================================================================================
CL&P FUNDING LLC,
AS NOTE ISSUER
FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION,
IN ITS SEPARATE CAPACITY AS CERTIFICATE TRUSTEE
FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION,
IN ITS SEPARATE CAPACITY AS DELAWARE TRUSTEE,
CONNECTICUT RRB SPECIAL PURPOSE TRUST CL&P-1,
AS CERTIFICATE ISSUER
AND
STATE OF CONNECTICUT
AS SETTLOR
--------------------------------------------------
FEE AND INDEMNITY AGREEMENT
DATED AS OF MARCH __, 2001
--------------------------------------------------
================================================================================
TABLE OF CONTENTS
PAGE
Section 1. Payment of Fees and Expenses of Certificate Trustee; Authorized Agents.........................1
Section 2. Payment of Fees and Expenses of Delaware Trustee...............................................2
Section 3. Indemnity and Contribution.....................................................................2
Section 4. Payment........................................................................................5
Section 5. Notices........................................................................................5
Section 6. Survival of Agreements.........................................................................7
Section 7. Nonpetition Covenant...........................................................................7
Section 8. Counterparts...................................................................................7
Section 9. GOVERNING LAW..................................................................................7
Section 10. Non-Consolidation..............................................................................7
i
FEE AND INDEMNITY AGREEMENT dated as of March __, 2001 (as amended or
restated from time to time, the "Agreement"), among FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION, in its separate capacity as Delaware Trustee (the
"Delaware Trustee") under the Declaration of Trust (the "Declaration of Trust"),
dated as of March __, 2001, the state of coNNecticut, acting through the office
of the State Treasurer (the "Finance Authority"), acting pursuant to Sections
16-245e through and including 16-245k (the "Statute") as Settlor under the
Declaration of Trust, CONNECTICUT RRB SPECIAL PURPOSE TRUST CL&P-1, as
Certificate Issuer (the "Certificate Issuer" or the "Trust"), FIRST UNION TRUST
COMPANY, NATIONAL ASSOCIATION, in its separate capacity as Certificate Trustee
(the "Certificate Trustee") under the Certificate Indenture (the "Certificate
Indenture") of even date herewith, and CL&P Funding LLC, as Note Issuer (the
"Note Issuer") under the Note Indenture (the "Note Indenture") of even date
herewith. All capitalized terms used herein and not otherwise defined herein
shall have the meanings attributed to them in the Certificate Indenture.
Section 1. PAYMENT OF FEES AND EXPENSES OF CERTIFICATE TRUSTEE;
AUTHORIZED AGENTS.
(a) Subject to Section 4 hereof, the Note Issuer hereby covenants and
agrees to pay to the Certificate Trustee (or any successor certificate trustee)
from time to time reasonable compensation for its services under 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 Certificate Trustee shall have no
recourse against the Finance Authority or against the Notes or the payments
thereon and proceeds thereof, for payment of such amounts, except as provided in
Section 8.02 of the Note Indenture. The Certificate 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
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 Finance
Authority 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 Finance Authority and the Note Issuer.
(c) In addition, subject to Section 4 hereof, the Note Issuer
covenants and agrees to reimburse the Certificate Trustee for any tax incurred
other than through gross negligence or willful misconduct on the part of the
Certificate Trustee, arising out of or in connection with the acceptance or
administration of the Trust Property under the Certificate Indenture (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.
(d) Notwithstanding anything herein to the contrary, if the
Certificate Trustee shall have entered into a fee agreement in writing with the
Certificate Issuer with respect to the Certificate Trustee's compensation for
services under the Certificate Indenture, the terms of such fee agreement shall
control and the provisions of this 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 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 Finance Authority or against the Notes or the payments thereon and
proceeds thereof, for payment of such amounts except as provided 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 Certificateholders, the Swap Counterparty, the Trust,
the State of Connecticut, the Finance Authority, the State Treasurer, agencies
of the State of Connecticut 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
-2-
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 or
termination of the Certificate Issuer, the execution, delivery or performance of
the Declaration of Trust 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 resignation or
removal of the Delaware 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
-3-
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
-4-
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 Delaware Trustee, the Swap Counterparty, the Trust, any
Authorized Agent or the Finance Authority under the Declaration of Trust or the
Certificate Indenture, as the case may be, shall be paid to the Certificate
Trustee, the Delaware Trustee, the Swap Counterparty, the Trust, any Authorized
Agent or the Finance Authority, 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
Delaware Trustee, the Swap Counterparty, the Trust, any Authorized Agent or the
Finance Authority, as appropriate, until the Note Issuer is otherwise notified
in writing by the Certificate Trustee, the Delaware Trustee, the Swap
Counterparty, the Trust, such Authorized Agent or such Finance Authority;
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 Finance Authority, to:
Office of the State Treasurer
00 Xxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Assistant Treasurer - Debt Management
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
-5-
if to the Certificate Issuer (or the Trust), to:
Connecticut RRB Special Purpose Trust CL&P-1
c/o First Union Trust Company, National Association
One Xxxxxx Square
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: [_____________]
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
with copies to the Finance Authority at the addresses listed
herein.
if to the Delaware Trustee or the Certificate Trustee, to:
First Union Trust Company, National Association
One Xxxxxx Square
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: [_____________]
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
if to the Note Issuer, to:
CL&P Funding LLC
c/o The Connecticut Light and Power Company
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Treasurer
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Email: xxxxxxx@xx.xxx
with a copy to:
The Connecticut Light and Power Company
if by U.S. Mail:
X.X. Xxx 000
Xxxxxxxx, XX 00000-0000 if by courier:
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Treasurer
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Email: xxxxxxx@xx.xxx
-6-
if to the Note Trustee, to:
First Union Trust Company, National Association
One Xxxxxx Square
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: [_____________]
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Section 6. SURVIVAL OF AGREEMENTS. This Agreement shall terminate upon
the termination of the Certificate Issuer and the payment and discharge of 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 Connecticut Department of Public Utility
Control'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
Finance Authority, the Certificate Issuer, the Delaware 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 CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF CONNECTICUT 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 The Connecticut Light and Power Company shall not be
substantively consolidated, and that The Connecticut Light and Power 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
-7-
relieve The Connecticut Light and Power 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]
-8-
IN WITNESS WHEREOF, the Finance Authority, the Delaware 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.
STATE OF CONNECTICUT, as Settlor
By:
-----------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Treasurer of the State of
Connecticut
FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION,
in its separate capacity as Delaware Trustee
By:
-----------------------------------------
Name:
Title:
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
S-1
FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION, in
its separate capacity as Certificate Trustee
By:
-----------------------------------------------
Name:
Title:
CL&P FUNDING LLC,
as Note Issuer
By:
-----------------------------------------------
Name:
Title:
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
By:
-----------------------------------------------
Name:
Title:
S-2
