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PSNH FUNDING LLC 2,
as Issuer
and
THE BANK OF NEW YORK,
as Trustee
__________________________________________________
FEE AND INDEMNITY AGREEMENT
Dated as of January __, 2002
__________________________________________________
TABLE OF CONTENTS
Page
Section 1. Payment of Fees and Expenses of Trustee; Paying Agent and
Resgistrar .................................................... 1
Section 2. Indemnity and Contribution .................................... 1
Section 3. Payment ....................................................... 4
Section 4. Notices ....................................................... 4
Section 5. Survival of Agreements ........................................ 5
Section 6. Nonpetition Covenant .......................................... 5
Section 7. Counterparts .................................................. 6
Section 8. GOVERNING LAW ................................................. 6
Section 9. Non-Consolidation ............................................. 6
FEE AND INDEMNITY AGREEMENT dated as of January __, 2002 (as amended or
restated from time to time, the "Agreement"), among PSNH Funding LLC 2, as
Issuer (the "Issuer") under the Indenture (the "Indenture") of even date
herewith, and THE BANK OF NEW YORK, as Trustee under the Indenture (the
"Trustee"). All capitalized terms used herein and not otherwise defined herein
shall have the meanings attributed to them in the Indenture.
Section 1 . Payment of Fees and Expenses of Trustee; Paying Agent and
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Registrar.
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(a) Subject to Section 3 hereof, the Issuer hereby covenants and
agrees to pay to the Trustee (or any successor trustee) from time to time
reasonable compensation for its services under the Indenture and to reimburse it
for its reasonable expenses incurred in connection therewith, it being
understood that the Trustee shall have no recourse against the Bonds or the
payments thereon and proceeds thereof, for payment of such amounts. Subject to
the provisions of the Indenture, the Trustee shall have a lien against the RRB
Property to secure payment of such amounts to the extent provided in the Statute
or the finance order issued pursuant thereto. The Issuer's obligations to make
payments of such amounts to the Trustee shall be subject to the priorities set
forth in Section 8.02 of the Indenture.
(b) Subject to Section 3 hereof, the Issuer further covenants and
agrees to pay, or cause to be paid, from time to time to each Paying Agent and
Registrar reasonable compensation for its services and to reimburse it for its
reasonable expenses incurred in connection with such service, it being
understood that no Paying Agent or Registrar shall have any recourse against the
Bonds or the payments thereon and proceeds thereof, for payment of such amounts.
The appointment of any Paying Agent or Registrar Authorized shall be subject to
the approval of the Issuer.
(c) In addition, subject to Section 3 hereof, the Issuer covenants
and agrees to reimburse the Trustee for any tax incurred other than through
gross negligence, bad faith or willful misconduct on the part of the Trustee,
arising out of or in connection with the acceptance or administration of the
Collateral under the Indenture (other than any tax attributable to the 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, but subject to
the provisions of Section 3 hereof, if the Trustee shall have entered into a fee
agreement in writing with the Issuer with respect to the Trustee's compensation
for services under the Indenture, the terms of such fee agreement shall control
and the provisions of this Agreement shall not entitle the Trustee to greater
compensation than that due and owing pursuant to such fee agreement.
Section 2. Indemnity and Contribution.
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(a) Subject to Section 2(b), the Issuer hereby covenants and agrees
to indemnify, defend and hold harmless the Trustee, the Bondholders, 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 (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 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 execution, delivery or performance of the Indenture or the
transactions contemplated thereby, the failure of the 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 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 Bondholders may only exercise their rights and remedies hereunder through
the Trustee and no Bondholder shall have any right to pursue any cause of action
to enforce its rights and remedies hereunder except through the Trustee. The
obligations of the Issuer to indemnify the Indemnified Persons as provided
herein shall survive the termination, satisfaction or discharge of the Indenture
and the resignation or removal of the Trustee. The Indemnified Persons are
entitled to the benefit of this Agreement and shall have the right to enforce
the provisions hereof. Subject to the provisions of the Indenture, the
Indemnified Persons shall have a lien against the RRB Property to secure payment
of such Expenses to the extent provided in the Statute or the finance order
issued pursuant thereto. The Issuer's obligations to make payments of such
Expenses shall be subject to the priorities set forth in Section 8.02 of the
Indenture.
(b) The Issuer shall not be required to indemnify an Indemnified
Person for any amount paid or payable by such Indemnified Person pursuant to
Section 2(a) in the settlement of any action, proceeding or investigation
without the written consent of the 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 Issuer under Section 2(a), notify the Issuer in writing of such
involvement. Failure by an Indemnified Person to so notify the Issuer shall
relieve the Issuer from the obligation to indemnify and hold harmless such
Indemnified Person under Section 2(a), only to the extent that the 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 2(a), the Issuer shall be entitled
to assume the defense of any such action, proceeding or investigation. Upon
assumption by the 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 Issuer shall be
entitled to appoint counsel of the Issuer's choice at the Issuer's expense to
represent the Indemnified Person in any action, proceeding or investigation for
which a claim of indemnification is made against the
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Issuer under Section 2(a) (in which case the 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 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 Issuer shall bear the reasonable fees, costs and expenses of
such separate counsel if (i) the use of counsel chosen by the 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 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
Issuer, (iii) the 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
Issuer shall authorize the Indemnified Person to employ separate counsel at the
expense of the Issuer. Notwithstanding the foregoing, the 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 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 2(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 2(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 2(a) is unavailable to or
insufficient to hold harmless an Indemnified Person for any reason, the Issuer
and such Indemnified Person agree to contribute to the aggregate Expenses to
which the Issuer and such Indemnified Person may be subject in such proportion
as is appropriate to reflect the relative benefits received by the Issuer and
such Indemnified Person, respectively, from the offering of the Bonds; 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 Bonds. If
the allocation provided by the immediately preceding sentence is unavailable for
any reason, the 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 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 Bonds. The Issuer and the Indemnified
Persons agree that it would not be just and
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equitable if contribution were determined by pro rata allocation or any other
method of allocation which does not take account of the equitable considerations
referred to above.
Section 3. Payment. All amounts owed by the Issuer to the Trustee, any
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Paying Agent or any Registrar under the Indenture shall be paid to the Trustee,
any Paying Agent or any Registrar, as appropriate, pursuant to the Indenture or,
if a fee agreement or fee schedule has been provided to the 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 Trustee, any Paying Agent or
any Registrar, as appropriate, until the Issuer is otherwise notified in writing
by the Trustee, such Paying Agent or such Registrar; provided however, 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
Issuer's obligations to make payments to it shall be subject to the priorities
set forth in Section 8.02 of the Indenture and the Issuer shall have no
obligation to make any payment except to the extent consistent with Section 8.02
of the Indenture. The Issuer hereby irrevocably directs the Trustee to pay such
amounts from monies on deposit in the Collection Account as provided pursuant to
Section 8.02 of the Indenture.
Section 4. Notices. Unless otherwise specifically provided herein, all
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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 Issuer, to:
PSNH Funding LLC 0
x/x Xxxxxx Xxxxxxx Xxxxxxx xx Xxx Xxxxxxxxx
if prior to April 1, 2002:
0000 Xxx Xxxxxx
Xxxxxxxxxx, XX 00000
if on or after April 1, 2002:
000 Xxxxx Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
E-Mail: xxxxxxx@xx.xxx (email)
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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
if to the Trustee, to:
The Bank of New York
0 Xxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: ABS Unit
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Section 5. Survival of Agreements. This Agreement shall terminate upon the
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payment and discharge of all Bonds; provided, however, that the agreements of
the Issuer and the Trustee set forth in Section 2 and Section 6 hereof shall
survive the termination of this Agreement or the resignation or removal of the
Trustee.
Section 6. Nonpetition Covenant. Notwithstanding any prior termination of
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this Agreement, but subject to the New Hampshire Public Utilities Commission'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 the Statute, the Trustee agrees that it shall not,
prior to the date which is one year and one day after the termination of the
Indenture with respect to the Issuer, acquiesce, petition or otherwise invoke or
cause the Issuer to invoke the process of any court or government authority for
the purpose of commencing or sustaining a case against the 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 Issuer or any
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substantial part of the property of the Issuer, or ordering the winding up of
the affairs of or the liquidation of the Issuer.
Section 7. Counterparts. This Agreement may be executed in one or more
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counterparts, each of which shall be an original and all of which taken together
shall constitute one and the same agreement.
Section 8. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
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WITH THE LAWS OF THE STATE OF NEW HAMPSHIRE 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 9. Non-Consolidation. The parties hereby acknowledge and agree
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that the Issuer and Public Service Company of New Hampshire shall not be
substantively consolidated, and that Public Service Company of New Hampshire
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 Public Service Company of New Hampshire of its obligations to indemnify
the Issuer pursuant to any other Basic Document, including without limitation
with respect to amounts paid by the Issuer to persons indemnified by it under
this Agreement, to the extent the 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 Issuer and the Trustee have caused this
Agreement to be duly executed by duly authorized officers, all as of the day and
year first above written.
PSNH FUNDING LLC 2,
as Issuer
By:
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Name: Xxxxx X. Xxxxx
Title: President
THE BANK OF NEW YORK,
as Trustee
By:
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Name:
Title:
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