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BEC FUNDING LLC,
AS NOTE ISSUER
THE BANK OF NEW YORK,
IN ITS SEPARATE CAPACITY AS CERTIFICATE TRUSTEE
THE BANK OF NEW YORK (DELAWARE),
IN ITS SEPARATE CAPACITY AS DELAWARE TRUSTEE,
MASSACHUSETTS RRB SPECIAL PURPOSE TRUST BEC-1,
AS CERTIFICATE ISSUER
AND
MASSACHUSETTS DEVELOPMENT FINANCE AGENCY
ACTING JOINTLY WITH
MASSACHUSETTS HEALTH AND EDUCATIONAL FACILITIES AUTHORITY
AS SETTLORS
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FEE AND INDEMNITY AGREEMENT
DATED AS OF JULY 29, 1999
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FEE AND INDEMNITY AGREEMENT dated as of July 29, 1999 (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 July 28, 1999, 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 BEC-1, as Certificate Issuer (the
"Certificate Issuer" or the "Trust"), THE BANK OF NEW YORK, in its separate
capacity as Certificate Trustee (the "Certificate Trustee") under the
Certificate Indenture (the "Certificate Indenture") of even date herewith, and
BEC 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 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 and amounts owed to the Note Trustee and/or
the Delaware Trustee that have been or are to be paid by the Certificate Trustee
pursuant to Section 6.16 of the Certificate Indenture) incurred in connection
therewith, it being understood that the Certificate 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 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 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 for any tax incurred other than
through gross negligence, bad faith 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
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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 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 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, bad faith 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) The Note Issuer hereby covenants and agrees to indemnify, defend
and hold harmless the Delaware Trustee, the Certificate Trustee, the Certificate
holders, the Trust, the Agencies and any of their respective affiliates,
officers, directors, employees and agents (the "Indemnified Persons") from and
against any and all losses, claims, actions, suits, 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 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
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
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willful misconduct or gross negligence of such Indemnified Person and provided,
further that it is understood and agreed that the Certificate holders may only
exercise their rights and remedies hereunder through the Certificate Trustee and
no Certificate holder shall have any right to pursue any cause of action to
enforce its rights and remedies hereunder except through the Certificate
Trustee. For purposes of this indemnification, the references to the "Agencies"
shall include the Executive Office of Administration and Finance of The
Commonwealth of Massachusetts. 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) If the indemnity provided in paragraph (a) of this Section 3 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 Trust, any Authorized Agent or
the Agencies 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
Trust, any Authorized Agent or the Agencies, as appropriate, pursuant to the
Declaration of Trust 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 Trust, any Authorized Agent or the Agencies, as
appropriate, until the Note Issuer is otherwise notified by the Certificate
Trustee, the Delaware Trustee, the Trust, such Authorized Agent or such Agency;
provided, however, that
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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, 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,
if to the Agencies, to:
Massachusetts Development Finance Agency
75 Federal Street
Boston, MA 02110
Attention: General Counsel
Facsimile: (617) 727-8741
Telephone: (617) 451-2477
and
Massachusetts Health and Educational Facilities Authority
99 Summer Street
10th Floor
Boston, MA 02110
Attention: General Counsel
Facsimile: (617) 737-8366
Telephone: (617) 737-8377
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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 BEC-1
c/o The Bank of New York
101 Barclay Street
Floor 12 East
New York, NY 10286
Attention: Asset Backed Finance Unit
Facsimile: (212) 815-5544
Telephone: (212) 815-5286
with copies to the Agencies at the addresses listed herein.
if to the Delaware Trustee, to:
The Bank of New York (Delaware)
c/o The Bank of New York
101 Barclay Street
Floor 12 East
New York, NY 10286
Attention: Asset Backed Finance Unit
Facsimile: (212) 815-5544
Telephone: (212) 815-5286
if to the Certificate Trustee, to:
The Bank of New York
101 Barclay Street
Floor 12 East
New York, NY 10286
Attention: Asset Backed Finance Unit
Facsimile: (212) 815-5544
Telephone: (212) 815-5286
if to the Note Issuer, to:
BEC Funding LLC
800 Boylston Street, 35th Floor
Boston, Massachusetts 02199
Attention: Treasurer
Facsimile: (617) 424-2605
Telephone: (617) 369-6000
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if to the Note Trustee, to:
The Bank of New York
101 Barclay Street
Floor 12 East
New York, NY 10286
Attention: Asset Backed Finance Unit
Facsimile: (212) 815-5544
Telephone: (212) 815-5286
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 Massachusetts Department of Transportation
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 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 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 Boston Edison Company shall not be substantively
consolidated, and that Boston Edison 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 Boston Edison 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
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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.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the Agencies, the Delaware Trustee, the Certificate
Trustee and the Note 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/ David T. Slatery
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Name: David T. Slatery
Title: General Counsel
MASSACHUSETTS HEALTH AND EDUCATIONAL FACILITIES AUTHORITY,
as a Settlor
By: /s/ David J. MacKenzie
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Name: David J. MacKenzie
Title: General Counsel
THE BANK OF NEW YORK (DELAWARE),
in its separate capacity as Delaware Trustee
By: /s/ Cheryl L. Laser
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Name: Cheryl L. Laser
Title: Assistant Vice President
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
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THE BANK OF NEW YORK,
in its separate capacity as Certificate Trustee
By: /s/ Cheryl L. Laser
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Name: Cheryl L. Laser
Title: Assistant Vice President
BEC FUNDING LLC,
as Note Issuer
By: /s/ Emilie G. O'Neil
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Name: Emilie G. O'Neil
Title: Vice President
MASSACHUSETTS RRB SPECIAL PURPOSE TRUST BEC-1
By: THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
By: /s/ Cheryl L. Laser
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Name: Cheryl L. Laser
Title: Assistant Vice President
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