P&D Draft
5/3/01
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WMECO FUNDING LLC,
AS NOTE ISSUER
THE BANK OF NEW YORK,
IN ITS SEPARATE CAPACITIES AS CERTIFICATE TRUSTEE AND NOTE TRUSTEE,
THE BANK OF NEW YORK (DELAWARE),
IN ITS SEPARATE CAPACITY AS DELAWARE TRUSTEE,
MASSACHUSETTS RRB SPECIAL PURPOSE TRUST WMECO-1,
AS CERTIFICATE ISSUER
AND
MASSACHUSETTS DEVELOPMENT FINANCE AGENCY
ACTING JOINTLY WITH
MASSACHUSETTS HEALTH AND EDUCATIONAL FACILITIES AUTHORITY
AS SETTLORS
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FEE AND INDEMNITY AGREEMENT
DATED AS OF MAY 17, 2001
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FEE AND INDEMNITY AGREEMENT dated as of May 17, 2001 (as amended or
restated from time to time, the "Agreement"), among THE BANK OF NEW YORK
(DELAWARE), in its separate capacity as Delaware Trustee (the "Delaware
Trustee") under the Declaration of Trust (the "Declaration of Trust"), dated as
of May 5, 2001, the Massachusetts Development Finance Agency and the
Massachusetts Health and Educational Facilities Authority (collectively herein,
the "Agencies"), acting jointly pursuant to Chapter 164 of the Massachusetts
Acts of 1997 (the "Statute") as Settlors under the Declaration of Trust,
MASSACHUSETTS RRB SPECIAL PURPOSE TRUST WMECO-1, as Certificate Issuer (the
"Certificate Issuer" or the "Trust"), THE BANK OF NEW YORK, in its separate
capacities as Certificate Trustee (the "Certificate Trustee") under the
Certificate Indenture (the "Certificate Indenture") of even date herewith and as
Note Trustee (the "Note Trustee") under the Note Indenture (the "Note
Indenture") of even date herewith, and WMECO Funding LLC, as Note Issuer (the
"Note Issuer") under the Note Indenture. All capitalized terms used herein and
not otherwise defined herein shall have the meanings attributed to them in the
Certificate Indenture and/or the Note Indenture, as applicable.
Section 1. OF FEES AND EXPENSES OF CERTIFICATE TRUSTEE AND NOTE
TRUSTEE; AUTHORIZED AGENTS.
(a) Subject to Section 4 hereof, the Note Issuer hereby
covenants and agrees to pay to the Certificate Trustee and the Note Trustee (or
any successor certificate trustee or note trustee) from time to time reasonable
compensation for their services under the Certificate Indenture or the Note
Indenture, as applicable, and to reimburse them for their reasonable expenses
(including without limitation reasonable legal fees and expenses) incurred in
connection therewith, it being understood that the Certificate Trustee and the
Note Trustee shall have no recourse against the Agencies or against the Notes or
the payments thereon and proceeds thereof, for payment of such amounts. The
foregoing shall not adversely affect the right of the Certificate Trustee or the
Note Trustee to receive payment of such amounts from amounts deposited in the
Collection Account (as defined in the Note Indenture) in the priorities
described in Section 8.02 of the Note Indenture. The Certificate Trustee and the
Note Trustee shall have a lien against the Transition Property to secure payment
of such amounts to the extent provided in the Statute or the financing order
issued pursuant thereto. The Note Issuer's obligations to make payments of such
amounts to the Certificate Trustee and the Note Trustee shall be subject to the
priorities set forth in Section 8.02 of the Note Indenture.
(b) Subject to Section 4 hereof, the Note Issuer further
covenants and agrees to pay, or cause to be paid, from time to time to each
Authorized Agent reasonable compensation for its services and to reimburse it
for its reasonable expenses incurred in connection with such service, it being
understood that no Authorized Agent shall have any recourse against the Agencies
or against the Notes or the payments thereon and proceeds thereof, for payment
of such amounts. The appointment of any Authorized Agent shall be subject to the
approval of the Agencies and the Note Issuer.
(c) In addition, subject to Section 4 hereof, the Note Issuer
covenants and agrees to reimburse the Certificate Trustee and the Note Trustee
for any tax incurred other than through negligence or willful misconduct on the
part of the Certificate Trustee or the Note Trustee, as applicable, arising out
of or in connection with the acceptance or administration of
the Trust Property under the Certificate Indenture or the Collateral under the
Note Indenture, as applicable (other than any tax attributable to the
Certificate Trustee's or Note Trustee's compensation for serving as such),
including any costs and expenses incurred in contesting the imposition of any
such tax.
(d) Notwithstanding anything herein to the contrary, if the
Certificate Trustee or the Note Trustee shall have entered into a fee agreement
in writing with the Certificate Issuer or the Note Issuer, as applicable, with
respect to the Certificate Trustee's compensation for services under the
Certificate Indenture or Note Indenture, as applicable, the terms of such fee
agreement shall control and the provisions of this Agreement shall not entitle
the Certificate Trustee or the Note Trustee to greater compensation than that
due and owing pursuant to such fee agreement.
Section 2. PAYMENT OF FEES AND EXPENSES OF DELAWARE TRUSTEE.
(a) The Note Issuer covenants and agrees to pay to the
Delaware Trustee (or any successor Delaware trustee) from time to time
reasonable compensation for its services under the Declaration of Trust and the
Certificate Indenture and to reimburse it for its reasonable expenses
(including, without limitation, reasonable legal fees and expenses) incurred in
connection therewith, it being understood that the Delaware Trustee shall have
no recourse against the Agencies or against the Notes or the payments thereon
and proceeds thereof, for payment of such amounts. The foregoing shall not
adversely affect the right of the Delaware Trustee to receive payment of such
amounts from amounts deposited in the Collection Account (as defined in the Note
Indenture) in the priorities described in Section 8.02 of the Note Indenture.
The Delaware Trustee shall have a lien against the Transition Property to secure
payment of such amounts to the extent provided in the Statute or the financing
order issued pursuant thereto. The Note Issuer's obligations to make payments of
such amounts to the Delaware Trustee shall be subject to the priorities set
forth in Section 8.02 of the Note Indenture.
(b) In addition, subject to Section 4 hereof, the Note Issuer
covenants and agrees to reimburse the Delaware Trustee for any tax incurred
other than through gross negligence or willful misconduct on the part of the
Delaware Trustee, arising out of or in connection with the acceptance or
administration of the Trust Property under the Declaration of Trust (other than
any tax attributable to the Delaware Trustee's compensation for serving as
such), including any costs and expenses incurred in contesting the imposition of
any such tax.
(c) Notwithstanding anything herein to the contrary, if the
Delaware Trustee shall have entered into a fee agreement in writing with the
Certificate Issuer with respect to its compensation for services under the
Declaration of Trust and the Certificate Indenture, the terms of such other fee
agreement shall control and the provisions of this Agreement shall not entitle
the Delaware Trustee to greater compensation than that due and owing pursuant to
such fee agreement.
Section 3. INDEMNITY AND CONTRIBUTION.
(a) Subject to Section 3(b), the Note Issuer hereby covenants
and agrees to indemnify, defend and hold harmless the Delaware Trustee, the
Certificate Trustee, the Note
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Trustee, the Certificateholders, the Trust, 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 (the
"Indemnified Persons") from and against any and all losses, claims, actions,
suits, taxes (other than taxes payable by such Indemnified Person attributable
to income or gain received by such Indemnified Person in connection with the
transactions contemplated in the Note Indenture and the Certificate Indenture),
damages, expenses (including, without limitation, reasonable legal fees and
expenses) and liabilities (including liabilities under state or federal
securities laws) of any kind and nature whatsoever (collectively, "Expenses"),
to the extent that such Expenses arise out of or are imposed upon or asserted
against such Indemnified Persons with respect to the creation, operation,
enforcement or termination of the Certificate Issuer, the execution, delivery or
performance of the Declaration of Trust, the Note Indenture or the Certificate
Indenture, as the case may be, or the transactions contemplated thereby, the
failure of the Note Issuer or any other Person (other than the Indemnified
Person being indemnified) to perform its obligations hereunder or under any of
the Basic Documents, or otherwise in connection with the Basic Documents or the
transactions contemplated thereby; provided, however, that the Note Issuer is
not required to indemnify any Indemnified Person for any Expenses that result
from the willful misconduct or gross negligence of such Indemnified Person and
provided further, that it is understood and agreed that the Certificateholders
may only exercise their rights and remedies hereunder through the Certificate
Trustee and no Certificateholder shall have any right to pursue any cause of
action to enforce its rights and remedies hereunder except through the
Certificate Trustee. The obligations of the Note Issuer to indemnify the
Indemnified Persons as provided herein shall survive the termination of the
Declaration of Trust, the termination, satisfaction or discharge of the
Certificate Indenture and the Note Indenture and the resignation or removal of
the Delaware Trustee, the Note Trustee or the Certificate Trustee. The
Indemnified Persons are entitled to the benefit of this Agreement and shall have
the right to enforce the provisions hereof. The Indemnified Persons shall have a
lien against the Transition Property to secure payment of such Expenses to the
extent provided in the Statute or the financing order issued pursuant thereto.
The Note Issuer's obligations to make payments of such Expenses shall be subject
to the priorities set forth in Section 8.02 of the Note Indenture.
(b) The Note Issuer shall not be required to indemnify an
Indemnified Person for any amount paid or payable by such Indemnified Person
pursuant to Section 3(a) in the settlement of any action, proceeding or
investigation without the written consent of the Note Issuer, 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 Note Issuer under Section 3(a), notify the Note Issuer
in writing of such involvement. Failure by an Indemnified Person to so notify
the Note Issuer shall relieve the Note Issuer from the obligation to indemnify
and hold harmless such Indemnified Person under Section 3(a), only to the extent
that the Note Issuer 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 Section 3(a), the Note Issuer shall be
entitled to assume the defense of any such action, proceeding or investigation.
Upon assumption by the Note Issuer 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 Note Issuer shall
be
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entitled to appoint counsel of the Note Issuer's choice at the Note Issuer's
expense to represent the Indemnified Person in any action, proceeding or
investigation for which a claim of indemnification is made against the Note
Issuer under Section 3(a) (in which case the Note Issuer 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 Note Issuer'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 Note Issuer shall bear the reasonable fees, costs and expenses
of such separate counsel if (i) the use of counsel chosen by the Note Issuer 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 Note Issuer 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 Note Issuer, (iii) the Note Issuer 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 Note Issuer shall authorize the Indemnified Person to
employ separate counsel at the expense of the Note Issuer. Notwithstanding the
foregoing, the Note Issuer 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 Note Issuer 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 Section 3(a)
(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. Indemnification under Section 3(a)
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.
(c) If the indemnity provided in Section 3(a) is unavailable
to or insufficient to hold harmless an Indemnified Person for any reason, the
Note Issuer and such Indemnified Person agree to contribute to the aggregate
Expenses to which the Note Issuer and such Indemnified Person may be subject in
such proportion as is appropriate to reflect the relative benefits received by
the Note Issuer and such Indemnified Person, respectively, from the offering of
the Certificates and the Notes; provided, however, that in no case shall any
Indemnified Person be responsible for any amount in excess of the fees or other
amounts received by such Indemnified Person in connection with the Basic
Documents and the issuance of the Notes and the Certificates. If the allocation
provided by the immediately preceding sentence is unavailable for any reason,
the Note Issuer and the Indemnified Person shall contribute in such proportion
as is appropriate to reflect not only such relative benefits but also the
relative fault of the Note Issuer and such Indemnified Person, respectively, in
connection with the actions or omissions giving rise to such Expenses as well as
any other relevant equitable considerations; provided, however, that in no case
shall any Indemnified Person be responsible for any amount in excess of the fees
or other amounts received by such Indemnified Person in connection with the
Basic Documents and the issuance of the Notes and the Certificates. The Note
Issuer and the Indemnified Persons agree that it would not be just and equitable
if contribution were determined
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by pro rata allocation or any other method of allocation which does not take
account of the equitable considerations referred to above.
Section 4. PAYMENT. All amounts owed by the Note Issuer to the
Certificate Trustee, the Note Trustee, the Delaware Trustee, the Trust, any
Authorized Agent or the Agencies under the Declaration of Trust, the Note
Indenture or the Certificate Indenture, as the case may be, shall be paid to the
Certificate Trustee, the Note Trustee, the Delaware Trustee, the Trust, any
Authorized Agent or the Agencies, as appropriate, pursuant to the Declaration of
Trust, the Note Indenture or the Certificate Indenture, as the case may be, or,
if a fee agreement or fee schedule has been provided to the Note Issuer, payment
shall be made in accordance with said agreement or schedule, or if not otherwise
provided, such amount shall be paid directly to the Certificate Trustee, the
Note Trustee, the Delaware Trustee, the Trust, any Authorized Agent or the
Agencies, as appropriate, until the Note Issuer is otherwise notified in writing
by the Certificate Trustee, the Note Trustee, the Delaware Trustee, the Trust,
such Authorized Agent or such Agency; provided, however, that notwithstanding
anything to the contrary in this Agreement or in any fee agreement or fee
schedule, not later than 30 days following the selection of a successor Delaware
Trustee pursuant to the provisions of Section 4.7 of the Declaration of Trust,
the Note Issuer shall pay to the appropriate parties all amounts described in
this Section 4 which have accrued through the date of selection of such
successor Delaware Trustee; and, provided further, that notwithstanding anything
to the contrary in this Agreement or in any fee agreement or fee schedule, each
of the parties to this Agreement agrees that the Note Issuer's obligations to
make payments to it shall be subject to the priorities set forth in Section 8.02
of the Note Indenture and the Note Issuer shall have no obligation to make any
payment except to the extent consistent with Section 8.02 of the Note Indenture.
The Note Issuer hereby irrevocably directs the Note Trustee to pay such amounts
from monies on deposit in the Collection Account as provided pursuant to Section
8.02 of the Note Indenture.
Section 5. 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,
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
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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
if to the Certificate Issuer (or the Trust), to:
The Bank of New York (Delaware), as Delaware Trustee for the
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.
if to the Delaware Trustee, to:
The Bank of New York (Delaware)
Xxxxx Xxxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attention:
Facsimile: (___) ___-____
Telephone: (___) ___-____
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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
if to the Certificate Trustee or 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
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
Section 6. SURVIVAL OF AGREEMENTS. This Agreement shall terminate upon
the termination of the Certificate Issuer and the payment and discharge of all
Notes and all Certificates; provided, however, that the agreements of the Note
Issuer set forth in Sections 3 and 7 hereof shall survive the termination of
this Agreement or the resignation or removal of the Delaware Trustee, the
Certificate Trustee or the Note Trustee.
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Section 7. NONPETITION COVENANT. Notwithstanding any prior termination
of this Agreement, but subject to the Massachusetts Department of
Telecommunications and Energy'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
debtor, pledgor or transferor of the Transition Property pursuant to the
Statute, the Agencies, the Certificate Issuer, the Delaware Trustee, the Note
Trustee and the Certificate Trustee agree that they shall not, prior to the date
which is one year and one day after the termination of the Note Indenture with
respect to the Note Issuer, acquiesce, 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 of the affairs of or the liquidation of the Note
Issuer.
Section 8. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be an original and all of which taken together
shall constitute one and the same agreement.
Section 9. 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 10. NON-CONSOLIDATION. The parties hereby acknowledge and agree
that the Note Issuer and Western Massachusetts Electric Company shall not be
substantively consolidated, and that Western Massachusetts Electric Company
shall have no liability or obligation of any kind with respect to this
Agreement; provided, however, that this provision shall not be interpreted to
relieve Western Massachusetts Electric Company of its obligations to indemnify
the Note Issuer pursuant to any other Basic Document, including without
limitation with respect to amounts paid by the Note Issuer to persons
indemnified by it under this Agreement, to the extent the Note Issuer would
otherwise be entitled to indemnification with respect to such amounts under such
other Basic Document.
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IN WITNESS WHEREOF, the Agencies, the Delaware Trustee, the Note
Trustee, the Certificate Trustee, the Note Issuer and the Certificate Issuer
have caused this Agreement to be duly executed by duly authorized officers, all
as of the day and year first above written.
MASSACHUSETTS DEVELOPMENT FINANCE
AGENCY, as a Settlor
By:
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Name:
Title:
MASSACHUSETTS HEALTH AND
EDUCATIONAL FACILITIES AUTHORITY, as
a Settlor
By:
-------------------------------------
Name:
Title:
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
By:
-------------------------------------
Name:
Title:
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
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THE BANK OF NEW YORK,
as Certificate Trustee
By:
-------------------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Note Trustee
By:
-------------------------------------
Name:
Title:
WMECO FUNDING LLC,
as Note Issuer
By:
-------------------------------------
Name:
Title:
MASSACHUSETTS RRB SPECIAL PURPOSE
TRUST WMECO-1
By: THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
By:
-------------------------------------
Name:
Title:
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