EXHIBIT 10.7
INTER-CREDITOR AGREEMENT
INTER-CREDITOR AGREEMENT dated as of March 30, 2001 among CITICORP NORTH
AMERICA, INC., a Delaware corporation with an office at 000 Xxxxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 ("CNAI"), CITIBANK, N.A., a national banking
association with an office at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
(the "Bank") FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION, a national
banking association with an office at One Xxxxxx Square, 000 Xxxx Xxxxxx, 0xx
Xxxxx, Xxxxxxxxxx, Xxxxxxxx 00000-0000, not in its individual capacity, but
solely as Note Trustee under the Note Indenture (as hereinafter defined) (the
"Note Trustee"), CL&P RECEIVABLES CORPORATION, a Connecticut corporation,
with an office at 000 Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxx 00000-0000 ("CRC"),
CL&P FUNDING LLC, a Delaware limited liability company with an office at 000
Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxx 00000-0000 (the "Note Issuer"), and THE
CONNECTICUT LIGHT AND POWER COMPANY, a Connecticut corporation with an office
at 000 Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxx 00000-0000 ("CL&P").
WHEREAS, pursuant to the terms of that certain Purchase and Contribution
Agreement, dated as of September 30, 1997, as amended, between CL&P and CRC,
(said agreement as the same now exists and as it may hereafter be amended,
restated or modified, being the "PCA"), CL&P has sold or otherwise
transferred and may continue to sell or otherwise transfer to CRC certain of
its accounts receivable referred to therein as Receivables; and
WHEREAS, pursuant to the terms of that certain Receivables Purchase and
Sale Agreement, dated as of September 30, 1997, as amended and restated as of
March 30, 2001, among CL&P, CORPORATE ASSET FUNDING COMPANY, INC. (the
"Purchaser"), the Bank and CNAI, as agent (the "Agent") for the Purchasers
and the Banks (said agreement as the same now exists and as it may hereafter
from time to time be amended, restated or modified, being the "RPA"; certain
terms which are capitalized and used throughout this Agreement (in addition
to those defined herein) having the meanings ascribed thereto on this date in
the RPA), CRC has sold and may continue to sell interests in its Receivables
referred to as Receivable Interests to the Purchaser; and
WHEREAS, pursuant to the terms of that certain Transition Property
Purchase and Sale Agreement, dated as of March 30, 2001, between CL&P and the
Note Issuer (said agreement as the same now exists and as it may hereafter
from time to time be amended, restated or modified, being the "Sale
Agreement"), CL&P is selling to the Note Issuer certain assets known as
Transition Property which includes the RRB Charge (each as defined in the
Sale Agreement); and
WHEREAS, pursuant to the terms of that certain Note Indenture, dated as
of March 30, 2001, between the Note Issuer and the Note Trustee (said
indenture as the same now exists and as it may hereafter from time to time be
amended, restated or modified being the "Note Indenture"), the Note Issuer,
among other things, has granted to the Note Trustee a security interest in
certain of its assets to secure certain Notes issued pursuant to the Note
Indenture ("Notes"); and
WHEREAS, pursuant to the terms of that certain Declaration of Trust,
dated as of March 30, 2001, between the STATE OF CONNECTICUT, acting through
the office of the State Treasurer (the "Finance Authority"), and FIRST UNION
TRUST COMPANY, NATIONAL ASSOCIATION, as Delaware Trustee (the "Delaware
Trustee"; said declaration of trust as the same now exists and as it may
hereafter from time to time be amended, restated or modified being the
Declaration of Trust), the Finance Authority has created CONNECTICUT RRB
SPECIAL PURPOSE TRUST CL&P-1 (the "Certificate Issuer"); and
WHEREAS, pursuant to the terms of that certain Note Purchase Agreement,
dated as of March 30, 2001, between the Note Issuer and CONNECTICUT RRB
SPECIAL PURPOSE TRUST CL&P-1 (the "Certificate Issuer"; said agreement, as
the same now exists and as it may hereafter from time to time be amended,
restated or modified, being the "Note Purchase Agreement"), the Note Issuer
has agreed to issue and sell, and the Certificate Issuer has agreed to
purchase from the Note Issuer, the Notes; and
WHEREAS, pursuant to the terms of that certain Certificate Indenture,
dated as of March 30, 2001, among the Certificate Issuer, the Delaware
Trustee and FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION, as Certificate
Trustee (the "Certificate Trustee"; said indenture as the same now exists and
as it may hereafter from time to time be amended, restated and modified being
the "Certificate Indenture"), the Certificate Issuer has granted to the
Certificate Trustee all of its right, title and interest in the Notes
acquired pursuant to the Note Purchase Agreement and agreed to issue certain
Certificates representing fractional undivided beneficial interests in the
Notes and the proceeds thereof (the "Certificates"); and
WHEREAS, pursuant to the terms of that certain Transition Property
Servicing Agreement, dated as of March 30, 2001, between the Note Issuer and
CL&P, as servicer (said agreement being, as the same now exists and as it may
hereafter from time to time be amended, restated or modified, being the
"Servicing Agreement"), CL&P has agreed to provide for the benefit of the
Note Issuer servicing functions with respect to the collection of the RRB
Charge (as defined in the Servicing Agreement); and
WHEREAS, pursuant to the terms of the PCA and the RPA, CL&P has agreed
to provide for the benefit of CRC, the Purchasers and the Banks servicing
functions with respect to Collections related to Receivables and Receivable
Interests; and
WHEREAS, Collections with respect to Receivables and Receivable
Interests and collections with respect to the RRB Charge and related bank
accounts as to which the same may be deposited are the subject of the PCA,
the RPA, the Sale Agreement, the Note Indenture and the Servicing Agreement;
and
WHEREAS, the parties hereto wish to agree upon their respective rights
relating to such Collections, collections and bank accounts, as well as other
matters of common interest to them which arise under or result from the
coexistence of the PCA, the RPA, the Sale Agreement, the Note Indenture and
the Servicing Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
1. The Agent, the Bank and CRC hereby acknowledge the ownership
interest of the Note Issuer in the Transition Property including the RRB
Charge (the "Note Issuer Assets") and the security interest in favor of the
Note Trustee in such assets (the "Note Trustee Collateral"). The Note
Trustee, the Note Issuer and, by its signature below, the Certificate Trustee
hereby acknowledge the ownership interest of CRC, the Purchaser, the Banks
and the Agent in the Receivables and/or Receivable Interests, as the case may
be. The Agent, the Bank and CRC further acknowledge that, notwithstanding
anything in the RPA or the PCA to the contrary, none of the Agent, the Bank,
CRC or the Purchaser has any interest in the Note Issuer Assets or the Note
Trustee Collateral and each of the Note Trustee and the Note Issuer further
acknowledge that, notwithstanding anything in the Sale Agreement or the Note
Indenture to the contrary, it has no interest in the Receivables and the
Receivable Interests.
2. The Agent, the Bank, CRC and the Note Trustee acknowledge that
Collections relating to the Receivables and Receivable Interests shall be
initially deposited into one or more general accounts of CL&P (together, the
"Deposit Account") and that collections with respect to the RRB Charge will
also initially be deposited into the Deposit Account by CL&P as servicer
under the Servicing Agreement. The Note Trustee and the Note Issuer waive
any interest in deposits to the Deposit Account to the extent that they
relate to Collections on account of Receivables and Receivable Interests and
CRC, the Agent and the Bank waive any interest in deposits to the Deposit
Account to the extent that they relate to collections on account of the RRB
Charge. Without in any way derogating their respective security interests in
the proceeds of the RRB Charge or the Receivables or Receivable Interests, as
the case may be, or their rights referred to in Section 5 hereof, each of
CRC, the Agent, the Bank, the Note Issuer and the Note Trustee acknowledges
that it has no security interest in or claim to the Deposit Account as a
whole.
3. The Agent, the Bank and CRC hereby acknowledge that,
notwithstanding anything in the RPA or the PCA to the contrary, all
collections of the RRB Charge are, and will continue to be, property of the
Note Issuer pledged to the Note Trustee for the benefit of Noteholders (as
defined in the Note Indenture). Each of the Note Issuer and the Note Trustee
hereby acknowledge that, notwithstanding anything in the Sale Agreement or
the Note Indenture to the contrary, all Collections related to Receivables
and Receivable Interests, are, and will continue to be, the property of the
Purchaser and the Bank subject to the terms of the RPA and the PCA.
4. The acknowledgments contained in Paragraphs 1, 2 and 3 of this
Agreement are applicable irrespective of the time or order of attachment or
perfection of security or ownership interests or the time or order of filing
or recording of financing statements or mortgages.
5. The parties hereto recognize the existence of rights in favor
of the Note Issuer, the Note Trustee, the Certificate Trustee, CRC (assigned
to the Agent) and the Agent under the Note Indenture, the Servicing
Agreement, the Certificate Indenture, the PCA and the RPA, as the case may
be, to (i) replace CL&P as servicer under the Servicing Agreement, or under
the PCA and the RPA, as the case may be, and/or (ii) to take control over
Collections relating to Receivables and Receivable Interests and collections
relating to the RRB Charge by means, among other things, of notifying
customers of CL&P to stop making payments to CL&P on account of Receivables
and Receivable Interests or the RRB Charge, as the case may be, and to direct
that such payments be made to a Person or a lock-box or bank account selected
by the relevant party (whether by means of court ordered sequestration or
otherwise), in each case subject to the terms of this paragraph 5.
In the event that any of the Note Trustee, the Note Issuer, the
Certificate Trustee or the Agent is entitled to and desires (i) to exercise
its right to replace CL&P or its successor as servicer, the party desiring to
exercise such right will consult with the other with respect to the Person
who would replace CL&P or its successor and/or (ii) to exercise its rights
referred to in clause (ii) of the prior paragraph, any redirection of funds
will be either to (A) a replacement servicer agreed to by both the Note
Trustee and the Agent in accordance with the terms hereof or (B) to an
account designated by the Note Trustee or the Agent, as the case may be,
which shall be governed by the following.
Subject to satisfaction of the Rating Agency Condition (as defined
below) and the consent, if required by law or the Financing Order (as defined
in the Sale Agreement), of the Connecticut Department of Public Utility
Control, the Note Trustee and the Agent shall appoint an independent third
party (which shall be a financial institution having minimum capital of
$50,000,000 or a nationally-recognized, independent accounting firm) to (i)
allocate and remit funds from such account on a daily basis to the persons
entitled thereto, being the Note Trustee in the case of all collections
relating to the Note Issuer Assets and the Agent in the case of all
Collections relating to the Receivables and Receivable Interests, and (ii)
maintain records as to the amounts deposited into such account, the amounts
remitted therefrom and the allocation as provided in clause (i). The Note
Trustee, the Note Issuer and the Agent agree not to take any action to
contest or interfere with the actions of the independent third party provided
in the preceding clauses (i) or (ii); provided that, subject to the
foregoing, each such party reserves the right to require an accounting of
collections, allocations and remittances by the independent third party in
order to preserve the respective property rights recognized under this
Agreement. The parties hereto agree that such account shall meet the
requirements of an "Eligible Deposit Account," as such term is defined in the
Note Indenture and that such account shall be held for the benefit of the
Note Trustee and the Agent as their interests may appear.
If in accordance with the previous paragraph a replacement servicer
cannot be agreed upon within five Business Days, each of the Note Trustee and
the Agent at their own expense will appoint a Person to select a replacement
servicer for them and such Persons shall agree upon a replacement servicer.
Such replacement servicer shall be an "eligible" servicer which is a Person
(i) which is a financial institution having minimum capital of $50,000,000,
experienced in collecting utility company receivables and (ii) whose
appointment is subject to the Rating Agency Condition.
Anything in this Agreement to the contrary notwithstanding, any action
taken by either the Note Trustee or the Agent pursuant to this paragraph 5
shall be subject to the Rating Agency Condition and the consent, if required
by law, of the Regulatory Authority. For the purposes of this Agreement, the
Rating Agency Condition means, with respect to any such action, notification
to each rating agency then rating any class or series of the Notes or
Certificates, and the receipt of notification or other assurance acceptable
to the Note Trustee from each of Fitch and S&P (as defined in the Note
Indenture) that such action will not result in a reduction or withdrawal of
its then current rating of any class or series of Notes or Certificates and
as of the date of receipt of the last of such notifications or other
assurances from Fitch and S&P, Xxxxx'x (as defined in the Note Indenture) has
not taken any action to reduce or withdraw its rating of any class or series
of Notes or Certificates. The parties hereto acknowledge and agree that the
approval or the consent of the rating agencies which is required in order to
satisfy the Rating Agency Condition is not subject to any standard of
commercial reasonableness, and the parties are bound to satisfy this
condition whether or not the rating agencies are unreasonable or arbitrary.
6. The Agent, the Note Trustee, the Note Issuer and CL&P agree to
cooperate with each other and make available to each other or any replacement
servicer any and all records and other data relevant to the RRB Charge,
Receivables and Receivable Interests hereinabove mentioned which it may from
time to time receive from CL&P (or its successor) or, in the case of CL&P,
possess including, without limitation, any and all computer programs, data
files, documents, instruments, files and records and any receptacles and
cabinets containing the same.
7. Nothing herein contained shall be deemed as effecting a joint
venture among any of the Agent, CL&P, CRC, the Banks, the Purchaser, the Note
Issuer and the Note Trustee.
8. For the purpose of this Agreement only, the Agent and the Bank
hereby consent and agree to the method of calculation, allocation and
remittance of payments set forth in Section 4.03(a) of the Servicing
Agreement and irrevocably waive any right to object to or enjoin such payment
or allocation. Such consent and agreement shall not relieve CL&P or CRC of
any of its obligations to make payments in accordance with the terms of the
RPA and/or the PCA, as the case may be.
9. This Agreement shall terminate upon the payment in full of
either the Notes or the obligations under the RPA, except that the
understandings and acknowledgments contained in paragraphs 1, 2, 3 and 4
shall survive the termination of this Agreement.
10. CL&P and the Agent shall not cause or permit the PCA or the
RPA to be amended in any manner that would adversely affect the Note Issuer
Assets, the Notes or the holders thereof, without the prior written consent
of the Note Trustee. CL&P and the Note Trustee shall not cause or permit the
Note Indenture to be amended in any manner that would adversely affect the
Receivables, the Receivable Interests, the Agent, the Purchasers or the
Banks, without the prior written consent of the Agent.
11. This Agreement shall be governed by the laws of the State of
New York.
12. The Agent, the Bank, CL&P, CRC, the Purchaser, the Note Issuer
and the Note Trustee agree to execute any and all agreements, instruments,
financing statements, releases and any and all other documents reasonably
requested by the other in order to effectuate the intent of this Agreement.
In each case where a release is to be given pursuant to this Agreement, the
term release shall include any documents or instruments necessary to effect a
release, as contemplated by this Agreement. All releases, subordinations and
other instruments submitted to the executing party are to be prepared at no
expense to such party.
13. This Agreement is solely for the benefit of the Agent, the
Bank, CL&P, the Note Issuer, the Purchasers, the Note Trustee for the benefit
of the Noteholders and the Certificate Trustee for the benefit of the
Certificateholders (as defined in the Certificate Indenture), and no other
person or entity shall have any rights, benefits, priority or interest under
or because of the existence of this Agreement.
14. This Agreement may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when
so executed and delivered shall be deemed to be an original and all of which
taken together shall constitute but one and the same instrument. Delivery of
an executed counterpart of a signature page to this Agreement by telecopier
shall be effective as delivery of a manually executed counterpart of this
Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the
date first above written.
CITICORP NORTH AMERICA, INC.,
as Agent
By: /S/ XXXXXX XXXXXX
Vice President
CITIBANK, N.A.
By: /S/ XXXXXX XXXXXX
Vice President
THE CONNECTICUT LIGHT AND POWER COMPANY
By: /S/ XXXXX X. XXXXX
NAME: XXXXX X. XXXXX
Title: TREASURER
FIRST UNION TRUST COMPANY, NATIONAL
ASSOCIATION, not in its individual
capacity but solely as Note Trustee
under the Note Indenture
By: /S/ W. XXXXXXX XXXXXX
Title: VICE PRESIDENT
CL&P FUNDING LLC
By: /S/ XXXXX X. XXXXX
NAME: XXXXX X. XXXXX
Title: PRESIDENT
CL&P RECEIVABLES CORPORATION
By: /S/XXXXX X. XXXXX
Title: TREASURER
ACKNOWLEDGED AND AGREED:
CONNECTICUT RRB SPECIAL PURPOSE TRUST
CL&P-1
By: First Union Trust Company, National Association,
not in its individual capacity, but solely as Delaware
Trustee under the Declaration of Trust
By: W. XXXXXXX XXXXXX
Title: VICE PRESIDENT
First Union Trust Company, National Association,
not in its individual capacity, but solely as Delaware
Trustee under the Certificate Indenture
By: W. XXXXXXX XXXXXX
Title: VICE PRESIDENT
First Union Trust Company, National Association,
not in its individual capacity but solely as Certificate
Trustee under the Certificate Indenture
By W. XXXXXXX XXXXXX
Title: VICE PRESIDENT
