EXBIBIT 10.5
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
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FEE AND INDEMNITY AGREEMENT
Dated as of March 30, 2001
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Section 1. Payment of Fees and Expenses of Certificate Trustee;
Authorized Agents
Section 2. Payment of Fees and Expenses of Delaware Trustee
Section 3. Indemnity and Contribution
Section 4. Payment
Section 5. Notices
Section 6. Survival of Agreements
Section 7. Nonpetition Covenant
Section 8. Counterparts
Section 9. GOVERNING LAW
Section 10. Non-Consolidation
FEE AND INDEMNITY AGREEMENT dated as of March 30, 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 23, 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. The
foregoing shall not adversely affect the right of the Certificate 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 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 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. 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 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 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 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 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
▇▇ ▇▇▇ ▇▇▇▇▇▇
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Attention: Assistant Treasurer - Debt Management
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
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 ▇▇▇▇▇▇ Square
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Attention: Corporate Trust Administration
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to the Finance Authority at the addresses listed
herein.
if to the Delaware Trustee, the Certificate Trustee or the Note Trustee,
to:
First Union Trust Company, National Association
One ▇▇▇▇▇▇ Square
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Attention: Corporate Trust Administration
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Note Issuer, to:
CL&P Funding LLC
c/o The Connecticut Light and Power Company
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Attention: Treasurer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇@▇▇.▇▇▇
with a copy to:
The Connecticut Light and Power Company
if by U.S. Mail:
P.O. Box 270
Hartford, CT 06141-0270
if by courier:
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▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Treasurer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇@▇▇.▇▇▇
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 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.
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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: /S/ ▇▇▇▇▇▇ ▇.▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Treasurer of the State of
Connecticut
FIRST UNION TRUST COMPANY, NATIONAL
ASSOCIATION,
in its separate capacity as Delaware Trustee
By:
Name:
Title:
FIRST UNION TRUST COMPANY, NATIONAL
ASSOCIATION,
in its separate capacity as Certificate Trustee
By:
Name:
Title:
CL&P FUNDING LLC,
as Note Issuer
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
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: /S/ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Name: ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: VICE PRESIDENT