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EXECUTION COPY
MASSACHUSETTS RRB SPECIAL PURPOSE TRUST BEC-1
RATE REDUCTION CERTIFICATES
BEC FUNDING LLC
BOSTON EDISON COMPANY
UNDERWRITING AGREEMENT
New York, New York
July 22, 1999
To the Representatives named in Schedule I
hereto of the Underwriters named in
Schedule II hereto
Ladies and Gentlemen:
1. Introduction. Massachusetts RRB Special Purpose Trust BEC-1, a
Delaware business trust to be formed (the "Trust"), will sell to the
underwriters named in Schedule II hereto (the "Underwriters"), for whom you (the
"Representatives") are acting as representatives, the principal amount of
Massachusetts RRB Special Purpose Trust BEC-1 Rate Reduction Certificates
identified in Schedule I hereto (the "Certificates"). If the firm or firms
listed in Schedule I hereto include only the firm or firms listed in Schedule II
hereto, then the terms "Underwriters" and "Representatives," as used herein,
shall each be deemed to refer to such firm or firms.
The Trust will be formed pursuant to a Declaration of Trust to be dated
prior to the Closing Date (as hereinafter defined) (the "Declaration of Trust"),
by The Bank of New York (Delaware), as Delaware Trustee (the "Delaware
Trustee"), and the Massachusetts Development Finance Agency and the
Massachusetts Health and Educational Facilities Authority (each an "Agency,"
and, collectively, the "Agencies"), acting jointly as settlors thereunder
pursuant to Chapter 164 of the Massachusetts Acts of 1997 (the "Statute"). The
Certificates will be issued pursuant to a Certificate Indenture dated as of July
29, 1999 (the "Certificate Indenture"), between the Trust, the Delaware Trustee
and The Bank of New York, as Certificate Trustee (the "Certificate Trustee").
The assets of the Trust will consist solely of the BEC Funding LLC Notes (the
"Notes"), issued by BEC Funding LLC, a Delaware limited liability company (the
"Note
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Issuer"), and the payments received with respect thereto. The Notes will be
issued pursuant to a Note Indenture dated as of July 29, 1999 (the "Note
Indenture"), between the Note Issuer and The Bank of New York, as Note Trustee
(the "Note Trustee"), and purchased by the Trust pursuant to a Note Purchase
Agreement dated as of July 29, 1999 (the "Note Purchase Agreement"), between the
Note Issuer and the Trust. Each Class of Certificates will correspond to a Class
of Notes and will represent fractional undivided beneficial interests in such
underlying Class of Notes and the proceeds thereof. The Notes will be secured
primarily by, and will be payable from, the Transition Property described in the
Issuance Advice Letter. Such Transition Property will be sold to the Note Issuer
by Boston Edison Company, a Massachusetts corporation (the "Company"), pursuant
to a Transition Property Purchase and Sale Agreement dated as of July 29, 1999
(the "Sale Agreement"), between the Company, as Seller, and the Note Issuer. The
Transition Property will be serviced pursuant to a Transition Property Servicing
Agreement dated as of July 29, 1999 (as amended and supplemented from time to
time, the "Servicing Agreement"), between the Company, as Servicer, and the Note
Issuer.
Capitalized terms used and not otherwise defined herein shall have the
respective meanings given to them in the Note Indenture.
2. Representations and Warranties.
(a) Each of the Company and the Note Issuer represents and warrants
to, and agrees with, each Underwriter as set forth below in this Section
2(a). Certain terms used in this Section 2(a) are defined in paragraph
(iii) below.
(i) If the offering of the Certificates is a Delayed Offering
(as specified in Schedule I hereto), paragraph (a) below is
applicable and, if the offering of the Certificates is a Non-Delayed
Offering (as so specified), paragraph (b) below is applicable.
(1) The Note Issuer, the Notes and the Certificates meet the
requirements for the use of Form S-3 under the Securities
Act of 1933 (the "Act"), and the Note Issuer has filed with
the Securities and Exchange Commission (the "SEC") a
registration statement (file number 333-74671) on such Form,
including a basic prospectus, for registration under the Act
of the offering and sale of the Certificates. The Note
Issuer may have filed one or more amendments thereto, and
may have used a Preliminary Final Prospectus, each of which
has previously been furnished to you. Such registration
statement, as so amended, and in the form heretofore
delivered to you, has become effective. The offering of the
Certificates is a Delayed Offering and, although the Basic
Prospectus may not include all the information with respect
to the Certificates and the offering thereof required by the
Act and
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the rules thereunder to be included in the Final Prospectus,
the Basic Prospectus includes all such information required
by the Act and the rules thereunder to be included therein
as of the Effective Date. The Note Issuer will next file
with the SEC pursuant to Rules 415 and 424(b)(2) or (5) a
final supplement to the form of prospectus included in such
registration statement relating to the Certificates and the
offering thereof. As filed, such final prospectus supplement
shall include all required information with respect to the
Certificates and the offering thereof and, except to the
extent the Representatives shall agree in writing to a
modification, shall be in all substantive respects in the
form furnished to you prior to the Execution Time or, to the
extent not completed at the Execution Time, shall contain
only such specific additional information and other changes
(beyond that contained in the Basic Prospectus and any
Preliminary Final Prospectus) as the Note Issuer has advised
you, prior to the Execution Time, will be included or made
therein.
(2) The Note Issuer, the Notes and the Certificates meet the
requirements for the use of Form S-3 under the Act and the
Note Issuer has filed with the SEC a registration statement
(file number 333-74671) on such Form, including a basic
prospectus, for registration under the Act of the offering
and sale of the Certificates. The Note Issuer may have filed
one or more amendments thereto, including a Preliminary
Final Prospectus, each of which has previously been
furnished to you. The Note Issuer will next file with the
SEC either (x) a final prospectus supplement relating to the
Certificates in accordance with Rules 430A and 424(b)(1) or
(4), or (y) prior to the effectiveness of such registration
statement, an amendment to such registration statement,
including the form of final prospectus supplement. In the
case of clause (x), the Note Issuer has included in such
registration statement, as amended at the Effective Date,
all information (other than Rule 430A Information) required
by the Act and the rules thereunder to be included in the
Final Prospectus with respect to the Certificates and the
offering thereof. As filed, such final prospectus supplement
or such amendment and form of final prospectus supplement
shall contain all Rule 430A Information, together with all
other such required information, with respect to the
Certificates and the offering thereof and, except to the
extent the Representatives shall agree in writing to a
modification, shall be in all substantive respects in the
form furnished to you prior to the Execution Time or, to the
extent not completed at the Execution Time, shall contain
only such specific additional information and other changes
(beyond that contained in the Basic Prospectus and any
Preliminary Final Prospectus) as the
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Note Issuer has advised you, prior to the Execution Time,
will be included or made therein.
(ii) On the Effective Date, the Registration Statement did or
will, and when the Final Prospectus is first filed (if required) in
accordance with Rule 424(b) and on the Closing Date, the Final
Prospectus (and any supplement thereto) will, comply in all material
respects with the applicable requirements of the Act, the Securities
Exchange Act of 1934 (the "Exchange Act") and the Trust Indenture
Act of 1939 (the "Trust Indenture Act") and the respective rules
thereunder; on the Effective Date, the Registration Statement did
not or will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading; on
the Effective Date and on the Closing Date the Note Indenture and
the Certificate Indenture did or will comply in all material
respects with the requirements of the Trust Indenture Act and the
rules and regulations thereunder; and, on the Effective Date, the
Final Prospectus, if not filed pursuant to Rule 424(b), did not or
will not, and on the date of any filing pursuant to Rule 424(b) and
on the Closing Date, the Final Prospectus (together with any
supplement thereto) will not, include any untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that
neither the Note Issuer nor the Company makes any representations or
warranties as to (i) that part of the Registration Statement which
shall constitute the Statements of Eligibility and Qualification
(Forms T-1) under the Trust Indenture Act of the Note Trustee and
the Certificate Trustee or (ii) the information contained in or
omitted from the Registration Statement or the Final Prospectus (or
any supplement thereto) in reliance upon and in conformity with
information furnished in writing to the Note Issuer by or on behalf
of any Underwriter through the Representatives specifically for
inclusion in the Registration Statement or the Final Prospectus (or
any supplement thereto). No stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings for
that purpose have been instituted.
(iii) The terms which follow, when used in this Agreement, shall
have the meanings indicated. The term "the Effective Date" shall
mean each date that the Registration Statement and any
post-effective amendment or amendments thereto became or become
effective and each date after the date hereof on which a document
incorporated by reference in the Registration Statement is filed.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto. "Basic Prospectus"
shall mean the prospectus referred to in paragraph (a)(i) above
contained in the Registration Statement at the Effective Date
including, in the case of a Non-Delayed Offering, any Preliminary
Final Prospectus. "Preliminary Final Prospectus" shall mean any
preliminary prospectus supplement to the Basic Prospectus which
describes the Certificates and the offering thereof and is used
prior to filing of the Final Prospectus. "Final
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Prospectus" shall mean the prospectus supplement relating to the
Certificates that is first filed pursuant to Rule 424(b) after the
Execution Time, together with the Basic Prospectus or, if, in the
case of a Non-Delayed Offering, no filing pursuant to Rule 424(b) is
required, shall mean the form of final prospectus relating to the
Certificates, including the Basic Prospectus, included in the
Registration Statement at the Effective Date. "Registration
Statement" shall mean the registration statement referred to in
paragraph (a)(i) above, including all incorporated documents,
exhibits and financial statements, as amended at the Execution Time
(or, if not effective at the Execution Time, in the form in which it
shall become effective) and, in the event any post-effective
amendment thereto becomes effective prior to the Closing Date (as
hereinafter defined), shall also mean such registration statement as
so amended. Such term shall include any Rule 430A Information deemed
to be included therein at the Effective Date as provided by Rule
430A. "Rule 415," "Rule 424," "Rule 430A" and "Regulation S-K" refer
to such rules or regulation under the Act. "Rule 430A Information"
means information with respect to the Certificates and the offering
thereof permitted to be omitted from the Registration Statement when
it becomes effective pursuant to Rule 430A. Any reference herein to
the Registration Statement, the Basic Prospectus, any Preliminary
Final Prospectus or the Final Prospectus shall be deemed to refer to
and include the documents incorporated by reference therein pursuant
to Item 12 of Form S-3 which were filed under the Exchange Act on or
before the Effective Date of the Registration Statement or the issue
date of the Basic Prospectus, any Preliminary Final Prospectus or
the Final Prospectus, as the case may be; and any reference herein
to the terms "amend," "amendment" or "supplement" with respect to
the Registration Statement, the Basic Prospectus, any Preliminary
Final Prospectus or the Final Prospectus shall be deemed to refer to
and include the filing of any document under the Exchange Act after
the Effective Date of the Registration Statement or the issue date
of the Basic Prospectus, any Preliminary Final Prospectus or the
Final Prospectus, as the case may be, deemed to be incorporated
therein by reference. A "Non-Delayed Offering" shall mean an
offering of Certificates which is intended to commence promptly
after the effective date of a registration statement, with the
result that, pursuant to Rules 415 and 430A, all information (other
than Rule 430A Information) with respect to the Certificates so
offered must be included in such registration statement at the
effective date thereof. A "Delayed Offering" shall mean an offering
of Certificates pursuant to Rule 415 which does not commence
promptly after the effective date of a registration statement, with
the result that only information required pursuant to Rule 415 need
be included in such registration statement at the effective date
thereof with respect to the Certificates so offered. Whether the
offering of the Certificates is a Non-Delayed Offering or a Delayed
Offering shall be set forth in Schedule I hereto.
3. Purchase and Sale. Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Trust
will sell to each Underwriter, and each Underwriter agrees, severally and not
jointly, to purchase from the Trust, at the
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purchase price for each class of Certificates set forth in Schedule II hereto,
the respective principal amount of each class of Certificates set forth opposite
the name of each Underwriter on Schedule II hereto. Simultaneously with the
execution and delivery of this Agreement, and as a condition precedent to the
effectiveness of this Agreement, the Agencies will deliver to the Company, the
Note Issuer and the Representatives an executed copy of the certificate attached
hereto as Appendix A.
4. Delivery and Payment. Delivery of and payment for the
Certificates shall be made at 9:00 AM Eastern Standard Time on July 29, 1999 (or
such later date not later than five business days after such specified date as
the Representatives shall designate), which date and time may be postponed by
agreement between the Representatives and the Note Issuer or as provided in
Section 9 hereof (such date and time of delivery and payment for the
Certificates being herein called the "Closing Date"). Delivery of the
Certificates shall be made to the Representatives for the respective accounts of
the several Underwriters against payment by the several Underwriters through the
Representatives of the purchase price thereof to the Trust by wire transfer of
immediately available funds in U.S. dollars. Delivery of the Certificates shall
be made at such location as the Representatives shall reasonably designate at
least one business day in advance of the Closing Date. The Certificates to be so
delivered shall be initially represented by Certificates registered in the name
of Cede & Co., as nominee of The Depository Trust Company ("DTC"). The interests
of beneficial owners of the Certificates will be represented by book entries on
the records of DTC and participating members thereof. Definitive Certificates
will be available only under limited circumstances described in the Final
Prospectus.
The Trust will have the Certificates available for inspection,
checking and packaging by the Representatives in New York, New York, not later
than 1:00 PM on the business day prior to the Closing Date.
5. Covenants.
(a) Covenants of the Note Issuer. The Note Issuer covenants and
agrees with the several Underwriters that:
(i) The Note Issuer will use its best efforts to cause the
Registration Statement, if not effective at the Execution Time, and
any amendment thereto, to become effective. Prior to the termination
of the offering of the Certificates, the Note Issuer will not file
any amendment of the Registration Statement or supplement (including
the Final Prospectus or any Preliminary Final Prospectus) to the
Basic Prospectus unless the Note Issuer has furnished you a copy for
your review prior to filing and will not file any such proposed
amendment or supplement to which you reasonably object. Subject to
the foregoing sentence, the Note Issuer will cause the Final
Prospectus, properly completed in a form approved by you, and any
supplement thereto to be filed with the SEC pursuant to the
applicable paragraph of Rule 424(b) within the time period
prescribed and will provide evidence satisfactory to the
Representatives of such timely filing. The Note Issuer will promptly
advise the Representatives (i) when the Registration
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Statement, if not effective at the Execution Time, and any amendment
thereto, shall have become effective, (ii) when the Final
Prospectus, and any supplement thereto, shall have been filed with
the SEC pursuant to Rule 424(b), (iii) when, prior to termination of
the offering of the Certificates, any amendment to the Registration
Statement shall have been filed or become effective, (iv) of any
request by the SEC for any amendment of the Registration Statement
or supplement to the Final Prospectus or for any additional
information, (v) of the issuance by the SEC of any stop order
suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose and
(vi) of the receipt by the Note Issuer of any notification with
respect to the suspension of the qualification of the Certificates
for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose. The Note Issuer will use its best
efforts to prevent the issuance of any such stop order and, if
issued, to obtain as soon as possible the withdrawal thereof.
(ii) If, at any time when a prospectus relating to the
Certificates is required to be delivered under the Act, any event
occurs as a result of which the Final Prospectus as then
supplemented would include any untrue statement of a material fact
or omit to state any material fact necessary to make the statements
therein in the light of the circumstances under which they were made
not misleading, or if it shall be necessary to amend the
Registration Statement or supplement the Final Prospectus to comply
with the Act or the Exchange Act or the respective rules thereunder,
the Note Issuer promptly will (i) prepare and file with the SEC,
subject to the second sentence of paragraph (a) of this Section 5,
an amendment or supplement which will correct such statement or
omission or effect such compliance and (ii) supply any supplemented
Prospectus to you in such quantities as you may reasonably request.
(iii) As soon as practicable, the Note Issuer will use its
reasonable efforts to cause the Trust to make generally available to
the Certificateholders and the Representatives an earnings statement
or statements of the Trust which will satisfy the provisions of
Section 11(a) of the Act and Rule 158 under the Act.
(iv) The Note Issuer will furnish to the Representatives and
counsel for the Underwriters, without charge, copies of the
Registration Statement (including exhibits thereto) and, so long as
delivery of a prospectus by an Underwriter or dealer may be required
by the Act, as many copies of any Preliminary Final Prospectus and
the Final Prospectus and any supplement thereto as the
Representatives may reasonably request. The Note Issuer shall
furnish or cause to be furnished to the Representatives copies of
all reports on Form SR required by Rule 463 under the Act. The Note
Issuer will pay the expenses of printing or other production of all
documents relating to the offering.
(v) The Note Issuer will arrange for the qualification of the
Certificates for sale under the laws of such jurisdictions as the
Representatives may
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designate, will maintain such qualifications in effect so long as
required for the distribution of the Certificates and will arrange
for the determination of the legality of the Certificates for
purchase by institutional investors; provided, however, that in no
event shall the Note Issuer be obligated to qualify to do business
in any jurisdiction where it is not now so qualified or to take any
action that would subject it to service of process in suits, other
than those arising out of the offering or sale of the Certificates,
in any jurisdiction where it is not now so subject.
(vi) Until 90 days after the date hereof, the Note Issuer will
not, without the written consent of the Representatives, offer, sell
or contract to sell, or otherwise dispose of, directly or
indirectly, or announce the offering of, any asset-backed securities
of a trust or other special purpose vehicle (other than the Notes
and the Certificates).
(vii) For a period from the date of this Agreement until the
retirement of the Certificates or until such time as the
Underwriters shall cease to maintain a secondary market in the
Certificates, whichever occurs first, the Note Issuer will deliver
to the Representatives the annual statements of compliance and the
annual independent auditor's servicing reports furnished to the Note
Issuer or the Note Trustee pursuant to the Servicing Agreement or
the Note Indenture, as applicable, as soon as such statements and
reports are furnished to the Note Issuer or the Note Trustee.
(viii) So long as any of the Certificates are outstanding, the
Note Issuer will furnish to the Representatives (i) as soon as
available, a copy of each report of the Note Issuer or the Trust
filed with the SEC under the Exchange Act, or mailed to
Certificateholders, (ii) a copy of any filings with the
Massachusetts Department of Transportation and Energy ("DTE")
pursuant to the Financing Order, including, but not limited to, any
Advice Letters, and (iii) from time to time, any information
concerning the Company, the Note Issuer or the Trust, as the
Representatives may reasonably request.
(ix) To the extent, if any, that any rating necessary to satisfy
the condition set forth in Section 6(r) of this Agreement is
conditioned upon the furnishing of documents or the taking of other
actions by the Note Issuer on or after the Closing Date, the Note
Issuer shall furnish such documents and take such other actions.
(b) Covenants of the Company. The Company covenants and agrees with
the several Underwriters that, to the extent that the Note Issuer has
not already performed such act pursuant to Section 5(a):
(i) The Company will use its best efforts to cause the
Registration Statement, if not effective at the Execution Time, and
any amendment thereto, to become effective. The Company will use its
best efforts to prevent the issuance
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by the SEC of any stop order suspending the effectiveness of the
Registration Statement and, if issued, to obtain as soon as possible
the withdrawal thereof.
(ii) The Company will cause the proceeds from the sale of the
Transition Property to be applied for the purposes described in the
Prospectus under the caption "Use of Proceeds."
(iii) Until 90 days after the date hereof, the Company will not,
without the written consent of the Representatives, offer, sell or
contract to sell, or otherwise dispose of, directly or indirectly,
or announce the offering of, any asset-backed securities of a trust
or other special purpose vehicle (other than the Notes and the
Certificates).
(iv) So long as any of the Certificates are outstanding and the
Company is the Servicer, the Company will furnish to the
Representatives (i) as soon as available, a copy of each report of
the Trust filed with the SEC under the Exchange Act, or mailed to
Certificateholders, (ii) a copy of any filings with the DTE pursuant
to the Financing Order, including, but not limited to, any Advice
Letters, and (iii) from time to time, any information concerning the
Company, the Note Issuer or the Trust, as the Representatives may
reasonably request.
(v) To the extent, if any, that any rating necessary to satisfy
the condition set forth in Section 6(r) of this Agreement is
conditioned upon the furnishing of documents or the taking of other
actions by the Company on or after the Closing Date, the Company
shall furnish such documents and take such other actions.
(vi) If, at any time when a prospectus relating to the
Certificates is required to be delivered under the Act, any event
occurs as a result of which the Final Prospectus as then
supplemented would include any untrue statement of a material fact
or omit to state any material fact necessary to make the statements
therein in the light of the circumstances under which they were made
not misleading, or if it shall be necessary to amend the
Registration Statement or supplement the Final Prospectus to comply
with the Act or the Exchange Act or the respective rules thereunder,
the Company at the Note Issuer's expense promptly will (i) prepare
and file with the SEC, subject to the second sentence of paragraph
(a) of this Section 5, an amendment or supplement which will correct
such statement or omission or effect such compliance and (ii) supply
any supplemented Prospectus to you in such quantities as you may
reasonably request.
6. Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Certificates shall be subject to
the accuracy of the representations and warranties on the part of the Note
Issuer and the Company contained herein as of the Execution Time and the Closing
Date and on the part of the Company contained in Article III of the Sale
Agreement and in Section 6.01 of the Servicing Agreement as of the Closing Date,
to the accuracy of the statements of the Note Issuer, the Company and the Trust
made in any certifi-
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cates pursuant to the provisions hereof, to the performance by the Note Issuer,
the Company and the Trust of their obligations hereunder to be performed on or
prior to the Closing Date and to the following additional conditions:
(a) If the Registration Statement has not become effective prior to
the Execution Time, unless the Representatives agree in writing to a
later time, the Registration Statement will become effective not later
than (i) 6:00 PM Eastern Standard Time, on the date of determination of
the public offering price, if such determination occurred at or prior to
3:00 PM Eastern Standard Time on such date, or (ii) 12:00 Noon Eastern
Standard Time on the business day following the day on which the public
offering price was determined, if such determination occurred after 3:00
PM Eastern Standard Time on such date; if filing of the Final
Prospectus, or any supplement thereto, is required pursuant to Rule
424(b), the Final Prospectus, and any such supplement, shall have been
filed in the manner and within the time period required by Rule 424(b);
and no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose
shall have been instituted or threatened.
(b) The Representatives shall have received opinions of counsel for
the Company, portions of which may be delivered by Ropes & Gray, outside
counsel for the Company, and portions of which may be delivered by
in-house counsel for the Company, each dated the Closing Date, in form
and substance reasonably satisfactory to the Representatives, to the
effect that:
(i) the Company is a validly existing corporation in good
standing under the laws of the jurisdiction in which it is chartered
or organized and has all requisite corporate power and authority to
own its properties, conduct its business as presently conducted and
execute, deliver and perform its obligations under this Agreement,
the Sale Agreement and the Servicing Agreement;
(ii) the Sale Agreement and the Servicing Agreement have been
duly authorized, executed and delivered, and constitute legal, valid
and binding instruments enforceable against the Company in
accordance with their terms (subject, as to enforcement of remedies,
to applicable bankruptcy, reorganization, insolvency, moratorium or
other laws or equitable principles affecting creditors' rights
generally from time to time in effect);
(iii) to the knowledge of such counsel, there is no pending or
threatened action, suit or proceeding before any court or
governmental agency, authority or body or any arbitrator involving
the Company or any of its subsidiaries of a character required to be
disclosed in the Registration Statement which is not adequately
disclosed in the Final Prospectus, and there is no franchise,
contract or other document of a character required to be described
in the Registration Statement or Final Prospectus, or to be filed as
an exhibit, which is not described or filed as required;
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(iv) this Agreement has been duly authorized, executed and
delivered by the Company;
(v) no consent, approval, authorization or order of any court or
governmental agency or body is required to be obtained by the
Company for the consummation of the transactions contemplated
herein, except such as have been obtained under the Statute, the DTE
Regulations (as defined in Section 1.01 of the Servicing Agreement)
and the Act and such as may be required under the blue sky laws of
any jurisdiction in connection with the purchase and distribution of
the Certificates by the Underwriters and such other approvals
(specified in such opinion) as have been obtained;
(vi) neither the execution and delivery of this Agreement, the
Sale Agreement, the Servicing Agreement, the Administration
Agreement nor the consummation of the transactions contemplated by
this Agreement, the Sale Agreement, the Servicing Agreement or the
Administration Agreement nor the fulfillment of the terms of this
Agreement, the Sale Agreement, the Servicing Agreement or the
Administration Agreement by the Company, will (A) conflict with,
result in any breach of any of the terms or provisions of, or
constitute (with or without notice or lapse of time) a default under
the articles of incorporation, bylaws or other organizational
documents of the Company, or conflict with or breach any of the
material terms or provisions of, or constitute (with or without
notice or lapse of time) a default under, any indenture, material
agreement or other material instrument filed as an Exhibit to the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998, (B) result in the creation or imposition of any
lien upon any properties of the Company pursuant to the terms of any
such indenture, agreement or other instrument (other than as
contemplated by the Basic Documents and Section 1H(e) of the
Statute), or (C) violate any Massachusetts or federal law or any
order, rule or regulation applicable to the Company of any
Massachusetts or federal court or regulatory body, administrative
agency or other governmental instrumentality having jurisdiction
over the Company, or any of its properties; and
(vii) upon the delivery of the fully executed Sale Agreement to
the Note Issuer and the payment of the purchase price of the
Transition Property by the Note Issuer to the Seller pursuant to the
Sale Agreement, then (A) the transfer of the Transition Property by
the Seller to the Note Issuer pursuant to the Sale Agreement conveys
the Seller's right, title and interest in the Transition Property to
the Note Issuer and will be treated under the laws of The
Commonwealth of Massachusetts as an absolute transfer of all of the
Seller's right, title, and interest in the Transition Property,
other than for federal and state income tax purposes, (B) such
transfer of the Transition Property is perfected, (C) such transfer
has priority over any other assignment of the Transition Property,
and (D) the Transition Property is free and clear of all liens
created prior to its transfer to the Note Issuer pursuant to the
Sale Agreement.
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In rendering such opinion, such counsel may rely (A) as to matters involving
the application of laws of any jurisdiction other than The Commonwealth of
Massachusetts or the United States, to the extent deemed proper and
specified in such opinion, upon the opinion of other counsel of good
standing believed to be reliable and who are satisfactory to counsel for the
Underwriters and (B) as to matters of fact, to the extent deemed proper, on
certificates of responsible officers of the Company. References to the Final
Prospectus in this paragraph (b) include any supplements thereto at the
Closing Date.
(c) The Representatives shall have received opinions of counsel for the
Note Issuer, portions of which may be delivered by Ropes & Gray, outside
counsel for the Note Issuer, and portions of which may be delivered by
in-house counsel for the Note Issuer, and portions of which may be delivered
by Richards, Layton & Finger, P.A., special Delaware counsel for the Note
Issuer, each dated the Closing Date, in form and substance reasonably
satisfactory to the Representatives, to the effect that:
(i) the Note Issuer has been duly formed and is validly existing in
good standing as a limited liability company under the laws of the State
of Delaware, with all necessary limited liability company power and
authority to execute, deliver and perform its obligations under this
Agreement, the Sale Agreement, the Servicing Agreement, the Note
Indenture, the Note Purchase Agreement, the Administration Agreement,
the Fee and Indemnity Agreement and the Notes;
(ii) the Sale Agreement, the Servicing Agreement, the Note
Indenture, the Note Purchase Agreement, the Administration Agreement and
the Fee and Indemnity Agreement have been duly authorized, executed and
delivered, and constitute legal, valid and binding instruments
enforceable against the Note Issuer in accordance with their terms
(subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws or equitable
principles affecting creditors' rights generally from time to time in
effect); and the Notes have been duly authorized and executed, and when
authenticated in accordance with the provisions of the Note Indenture
and delivered to and paid for by the Trust in accordance with the terms
of the Note Purchase Agreement, will constitute legal, valid and binding
obligations of the Note Issuer entitled to the benefits of the Note
Indenture (subject, as to enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency, moratorium or other laws or
equitable principles affecting creditors' rights generally from time to
time in effect);
(iii) to the extent described in the Final Prospectus, the Sale
Agreement, the Servicing Agreement, the Note Indenture, the Note
Purchase Agreement, the Administration Agreement, the Fee and Indemnity
Agreement and the Notes conform to the descriptions thereof contained
therein;
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(iv) the Note Indenture has been duly qualified under the Trust
Indenture Act;
(v) to the knowledge of such counsel, after having made inquiry of
officers of the Note Issuer, but without having made any other
investigation, there is no pending or threatened action, suit or
proceeding before any court or governmental agency, authority or body or
any arbitrator involving the Note Issuer, or challenging the Notes, the
Financing Order or the collection of the RTC Charge or the use and
enjoyment of transition property under the Statute of a character
required to be disclosed in the Registration Statement which is not
adequately disclosed in the Final Prospectus, and there is no franchise,
contract or other document relating to the Note Issuer, the Notes or the
Financing Order of a character required to be described in the
Registration Statement or Final Prospectus, or to be filed as an
exhibit, which is not described or filed as required; and the statements
included in the Final Prospectus under the headings "Energy Deregulation
and New Massachusetts Market Structure" (to the extent the Statute is
described), "Description of the Transition Property," "The Note Issuer,"
"Servicing" (to the extent the Servicing Agreement is described) and
"Description of the Notes," and under the subheading "Bankruptcy and
Creditors' Rights Issues" under the caption "Risk Factors," to the
extent that they constitute matters of Massachusetts, Delaware or
federal law or legal conclusions with respect thereto, fairly summarize
the matters described therein;
(vi) the Registration Statement has become effective under the Act;
any required filing of the Basic Prospectus, any Preliminary Final
Prospectus and the Final Prospectus, and any supplements thereto,
pursuant to Rule 424(b) have been made in the manner and within the time
period required by Rule 424(b); to the knowledge of such counsel, no
stop order suspending the effectiveness of the Registration Statement
has been issued, no proceedings for that purpose have been instituted or
threatened, and the Registration Statement and the Final Prospectus
(other than (A) the information contained under the captions "The
Trust," "The Agencies," "Federal Income Tax Consequences" and "State
Taxation," and to the extent statements contained under the subheadings
"Legislative actions" and "Court decisions" under the caption "Risk
Factors" represent the opinions of Palmer & Dodge LLP, or (B) the
financial statements and other financial, numerical, statistical and
quantitative information contained in the Final Prospectus as to which
such counsel need express no opinion) comply as to form in all material
respects with the applicable requirements of the Act, the Exchange Act
and the Trust Indenture Act and the respective rules thereunder; and
such counsel shall confirm, on the basis of certain assumptions, that at
the Effective Date no facts have come to such counsel's attention which
would cause such counsel to believe that the Registration Statement
contained any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading or that the Final Prospectus as of its
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date and the Closing Date includes any untrue statement of a material
fact or omits to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading (other than (A) the information contained under the
captions "The Trust," "The Agencies," "Federal Income Tax Consequences"
and "State Taxation," and to the extent statements contained under the
subheadings "Legislative actions" and "Court decisions" under the
caption "Risk Factors" represent the opinions of Palmer & Dodge LLP, or
(B) the financial statements and other financial, numerical, statistical
and quantitative information contained in the Final Prospectus as to
which such counsel need express no opinion);
(vii) this Agreement has been duly authorized, executed and
delivered by the Note Issuer;
(viii) no consent, approval, authorization or order of any
Massachusetts, Delaware or federal court or governmental agency or body
is required to be obtained by the Note Issuer for the issuance of the
Notes or the consummation by the Note Issuer of the transactions
contemplated herein, except such as have been obtained under the
Statute, the DTE Regulations and the Act and such as may be required
under the blue sky laws of any jurisdiction in connection with the
purchase and distribution of the Certificates by the Underwriters and
such other approvals (specified in such opinion) as have been obtained;
(ix) neither the execution and delivery of this Agreement, Sale
Agreement, the Servicing Agreement, the Note Indenture, the Note
Purchase Agreement, the Administration Agreement or the Fee and
Indemnity Agreement, nor the issue and sale of the Notes, nor the
consummation of the transactions contemplated by this Agreement, Sale
Agreement, the Servicing Agreement, the Note Indenture, the Note
Purchase Agreement, the Administration Agreement or the Fee and
Indemnity Agreement, nor the fulfillment of the terms of this Agreement,
Sale Agreement, the Servicing Agreement, the Note Indenture, the Note
Purchase Agreement, the Administration Agreement or the Fee and
Indemnity Agreement by the Note Issuer, will (A) conflict with, result
in any breach of any of the terms or provisions of, or constitute (with
or without notice or lapse of time) a default under the Limited
Liability Company Agreement of the Note Issuer, or conflict with or
breach any of the material terms or provisions of, or constitute (with
or without notice or lapse of time) a default under, any indenture,
agreement or other instrument known to such counsel and to which the
Note Issuer is a party or by which the Note Issuer is bound, (B) result
in the creation or imposition of any lien upon any properties of the
Note Issuer pursuant to the terms of any such indenture, agreement or
other instrument (other than as contemplated by the Basic Documents and
Section 1H(e) of the Statute), or (C) violate any Massachusetts,
Delaware or federal law or any order, rule or regulation applicable to
the Note Issuer of any Massachusetts, Delaware or federal
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court, regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Note Issuer, or any of its
properties;
(x) Upon the giving of value by the Note Trustee to the Note Issuer
with respect to the Collateral, (I) the Note Indenture creates in favor
of the Note Trustee a security interest in the rights of the Note Issuer
in the Collateral, (II) such security interest is valid against the Note
Issuer (subject to the rights of any third parties holding security
interests in such Collateral perfected in the manner described in
Sections 1H(d) and (e) of the Statute), and has attached and (III) such
security interest is perfected; and
(xi) the Note Issuer is not an "investment company" or under the
"control" of an "investment company" as such terms are defined under the
Investment Company Act of 1940, as amended.
In rendering such opinion, such counsel may rely (A) as to matters involving
the application of laws of any jurisdiction other than The Commonwealth of
Massachusetts, the State of Delaware or the United States, to the extent
deemed proper and specified in such opinion, upon the opinion of other
counsel of good standing believed to be reliable and who are satisfactory to
counsel for the Underwriters and (B) as to matters of fact, to the extent
deemed proper, on certificates of responsible officers of the Note Issuer
and public officials. References to the Final Prospectus in this paragraph
(c) include any supplements thereto at the Closing Date.
(d) The Representatives shall have received opinions of counsel for the
Trust and the Agencies, portions of which may be delivered by Palmer & Dodge
LLP or Krokidas & Bluestein LLP, both co-special counsel for the Trust and
the Agencies, and portions of which may be delivered by Richards, Layton &
Finger, P.A., special Delaware counsel for the Trust, each dated the Closing
Date, in form and substance reasonably satisfactory to the Representatives,
to the effect that:
(i) the Declaration of Trust, the Certificate Indenture and the
Certificates conform in all material respects with the descriptions
thereof contained in the Final Prospectus under the headings "The Trust"
and "Description of the Certificates" (other than matters regarding DTC,
CEDEL and Euroclear, as to which we express no opinion) and in the
Prospectus Summary under the headings "The Certificates," "Issuer of
Certificates," "Interest" and "Principal";
(ii) the Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Business Trust Act
(being Chapter 38 of Title 12 of the Delaware Code, 12 Del.C., Section
3801 et seq.,);
(iii) each of the Agencies is a duly created and validly existing
body politic and corporate and a public instrumentality of The
Commonwealth of Massachusetts with the necessary power, authority and
legal right to execute,
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deliver and perform all of its obligations under the Declaration of
Trust and the issuance resolution of such Agency;
(iv) the Declaration of Trust has been duly authorized, executed and
delivered by the Agencies and, assuming the due authorization, execution
and delivery thereof by the Delaware Trustee, constitutes a legal, valid
and binding instrument enforceable against the Agencies in accordance
with its terms, except as enforcement thereof may be subject to or
limited by bankruptcy, insolvency, moratorium, reorganization,
fraudulent conveyance or other laws relating to or affecting the
enforcement of creditors' rights generally, and except as limited by
general equitable principles (regardless of whether such enforceability
is considered in a proceeding in equity or at law);
(v) the Certificate Indenture has been duly authorized, executed and
delivered by the Delaware Trustee on its own behalf and separately on
behalf of the Trust and, assuming the due authorization, execution and
delivery thereof by the Certificate Trustee and the Delaware Trustee,
constitutes a legal, valid and binding instrument, enforceable against
the Trust in accordance with its terms, except as enforcement thereof
may be subject to or limited by bankruptcy, insolvency, moratorium,
reorganization, fraudulent conveyance or other similar laws relating to
or affecting the enforcement of creditors' rights generally, and except
as limited by general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law);
(vi) the Certificates have been duly authorized and executed and,
when authenticated in accordance with the provisions of the Certificate
Indenture and delivered to and paid for by the Underwriters pursuant to
this Agreement, (A) the Certificates will be duly issued in conformity
with the Statute, (B) the Certificates will constitute valid, fully paid
and non-accessible undivided beneficial interests in the Trust, (C) the
Certificateholders will be entitled to the benefits of the Certificate
Indenture, (D) the Certificates will constitute "electric rate reduction
bonds" under Section 1H of the Statute and (E) the Certificateholders
will be entitled to the rights and benefits afforded under the Statute;
(vii) the Note Purchase Agreement has been duly authorized, executed
and delivered by the Delaware Trustee on behalf of the Trust and,
assuming due authorization, execution and delivery thereof by BEC
Funding LLC, constitutes a legal, valid and binding instrument,
enforceable against the Trust in accordance with its terms, except as
enforcement thereof may be subject to or limited by bankruptcy,
insolvency, moratorium, reorganization, fraudulent conveyance or other
similar laws relating to or affecting the enforcement of creditors'
rights generally, and except as limited by general equitable principles
(regardless of whether such enforceability is considered in a proceeding
in equity or at law);
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(viii) the issuance resolutions of the Agencies have been duly and
validly adopted by the Agencies in compliance with all applicable laws
and are in full force and effect;
(ix) pursuant to the issuance resolutions of the Agencies, the
Agencies have validly authorized and approved the formation of the
Trust, the issuance of the Certificates and all other transactions and
actions contemplated by the Basic Documents or required to be taken by
the Agencies as conditions precedent to the issuance of the
Certificates; such authorizations and approvals are valid and in full
force and effect;
(x) the Certificate Indenture has been duly qualified under the
Trust Indenture Act of 1939, as amended;
(xi) the statements included in the Final Prospectus under the
headings "The Trust," "The Agencies" and "Description of the
Certificates" fairly summarize the matters described therein (other than
matters related to DTC, CEDEL or Euroclear, as to which we express no
opinion) and the statements included or incorporated in the Final
Prospectus under the headings "Federal Income Tax Consequences," "State
Taxation" and "ERISA Considerations," and under the following
subheadings of the caption "Risk Factors": "Legislative actions" and
"Court decisions," to the extent that they constitute matters of
Massachusetts, Delaware or federal law or legal conclusions with respect
thereto, provide a fair and accurate summary of such law or conclusions;
(xii) to the knowledge of such counsel, there is no pending or
threatened action, suit or proceeding before any court or governmental
agency, authority or body or any arbitrator challenging the validity or
enforceability of the issuance resolutions of the Agencies or actions
taken by the Agencies in connection therewith or otherwise involving the
Agencies or relating to the Certificates or the Trust of a character
required to be described in the Registration Statement or Final
Prospectus, or to be filed as an exhibit, which is not described or
filed as required;
(xiii) to the knowledge of such counsel, the Registration Statement
and the Final Prospectus (other than (A) the financial statements and
other financial, numerical, statistical and quantitative information
contained therein, (B) information contained under the captions "The
Note Issuer" and "The Seller and Servicer," (C) information regarding
DTC, CEDEL and Euroclear and (D) the statement of eligibility of the
Trustee on Form T-l and the documents incorporated by reference therein,
as to which such counsel shall not be required to make any statement or
express any opinion) comply as to form in all material respects with the
applicable requirements of the Act, the Exchange Act and the Trust
Indenture Act and the respective rules thereunder, and such counsel
shall confirm, on the basis of certain assumptions, that at the
Effective Date no facts
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have come to such counsel's attention which would cause such counsel to
believe that the Registration Statement (other than (A) the financial
statements and other financial, numerical, statistical and quantitative
information contained therein, (B) information contained under the
captions "The Note Issuer" and "The Seller and Servicer," (C)
information regarding DTC, CEDEL and Euroclear and (D) the statement of
eligibility of the Trustee on Form T-l and the documents incorporated by
reference therein, as to which such counsel shall not be required to
make any statement or express any opinion) contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading or that the Final Prospectus (other than (A) the
financial statements and other financial, numerical, statistical and
quantitative information contained therein, (B) information contained
under the captions "The Note Issuer" and "The Seller and Servicer," (C)
information regarding DTC, CEDEL and Euroclear and (D) the statement of
eligibility of the Trustee on Form T-l and the documents incorporated by
reference therein, as to which such counsel shall not be required to
make any statement or express any opinion) as of its date and the
Closing Date contained or contains any untrue statement of a material
fact or omits to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading;
(xiv) no consent, approval, authorization or order of any court or
governmental agency or body is required to be obtained by the Delaware
Trustee, the Certificate Trustee or the Trust under Massachusetts,
Delaware or federal law for the issuance of the Certificates by the
Trust, except such as have been obtained under the Statute, the DTE
Regulations and the Act and such as may be required under the blue sky
laws of any jurisdiction in connection with the purchase and
distribution of the Certificates by the Underwriters and such other
approvals (specified in such opinion) as have been obtained;
(xv) neither the execution and delivery of the Certificate
Indenture, nor the issuance and sale of the Certificates, nor the
consummation of the transactions contemplated by this Agreement or the
Certificate Indenture, nor the fulfillment of the terms of this
Agreement or the Certificate Indenture by the Trust will (A) conflict
with, result in any breach of any of the terms or provisions of, or
constitute (with or without notice or lapse of time) a default under the
Certificate of Trust or Declaration of Trust or other procedural
documents of the Trust, or conflict with or breach any of the material
terms or provisions of, or constitute (with or without notice or lapse
of time) a default under, any indenture, agreement or other instrument
known to such counsel and to which the Trust is a party or by which the
Trust is bound, (B) result in the creation or imposition of any lien
upon any properties of the Trust pursuant to the terms of any such
indenture, agreement or other instrument (except as contemplated by the
Basic Documents or created pursuant to the Statute), or (C) violate any
Massachusetts, Delaware or federal law, order, rule or regulation
applicable to the Trust of any Massachusetts,
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Delaware or federal court, state regulatory body, administrative agency
or other governmental instrumentality having jurisdiction over the
Trust, or any of its properties;
(xvi) neither the execution and delivery of the Declaration of Trust
and the certificate the form of which is attached hereto as Appendix A,
nor the consummation of the transactions contemplated by the Declaration
of Trust and the certificate the form of which is attached hereto as
Appendix A, nor the fulfillment of the terms of the Declaration of Trust
and the certificate the form of which is attached hereto as Appendix A,
by the Agencies will (A) conflict with, result in any breach of any of
the terms or provisions of, or constitute (with or without notice or
lapse of time) a default under the bylaws or procedural documents of the
Agencies, or conflict with or breach any of the material terms or
provisions of, or constitute (with or without notice or lapse of time) a
default under, any indenture, agreement or other instrument known to
such counsel and to which the Agencies are parties or by which the
Agencies are bound, (B) result in the creation or imposition of any lien
upon any properties of the Agencies pursuant to the terms of any such
indenture, agreement or other instrument (except as contemplated by the
Basic Documents or created pursuant to the Statute), or (C) violate any
Massachusetts or federal law, order, rule or regulation applicable to
the Agencies of any Massachusetts or federal court or of any federal or
Massachusetts state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Agencies, or
any of their properties; and
(xvii) the Trust is not an "investment company" or under the
"control" of an "investment company" as such terms are defined under the
Investment Company Act of 1940, as amended.
In rendering such opinion, such counsel may (A) rely as to matters involving
the application of laws of any jurisdiction other than The Commonwealth of
Massachusetts, the State of Delaware or the United States, to the extent
deemed proper and specified in such opinion, upon the opinion of other
counsel of good standing believed to be reliable and who are satisfactory to
counsel for the Underwriters, (B) as to matters relating to actions taken by
the Company, the Note Issuer, the Note Trustee, the DTE and the Servicer,
assume such matters which are the subject of opinions rendered by counsel to
such parties hereunder or under the Basic Documents, and (C) rely as to
matters of fact, to the extent deemed proper, on certificates of authorized
representatives of the Trust, the Agencies and public officials. References
to the Final Prospectus in this paragraph (d) include any supplements
thereto at the Closing Date.
(e) The Representatives shall have received an opinion of Winthrop
Stimson Putnam & Roberts, counsel to the Note Trustee, dated the Closing
Date, in form and substance reasonably satisfactory to the Representatives,
to the effect that:
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(i) the Note Trustee is validly existing as a state banking
institution in good standing under the laws of the State of New York;
(ii) the Note Indenture has been duly authorized, executed and
delivered, and constitutes a legal, valid and binding instrument
enforceable against the Note Trustee in accordance with its terms
(subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other similar laws or
equitable principles affecting creditors' rights generally from time to
time in effect); and
(iii) the Notes have been duly authenticated by the Note Trustee.
(f) The Representatives shall have received an opinion of Winthrop
Stimson Putnam & Roberts, counsel to the Certificate Trustee, dated the
Closing Date, in form and substance reasonably satisfactory to the
Representatives, to the effect that:
(i) the Certificate Trustee is validly existing as a state banking
institution in good standing under the laws of the State of New York;
(ii) the Certificate Indenture has been duly authorized, executed
and delivered by the Certificate Trustee and constitutes a legal, valid
and binding instrument enforceable against the Certificate Trustee in
accordance with its terms (subject, as to enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium or other
similar laws or equitable principles affecting creditors' rights
generally from time to time in effect); and
(iii) the Certificate Trustee has duly authenticated and delivered
the Certificates issued on the Closing Date on behalf of the Trust;
(g) The Representatives shall have received an opinion of Richards,
Layton & Finger, P.A., counsel to the Delaware Trustee, dated the Closing
Date, in form and substance reasonably satisfactory to the Representatives,
to the effect that:
(i) the Delaware Trustee is duly incorporated and is validly
existing as a banking corporation in good standing under the laws of the
State of Delaware, with full corporate trust power and authority to
enter into and perform its obligations under the Declaration of Trust,
and under the Note Purchase Agreement and the Certificate Indenture on
behalf of the Trust; and
(ii) the Declaration of Trust, the Certificate Indenture and the
Note Purchase Agreement (on behalf of the Trust) have been duly
authorized, executed and delivered by the Delaware Trustee, and
constitute legal, valid and binding instruments enforceable against the
Delaware Trustee in accordance with their terms (subject, as to
enforcement of remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium or other similar laws or equitable principles
affecting creditors' rights generally from time to time in effect);
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(iii) the Delaware Trustee has duly executed the Certificates issued
on the Closing Date on behalf of the Trust;
(h) The Representatives shall have received from Brown & Wood LLP,
counsel for the Underwriters, such opinion or opinions, dated the Closing
Date, with respect to the issuance and sale of the Notes and the
Certificates, the Note Indenture, the Certificate Indenture, the
Registration Statement, the Final Prospectus (together with any supplement
thereto) and other related matters as the Representatives may reasonably
require, and the Company, the Note Issuer and the Trust shall have furnished
to such counsel such documents as they request for the purpose of enabling
them to pass upon such matters.
(i) The Representatives shall have received a certificate of the Note
Issuer, signed by an officer of the Note Issuer, dated the Closing Date, to
the effect that the signer of such certificate has carefully examined the
Registration Statement, the Final Prospectus, any supplement to the Final
Prospectus and this Agreement and that:
(i) the representations and warranties of the Note Issuer in this
Agreement and in the Note Indenture are true and correct in all material
respects on and as of the Closing Date with the same effect as if made
on the Closing Date, and the Note Issuer has complied with all the
agreements and satisfied all the conditions on its part to be performed
or satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or, to the Note Issuer's knowledge, threatened; and
(iii) since the dates as of which information is given in the Final
Prospectus (exclusive of any supplement thereto), there has been no
material adverse change in (x) the condition (financial or other),
earnings, business or properties of the Note Issuer, whether or not
arising from transactions in the ordinary course of business, or (y) the
Transition Property, except as set forth in or contemplated in the Final
Prospectus (exclusive of any supplement thereto).
(j) The Representatives shall have received a certificate of the
Company, signed by an executive officer of the Company, dated the Closing
Date, to the effect that the signers of such certificate have carefully
examined the Registration Statement, the Final Prospectus, any supplement to
the Final Prospectus and this Agreement and that:
(i) the representations and warranties of the Company in this
Agreement, the Sale Agreement and the Servicing Agreement are true and
correct in all material respects on and as of the Closing Date with the
same effect as if made on the Closing Date, and the Company has complied
with all the agreements and satisfied all the conditions on its part to
be performed or satisfied at or prior to the Closing Date;
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(ii) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or, to the Company's knowledge, threatened; and
(iii) since the dates as of which information is given in the Final
Prospectus (exclusive of any supplement thereto), there has been no
material adverse change in (x) the condition (financial or other),
earnings, business or properties of the Company and its subsidiaries
taken as a whole, whether or not arising from transactions in the
ordinary course of business, or (y) the Transition Property, except as
set forth in or contemplated in the Final Prospectus (exclusive of any
supplement thereto).
(k) At the Closing Date, PricewaterhouseCoopers LLP shall have furnished
to the Representatives (i) a letter or letters (which may refer to letters
previously delivered to one or more of the Representatives), dated as of the
Closing Date, in form and substance satisfactory to the Representatives,
confirming that they are independent accountants within the meaning of the
Act and the Exchange Act and the respective applicable published rules and
regulations thereunder and stating in effect that they have performed
certain specified procedures as a result of which they determined that
certain information of an accounting, financial or statistical nature (which
is limited to accounting, financial or statistical information derived from
the general accounting records of the Company and the Note Issuer) set forth
in the Registration Statement and the Final Prospectus, including
information specified by the Underwriters and set forth under the captions
"Prospectus Summary," "Description of the Transition Property," "The Seller
and Servicer," "Description of the Notes" and "Description of the
Certificates" in the Final Prospectus, agrees with the accounting records of
the Company and the Note Issuer, excluding any questions of legal
interpretation, and (ii) the opinion or certificate, dated as of the Closing
Date, in form and substance satisfactory to the Representatives, satisfying
the requirements of Section 2.10(7) of the Note Indenture.
References to the Final Prospectus in this paragraph (k) include any
supplement thereto at the date of the letter.
In addition, at the Execution Time, PricewaterhouseCoopers LLP shall
have furnished to the Representatives a letter or letters, dated as of the
Execution Time, in form and substance satisfactory to the Representatives,
to the effect set forth above.
(l) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Final Prospectus (exclusive of any supplement
thereto), there shall not have been any change, or any development involving
a prospective change, in or affecting either (i) the business, properties or
financial condition of the Company or the Note Issuer or (ii) the Transition
Property, the Notes, the Certificates, the Financing Order or the Statute,
the effect of which is, in the judgment of the Representatives, so material
and adverse as to make it impractical or inadvisable to proceed with the
offering or delivery of the Notes
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or the Certificates as contemplated by the Registration Statement (exclusive
of any amendment thereof) and the Final Prospectus (exclusive of any
supplement thereto).
(m) The Representatives shall have received on the Closing Date an
opinion letter or letters of Ropes & Gray, counsel to the Company and the
Note Issuer, dated the Closing Date, in form and substance reasonably
satisfactory to the Representatives, (i) with respect to the
characterization of the transfer of the Transition Property by the Company
to the Note Issuer as a "true sale" for bankruptcy purposes and (ii) to the
effect that a court would not order the substantive consolidation of the
assets and liabilities of the Note Issuer with those of the Company in the
event of a bankruptcy, reorganization or other insolvency proceeding
involving the Company.
(n) The Representatives shall have received on the Closing Date an
opinion letter of Palmer & Dodge LLP, special counsel to the Agencies and
the Trust, dated the Closing Date, in form and substance reasonably
satisfactory to the Representatives, to the effect that a court would not
order the substantive consolidation of the assets and liabilities of the
Agencies with those of the Trust.
(o) The Representatives shall have received on the Closing Date an
opinion letter or letters of counsel for the Company, portions of which may
be delivered by Ropes & Gray, outside counsel for the Company, and portions
of which may be delivered by in-house counsel for the Company, each dated
the Closing Date, in form and substance reasonably satisfactory to the
Representatives, to the effect that: (i) the Financing Order has been duly
issued and authorized by the DTE and the Financing Order, giving effect to
the Issuance Advice Letter, is effective; (ii) in reliance on the opinion of
Krokidas & Bluestein LLP that the Certificates are "electric rate reduction
bonds" under Section 1H(a) of the Statute, as of the issuance of the
Certificates, the Certificates are entitled to the protections provided in
Sections 1H(b)(3) and 1H(c)(4) of the Statute; (iii) the Financing Order is
no longer subject to appeal by any person in state courts of The
Commonwealth of Massachusetts; and (iv) the Servicer is authorized to file
periodic RTC Charge adjustments to the extent necessary to ensure the timely
recovery of revenues sufficient to provide for the payment of an amount
equal to the sum of the periodic RRB payment requirements for the upcoming
year, which includes indemnity obligations under the Basic Documents.
(p) The Representatives shall have received on the Closing Date an
opinion letter or letters of Palmer & Dodge LLP, special counsel for the
Agencies and the Trust, dated the Closing Date, in form and substance
reasonably satisfactory to the Representatives, to the effect that any state
action (whether by legislative, DTE, citizen initiative or otherwise) to
revoke or limit the Financing Order, the Issuance Advice Letter, the
Transition Property or the RTC Charge in a manner which would substantially
impair the rights of Certificateholders would be subject to a successful
constitutional contracts clause defense.
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(q) The Representatives shall have received on the Closing Date an
opinion letter or letters of Richards, Layton & Finger, P.A., special
Delaware counsel to the Note Issuer, dated the Closing Date, in form and
substance reasonably satisfactory to the Representatives, to the effect
that: (i) if properly presented to a Delaware court, a Delaware court
applying Delaware law, would conclude that (x) in order for a person to file
a voluntary bankruptcy petition on behalf of the Note Issuer, the
affirmative vote of the Note Issuer's Sole Member and the affirmative vote
of all of the Directors (including the Independent Directors), as provided
in Section 2.07(ii) of the LLC Agreement of the Note Issuer, is required,
and (y) such provision, contained in Section 2.07(ii) of the LLC Agreement,
that requires the affirmative vote of the Note Issuer's Sole Member and the
affirmative vote of all of the Directors (including the Independent
Directors) in order for a person to file a voluntary bankruptcy petition on
behalf of the Note Issuer, constitutes a legal, valid and binding agreement
of the Sole Member and is enforceable against the Sole Member, in accordance
with its terms; and (ii) the LLC Agreement constitutes a legal, valid and
binding agreement of the Sole Member thereunder, and is enforceable against
the Sole Member in accordance with its terms.
(r) The Notes and the Certificates shall have been rated in the highest
long-term rating category by each of the Rating Agencies.
(s) On or prior to the Closing Date, the Note Issuer shall have
delivered to the Representatives evidence, in form and substance reasonably
satisfactory to the Representatives, that appropriate filings have been or
are being made in accordance with the Statute and other applicable law
reflecting the grant of a security interest by the Note Issuer in the
Collateral to the Note Trustee.
(t) On or prior to the Closing Date, the Note Issuer shall have
delivered to the Representatives evidence, in form and substance
satisfactory to the Representatives, of the DTE's issuance of the Financing
Order relating to the Transition Property and the Issuance Advice Letter.
(u) Prior to the Closing Date, the Note Issuer, the Company and the
Trust shall have furnished to the Representatives such further information,
certificates, opinions and documents as the Representatives may reasonably
request.
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Representatives and counsel for the
Underwriters, this Agreement and all obligations of the Underwriters hereunder
may be canceled at, or at any time prior to, the Closing Date by the
Representatives. Notice of such cancellation shall be given to the Note Issuer
and the Trust in writing or by telephone or electronic mail confirmed in
writing.
The documents required to be delivered by this Section 6 shall be
delivered at the office of Ropes & Gray, Boston, Massachusetts, on the Closing
Date.
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7. Expenses. Upon the sale of the Certificates, the Note Issuer
will pay or cause to be paid all costs and expenses incident to the performance
of the obligations of the Company, the Note Issuer, the Trust and the
Underwriters hereunder and the Agencies under the Basic Documents, including,
without limiting the generality of the foregoing, all costs, taxes and expenses
incident to the issue and delivery of the Certificates to the Underwriters, all
fees, disbursements and expenses of the Company's, the Note Issuer's, the
Trust's, the Agencies' and the Underwriters' counsel and accountants, all costs
and expenses incident to the preparation, printing and filing of the
Registration Statement (including all exhibits thereto), any preliminary
prospectus, the Basic Prospectus, any Preliminary Final Prospectus, the Final
Prospectus and any amendments thereof or supplements thereto, all costs and
expenses incurred in connection with blue sky qualifications, examining the
legality of the Certificates for the investment and the rating of the
Certificates, all costs and expenses of the Note Trustee, the Certificate
Trustee and the Delaware Trustee, all costs and expenses incurred in the
acquisition or preparation of documents required to be delivered by the Company,
the Note Issuer, the Trust or the Agencies in connection with the closing of the
transactions contemplated hereby, all costs and expenses required in connection
with any filing with the National Association of Securities Dealers in
connection with the transactions contemplated hereby, and all costs and expenses
of the printing and distribution of all documents in connection with the
Certificates.
If the sale of the Certificates provided for herein is not consummated
because any condition to the obligations of the Underwriters set forth in
Section 6 hereof is not satisfied, because of any termination pursuant to
Section 10 hereof or because of any refusal, inability or failure on the part of
the Company, the Note Issuer or the Trust to perform any agreement herein or
comply with any provision hereof other than by reason of a default (including
under Section 9) by any of the Underwriters, the Company and the Note Issuer
will, jointly and severally, reimburse the Underwriters upon demand for all
out-of-pocket expenses (including reasonable fees and disbursements of counsel)
that shall have been incurred by the Underwriters in connection with the
proposed purchase and sale of the Certificates.
8. Indemnification and Contribution.
(a) The Company and the Note Issuer will, jointly and severally,
indemnify and hold harmless each Underwriter, the Trust and the Agencies,
the directors, officers, members, employees and agents of each Underwriter,
the Trust and the Agencies and each person who controls any Underwriter, the
Trust and the Agencies within the meaning of either the Act or the Exchange
Act against any and all losses, claims, damages or liabilities, joint or
several, to which they or any of them may become subject under the Act, the
Exchange Act or other Federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement for the registration of the
Certificates as originally filed or in any amendment thereof, or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
any untrue statement or alleged untrue statement of a material fact
contained in the Basic Prospectus, any
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Preliminary Final Prospectus or the Final Prospectus, or in any amendment
thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and will reimburse
each such indemnified party, as incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating or defending
any such loss, claim, damage, liability or action; provided, however, that
neither the Company nor the Note Issuer will be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of or
is based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in conformity
with written information furnished to the Note Issuer or the Company by or
on behalf of any Underwriter through the Representatives specifically for
inclusion therein. This indemnity agreement will be in addition to any
liability which the Company and the Note Issuer may otherwise have.
(b) Each Underwriter severally agrees to indemnify and hold harmless the
Company, the Note Issuer, the Trust and the Agencies, each of their
directors, each of their officers (if any) who signs the Registration
Statement, and each person who controls the Company or the Note Issuer
within the meaning of either the Act or the Exchange Act, to the same extent
as the foregoing indemnity from the Company and the Note Issuer to each
Underwriter, but only with reference to written information relating to such
Underwriter furnished to the Note Issuer or the Company by or on behalf of
such Underwriter through the Representatives specifically for inclusion in
the documents referred to in the foregoing indemnity. This indemnity
agreement will be in addition to any liability which any Underwriter may
otherwise have. The Note Issuer, the Company and the Agencies acknowledge
that the statements set forth in the last paragraph of the cover page, under
the heading "Underwriting" or "Plan of Distribution" in any Preliminary
Final Prospectus or the Final Prospectus constitute the only information
furnished in writing by or on behalf of the several Underwriters for
inclusion in the documents referred to in the foregoing indemnity, and you,
as the Representatives, confirm that such statements are correct.
(c) Promptly after receipt by an indemnified party under this Section 8
of notice of the commencement of any action, such indemnified party will, if
a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party
(i) will not relieve it from liability under paragraph (a) or (b) above
unless and to the extent it did not otherwise learn of such action and such
failure results in the forfeiture by the indemnifying party of substantial
rights and defenses and (ii) will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other than
the indemnification obligation provided in paragraph (a) or (b) above. The
indemnifying party shall be entitled to appoint counsel of the indemnifying
party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in
which case the indemnifying party shall not thereafter be responsible for
the fees and expenses of any
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separate counsel retained by the indemnified party or parties except as set
forth below); provided, however, that such counsel shall be reasonably
satisfactory to the indemnified party. Notwithstanding the indemnifying
party's election to appoint counsel to represent the indemnified party in an
action, the indemnified party shall have the right to employ separate
counsel (including local counsel), and the indemnifying party shall bear the
reasonable fees, costs and expenses of such separate counsel if (i) the use
of counsel chosen by the indemnifying party to represent the indemnified
party 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 party and the indemnifying party and the indemnified
party shall have reasonably concluded that there may be legal defenses
available to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel reasonably satisfactory
to the indemnified party to represent the indemnified party within a
reasonable time after notice of the institution of such action or (iv) the
indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. An indemnifying party will
not, without the prior written consent of the indemnified parties, 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 or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional
release of each indemnified party from all liability arising out of such
claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b) of
this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company, the Note Issuer and the
Underwriters agree to contribute to the aggregate losses, claims, damages
and liabilities (including legal or other expenses reasonably incurred in
connection with investigating or defending same) (collectively "Losses") to
which the Company, the Note Issuer and one or more of the Underwriters may
be subject in such proportion as is appropriate to reflect the relative
benefits received by the Company, Note Issuer and the Underwriters,
respectively, from the offering of the Certificates and the Notes; provided,
however, that in no case shall any Underwriter (except as may be provided in
any agreement among underwriters relating to the offering of the
Certificates) be responsible for any amount in excess of the underwriting
discount or commission applicable to the Certificates purchased by such
Underwriter hereunder. If the allocation provided by the immediately
preceding sentence is unavailable for any reason, the Company, the Note
Issuer and the Underwriters shall contribute in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company, the Note Issuer and of the Underwriters in connection
with the statements or omissions which resulted in such Losses as well as
any other relevant equitable considerations. Benefits received by the Note
Issuer shall be deemed to be equal to the total net proceeds from the
offering (before deducting expenses) of the Certificates (which shall be
equal to the net proceeds from the sale of the Notes to the Trust (before
deducting expenses)), and benefits received by the Underwriters shall be
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deemed to be equal to the total underwriting discounts and commissions, in
each case as set forth on the cover page of the Final Prospectus. Relative
fault shall be determined by reference to whether any alleged untrue
statement or omission relates to information provided by the Company, the
Note Issuer or the Underwriters. The Company, the Note Issuer and the
Underwriters 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. Notwithstanding the provisions of this paragraph, no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. For purposes of this Section 8, each
person who controls an Underwriter within the meaning of either the Act or
the Exchange Act and each director, officer, employee and agent of an
Underwriter shall have the same rights to contribution as such Underwriter,
and each person who controls the Note Issuer or the Company within the
meaning of either the Act or the Exchange Act, each officer of the Note
Issuer or the Company who shall have signed the Registration Statement and
each director of the Note Issuer or the Company shall have the same rights
to contribution as the Note Issuer or the Company, subject in each case to
the applicable terms and conditions of this paragraph. The Underwriters'
obligations in this paragraph to contribute are several in proportion to
their respective underwriting obligations and not joint.
9. Default by an Underwriter. If any one or more Underwriters
shall fail to purchase and pay for any of the Certificates agreed to be
purchased by such Underwriter or Underwriters hereunder the Representatives may
in their discretion arrange for the Underwriters or another party or other
parties to purchase such Certificates on the terms contained herein. If within
36 hours after such default by any Underwriter the Representatives do not
arrange for the purchase of such Certificates, the nondefaulting Underwriters
shall be obligated severally to take up and pay for (in the respective
proportions which the amount of Certificates set forth opposite the names of all
the remaining Underwriters) the Certificates which the defaulting Underwriter or
Underwriters agreed but failed to purchase; provided, however, that in the event
that the aggregate amount of Certificates which the defaulting Underwriter or
Underwriters agreed but failed to purchase shall exceed 10% of the aggregate
amount of Certificates set forth in Schedule II hereto, the nondefaulting
Underwriters shall have the right to purchase all, but shall not be under any
obligation to purchase any, of the Certificates, and if such nondefaulting
Underwriters do not purchase all the Certificates, this Agreement will terminate
without liability to any nondefaulting Underwriter, the Note Issuer or the
Company. In the event of a default by any Underwriter as set forth in this
Section 9, the Closing Date shall be postponed for such period, not exceeding
seven days, as the Representatives shall determine in order that the required
changes in the Registration Statement and the Final Prospectus or in any other
documents or arrangements may be effected. Nothing contained in this Agreement
shall relieve any defaulting Underwriter of its liability, if any, to the Note
Issuer and the Company and any nondefaulting Underwriter for damages occasioned
by its default hereunder.
10. Termination. This Agreement shall be subject to termination
in the absolute discretion of the Representatives, by notice given to the
Company, the Note Issuer and
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the Agencies prior to delivery of and payment for the Certificates, if prior to
such time there shall have occurred (i) any change, or any development involving
a prospective change, in or affecting (A) the business, properties or financial
condition of the Company or the Note Issuer, (B) the Transition Property, the
Notes, the Certificates, the Financing Order or the Statute, the effect of
which, in the judgment of the Representatives, materially impairs the investment
quality of the Certificates or makes it impractical or inadvisable to market the
Certificates; (ii) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange; (iii) a suspension or material
limitation in trading in the securities of the Company; (iv) a general
moratorium on commercial banking activities shall have been declared either by
Federal, New York state or Massachusetts state authorities or (v) any outbreak
or escalation of hostilities involving the United States or the declaration by
the United States of a national emergency or war the effect of which on
financial markets is such as to make it, in the judgment of the Representatives,
impracticable or inadvisable to proceed with the offering or delivery of the
Certificates as contemplated by the Final Prospectus (exclusive of any
supplement thereto).
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers, the Note Issuer or its officers and of the Underwriters
set forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter
or of the Company, the Note Issuer or any of the officers, directors or
controlling persons referred to in Section 8 hereof, and will survive delivery
of and payment for the Certificates. The provisions of Sections 7 and 8 hereof
shall survive the termination or cancellation of this Agreement.
12. Notices. All communications hereunder 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, and if sent to
the Representatives, to them at the address specified in Schedule I hereto; and
if sent to the Company, to it at Boston Edison Company, 800 Boylston Street,
Boston, Massachusetts 02199, Attention: Manager, Corporate Finance; and if sent
to the Note Issuer, to it at BEC Funding LLC, 800 Boylston Street, 35th Floor,
Boston, Massachusetts 02199, Attention: President; and if sent to the Agencies,
to each at Massachusetts Development Finance Agency, 75 Federal Street, Boston,
Massachusetts 02110, Attention: General Counsel, and Massachusetts Health and
Educational Facilities Authority, 99 Summer Street, 10th Floor, Boston,
Massachusetts 02110, Attention: General Counsel. The parties hereto, by notice
to the others, may designate additional or different addresses for subsequent
communications.
13. Successors. This Agreement will inure to the benefit of and
be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 8 hereof,
and no other person will have any right or obligation hereunder.
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14. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York.
15. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be deemed an original, which taken together
shall constitute one and the same instrument.
16. Miscellaneous. Time shall be of the essence of this
Agreement. As used herein, the term "business day" shall mean any day when the
SEC's office in Washington, D.C. is open for business.
17.
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If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company, the Note Issuer and the several Underwriters.
Very truly yours,
BOSTON EDISON COMPANY
By: /s/ R.J. Weafer, Jr.
----------------------------------------------
Name: R.J. Weafer, Jr.
Title: Vice President - Finance and Controller
BEC FUNDING LLC
By: /s/ Emilie G. O'Neil
----------------------------------------------
Name: Emilie G. O'Neil
Title: Vice President and Treasurer
CONFIRMED AND ACCEPTED
on behalf of each of the Underwriters
LEHMAN BROTHERS INC.
By: /s/ Lehman Brothers Inc.
------------------------
(Lehman Brothers Inc.)
GOLDMAN, SACHS & CO.
By: /s/ Goldman, Sachs & Co.
------------------------
(Goldman, Sachs & Co.)
S-1
32
SCHEDULE I TO THE
UNDERWRITING AGREEMENT
Underwriting Agreement dated July 22, 1999
Registration Statement No. 333-74671
Representative(s):
Lehman Brothers Inc.
Three World Financial Center
200 Vesey Street
New York, New York 10285
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Title: Massachusetts RRB Special Purpose Trust BEC-1
$725,000,000 Rate Reduction Certificates
Principal amount, Price to Public, Underwriting Discounts and Commissions and
Proceeds to Trust:
TOTAL SCHEDULED
PRINCIPAL UNDERWRITING FINAL FINAL
AMOUNT OF PRICE TO DISCOUNTS AND PROCEEDS TO DISTRIBUTION TERMINATION
CLASS PUBLIC COMMISSIONS TRUST DATE DATE
--------------- --------------- ------------- --------------- ------------ -----------
PER CLASS A-1 $108,500,000.00 99.97799% .24046% 99.73753% 3/15/01 3/15/03
CERTIFICATE
PER CLASS A-2 $170,609,837.00 99.97574% .35000% 99.62574% 9/15/03 9/15/05
CERTIFICATE
PER CLASS A-3 $103,390,163.00 99.97469% .43000% 99.54469% 3/15/05 3/15/07
CERTIFICATE
PER CLASS A-4 $170,875,702.00 99.97071% .48000% 99.49071% 9/15/07 9/15/09
CERTIFICATE
PER CLASS A-5 $171,624,298.00 99.93977% .55000% 99.38977% 3/15/10 3/15/12
CERTIFICATE
--------------- --------------- ------------- ---------------
TOTAL $725,000,000.00 $724,755,142.35 $3,066,750.00 $721,688,392.35
33
Original Issue Discount (if any): $244,857.65
Redemption provisions: Optional Redemption and Mandatory Redemption as
set forth in Article X of the Note Indenture
Closing Date, Time and Location: July 29, 1999
9:00 a.m., Eastern Standard Time
Boston, Massachusetts
Type of Offering: Delayed Offering
34
SCHEDULE II TO THE
UNDERWRITING AGREEMENT
PRINCIPAL AMOUNT OF CERTIFICATES TO BE PURCHASED
---------------------------------------------------------------------------------------
UNDERWRITERS Class A-1 Class A-2 Class A-3 Class A-4 Class A-5
Certificates Certificates Certificates Certificates Certificates TOTAL
------------ ------------ ------------ ------------ ------------ ------------
Lehman Brothers Inc. $ 48,825,000 $ 76,774,427 $ 46,525,573 $ 76,894,066 $ 77,230,934 $326,250,000
Goldman, Sachs & Co. $ 48,825,000 $ 76,774,427 $ 46,525,573 $ 76,894,066 $ 77,230,934 $326,250,000
Banc One Capital Markets, Inc. $ 1,085,000 $ 1,706,098 $ 1,033,902 $ 1,708,757 $ 1,716,243 $ 7,250,000
BancBoston Robertson Stephens Inc. $ 1,085,000 $ 1,706,098 $ 1,033,902 $ 1,708,757 $ 1,716,243 $ 7,250,000
Bear, Stearns & Co. Inc. $ 1,085,000 $ 1,706,098 $ 1,033,902 $ 1,708,757 $ 1,716,243 $ 7,250,000
BNY Capital Markets, Inc. $ 1,085,000 $ 1,706,098 $ 1,033,902 $ 1,708,757 $ 1,716,243 $ 7,250,000
CIBC World Markets Corp. $ 1,085,000 $ 1,706,098 $ 1,033,902 $ 1,708,757 $ 1,716,243 $ 7,250,000
Merrill Lynch, Pierce, Fenner &
Smith Incorporated $ 1,085,000 $ 1,706,098 $ 1,033,902 $ 1,708,757 $ 1,716,243 $ 7,250,000
PaineWebber Incorporated $ 1,085,000 $ 1,706,098 $ 1,033,902 $ 1,708,757 $ 1,716,243 $ 7,250,000
Prudential Securities Incorporated $ 1,085,000 $ 1,706,098 $ 1,033,902 $ 1,708,757 $ 1,716,243 $ 7,250,000
Salomon Smith Barney Inc. $ 1,085,000 $ 1,706,098 $ 1,033,902 $ 1,708,757 $ 1,716,243 $ 7,250,000
State Street Capital Markets, LLC $ 1,085,000 $ 1,706,098 $ 1,033,902 $ 1,708,757 $ 1,716,243 $ 7,250,000
------------ ------------ ------------ ------------ ------------ ------------
TOTAL ............................ $108,500,000 $170,609,837 $103,390,163 $170,875,702 $171,624,298 $725,000,000
============ ============ ============ ============ ============ ============
35
APPENDIX A to the
Underwriting Agreement
CERTIFICATE OF THE AGENCIES PURSUANT
TO FINANCING ORDER APPROVING FINAL TERMS AND
CONDITIONS OF BEC FUNDING LLC NOTES AND MASSACHUSETTS
RRB SPECIAL PURPOSE TRUST BEC-1 RATE REDUCTION CERTIFICATES
Pursuant to order number 24 of the Financing Order, the Massachusetts
Development Finance Agency and the Massachusetts Health and Educational
Facilities Authority (collectively, the "Agencies"), hereby approve the final
terms and conditions of the BEC Funding LLC Notes (the "Notes") and the
Massachusetts RRB Special Purpose Trust BEC-1 Rate Reduction Certificates (the
"Certificates"), as set forth in the underwriting agreement dated as of July 22,
1999 by and among BEC Funding LLC, Boston Edison Company and Lehman Brothers
Inc. and Goldman, Sachs & Co., as representatives (the "Representatives") of the
Underwriters named therein (the "Underwriting Agreement").
In furtherance of this approval, the Agencies shall cause the
Massachusetts RRB Special Purpose Trust BEC-1 to be formed as a Delaware
business trust (the "Trust") prior to the Closing Date, and to issue the
Certificates and otherwise comply with the terms and conditions of the
Underwriting Agreement.
BEC Funding LLC, Boston Edison Company and the Representatives are
entitled to rely on this certificate as if this certificate were a part of, and
the Agencies were parties to, the Underwriting Agreement.
Capitalized terms used herein and not otherwise defined shall have the
meaning set forth in the Underwriting Agreement.
Dated: July 22, 1999
MASSACHUSETTS DEVELOPMENT FINANCE AGENCY
By:
-----------------------------------------------------
Name:
Title:
Massachusetts Health and EducationAL Facilities Authority
By:
-----------------------------------------------------
Name:
Title: