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
__________________________________________________
FEE AND INDEMNITY AGREEMENT
Dated as of May 17, 2001
__________________________________________________
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 15, 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. Payment 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 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 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 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
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
000 Xxxxx Xxxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attention: Compliance
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
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)
700 Xxxxx Xxxx Center
Route 000
Xxxxxx, Xxxxxxxx 00000
Attention: Compliance
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
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
c/o Western Massachusetts 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.
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.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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: /s/Xxxx Xxxxx Xxxx
Name: Xxxx Xxxxx Xxxx
Title: General Counsel
MASSACHUSETTS HEALTH AND EDUCATIONAL FACILITIES
AUTHORITY, as a Settlor
By: /s/C.A. Xxxxx Xxxxxx
Name: C.A. Xxxxx Xxxxxx
Title: Director of Financing Programs
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
By: /s/Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: SVP
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
THE BANK OF NEW YORK,
as Certificate Trustee
By: /s/Xxxxxxxxx Xxxxx
Name: Xxxxxxxxx X. Xxxxx
Title: Assistant Vice President
THE BANK OF NEW YORK,
as Note Trustee
By: /s/Xxxxxxxxx Xxxxx
Name: Xxxxxxxxx X. Xxxxx
Title: Assistant Vice President
WMECO FUNDING LLC,
as Note Issuer
By: /s/Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: President
MASSACHUSETTS RRB SPECIAL PURPOSE TRUST WMECO-1
By: THE BANK OF NEW YORK (DELAWARE),
not in its individual capacity but solely
as Delaware Trustee
By: /s/Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: SVP
