanding anything to the contrary in this Agreement, the Seller makes no
representation or warranty that any amounts actually collected in respect of the
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RTC Charge will in fact be sufficient to meet payment obligations with respect
to the Notes and the Certificates or that the assumptions used in calculating
the RTC Charge will in fact be realized nor shall the Seller be obligated to
reduce, or accept a reduction of, any rates or charges to which it would
otherwise be entitled in respect of services rendered or to be rendered to
Customers in order to permit the payment of the RTC Charge.
ARTICLE 4
COVENANTS OF THE SELLER
Section 4.01. CORPORATE EXISTENCE. So long as any of the Notes are
outstanding, the Seller (a) will keep in full force and effect its existence,
rights and franchises as a corporation under the laws of the jurisdiction of its
organization and (b) will obtain and preserve its qualification to do business,
in each case to the extent that in each such jurisdiction such existence or
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the other Basic Documents to which the Seller
is a party and each other instrument or agreement necessary or appropriate to
the proper administration of this Agreement and the transactions contemplated
hereby.
Section 4.02. NO LIENS. Except for the conveyances hereunder, any
Lien under Section 1H(e) of the Statute or the Back-Up Security Interest, the
Seller will not sell, pledge, assign or transfer, or grant, create, or incur any
Lien on, any of the Transition Property, or any interest therein, and the Seller
shall defend the right, title and interest of the Note Issuer and the Note
Trustee in, to and under the Transition Property against all claims of third
parties claiming through or under the Seller. Western Massachusetts Electric
Company, in its capacity as Seller, will not at any time assert any Lien
against, or with respect to, any of the Transition Property.
Section 4.03. DELIVERY OF COLLECTIONS. If the Seller receives any
payments in respect of the RTC Charge or the proceeds thereof when it is not
acting as the Servicer, the Seller agrees to pay to the Servicer all payments
received by it in respect thereof as soon as practicable after receipt thereof
by it.
Section 4.04. NOTICE OF LIENS. The Seller shall notify the Note
Issuer and the Note Trustee promptly after becoming aware of any Lien on any of
the Transition Property, other than the conveyances hereunder, any Lien Granted
by the Issuer under the Basic Documents or any Lien under Section 1H(e) of the
Statute or the Back-Up Security Interest.
Section 4.05. COMPLIANCE WITH LAW. The Seller hereby agrees to comply
with its organizational and governing documents and all laws, treaties, rules,
regulations and determinations of any governmental instrumentality applicable to
it, except to the extent that failure to so comply would not adversely affect
the Note Issuer's or the Note Trustee's interests in the Transition Property or
under any of the other Basic Documents to which the Seller is party or the
Seller's performance of its obligations hereunder or under any of the other
Basic Documents to which it is party.
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Section 4.06. COVENANTS RELATED TO NOTES AND TRANSITION PROPERTY.
(a) So long as any of the Notes are outstanding, the Seller
shall treat the Notes as debt of the Note Issuer and not of the Seller, except
for financial accounting or tax reporting purposes.
(b) So long as any of the Notes are outstanding, the Seller
shall indicate in its financial statements that it is not the owner of the
Transition Property and that the assets of the Note Issuer are not available to
pay creditors of the Seller or any of its Affiliates (other than the Note
Issuer).
(c) So long as any of the Notes are outstanding, the Seller
shall disclose the effects of all transactions between the Seller and the Note
Issuer in accordance with generally accepted accounting principles.
(d) So long as any of the Notes or Certificates are
outstanding, the Seller shall not own or purchase any Notes or Certificates.
(e) The Seller agrees that, upon the sale by the Seller of
the Transition Property to the Note Issuer pursuant to this Agreement, (i) to
the fullest extent permitted by law, including the Statute and applicable DTE
Regulations, the Note Issuer shall have all of the rights originally held by the
Seller with respect to the Transition Property, including the right (subject to
the terms of the Servicing Agreement) to exercise any and all rights and
remedies to collect any amounts payable by any Customer or third party supplier
in respect of the Transition Property, notwithstanding any objection or
direction to the contrary by the Seller and (ii) any payment by any Customer or
third party supplier to the Note Issuer shall discharge such Customer's or third
party supplier's obligations in respect of the Transition Property to the extent
of such payment, notwithstanding any objection or direction to the contrary by
the Seller.
(f) So long as any of the Notes are outstanding, (i) (A)
the Seller shall affirmatively certify and confirm that it has sold the
Transition Property to the Note Issuer (other than for financial accounting or
tax reporting purposes), and (B) the Seller shall not make any statement or
reference in respect of the Transition Property that is inconsistent with the
ownership thereof by the Note Issuer (other than for financial accounting or tax
reporting purposes), and (ii) the Seller shall not take any action in respect of
the Transition Property except solely in its capacity as the Servicer thereof
pursuant to the Servicing Agreement or as otherwise contemplated by the Basic
Documents.
Section 4.07. PROTECTION OF TITLE. The Seller shall execute and file
such filings, including filings with the DTE pursuant to the Statute and UCC
filings, and cause to be executed and filed such filings, all in such manner and
in such places as may be required by law fully to preserve, maintain and protect
the ownership or security interest of the Note Issuer in and the Note Trustee in
the Transition Property and the Back Up Security Interest, including all filings
required under the Statute and the applicable UCC relating to the transfer of
the ownership or security interest in the Transition Property by the Seller to
the Note Issuer, the granting of a security interest in the Transition Property
by the Note Issuer to the Note Trustee and the Back-Up Security Interest and the
continued perfection of such ownership or security interest. The Seller shall
deliver (or cause to be delivered) to the Note Trustee (with a copy of the Note
Issuer)
11
file-stamped copies of, or filing receipts for, any document filed as provided
above, as soon as available following such filing. The Seller shall institute
any action or proceeding necessary to compel performance by the DTE or The
Commonwealth of Massachusetts of any of their obligations or duties under the
Statute or the Financing Order, and the Seller 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 (i) to protect the Note Issuer, the Noteholders, the
Certificateholders, the Note Trustee, the Delaware Trustee, the Certificate
Trustee, the Certificate Issuer, the Commonwealth of Massachusetts, the
Executive Office for Administration and Finance of The Commonwealth of
Massachusetts and the Agencies and any of their respective affiliates,
officials, officers, directors, employees, consultants, counsel and agents from
claims, state actions or other actions or proceedings of third parties which, if
successfully pursued, would result in a breach of any representation set forth
in Article III or (ii) to block or overturn any attempts to cause a repeal of,
modification of or supplement to the Statute, the Financing Order, any Advice
Letter (as defined in the Note Indenture), the Restructuring Order (as defined
in the Financing Order) (to the extent it adversely affects the rights of
Noteholders or the validity or value of the Transition Property) or the rights
of Noteholders by executive action, legislative enactment or constitutional
amendment that would be adverse to the Note Issuer, the Note Trustee or the
Noteholders. If the Servicer performs its obligations under Section 5.02(d) of
the Servicing Agreement in all respects, such performance shall be deemed to
constitute performance of the Seller's obligations pursuant to clause (ii) of
the immediately preceding sentence. In such event, the Seller agrees to assist
the Servicer as reasonably necessary to perform its obligations under Section
5.02(d) of the Servicing Agreement in all respects. The costs of any such
actions or proceedings shall be payable from RTC Charge Collections as an
Operating Expense in accordance with the priorities set forth in Section 8.02(d)
of the Note Indenture. The Seller's obligations pursuant to this Section 4.07
shall survive and continue notwithstanding the fact that the payment of
Operating Expenses pursuant to Section 8.02(d) of the Note Indenture may be
delayed (it being understood that the Seller may be required to advance its own
funds to satisfy its obligations hereunder).
Section 4.08. NONPETITION COVENANTS. Notwithstanding any prior
termination of this Agreement or the Note Indenture, but subject to the DTE's
right to order the sequestration and payment of revenues arising with respect to
the Transition Property notwithstanding any bankruptcy, reorganization or other
insolvency proceedings with respect to the Seller pursuant to Section 1H(d)(5)
of the Statute, the Seller shall not, prior to the date which is one year and
one day after the termination of the Note Indenture, petition or otherwise
invoke or cause the Note Issuer to invoke the process of any court or government
authority for the purpose of commencing or sustaining a case against the Note
Issuer under any Federal or state bankruptcy, insolvency or similar law,
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or
other similar official of the Note Issuer or any substantial part of the
property of the Note Issuer, or ordering the winding up or liquidation of the
affairs of the Note Issuer.
Section 4.09. TAXES. So long as any of the Notes are outstanding, the
Seller shall, and shall cause each of its subsidiaries to, pay all material
taxes, assessments and governmental charges imposed upon it or any of its
properties or assets or with respect to any of its franchises, business, income
or property before any penalty accrues thereon if the failure to pay any such
taxes, assessments and governmental charges would, after any applicable grace
periods, notices or other similar requirements, result in a lien on the
Transition Property; provided that no such
12
tax need be paid if the Seller or one of its subsidiaries is contesting the same
in good faith by appropriate proceedings promptly instituted and diligently
conducted and if the Seller or such subsidiary has established appropriate
reserves as shall be required in conformity with generally accepted accounting
principles.
Section 4.10. ADDITIONAL SALES OF TRANSITION PROPERTY. So long as any
of the Notes are outstanding, the Seller shall not sell any transition property
(as defined in the Statute) to secure another issuance of electric rate
reduction bonds (as defined in the Statute) if it would cause the then existing
ratings on any Class of Certificates from the Rating Agencies to be withdrawn or
downgraded.
Section 4.11. ISSUANCE ADVICE LETTER. The Seller hereby agrees not to
withdraw the filing of the Issuance Advice Letter with the DTE.
Section 4.12. MAINTENANCE OF WORKING PAPERS. So long as any of the
Notes are outstanding, the Seller shall keep and maintain any and all working
papers, reports and other documents used by the firm of Independent certified
public accountants in the preparation of its letters delivered on the Issuance
Date pursuant to Section 2.10(g) of the Note Indenture and [Section 6(k)] of the
Underwriting Agreement.
ARTICLE 5
THE SELLER
Section 5.01. LIABILITY OF SELLER; INDEMNITIES.
(a) The Seller shall be liable in accordance herewith only
to the extent of the obligations specifically undertaken by the Seller under
this Agreement.
(b) (i) In the event of a breach by the Seller of any
representation and warranty specified in Sections 3.08(c) or 3.08(e) that has a
material adverse effect on the Certificateholders, the Seller shall repurchase
the Transition Property from the Note Issuer at a purchase price equal to the
then outstanding principal amount of the Notes and all accrued and unpaid
interest thereon, excluding any premium or penalty of any kind (the "REPURCHASE
PRICE"), as of the Repurchase Date; provided, however, that the Seller shall not
be obligated to repurchase the Transition Property if (A) within 90 days after
the Date of Breach such breach is cured or the Seller takes remedial action such
that there is not and will not be a material adverse effect on the
Certificateholders as a result of such breach and (B) either (1) if the Seller
had, immediately prior to the Date of Breach, a long term debt rating of at
least "A3" by Moody's and "BBB" or the equivalent by S&P or Fitch, and the
Seller enters into a binding agreement with the Note Issuer to pay any amounts
necessary so that all interest payments due on the Notes during such 90-day
period will be paid in full, or (2) if the Seller does not have such long term
debt ratings, the Seller deposits, within two Business Days after the Date of
Breach, an amount in escrow with the Note Trustee sufficient, taking into
account amounts on deposit in the Collection Account which will be available for
such purpose, to pay all interest payments which will become due on the Notes
during such 90-day period.
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(ii) In the event of a breach by the Seller of any
representation and warranty specified in Sections 3.01, 3.03, 3.04, 3.05, 3.06,
3.08(a) or 3.08(b) that has a material adverse effect on the Certificateholders,
if within 90 days after the Date of Breach such breach has not been cured or the
Seller has not taken remedial action such that there is not and will not be a
material adverse effect on the Certificateholders as a result of such breach,
then the Seller shall repurchase the Transition Property from the Note Issuer
for the Repurchase Price on the Repurchase Date.
(iii) Notwithstanding any other provision of this
Agreement, upon the payment by the Seller of the Repurchase Price pursuant to
this Section 5.01(b), neither the Note Issuer nor any other Person shall have
any other claims, rights or remedies against the Seller under, arising from or
with respect to this Agreement, except as set forth in Section 5.01(b), 5.01(c),
5.01(d) and 5.01(h).
(c) Subject to Section 5.01(i), the Seller shall indemnify
the Note Issuer, the Note Trustee, the Certificate Trustee, the Delaware
Trustee, the Commonwealth of Massachusetts, the Executive Office for
Administration and Finance of The Commonwealth of Massachusetts, the Agencies,
the Certificate Issuer, the Noteholders and the Certificateholders (each an
"INDEMNIFIED PERSON" for purposes of this Section 5.01(c) and Section 5.01(i))
for, and defend and hold harmless each such Indemnified Person from and against,
any and all taxes (other than taxes imposed on Noteholders or Certificateholders
solely as a result of their ownership of Notes or Certificates, respectively)
that may at any time be imposed on or asserted against any such Person under
existing law as of the Closing Date as a result of the sale of the Transition
Property to the Note Issuer, including any sales, gross receipts, general
corporation, tangible personal property, privilege or license taxes; provided,
however, that the Noteholders and the Certificateholders shall be entitled to
enforce their rights against the Seller under this Section 5.01(c) solely
through a cause of action brought for their benefit by the Note Trustee or the
Certificate Trustee, as the case may be.
(d) Subject to Section 5.01(i), the Seller shall indemnify
the Note Issuer, the Note Trustee, the Certificate Trustee, the Delaware
Trustee, The Commonwealth of Massachusetts, the Executive Office for
Administration and Finance of The Commonwealth of Massachusetts, the Agencies,
the Certificate Issuer, the Noteholders and the Certificateholders (each an
"INDEMNIFIED PERSON" for purposes of this Section 5.01(d) and Section 5.01(i))
for, and defend and hold harmless each such Indemnified Person from and against,
any and all taxes that may be imposed on or asserted against any such
Indemnified Person under existing law as of the Closing Date as a result of the
issuance and sale by the Note Issuer of the Notes, the issuance and sale by the
Trust of the Certificates or the other transactions contemplated herein,
including any sales, gross receipts, general corporation, tangible personal
property, privilege or license taxes; provided, however, that the Noteholders
and the Certificateholders shall be entitled to enforce their rights against the
Seller under this Section 5.01(d) solely through a cause of action brought for
their benefit by the Note Trustee or the Certificate Trustee, as the case may
be. The Seller shall be reimbursed for any payments under this Section 5.01(d)
from RTC Charge Collections as an Operating Expense in accordance with the
priorities set forth in Section 8.02(d) of the Note Indenture.
(e) Subject to Section 5.01(i), the Seller shall indemnify
the Note Issuer, the Noteholders and the Certificateholders (each an
"INDEMNIFIED PERSON" for purposes of this
14
Section 5.01(e) and Section 5.01(i)) for, and defend and hold harmless each such
Person from and against, any and all liabilities, obligations, losses, actions,
suits, claims, damages, payments, costs or expenses of any kind whatsoever
(collectively, "LOSSES") that may be imposed on, incurred by or asserted against
each such Indemnified Person as a result of (i) the Seller's willful misconduct
or negligence in the performance of its duties or observance of its covenants
under this Agreement, or (ii) the Seller's breach in any material respect of any
of its representations and warranties contained in this Agreement (other than
the representations and warranties specified in Sections 3.01, 3.03, 3.04, 3.05,
3.06, 3.08(a), 3.08(b), 3.08(c) or 3.08(e), the breach of which are subject to
the repurchase obligation set forth in Section 5.01(b)), except in the case of
both clauses (i) and (ii) to the extent of Losses either resulting from the
willful misconduct or gross negligence of such Indemnified Person or resulting
from a breach of a representation and warranty made by such Indemnified Person
in any of the Basic Documents that gives rise to the Seller's breach; provided,
however, that the Noteholders and the Certificateholders shall be entitled to
enforce their rights against the Seller under this indemnification solely
through a cause of action brought for their benefit by the Note Trustee or the
Certificate Trustee, as the case may be; provided, further, that the Seller may,
at its election and in full satisfaction of its obligations under this Section
5.01(e), repurchase the Transition Property at the Repurchase Price, in which
case neither the Note Issuer nor any other Person shall have any other claims,
rights or remedies against the Seller under, arising from or with respect to
this Agreement, except as set forth in Sections 5.01(b), 5.01(c), 5.01(d) and
5.01(h).
(f) Indemnification under Sections 5.01(c), 5.01(d),
5.01(e) and 5.01(h) 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.
(g) Without prejudice to any of the other rights of the
parties, the Seller will not be in breach of any representation or warranty as a
result of a change in law by means of a legislative enactment, constitutional
amendment or voter initiative. Notwithstanding anything to the contrary in this
Agreement, the Seller makes no representation or warranty that any amounts
actually collected in respect of the RTC Charge will in fact be sufficient to
meet payment obligations with respect to the Notes and the Certificates or that
the assumptions used in calculating the RTC Charge will in fact be realized nor
shall the Seller be obligated to reduce, or accept a reduction of, any rates or
charges to which it would otherwise be entitled in respect of services rendered
or to be rendered to customers in order to permit the payment of the RTC Charge
(other than deferrals for future recovery).
(h) Subject to Section 5.01(i), the Seller shall indemnify
and hold harmless the Note Trustee, the Delaware Trustee, the Certificate
Trustee, the Certificate Issuer, The Commonwealth of Massachusetts, the
Executive Office for Administration and Finance of The Commonwealth of
Massachusetts, the Agencies and any of their respective affiliates, officials,
officers, directors, employees, consultants, counsel and agents (each an
"INDEMNIFIED PERSON" for purposes of this Section 5.01(h) and Section 5.01(i))
against any and all Losses incurred by any of such Indemnified Persons as a
result of (i) the Seller's willful misconduct or negligence in the performance
of its duties or observance of its covenants under this Agreement or (ii) the
Seller's breach in any material respect of any of its representations and
warranties contained in this Agreement, except in the case of both clauses (i)
and (ii) to the extent of Losses either 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
15
Documents that gives rise to the Seller's breach. The indemnities contained in
this Section 5.01(h) shall survive the resignation or termination of the Note
Trustee, the Certificate Trustee or the Delaware Trustee or the termination of
this Agreement.
(i) The Seller shall not be required to indemnify any
Indemnified Person under Sections 5.01(c), 5.01(d), 5.01(e) or 5.01(h) for any
amount paid or payable by such Indemnified Person in the settlement of any
action, proceeding or investigation without the written consent of the Seller,
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 Seller under this Section 5.01, notify
the Seller in writing of such involvement. Failure by an Indemnified Person to
so notify the Seller shall relieve the Seller from the obligation to indemnify
and hold harmless such Indemnified Person under this Section 5.01 only to the
extent that the Seller 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 this Section 5.01, the Seller
shall be entitled to assume the defense of any such action, proceeding or
investigation. Upon assumption by the Seller 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
Seller shall be entitled to appoint counsel of the Seller's choice at the
Seller's expense to represent the Indemnified Person in any action, proceeding
or investigation for which a claim of indemnification is made against the Seller
under this Section 5.01 (in which case the Seller 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 Seller'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 Seller shall bear the reasonable fees, costs and expenses of
such separate counsel if (i) the use of counsel chosen by the Seller 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 Seller 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
Seller, (iii) the Seller 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
Seller shall authorize the Indemnified Person to employ separate counsel at the
expense of the Seller. Notwithstanding the foregoing, the Seller 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 Seller
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 this Section 5.01 (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.
16
(j) The remedies of the Note Issuer, the Noteholders and
the Certificateholders provided in this Agreement are each such Person's sole
and exclusive remedies against the Seller for breach of its representations and
warranties in this Agreement.
Section 5.02. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, SELLER. Any Person (a) into which the Seller may be merged or
consolidated, (b) that may result from any merger or consolidation to which the
Seller shall be a party or (c) that may succeed to the properties and assets of
the Seller substantially as a whole, which Person in any case described in the
foregoing clause (c) executes an agreement of assumption to perform every
obligation of the Seller hereunder, shall be the successor to the Seller under
this Agreement without further act on the part of any of the parties to this
Agreement; provided, however, that (i) if the Seller is the Servicer, 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
Seller shall have delivered to the Note Issuer and the Note Trustee an Officer's
Certificate stating that such consolidation, merger or succession and such
agreement of assumption comply with this Section and that all conditions
precedent, if any, provided for in this Agreement relating to such transaction
have been complied with, (iii) the Seller shall have delivered to the Note
Issuer and the Note 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 Seller, including filings
with the DTE pursuant to the Statute and under the applicable UCC, have been
executed and filed that are necessary to preserve and protect fully the
interests of the Note Issuer and the Note Trustee in the Transition 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 Seller substantially as a whole and becomes the
successor to the Seller in accordance with the terms of this Section 5.02 and
execution by such successor of an agreement of assumption to perform every
obligation of the Seller hereunder, then upon satisfaction of all of the other
conditions of this Section 5.02, the Seller shall automatically and without
further notice be released from all of its obligations hereunder, except with
respect to any acts or omissions of the Seller that occurred prior to such
assumption.
Section 5.03. LIMITATION ON LIABILITY OF SELLER AND OTHERS. The
Seller and any director, officer, employee or agent of the Seller may rely in
good faith on the advice of counsel or on any document of any kind, prima facie
properly executed and submitted by any Person, respecting any matters arising
hereunder.
ARTICLE 6
MISCELLANEOUS PROVISIONS
Section 6.01. AMENDMENT. This Agreement may be amended by the Seller
and the Note Issuer, with ten Business Days' prior written notice given to the
Rating Agencies and the prior written consent of the Note Trustee, but without
the consent of any of the Noteholders, 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 Noteholders;
provided, however, that
17
such action shall not, as evidenced by an Officer's Certificate delivered to the
Note Issuer and the Note Trustee, adversely affect in any material respect the
interests of any Noteholder.
This Agreement may also be amended from time to time by the Seller and
the Note Issuer, with ten Business Days' prior written notice given to the
Rating Agencies and the prior written consent of the Note Trustee and the prior
written consent of the Holders of Notes evidencing not less than a majority of
the Outstanding Amount of the Notes affected thereby, 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 Noteholders.
It shall not be necessary for the consent of Noteholders pursuant to
this Section to approve the particular form of any proposed amendment or
consent, but it shall be sufficient if such consent shall approve the substance
thereof.
Prior to the execution of any amendment to this Agreement, the Note
Trustee shall be entitled to receive and rely upon an Opinion of Counsel stating
that the execution of such amendment is authorized or permitted by this
Agreement. The Note Trustee may, but shall not be obligated to, enter into any
such amendment which affects the Note Trustee's own rights, duties or immunities
under this Agreement or otherwise.
The Note Issuer shall provide a copy of any amendment to this Agreement
to the Rating Agencies and the Note Trustee promptly after the execution
thereof.
Section 6.02. 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:
18
Section 6.03.
(a) if to the Seller, to
Western Massachusetts Electric Company
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
Email: xxxxxxx@xx.xxx
(b) if to the Note Issuer, to
WMECO Funding LLC
x/x Xxxxxxx Xxxxxxxxxxxxx Electric Company
000 Xxxxx Xxxx Xxxxxx
Xxxx Xxxxxxxxxxx, XX 00000
Attention: Assistant Treasurer-Finance
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Email: xxxxxxx@xx.xxx
with a copy to:
Western Massachusetts Electric Company
c/o Northeast Utilities Service Company
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Assistant Treasurer-Finance
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Email: xxxxxxx@xx.xxx
(c) if to the Note Trustee, to
The Bank of New York, as trustee
000 Xxxxxxx Xxxxxx
Xxxxx 00 Xxxx
Xxx Xxxx, XX 00000
Attention: ABS Unit
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
19
(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
Email: xxxx@xxxxxxxxxxxx.xxx
(g) if to the Agencies, to:
Massachusetts Development Finance Agency
00 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: General Counsel
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
and
Massachusetts Health and Educational Facilities
Authority
00 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000
Attention: General Counsel
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
20
(h) if to the Certificate Issuer, to:
The Bank of New York (Delaware), as Delaware Trustee
for Massachusetts RRB Special Purpose Trust WMECO-1
Xxxxx Xxxx Center
Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attention:
Facsimile: (___) ____-____
Telephone: (___) ____-____
with a copy 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
(with copies to the Agencies at the addresses listed
herein)
(i) as to each of the foregoing, at such other address as
shall be designated by written notice to the other parties.
Section 6.04. ASSIGNMENT. Notwithstanding anything to the contrary
contained herein, except as provided in Section 5.02, this Agreement may not be
assigned by the Seller.
Section 6.05. LIMITATIONS ON RIGHTS OF THIRD PARTIES. The provisions
of this Agreement are solely for the benefit of the Seller, the Note Issuer, the
Noteholders, the Certificateholders, the Note Trustee, the Certificate Trustee,
the Delaware Trustee, The Commonwealth of Massachusetts, the Executive Office
for Administration and Finance of The Commonwealth of Massachusetts, the
Agencies, the Certificate Issuer 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 Noteholders and the Certificateholders shall
be entitled to enforce their rights against the Seller under this Agreement
solely through a cause of action brought for their benefit by the Note Trustee
or the Certificate Trustee, as the case may be. 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 Transition Property or under or
in respect of this Agreement or any covenants, conditions or provisions
contained herein.
Section 6.06. 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
21
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 6.07. 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 6.08. 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 6.09. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of The Commonwealth of Massachusetts,
without reference to its conflict of law provisions, and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws.
Section 6.10. ASSIGNMENT TO NOTE TRUSTEE. The Seller hereby
acknowledges and consents to any Grant of a Lien by the Note Issuer to the Note
Trustee pursuant to the Note Indenture for the benefit of the Noteholders and
the Note Trustee of all right, title and interest of the Note Issuer in, to and
under the Transition Property and the proceeds thereof and the assignment of any
or all of the Note Issuer's rights and obligations hereunder to the Note
Trustee.
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IN WITNESS WHEREOF, the parties hereto have caused this Transition
Property Purchase and Sale Agreement to be duly executed under seal by their
respective officers as of the day and year first above written.
WMECO FUNDING LLC,
Note Issuer
By:
--------------------------------------
Name: Xxxxx X. Xxxxx
Title: President
WESTERN MASSACHUSETTS ELECTRIC
COMPANY,
Seller
By:
--------------------------------------
Name: Xxxxx X. Xxxxx
Title: Assistant Treasurer - Finance
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