EXHIBIT 10.4
EXECUTION COPY
FEE AND INDEMNITY AGREEMENT
This Fee and Indemnity Agreement (the "Fee and Indemnity Agreement"), dated
as of December 16, 1997, is among Bankers Trust (Delaware), as Delaware Trustee
under the Amended and Restated Declaration and Agreement of Trust (the "Trust
Agreement") of even date herewith (the "Delaware Trustee"), Bankers Trust
Company of California, N.A., as Certificate Trustee under the Trust Agreement
(the "Certificate Trustee"), SDG&E Funding LLC, as Note Issuer under the Note
Indenture (the "Note Issuer"), and California Infrastructure and Economic
Development Bank, as Originator under the Trust Agreement (the "Originator").
All capitalized terms used herein and not otherwise defined herein shall
have the meanings attributed to them in the Trust Agreement.
Section 1. Payment of Fees and Expenses of Certificate Trustee; Authorized
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Agents. (a) Subject to Section 4 hereof, the Note Issuer hereby covenants and
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agrees to pay to the Certificate Trustee (or any successor trustee) from time to
time reasonable compensation for its services under the Trust Agreement and to
reimburse it for its reasonable expenses (including, without limitation, legal
fees and expenses), all in accordance with Schedule A hereto, it being
understood that the Certificate Trustee shall have no recourse against the
Originator, the California State Treasurer's Office (the "STO") or the Trust
Property for payment of such amounts.
(b) In addition, subject to Section 4 hereof, the Note Issuer covenants and
agrees to reimburse the Certificate Trustee for any tax incurred without
negligence, bad faith or willful misconduct on its part, arising out of or in
connection with the acceptance or administration of the Trust under the Trust
Agreement (other than any tax attributable to the Certificate Trustee's
compensation for serving as such), including any costs and expenses incurred in
contesting the imposition of any such tax.
(c) 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, all in accordance with
Schedule A hereto, and no Authorized Agent shall have any recourse against the
Originator, the STO or the Trust Property for payment of such amounts. The
appointment of any Authorized Agent shall be subject to the approval of the
Originator and the Note Issuer.
(d) Notwithstanding anything herein to the contrary, if the Certificate
Trustee shall have entered into a fee agreement with the Trust with respect to
its compensation for services under the Trust Agreement, the terms of such fee
agreement shall control and the provisions of this Fee and Indemnity Agreement
shall not entitle the Certificate 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
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Issuer covenants and agrees to pay to the Delaware Trustee (or any successor
trustee) from time to time reasonable compensation for its services under the
Trust Agreement and to reimburse it for its reasonable expenses (including,
without limitation, legal fees and expenses), all in accordance with Schedule A
hereto, it being understood that the Delaware Trustee shall have no recourse
against the Originator, the STO or the Trust Property for payment of such
amounts.
(b) Notwithstanding anything herein to the contrary, if the Delaware
Trustee shall have entered into a fee agreement with the Trust with respect to
its compensation for services under the Trust Agreement, the terms of such other
fee agreement shall control and the provisions of this Fee and Indemnity
Agreement shall not entitle the Delaware Trustee to greater compensation than
that due and owing pursuant to such fee agreement.
Section 3. Indemnity. The Note Issuer hereby covenants and agrees to
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indemnify, defend and hold harmless the Delaware Trustee, the Certificate
Trustee, the Originator, the STO and any of their respective affiliates,
officers, directors, employees and agents (the "Indemnified Persons") from and
against any and all losses, claims, taxes, damages, expenses (including, without
limitation, 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 or termination of the Trust, the execution, delivery or
performance of the Trust Agreement or the transactions contemplated thereby, or
the failure of the Note Issuer to perform its obligations hereunder; provided,
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however, that the Note Issuer is not required to indemnify any Indemnified
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Person for any Expenses that result from the willful misconduct or gross
negligence of such Indemnified Person. The obligations of the Note Issuer to
indemnify the Indemnified Persons as provided herein shall survive the
termination of the Trust Agreement or
the resignation or removal of the Delaware Trustee or the Certificate Trustee.
Section 4. Payment. All amounts owed by the Note Issuer to the
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Certificate Trustee, the Delaware Trustee, any Authorized Agent, the STO and the
Originator under the Trust Agreement shall be paid to the Certificate Trustee,
the Delaware Trustee, any Authorized Agent, the STO or the Originator, as
appropriate, pursuant to the Indenture or, if a fee agreement or fee schedule
has been provided to the Note Issuer in which event payment shall be made in
accordance with said agreement or schedule until the Note Issuer is otherwise
notified by the Certificate Trustee, the Delaware Trustee, any Authorized Agent,
the STO or the Originator; provided 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 and the STO shall be subject to the priorities set forth in
Section 8.02 of the Indenture and the Note Issuer shall have no obligation to
make any payment except to the extent consistent with Section 8.02 of the
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(d) of the Note Indenture.
Section 5. Notices. Unless otherwise specifically provided herein, all
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notices, directions, consents and waivers required under the terms and
provisions of this Fee and Indemnity 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, telegram, telex, telemessage, telecopy,
telefax, cable or facsimile (confirmed by telephone or in writing in the case of
notice by telegram, telex, telemessage, telecopy, telefax, cable or facsimile)
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; provided, however, that such notices, directions, consents and waivers
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to the Delaware Trustee and/or Certificate Trustee shall be given by United
States first-class mail, overnight mail, courier service or facsimile:
if to the Originator, to:
California Infrastructure and Economic Development Bank
c/o California Trade and Commerce Agency
000 X Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxxxxxxx 00000
Attention: Executive Director
Facsimile: 000-000-0000
Telephone: 000-000-0000
if to the STO, to:
California State Treasurer's Xxxxxx
000 Xxxxxxx Xxxx, Xxxx 000
Xxxxxxxxxx, Xxxxxxxxxx 00000
Attention: Deputy Treasurer
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
if to the Delaware Trustee, to:
Bankers Trust (Delaware)
E.A. Delle Donne Corporate Center
Xxxxxxxxxx Building
0000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: President
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
if to the Certificate Trustee, to:
Bankers Trust Company of California, N.A.
c/o Bankers Trust Company
Corporate Trust and Agency Services
Four Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Finance Group
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
if to the Note Issuer, to:
SDG&E Fund LLC
000 Xxx Xxxxxx, Xxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: President
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
if to the Note Trustee, to:
Bankers Trust Company of California, N.A.
c/o Bankers Trust Company
Corporate Trust and Agency Services
Four Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Finance Group
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Section 6. Survival of Agreements. This Fee and Indemnity Agreement
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shall terminate upon the termination of the Trust and the payment and discharge
of all Certificates, provided, however, the agreements of the Note Issuer set
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forth in
Section 3 herein shall survive the termination of this Fee and Indemnity
Agreement or the resignation or removal of the Delaware Trustee or the
Certificate Trustee.
Section 7. Nonpetition Covenant. Notwithstanding any prior termination
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of this Fee and Indemnity Agreement, the Originator agrees that it 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 or
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 8. Counterparts. This Fee and Indemnity Agreement may be
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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 Fee and Indemnity Agreement shall be
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governed by and construed in accordance with the laws of the laws of the State
of California.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Originator, the Delaware Trustee, the
Certificate Trustee and the Note Issuer have caused this Fee and Indemnity
Agreement to be duly executed by duly authorized officers, all as of the day and
year first above written.
CALIFORNIA INFRASTRUCTURE AND
ECONOMIC DEVELOPMENT BANK,
as Originator
By: /s/ Xxxxxxxxxxx X. Xxxxxx
Name: Xxxxxxxxxxx X. Xxxxxx
Title: Chair
BANKERS TRUST (DELAWARE),
as Delaware Trustee
By: /s/ M. Xxxx Xxxxxxx
Name: M. Xxxx Xxxxxxx
Title: Assistant Secretary
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A., as
Certificate Trustee
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Vice President
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
SDG&E FUNDING LLC, as Note
Issuer
By: /s/ Xxxxxxx X. XxXxxxxxx
Name: Xxxxxxx X. XxXxxxxxx
Title: President and Chief
Executive Officer
Schedule A
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SCHEDULE OF FEES
for
$658,000,000
California Infrastructure and Economic
Development Bank Special
Purpose Trust SDG&E-1
Rate Reduction Certificates, Series 1997-1
Note Trustee and Certificate Trustee/1/
ANNUAL TRUST ADMINISTRATION FEES:
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A. Trustee, Registrar and Paying Agent $2,666.67/annum/2/
B. Tax Reporting (if required) $1,666.67/annum/3/
OUT-OF-POCKET EXPENSES:
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Wire Transfers (excluding monthly P&I $10.00/wire
distribution)
Investments $40.00/trade/4/
Delaware Trustee/1/
ANNUAL TRUST ADMINISTRATION FEES:
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A. Delaware Business Trustee $1,666.67/annum
B. Tax Reporting (if required) $1,666.67/annum/5/
OUT-OF-POCKET EXPENSES: Same as above.
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/1/ All upfront fees will be paid in full at closing and are not reflected
herein.
/2/ Fees do not include out-of-pocket expenses for the administration of the
trust and are payable upon closing or shortly thereafter. Typical out-of-
pocket expenses include photocopying, faxing, conference calls, overnight
mail, and travel. Expenses typically average $2,000 plus travel for one
administrative person attending a closing.
/3/ Fees charged during subsequent years of transaction (i.e., year 2 until
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maturity) for tax reporting without original issue discount.
/4/ Fees waived if Bankers Trust Company of California, N.A. has entered into a
Shareholder Servicing Agreement with one of the Money Market Funds chosen
or if Bankers Trust Company of California, N.A. is receiving a 12-b-1 fee.
/5/ Same as footnote 3.
