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EXECUTION COPY
BEC FUNDING LLC,
AS NOTE ISSUER
AND
MASSACHUSETTS RRB SPECIAL PURPOSE TRUST BEC-1,
AS CERTIFICATE ISSUER
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NOTE PURCHASE AGREEMENT
DATED AS OF JULY 29, 1999
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NOTE PURCHASE AGREEMENT (this "Agreement") dated as of July 29, 1999,
between BEC FUNDING LLC, a Delaware limited liability company (the "Note
Issuer"), and MASSACHUSETTS RRB SPECIAL PURPOSE TRUST BEC-1, a Delaware business
trust (the "Certificate Issuer ") formed under the Declaration of Trust.
RECITALS
A. Capitalized terms used herein without definition shall have the
meanings ascribed to them in that certain Note Indenture (the "Note Indenture"),
dated as of July 29, 1999, between Note Issuer and The Bank of New York, a New
York banking corporation, as trustee (the "Note Trustee"), which is incorporated
herein by this reference.
B. On the Issuance Date, and on the terms set forth herein, the Note
Issuer has agreed to sell to the Certificate Issuer and the Certificate Issuer
has agreed to purchase from the Note Issuer $725,000,000 in principal amount of
BEC Funding LLC Notes (the "Notes"), issued pursuant to the Note Indenture.
AGREEMENT
NOW, THEREFORE, on the terms and conditions set forth below and for
good and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the Note Issuer and the Certificate Issuer agree as follows:
1. SALE OF NOTES
a. Authorization of Notes.
On or before the Issuance Date, the Note Issuer shall have caused to be
authorized pursuant to the Note Indenture the issuance of the Notes in such
classes and principal amounts as set forth in Schedule 1(a) attached hereto and
incorporated herein by this reference.
b. Issuance and Purchase.
On the basis of the representations, warranties and covenants contained
in this Agreement and in the Note Indenture (collectively, the "Note Purchase
Documents"), and subject to the terms and conditions of the Note Purchase
Documents, the Note Issuer agrees to issue and sell to the Certificate Issuer,
and the Certificate Issuer agrees to purchase from the Note Issuer, the Notes
set forth in Schedule 1(a) hereto. The purchase price of each class of Notes is
set forth in Schedule 1(a) attached hereto, and the aggregate purchase price of
the Notes shall be an amount equal to the proceeds net of underwriting discounts
and commissions to the Certificate Issuer set forth in Schedule I to the
Underwriting Agreement dated as of July 22, 1999 (the "Underwriting Agreement"),
among Boston Edison Company, the Note Issuer and the underwriters named therein,
for whom Lehman Brothers Inc. and Goldman, Sachs & Co. are acting as
representatives.
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c. Delivery.
Delivery of, and payment of the purchase price for the Notes shall be
made by federal wire transfer of immediately available funds as early as
possible after 9:00 a.m. (E.S.T.) on the Issuance Date to an account designated
by the Note Issuer not later than the Business Day prior to the Issuance Date.
2. CONDITIONS PRECEDENT
The obligations of the Certificate Issuer to purchase the Notes under
this Agreement are subject to the satisfaction of each of the following
conditions:
a. All the representations and warranties of the Note Issuer
contained in this Agreement shall be true and correct in all material respects
on the Issuance Date with the same force and effect as if made on and as of the
Issuance Date.
b. Neither the Notes nor the Certificates shall have received
a lower rating by any Rating Agency than that on which the Notes or the
Certificates, respectively, were marketed.
c. The Certificate Trustee, on behalf of the Certificate
Issuer, shall have received on the Issuance Date an Officer's Certificate dated
the Issuance Date confirming the matters set forth in Sections 2(a) and 2(b).
d. The Certificate Trustee, on behalf of the Certificate
Issuer, shall have received a copy of the executed Note Indenture (certified by
an Authorized Officer of the Note Issuer) which shall have been entered into by
the Note Issuer and the Note Trustee.
e. The Note Issuer shall not have failed on or prior to the
Issuance Date to perform or comply in any material respect with any of the
agreements herein contained and required to be performed or complied with by the
Note Issuer on or prior to the Issuance Date.
3. REPRESENTATIONS AND WARRANTIES
To induce the Certificate Issuer to enter into this Agreement and to
purchase the Notes, the Note Issuer represents and warrants to the Certificate
Issuer on the date of this Agreement that the following statements are true and
correct:
a. The Note Issuer has been duly formed and is validly
existing and in good standing as a limited liability company under the laws of
the State of Delaware and has the limited liability power and authority to carry
on its business as described in the Registration Statement covering the Notes
(the "Registration Statement") and to own its properties, and is registered to
transact business in The Commonwealth of Massachusetts.
b. This Agreement has been duly authorized, executed and
delivered by the Note Issuer.
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c. The Note Indenture has been duly authorized by the Note
Issuer and, on the Issuance Date, will have been validly executed and delivered
by the Note Issuer. When the Note Indenture has been duly executed and delivered
by the Note Issuer, the Note Indenture will be a valid and binding agreement of
the Note Issuer, enforceable against the Note Issuer in accordance with its
terms except as (i) the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, reorganization, fraudulent transfer and other laws
relating to or affecting creditors' rights generally and (ii) the availability
of equitable remedies may be limited by equitable principles of general
applicability. On the Issuance Date, the Note Indenture will conform in all
material respects to the requirements of the Trust Indenture Act, and the rules
and regulations of the Commission applicable to an indenture which is qualified
thereunder.
d. The Notes have been duly authorized and, on the Issuance
Date, will have been validly executed and delivered by the Note Issuer. When the
Notes have been issued, executed and authenticated in accordance with the
provisions of the Note Indenture and delivered to and paid for by the
Certificate Issuer in accordance with the terms of this Agreement, the Notes
will be entitled to the benefits of the Note Indenture and will be valid and
binding obligations of the Note Issuer, enforceable in accordance with their
terms except as (i) the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, reorganization, fraudulent transfer and other laws
relating to or affecting creditors' rights generally and (ii) the availability
of equitable remedies may be limited by equitable principles of general
applicability.
e. No Default or Event of Default under the Note Indenture
would occur as a result of the sale of the Notes pursuant to the terms hereof.
f. The execution, delivery and performance of this Agreement
and the other Basic Documents by the Note Issuer, compliance by the Note Issuer
with all provisions hereof and thereof and the consummation of the transactions
contemplated hereby and thereby will not (i) require any consent, approval,
authorization or other order of, or qualification with, any court or
governmental body or agency (except such as has been obtained or may be required
under the laws of The Commonwealth of Massachusetts, the Statute, the Securities
Act, or the securities or blue sky laws of the various states), (ii) conflict
with or constitute a material breach of any of the terms or provisions of, or a
default under, the limited liability company agreement of the Note Issuer, (iii)
violate or conflict in any material respect with any applicable law or any rule,
regulation, judgment, order or decree of any court or any governmental body or
agency having jurisdiction over the Note Issuer or its property, (iv) result in
the imposition or creation of a lien under, any agreement or instrument to which
the Note Issuer is a party or by which the Note Issuer or its respective
property is bound, except as may be created or imposed under the Basic Documents
and any statutory lien under Section 1H(e) of the Statute.
g. To the best knowledge of the Note Issuer, there are no
legal or governmental proceedings pending or threatened to which the Note Issuer
is or reasonably could be a party or to which any of its property is or
reasonably could be subject, which might result, singly or in the aggregate, in
a material adverse effect on the enforceability of the Notes.
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h. The Note Issuer is not and, after giving effect to the
offering and sale of the Notes and the application of the net proceeds thereof
as described in the Registration Statement, will not be, an "investment
company," as such term is defined in the Investment Company Act of 1940, as
amended.
i. The Note Issuer is not and, after giving effect to the
offering and sale of the Notes and the application of the net proceeds thereof
as described in the Registration Statement, will not be, a "holding company," as
such term is defined in the Public Utilities Holding Company Act of 1935, as
amended.
j. The Note Issuer has not taken any action that might cause
this Agreement or the issuance or sale of the Notes to violate Regulation T (12
C.F.R. Part 220), Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R.
Part 224) of the Board of Governors of the Federal Reserve System.
k. Since the date as of which information is given in the
Registration Statement and other than as set forth in the Registration Statement
(exclusive of any amendments or supplements thereto subsequent to the date of
this Agreement), (i) there has not occurred any material adverse change in the
assets, business, management or operations of the Note Issuer and (ii) other
than the Notes and as contemplated by the Basic Documents, the Note Issuer has
not incurred any material liability or obligation, direct or contingent.
4. COVENANTS
The Note Issuer covenants and agrees that, until payment in full of the
Notes, unless the Delaware Trustee, on behalf of the Certificate Issuer, shall
otherwise give prior written consent, the Note Issuer shall perform all
covenants in this Section 4.
a. To advise the Delaware Trustee, as the representative of
the Certificate Issuer, the Agencies and the Certificate Trustee promptly and,
if requested by the Delaware Trustee, on behalf of the Certificate Issuer, the
Agencies or the Certificate Trustee, confirm such advice in writing, of the
issuance by the Commission or any state securities commission of any stop order
or an order suspending the qualification or exemption from qualification of any
Note or Certificate for offering or sale in any jurisdiction in which the
Certificates have been offered or the initiation of any proceeding by the
Commission, any state securities commission or any other federal or state
regulatory authority for such purpose. The Note Issuer shall use its best
efforts to prevent the issuance of any stop order or order suspending the
qualification or exemption of any Note or Certificate under the Securities Act,
or any state securities or blue sky laws and, if at any time the Commission or
any state securities commission or other federal or state regulatory authority
shall issue a stop order or an order suspending the qualification or exemption
of any Note or Certificate under the Securities Act or any state securities or
blue sky laws, the Note Issuer shall use its reasonable efforts to obtain the
withdrawal or lifting of such order at the earliest possible time.
b. To the extent permitted by applicable law, not to claim
voluntarily the benefit of any usury laws against the holders of any Notes. To
the extent permitted by applicable law, to
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resist actively any attempts to claim the benefit of any usury laws against the
holders of any Notes.
c. To use its best efforts to do and perform all things
required or necessary to be done and performed under this Agreement by it prior
to the Issuance Date and to satisfy all conditions precedent to the delivery of
the Notes.
d. At the written request of the Delaware Trustee on behalf of
the Certificate Issuer, the Agencies, or the Certificate Trustee, to provide, or
cause to be provided, to the Delaware Trustee as the representative of the
Certificate Issuer, the Agencies or the Certificate Trustee, as applicable, a
copy of any requested certificate, notice, opinion or other document delivered
by the Note Issuer to the Note Trustee pursuant to the terms of the Note
Indenture.
5. MISCELLANEOUS
a. Fees
The Note Issuer agrees to reimburse the Certificate Issuer, the
Certificate Trustee, the Delaware Trustee and the Agencies and their respective
officers, directors and each person, if any, who controls the Certificate
Issuer, the Certificate Trustee, the Delaware Trustee or the Agencies within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
for any and all fees and expenses (including without limitation the reasonable
fees and expenses of counsel) reasonably incurred by them in connection with
enforcing their rights under this Agreement (including, without limitation,
their respective rights under this Section 5(a)); provided, however, that the
Note Issuer's obligations pursuant to this Section 5(a) shall be treated as
Operating Expenses under the Note Indenture and shall be payable only to the
extent that funds are available for such Operating Expenses in the priority set
forth in Section 8.02(d) of the Note Indenture.
b. Effective Date of Agreement
This Agreement shall become effective upon the execution and delivery
of this Agreement by the parties hereto.
c. Survival of Representations and Agreements
All agreements, representations and warranties made herein shall
survive the execution and delivery of this Agreement and the purchase of the
Notes hereunder. Notwithstanding anything in this Agreement or implied by law to
the contrary, the agreements of the Note Issuer set forth in Section 5(a),
except as otherwise expressly provided therein, shall survive the payment of the
Notes and the termination of this Agreement.
d. Notice
Unless otherwise specifically provided herein, all notices, directions,
consents and waivers required under the terms and provisions of this Note
Purchase Agreement shall be in
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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
75 Federal Street
Boston, Massachusetts 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, Massachusetts 02110
Attention: General Counsel
Facsimile: (617) 737-8366
Telephone: (617) 737-8377
if to the Certificate Issuer, 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, New York 10286
Attention: Asset Backed Finance Unit
Facsimile: (212) 815-5544
Telephone: (212) 815-5286
(with copies to the Agencies at the addresses listed herein)
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if to the Certificate Trustee, to:
The Bank of New York
101 Barclay Street
Floor 12 East
New York, New York 10286
Attention: Asset Backed Finance Unit
Facsimile: (212) 815-5544
Telephone: (212) 815-5286
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, New York 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: President
Facsimile: (617) 424-2605
Telephone: (617) 369-6000
if to the Note Trustee, to:
The Bank of New York
101 Barclay Street
Floor 12 East
New York, New York 10286
Attention: Asset Backed Finance Unit
Facsimile: (212) 815-5544
Telephone: (212) 815-5286
e. Parties
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of the Note Issuer, the Note Trustee, the Certificate
Issuer, the Certificate Trustee, the Delaware Trustee, the Agencies, the
directors and officers of the Certificate Issuer, the Certificate Trustee, the
Delaware Trustee and the Agencies, any controlling persons referred to herein,
the directors,
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officers and any manager of the Note Issuer (not in their individual capacities
but in their respective capacities as directors, officers or manager of the Note
Issuer) and their respective successors and assigns, all as and to the extent
provided in this Agreement, all of which Persons shall have rights of
enforcement with respect hereto, and no other Person shall acquire or have any
right under or by virtue of this Agreement, except as contemplated by the
Certificate Indenture and the other Basic Documents. The term "successors and
assigns" shall not include a purchaser of any of the Notes from the Certificate
Issuer merely because of such purchase.
f. Governing Law
This Agreement shall be governed by, and shall be construed and
enforced in accordance with, the internal laws of The Commonwealth of
Massachusetts, without regard to its conflict of laws principles.
g. Severability
If any provision of this Agreement shall be prohibited or invalid under
applicable law, the Agreement shall be ineffective only to such extent, without
invalidating the remainder of the Agreement.
h. Further Assurances
The Note Issuer agrees to execute and deliver such instruments and take
such actions as the Delaware Trustee on behalf of the Certificate Issuer, the
Agencies or the Certificate Trustee may, from time to time, reasonably request
in order to effectuate the purpose and to carry out the terms of this Agreement.
i. Headings
Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
j. Counterparts
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
k. Limitation of Liability.
It is expressly understood and agreed by the parties hereto that (a)
this Agreement is executed and delivered by The Bank of New York (Delaware), not
individually or personally but solely as Delaware Trustee on behalf of the
Certificate Issuer, in the exercise of the powers and authority conferred and
vested in it, (b) any representations, undertakings and agreements herein made
by the Delaware Trustee on behalf of the Certificate Issuer are made and
intended not as personal representations, undertakings and agreements by The
Bank of New York (Delaware) but are made and intended for the purpose of binding
only the Certificate Issuer, (c) nothing herein
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contained shall be construed as creating any liability on The Bank of New York
(Delaware), individually or personally, to perform any covenant either expressed
or implied contained herein, except in its capacity as Delaware Trustee, all
such liability, if any, being expressly waived by the parties who are
signatories to this Agreement and by any Person claiming by, through or under
such parties and (d) under no circumstances shall The Bank of New York
(Delaware) be personally liable for the payment of any indebtedness or expense
of the Certificate Issuer or be personally liable for the breach or failure of
any obligation, representation, warranty or covenant made or undertaken by the
Certificate Issuer under this Agreement; provided, however, that this provision
shall not protect The Bank of New York (Delaware) against any liability that
would otherwise be imposed by reason of willful misconduct, bad faith or gross
negligence in the performance of its obligations and duties under this
Agreement.
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IN WITNESS WHEREOF, the Note Issuer and the Certificate Issuer have
caused this Note Purchase Agreement to be duly executed by their respective
officer or trustee, all as of the day and year first above written.
BEC FUNDING LLC,
a Delaware limited liability company
/s/ Emilie G. O'Neil
By: ------------------------------------------------
Name: Emilie G. O'Neil
Title: Vice President and Treasurer
Massachusetts RRB
SPECIAL PURPOSE TRUST
BEC-1, a business
trust organized under
the laws of the State
of Delaware
By: THE BANK OF NEW YORK (DELAWARE), not in its
individual capacity, but solely as Delaware Trustee
/s/ Cheryl L. Laser
By: ------------------------------------------------
Name: Cheryl L. Laser
Title: Assistant vice President
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SCHEDULE 1(a)
NOTES
CLASS OF NOTES PRINCIPAL AMOUNT PURCHASE PRICE (%)
- -------------- ---------------- ------------------
A-1 $108,500,000 99.97799%
A-2 170,609,837 99.97574
A-3 103,390,163 99.97469
A-4 170,875,702 99.97071
A-5 171,624,298 99.93977
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Total: $725,000,000
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