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MASSACHUSETTS DEVELOPMENT FINANCE AGENCY
ACTING JOINTLY WITH
MASSACHUSETTS HEALTH AND EDUCATIONAL FACILITIES AUTHORITY,
AS SETTLORS,
AND
THE BANK OF NEW YORK (DELAWARE),
AS DELAWARE TRUSTEE
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DECLARATION OF TRUST
DATED AS OF JULY 28, 1999
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TABLE OF CONTENTS
PAGE
Article 1 Definitions and Incorporation By Reference...................2
SECTION 1.1 Definitions..........................................2
Article 2 Organization.................................................2
SECTION 2.1 Creation of Trust....................................2
SECTION 2.2 Trust as Financing Entity............................2
SECTION 2.3 Situs of the Trust...................................3
SECTION 2.4 Purposes and Powers..................................3
SECTION 2.5 Trust Property.......................................4
SECTION 2.6 Issuance of Certificates.............................4
SECTION 2.7 Organizational Expenses..............................4
SECTION 2.8 No Liability of the Agencies or Agency Personnel.....4
SECTION 2.9 Independent Status...................................4
SECTION 2.10 Tax Treatment; Construction..........................5
Article 3 Delivery of Certain Documents................................5
SECTION 3.1 Documents Relating to Issuance of Certificates.......5
SECTION 3.2 Compliance with Securities Laws......................5
Article 4 The Delaware Trustee.........................................5
SECTION 4.1 Appointment..........................................5
SECTION 4.2 Duties and Responsibilities..........................6
SECTION 4.3 Prohibited Actions...................................6
SECTION 4.4 Acceptance of the Trusts.............................6
SECTION 4.5 Limitation of Liability..............................6
SECTION 4.6 Compensation and Reimbursement; Indemnification......8
SECTION 4.7 Resignation..........................................8
SECTION 4.8 Representations and Warranties of Delaware Trustee...9
SECTION 4.9 Reliance; Advice of Counsel..........................9
SECTION 4.10 Delaware Trustee May Own Certificates...............10
Article 5 Representations and Warranties of the Agencies..............10
SECTION 5.1 Representations and Warranties of Agencies..........10
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TABLE OF CONTENTS
(CONTINUED)
PAGE
Article 6 Termination of Declaration..................................11
SECTION 6.1 Termination of the Trust............................11
Article 7 Miscellaneous...............................................11
SECTION 7.1 No Legal Title to Trust Property....................11
SECTION 7.2 Limitations on Rights of Others.....................11
SECTION 7.3 Notices.............................................12
SECTION 7.4 Severability........................................13
SECTION 7.5 Amendments Without Consent of Holders...............13
SECTION 7.6 Amendments With Consent of Holders..................14
SECTION 7.7 Form of Amendments..................................14
SECTION 7.8 Counterparts........................................15
SECTION 7.9 Successors..........................................15
SECTION 7.10 No Petition Covenant................................15
SECTION 7.11 Headings............................................15
SECTION 7.12 Governing Law.......................................15
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DECLARATION OF TRUST dated as of July 28, 1999 (as amended or restated
from time to time, the "Declaration"), by the Massachusetts Development Finance
Agency and the Massachusetts Health and Educational Facilities Authority, acting
jointly hereunder as settlors pursuant to Chapter 164 of the Massachusetts Acts
of 1997 (the "Statute") (each an "Agency," and, collectively, the "Agencies")
and The Bank of New York (Delaware), a Delaware banking corporation, acting
hereunder not in its individual or corporate capacity but solely as trustee
under the laws of the State of Delaware (the "Delaware Trustee").
RECITALS
Pursuant to the Statute, an electric company in The Commonwealth of
Massachusetts may obtain from the Massachusetts Department of Telecommunications
and Energy (the "DTE") a financing order (as defined in the Statute) permitting
such utility to recover a portion of its transition costs (as defined in the
Statute) through the issuance of electric rate reduction bonds (as defined in
the Statute). The Statute further empowers a special purpose trust (as defined
in the Statute) established by the Agencies to issue such electric rate
reduction bonds.
Boston Edison Company, a Massachusetts corporation ("Boston Edison"),
has applied for and received a financing order from the DTE, and has requested
the Agencies to establish a special purpose trust to issue electric rate
reduction bonds.
The Trust created hereby (the "Trust") shall constitute a special
purpose trust and shall be empowered to issue one series with one or more
classes of certificates constituting Massachusetts RRB Special Purpose Trust
BEC-1 Rate Reduction Certificates (the "Certificates"). All such Certificates
shall be issued pursuant to an indenture (the "Certificate Indenture"), by and
among the Delaware Trustee, the Trust and a trustee (the "Certificate Trustee"),
initially designated as The Bank of New York, and each class of Certificates
shall represent fractional undivided beneficial interests in the corresponding
class of BEC Funding LLC Notes (the "Notes") issued by BEC Funding LLC, a
special purpose limited liability company (the "Note Issuer") created by Boston
Edison. The Certificate Indenture and this Declaration shall together constitute
the governing instrument of the Trust. The Trust shall purchase the Notes from
the Note Issuer pursuant to a note purchase agreement (a "Note Purchase
Agreement") relating to the Notes. The Notes will be issued pursuant to an
indenture (the "Note Indenture"), by and between the Note Issuer and a trustee
(the "Note Trustee"), initially designated as The Bank of New York, and secured
by a pledge of and lien upon transition property (as defined in the Statute)
purchased by the Note Issuer from Boston Edison together with any other assets
of the Note Issuer. Boston Edison will service such transition property for the
benefit of the Note Issuer pursuant to a transition property servicing agreement
(the "Servicing Agreement"), between Boston Edison as servicer (in such
capacity, together with any successor servicer, the "Servicer") and the Note
Issuer. The Declaration, the Certificate Indenture, the Note Purchase Agreement,
the Note Indenture, the Servicing Agreement, the Fee and Indemnity Agreement
defined and described in Section 2.7 hereof, the Transition Property Purchase
and Sale Agreement between the Note Issuer and Boston Edison, as seller,
relating to the purchase and sale of the transition property described above,
the Administration Agreement between the Note Issuer and Boston Edison, as
administrator, relating to the administration of the
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Note Issuer, and the Underwriting Agreement among the Note Issuer, Boston Edison
and certain underwriters, relating to the underwriting of the Certificates, are
herein collectively referred to as the "Basic Documents."
THE AGENCIES AND THE DELAWARE TRUSTEE AGREE AS FOLLOWS:
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 Definitions. All references herein to "the Declaration" or
"this Declaration" are to this Declaration of Trust, all references herein to
the "Trust" are to the trust created hereunder, and all references herein to
Articles, Sections, subsections, Schedules and Exhibits are to Articles,
Sections, subsections, Schedules and Exhibits of this Declaration, unless
otherwise specified. All capitalized terms used herein and not otherwise defined
shall have the meanings set forth in the Recitals hereto.
ARTICLE 2
ORGANIZATION
SECTION 2.1 Creation of Trust. The Trust created hereby shall be known
as "Massachusetts RRB Special Purpose Trust BEC-1," in which name the Delaware
Trustee may conduct the business of the Trust, make and execute contracts and
other instruments on behalf of the Trust and sue and be sued on behalf of the
Trust. In addition, the Delaware Trustee may conduct the business of the Trust
in its own name, as trustee hereunder, to the extent deemed necessary or
appropriate by the Delaware Trustee, in its sole discretion; provided that the
Delaware Trustee may rely conclusively upon an opinion of counsel as to whether
any proposed action is necessary or appropriate. It is the intention that the
Trust shall constitute a not-for-profit 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., as the same may be amended from time to time and any
successor statute) (the "Business Trust Act"), that the Certificate Indenture
shall be deemed a part of this Declaration and that this Declaration (together
with the Certificate Indenture) shall constitute the governing instrument of the
Trust. To the extent that the provisions of this Declaration and the Certificate
Indenture conflict with respect to the issuance of the Certificates and the
rights of the holders thereof, the Certificate Indenture shall control. The
Delaware Trustee and the Certificate Trustee shall file the Certificate of
Trust, substantially in the form attached hereto as Exhibit A, pursuant to
Section 3810 et seq. of the Business Trust Act in connection with the formation
of the Trust as a not-for-profit business trust under the Business Trust Act.
The fiscal year of the Trust shall be the calendar year.
SECTION 2.2 Trust as Financing Entity. The Agencies hereby find and
determine, and hereby represent and warrant, that the Trust constitutes a
"special purpose trust" and a "financing
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entity" within the meaning of the Statute, and that the Trust is being
established to issue "electric rate reduction bonds" within the meaning of the
Statute.
SECTION 2.3 Situs of the Trust. The office of the Trust shall be in
care of the Delaware Trustee at the corporate trust office (the "Office") at
White Clay Center, Route 273, Newark, Delaware 19711 (although any notice,
direction, consent or waiver given to the Delaware Trustee hereunder may be
given in care of the address set forth in Section 7.3(a) hereof), which Office
shall be located in Delaware, or at such other address in Delaware as the
Delaware Trustee may designate by written notice to the Agencies, the
Certificate Trustee, the Note Issuer, the Note Trustee, the Servicer, and the
holders of the Certificates, and the Trust shall conduct its business in such
Office, separate and apart from that of the Agencies and their affiliates. If
and to the extent required pursuant to the provisions of the Business Trust Act,
all bank accounts of the Trust maintained by the Delaware Trustee, except those
bank accounts maintained by the Certificate Trustee, shall be located in the
State of Delaware. Any bank accounts of the Trust maintained by the Delaware
Trustee that are not required to be located in the State of Delaware by the
Business Trust Act may be maintained in Delaware or New York, or such other
location as is acceptable to the Agencies. The Trust shall not have any
employees in any state other than Delaware; provided, however, that nothing
herein shall restrict or prohibit the Delaware Trustee (in its individual
capacity but not as Delaware Trustee) from having employees within or without
the State of Delaware. If and to the extent required pursuant to the provisions
of the Business Trust Act, payments shall be received by the Trust only in
Delaware, and payments shall be made by the Trust only from Delaware, except as
otherwise provided in the Basic Documents. To the extent the Business Trust Act
does not require that payments be received in and paid from Delaware, to the
extent consistent with such act and the Basic Documents, payments may be
received and made by the Trust in and from Delaware, New York or such other
location as is acceptable to the Agencies. To the extent required pursuant to
the provisions of the Business Trust Act, the Delaware Trustee shall conduct the
Trust's activities from Delaware, sign documents on behalf of the Trust in
Delaware and maintain business records on behalf of the Trust in Delaware.
SECTION 2.4 Purposes and Powers.
(a) The Trust is constituted solely for the purpose of acquiring and
holding the Notes and issuing the Certificates, applying the proceeds of the
Notes to the payment of the Certificates and entering into and performing its
obligations under each of the Basic Documents to which it may be a party (which
functions the Delaware Trustee shall perform or cause to be performed on behalf
of the Trust), and, except as set forth herein, the Delaware Trustee is not
authorized or empowered to acquire any other investments or engage in any other
activities on behalf of the Trust and, in particular, the Delaware Trustee is
not authorized or empowered to do anything that would cause the Trust to fail to
qualify as a "grantor trust" for federal income tax purposes.
(b) The Delaware Trustee shall have all rights and powers set forth
herein and, to the extent not inconsistent herewith, in the Business Trust Act
with respect to accomplishing the purposes of the Trust.
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SECTION 2.5 Trust Property.
(a) The Agencies hereby assign, transfer, convey and set over to
the Delaware Trustee on behalf of the Trust the sum of $1.00. The Delaware
Trustee hereby acknowledges receipt of such amount in trust from the Agencies,
which amount shall constitute the initial trust property.
(b) Upon issuance of the Certificates and purchase of the Notes,
the holders of the Certificates shall become the sole and exclusive beneficial
owners of the Trust estate established hereby. The Delaware Trustee hereby
declares that it shall hold the Notes, the security interest in the transition
property (as defined in the Statute) securing the Notes, any other assets
acquired directly or indirectly from the Note Issuer and the proceeds therefrom
(the "Trust Property") in trust as herein provided for the benefit of the
holders of the Certificates, subject to the rights of such holders under the
Certificate Indenture, from and after such date until termination of the Trust
as herein provided, or under the Basic Documents.
(c) Legal title to the Trust Property shall be vested at all
times in the Trust as a separate legal entity except where applicable law in any
jurisdiction requires title to any part of the Trust Property to be vested in a
trustee or trustees, in which case title shall be deemed to be vested in the
Delaware Trustee, a co-trustee and/or a separate trustee, as the case may be.
SECTION 2.6 Issuance of Certificates. The Trust shall execute and
deliver the Certificates only upon satisfaction of the terms of the Certificate
Indenture. The Certificates of each Class shall represent undivided beneficial
interests in the assets of the Trust consisting of the Notes of the
corresponding Class and payments thereon, and shall be issued in accordance with
the terms of the Certificate Indenture.
SECTION 2.7 Organizational Expenses. The Delaware Trustee shall be
reimbursed, but solely from amounts payable by the Note Issuer under a fee and
indemnity agreement (the "Fee and Indemnity Agreement"), for organizational
expenses of the Trust as they may arise. The Delaware Trustee shall have no
recourse against the Agencies or against the Notes or the payments thereon and
proceeds thereof, for the reimbursement of such expenses.
SECTION 2.8 No Liability of the Agencies or Agency Personnel. No
recourse shall be had by the Delaware Trustee for any claim based on this
Declaration, the Certificates, the Notes or the Basic Documents against any
member, director, officer, employee, agent or attorney of the Agencies unless
such claim is based upon the bad faith, fraud or deceit of such person. No
covenant, stipulation, obligation or agreement of the Agencies contained in this
Declaration shall be deemed to be a covenant, stipulation, obligation or
agreement of any present or future member, director, officer, employee or agent
of the Agencies in his or her individual capacity, and any member, director,
officer, employee, agent or attorney of the Agencies executing and delivering or
directing the execution and delivery of the Certificates shall not be liable
personally thereon or be subject to any personal liability or accountability by
reason of the issuance of the Certificates.
SECTION 2.9 Independent Status. The Trust and each of the Agencies each
covenant and agree to hold itself out to the public under its own name as a
separate and distinct entity and
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will each conduct its business so as not to mislead others as to its identity.
The Trust shall cause those financial statements and other records required by
law, or otherwise required, to be prepared and maintained separate and apart
from those of the Agencies.
SECTION 2.10 Tax Treatment; Construction.
(a) It is the intention of the parties hereto that the Trust
shall be treated as a "grantor trust" for federal income tax purposes and all
transactions contemplated by this Declaration will be reported consistently with
such treatment.
(b) The provisions of this Declaration shall be construed, and
the affairs of the Trust shall be conducted, so as to achieve treatment of the
Trust as a "grantor trust" for federal income tax purposes. Accordingly,
notwithstanding any other provision hereof to the contrary, this Declaration
shall be construed to establish a class or classes of ownership interests, with
each class representing undivided beneficial interests in a separate specified
asset or set of assets of the Trust and facilitating the direct investment in
such assets by the holders of the Certificates. The assets of the Trust shall
consist of the Notes and other assets described in this Declaration, and the
Delaware Trustee shall have no power hereunder to vary the investment of the
holders of the Certificates.
ARTICLE 3
DELIVERY OF CERTAIN DOCUMENTS
SECTION 3.1 Documents Relating to Issuance of Certificates. The
Delaware Trustee is hereby directed to execute and deliver on behalf of the
Trust from time to time and as instructed in writing by the Agencies, all Basic
Documents to which the Trust or the Delaware Trustee may be a party, including
the Certificate Indenture, and any amendment or supplement thereto, the Note
Purchase Agreement, the Fee and Indemnity Agreement, the Underwriting Agreement,
and all other documents and instruments as may be necessary or desirable to
issue the Certificates pursuant to the provisions of the Certificate Indenture
and to purchase the Notes pursuant to the Note Purchase Agreement.
SECTION 3.2 Compliance with Securities Laws. The Delaware Trustee is
hereby authorized to take such action as it may deem necessary or desirable to
comply with applicable state and federal securities laws in connection with the
offering, sale and issuance of the Certificates or the administration of the
Trust.
ARTICLE 4
THE DELAWARE TRUSTEE
SECTION 4.1 Appointment. For valuable consideration received, it is
mutually covenanted and agreed that the Delaware Trustee has been and by this
document is, appointed to serve as the trustee of the Trust in the State of
Delaware pursuant to Section 3807 of the Business Trust Act.
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SECTION 4.2 Duties and Responsibilities. It is understood and agreed
that, except as provided in Section 2.4 hereof, the duties and responsibilities
of the Delaware Trustee shall be limited to (a) executing and delivering on
behalf of the Trust all Basic Documents to which the Trust or the Delaware
Trustee may be a party and, to the extent required by Article 3 hereof or deemed
appropriate by the Delaware Trustee, all other documents and instruments
referred to in Article 3 hereof, (b) accepting legal process served on the Trust
in the State of Delaware and (c) the execution and delivery of all
certifications required to be filed with the Secretary of State of the State of
Delaware in order to form, maintain and terminate the existence of the Trust
under the Business Trust Act. No implied covenants or obligations shall be read
into this Declaration against the Delaware Trustee.
SECTION 4.3 Prohibited Actions. Except as otherwise expressed herein
and as permitted under the Basic Documents, the Delaware Trustee shall not (i)
take any action with respect to any election by the Trust to file an amendment
to this Declaration, (ii) amend, change, modify or terminate any Basic Document,
or (iii) sell the Notes, any other Trust Property or any interest therein.
SECTION 4.4 Acceptance of the Trusts. By the execution hereof, the
Delaware Trustee accepts the trusts created hereinabove.
SECTION 4.5 Limitation of Liability. Except as otherwise expressly
required by this Declaration, the Delaware Trustee shall not have any duty or
liability with respect to the administration of the Trust, the investment of the
Trust's property or the payment of dividends or other distributions of income or
principal to the holders of the Certificates. The Delaware Trustee shall not be
liable for the acts or omissions of the Certificate Trustee, nor shall the
Delaware Trustee be liable for supervising or monitoring the performance of the
duties and obligations of the Certificate Trustee. The Delaware Trustee shall
not be personally liable under any circumstances, except for its own willful
misconduct or gross negligence. In particular, but not by way of limitation:
(a) the Delaware Trustee shall not be personally liable for any
error of judgment made in good faith by any officer within the corporate trust
department of the Delaware Trustee who has been assigned to perform or provide
trustee functions or services on behalf of the Trust;
(b) no provision of this Declaration shall require the Delaware
Trustee to expend or risk its personal funds or otherwise incur any financial
liability in the performance of its rights or powers hereunder, if the Delaware
Trustee shall have reasonable grounds for believing that repayment of such funds
or indemnity satisfactory to it against such risk or liability is not reasonably
assured or provided to it;
(c) it is expressly understood and agreed by the parties hereto
that (i) this Declaration is executed and delivered by The Bank of New York
(Delaware), not individually or personally but solely as Delaware Trustee of the
Trust, in the exercise of the powers and authority conferred and vested in it,
(ii) the representations, undertakings and agreements herein made on the part of
the Trust are made and intended not as personal representations, undertakings
and agreements by The Bank of New York (Delaware), but are made and intended for
the purpose of binding only the Trust, (iii) nothing herein contained shall be
construed as
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creating any liability of The Bank of New York (Delaware), individually or
personally, to perform any covenant either expressed or implied contained
herein, all such liability, if any, being expressly waived by the parties who
are signatories to this Declaration and by any person claiming by, through or
under such parties and (iv) under no circumstances shall The Bank of New York
(Delaware) be personally liable for the payment of any indebtedness or expenses
of the Trust or be liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by or on behalf of the
Trust under this Declaration;
(d) the Delaware Trustee shall not be personally responsible for
the validity or sufficiency of this Declaration or the Certificates or for the
due execution hereof by the Agencies;
(e) in the exercise or administration of the trusts hereunder,
the Delaware Trustee (i) may act directly or through agents (including
affiliates, such as The Bank of New York), attorneys, custodians or nominees
pursuant to agreements entered into with any of them, and the Delaware Trustee
shall not be liable for the default or misconduct or supervision of such agents,
attorneys, custodians or nominees if such agents, attorneys, custodians or
nominees shall have been selected by the Delaware Trustee in good faith and (ii)
may, at the expense of the Note Issuer, consult with attorneys, accountants and
other skilled persons to be selected in good faith and employed by it, and it
shall not be liable for anything done, suffered or omitted in good faith by it
in accordance with the advice or opinion of any such attorneys, accountants or
other skilled persons;
(f) except as expressly provided in this Section 4.5, in
accepting and performing the trusts hereby created, the Delaware Trustee acts
solely as trustee for the Trust and not in its individual capacity, and all
persons having any claim against the Delaware Trustee by reason of the
transactions contemplated by this Declaration shall look only to the Trust's
property for payment or satisfaction thereof;
(g) the Delaware Trustee's sole duty with respect to the custody,
safekeeping and physical preservation of the Trust Property shall be to deal
with such property in a manner similar to the manner in which the Delaware
Trustee deals with similar property for its own account, subject to the
protections and limitations on liability afforded to the Delaware Trustee under
this Declaration;
(h) the Delaware Trustee shall have no duty or liability for or
with respect to the value, genuineness, existence or sufficiency of the Trust
Property or the payment of any taxes or assessments levied thereon or in
connection therewith;
(i) the Delaware Trustee shall not be liable for any interest on
any moneys received by it on behalf of the Trust except as the Delaware Trustee
may otherwise agree with the Agencies;
(j) moneys held by the Delaware Trustee on behalf of the Trust
need not be segregated from other moneys except as the Delaware Trustee may
otherwise agree with the Agencies or as otherwise required by law; and
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(k) the Delaware Trustee shall have the right at any time to seek
instructions concerning the administration of the Trust from any court of
competent jurisdiction.
SECTION 4.6 Compensation and Reimbursement; Indemnification.
(a) Pursuant to the Fee and Indemnity Agreement, the Note Issuer
has agreed to pay, or cause to be paid, to the Delaware Trustee from time to
time compensation for its services and to reimburse it for its reasonable
expenses hereunder. The Delaware Trustee shall have no recourse against the
Agencies or against the Notes, the payments received thereon or the proceeds
therefrom, for the payment of such compensation or for the reimbursement of such
expenses.
(b) Pursuant to the Fee and Indemnity Agreement, the Note Issuer
has agreed to indemnify, defend and hold harmless the Delaware Trustee and any
of the affiliates, officers, directors, employees and agents of the Delaware
Trustee (the "Delaware Trustee Indemnified Persons") from and against any and
all losses, claims, actions, suits, taxes, damages, costs, expenses (including
the reasonable fees and expenses of its counsel) and liabilities (including
liabilities under state or federal securities laws) of any kind and nature
whatsoever (collectively, "Delaware Trustee Expenses"), to the extent that such
Delaware Trustee Expenses arise out of or are imposed upon or asserted against
such Delaware Trustee Indemnified Persons with respect to the creation,
operation or termination of the Trust, the execution, delivery or performance of
this Declaration or the transactions contemplated hereby; provided, however,
that the Note Issuer is not, and shall not be, required to indemnify any
Delaware Trustee Indemnified Person for any Delaware Trustee Expenses that
result from the willful misconduct or gross negligence of such Delaware Trustee
Indemnified Person. Pursuant to the Fee and Indemnity Agreement, the obligations
of the Note Issuer to indemnify the Delaware Trustee Indemnified Persons shall
survive the termination of this Declaration and the resignation or removal of
the Delaware Trustee. The Delaware Trustee is hereby authorized to execute the
Fee and Indemnity Agreement on behalf of the Trust and to enforce the terms
thereof on its own behalf and on behalf of the Trust.
(c) Notwithstanding anything to the contrary in this Declaration,
the Delaware Trustee shall have no recourse against the Agencies or against the
Notes or the payments thereon and proceeds thereof, for payment of any amounts
required to be paid to the Delaware Trustee under the Fee and Indemnity
Agreement. The Delaware Trustee shall have a lien against the Transition
Property to secure payment of such amounts to the extent provided in the Statute
or the financing order issued pursuant thereto. The Note Issuer's obligations to
make payments of such amounts to the Delaware Trustee shall be subject to the
priorities set forth in Section 8.02 of the Note Indenture.
SECTION 4.7 Resignation. The Delaware Trustee may resign upon 30 days'
prior written notice to the Certificate Trustee, the Agencies and the Trust;
provided, however, that a successor Delaware Trustee satisfactory to the
Agencies shall have been appointed and agreed to serve. If a successor Delaware
Trustee shall not have been appointed by the Agencies within such 30-day period,
the Delaware Trustee may apply to the Court of Chancery of the State of Delaware
for the appointment of a successor Delaware Trustee. Any successor Delaware
Trustee must satisfy the requirement of Section 3807(a) of the Business Trust
Act.
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SECTION 4.8 Representations and Warranties of Delaware Trustee. The
Bank of New York (Delaware) hereby represents and warrants to the other parties
hereto that:
(a) It is a banking corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware.
(b) It has full power, authority and legal right to execute,
deliver and perform this Declaration, and has taken all necessary action to
authorize the execution, delivery and performance by it of this Declaration.
(c) The execution, delivery and performance by it of this
Declaration (i) do not violate any requirement of federal law or the law of the
State of Delaware governing its banking and trust powers or any order, writ,
judgment or decree of any court, arbitrator or governmental authority applicable
to it or any of its assets, (ii) do not violate any provision of its charter or
by-laws, and (iii) do not violate any provision of, or constitute, with or
without notice or lapse of time, a default under, or result in the creation or
imposition of any Lien on any properties included in the Trust pursuant to the
provisions of any mortgage, indenture, contract, agreement or other undertaking
to which it is a party, which violation, default or Lien could reasonably be
expected to have a materially adverse effect on its performance or its ability
to perform its duties as a Trustee under this Declaration or on the transactions
contemplated in this Declaration.
(d) Its execution, delivery and performance of this Declaration
shall not require the authorization, consent or approval of, the giving of
notice to, the filing or registration with, or the taking of any other action in
respect of, any governmental authority or agency regulating the banking and
corporate trust activities of banks or trust companies in the jurisdiction in
which the Trust was formed (except for the filing of the Certificate of Trust
with the Secretary of State of the State of Delaware).
(e) This Declaration has been duly executed and delivered by it
and, assuming due authorization, execution and delivery hereof by the other
parties hereto, constitutes the legal, valid and binding agreement of it,
enforceable against it in accordance with the terms of this Declaration, except
as enforceability may be limited by bankruptcy, insolvency, reorganization, and
other similar laws affecting the enforcement of creditors' rights in general and
by general principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law.
SECTION 4.9 Reliance; Advice of Counsel.
(a) The Delaware Trustee shall incur no liability to anyone in
acting upon any signature, instrument, notice, resolution, request, consent,
order, certificate, report, opinion, bond or other document or paper reasonably
believed by it to be genuine and reasonably believed by it to be signed by the
proper party or parties and need not investigate any fact or matter pertaining
to or in any such document. The Delaware Trustee may accept a certified copy of
a resolution of the board of directors or other governing body of any corporate
party as conclusive evidence that such resolution has been duly adopted by such
body and that the same is in full force and effect unless and until the Delaware
Trustee receives a certified copy of a resolution of such board of directors or
other body revoking the same. As to any fact or matter the method of the
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determination of which is not specifically prescribed herein, the Delaware
Trustee may for all purposes hereof rely on a certificate, signed by the
president or any vice president or by the treasurer or other authorized officers
of the relevant party, as to such fact or matter, and such certificate shall
constitute full protection to it for any action taken or omitted to be taken by
it in good faith in reliance thereon.
(b) In the exercise or administration of the trusts hereunder and
in the performance of its duties and obligations under this Declaration and the
Basic Documents, the Delaware Trustee: (i) may, at the expense of the Note
Issuer or any other party, to the extent provided in the Fee and Indemnity
Agreement, act directly or through its agents, attorneys, custodians or nominees
(including, if necessary, the granting of a power of attorney to any of its
officers not otherwise authorized to execute and deliver any Basic Document,
Certificate or other documents related thereto and to take any action in
connection therewith on behalf of the Delaware Trustee) pursuant to agreements
entered into with any of them, and the Delaware Trustee shall not be liable for
the conduct or misconduct of such agents, attorneys, custodians or nominees if
such agents, attorneys, custodians or nominees shall have been selected by the
Delaware Trustee with reasonable care; and (ii) may, at the expense of the Note
Issuer or any other party, to the extent provided in the Fee and Indemnity
Agreement, consult with counsel, accountants and other professionals to be
selected with reasonable care by it. The Delaware Trustee shall not be liable
for anything done, suffered or omitted in good faith by it in accordance with
the opinion or advice of any such counsel, accountant or other such persons
reasonably relied on and which, according to such opinion or advice, is not
contrary to this Declaration or any other Basic Document.
SECTION 4.10 Delaware Trustee May Own Certificates. The Delaware
Trustee in its individual or any other capacity may become the owner or pledgee
of Certificates and may deal with Boston Edison, the Note Issuer, the Note
Trustee, the Certificate Trustee, the Servicer, the Agencies and their
respective affiliates and with the holders of the Certificates in transactions
in the same manner as the Delaware Trustee would have if it were not a trustee
under this Declaration.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE AGENCIES
SECTION 5.1 Representations and Warranties of Agencies. Each Agency as
a settlor of the Trust will represent and warrant, as of the Issuance Date of
the Certificates, the following:
(a) such Agency has full power, authority and legal right, and
has taken all action necessary, to execute and deliver this Declaration and to
fulfill its obligations under, and to consummate the transactions contemplated
by, this Declaration;
(b) the making and performance by such Agency of this Declaration
and all documents required to be executed and delivered by it hereunder do not
and will not violate any law or regulation of the jurisdiction of its
organization or any other law or regulation applicable to it or violate any
provision of, or constitute, with or without notice or lapse of time, a default
under, or result in the creation or imposition of any lien on any properties
included in the Trust
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Property pursuant to, any mortgage, indenture, contract, agreement or other
undertaking to which such Agency is a party;
(c) this Declaration has been duly executed and delivered by such
Agency and constitutes its legal, valid and binding obligation, enforceable in
accordance with its terms; and
(d) to the best knowledge of such Agency, all consents, licenses,
approvals, authorizations, exemptions, registrations, filings, opinions and
declarations from or with any agency, department, administrative authority,
statutory corporation or judicial entity necessary for the validity or
enforceability of such Agency's obligations under this Declaration have been
obtained, and no governmental authorizations other than any already obtained are
required in connection with the execution, delivery and performance of this
Declaration by such Agency.
ARTICLE 6
TERMINATION OF DECLARATION
SECTION 6.1 Termination of the Trust. The respective obligations and
responsibilities of the Agencies, the Delaware Trustee and the Trust created
hereby shall terminate with respect to any class of Certificates one year and
one day following the distribution to all holders of the Certificates of such
class of all amounts required to be distributed to them pursuant to the
Certificate Indenture and the disposition of all property held as part of the
Trust Property with respect to such class of Certificates. Upon the redemption
of all classes of Certificates and at the election of the Agencies, the Trust
shall dissolve. The Agencies shall pay or provide for the payment of all
remaining liabilities of the Trust and the Delaware Trustee, but solely from
amounts payable to the Agencies under the Fee and Indemnity Agreement, and
thereupon the Delaware Trustee shall file a certificate of cancellation under
the Business Trust Act and the Trust shall terminate, and any fees associated
with such filing shall be paid from amounts payable to the Agencies under the
Fee and Indemnity Agreement.
Notice of any termination of the Trust shall be mailed by the
Certificate Trustee promptly in accordance with the Certificate Indenture.
ARTICLE 7
MISCELLANEOUS
SECTION 7.1 No Legal Title to Trust Property. As provided in Section
2.5(c) hereof, the Agencies shall not have legal title to any part of the Trust
Property.
SECTION 7.2 Limitations on Rights of Others. Except as otherwise
provided herein, the provisions of this Declaration are solely for the benefit
of the Agencies, the Delaware Trustee, the Certificate Trustee and the holders
of the Certificates, and nothing in this Declaration, whether express or
implied, shall be construed to give to any other person any legal or equitable
right, remedy or claim in the Trust Property or under or in respect of this
Declaration or any covenants, conditions or provisions contained herein.
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SECTION 7.3 Notices. (a) Unless otherwise specifically provided herein,
all notices, directions, consents and waivers required under the terms and
provisions of this Declaration shall be in English and in writing, and any such
notice, direction, consent or waiver may be given by United States mail, courier
service, facsimile transmission or electronic mail (confirmed by telephone,
United States mail or courier service in the case of notice by facsimile
transmission or electronic mail) or any other customary means of communication,
and any such notice, direction, consent or waiver shall be effective when
delivered, or if mailed, three days after deposit in the United States mail with
proper postage for ordinary mail prepaid,
if to the Trust, to:
The Bank of New York (Delaware), as Delaware Trustee for the
Massachusetts RRB Special Purpose Trust BEC-1
c/o The Bank of New York
101 Barclay Street
Floor 12 East
New York, NY 10286
Attention: Asset Backed Finance Unit
Facsimile: (212) 815-5544
Telephone: (212) 815-5286
with copies to the Agencies at the addresses listed herein.
if to the Agencies, to:
Massachusetts Development Finance Agency
75 Federal Street
Boston, MA 02110
Attention: General Counsel
Facsimile: (617) 727-8741
Telephone: (617) 451-2477
and
Massachusetts Health and Education Facilities Authority
99 Summer Street
10th Floor
Boston, MA 02110
Attention: General Counsel
Facsimile: (617) 737-8366
Telephone: (617) 737-8377
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if to the Delaware Trustee, to:
The Bank of New York (Delaware)
c/o The Bank of New York
101 Barclay Street
Floor 12 East
New York, NY 10286
Attention: Asset Backed Finance Unit
Facsimile: (212) 815-5544
Telephone: (212) 815-5286
(b) The Trust, the Agencies or the Delaware Trustee, by notice to
the others, may designate additional or different addresses for subsequent
notices or communications.
(c) If a notice or communication is mailed in the manner provided
above within the time prescribed, it is conclusively presumed to have been duly
given, whether or not the addressee receives it.
SECTION 7.4 Severability. If any one or more of the covenants,
agreements, provisions or terms of this Declaration shall be for any reason
whatsoever held invalid, then such covenants, agreements, provisions or terms
shall be deemed severable from the remaining covenants, agreements, provisions
or terms of this Declaration and shall in no way affect the validity or
enforceability of the other provisions of this Declaration.
SECTION 7.5 Amendments Without Consent of Holders. This Declaration may
be amended by the Delaware Trustee and the Agencies with the prior written
consent of the Certificate Trustee but without the consent of any of the holders
of the Certificates (but with prior notice to the rating agencies named in the
Certificate Indenture) to (i) cure any ambiguity; (ii) correct or supplement any
provision in this Declaration that may be defective or inconsistent with any
other provision in this Declaration; (iii) add to the covenants, restrictions or
obligations of the Delaware Trustee for the benefit of the holders of the
Certificates; (iv) evidence and provide for the acceptance of the appointment of
a successor trustee with respect to the Trust Property and add to or change any
provisions as shall be necessary to facilitate the administration of the trusts
hereunder by more than one trustee; or (v) add, change or eliminate any other
provision of this Declaration in any manner that shall not, as evidenced by an
opinion of counsel to the Agencies, adversely affect in any material respect the
interests of the holders of the Certificates; provided, however, that this
Declaration shall not be amended in any manner which (i) would cause the Trust
to be characterized as other than a "grantor trust" for federal income tax
purposes or (ii) would affect the rights of the Agencies hereunder or under the
Basic Documents without the prior written consent of the Agencies or receipt of
an opinion of counsel to the Agencies to the effect that such amendment does not
adversely affect, in any manner, the interests of the Agencies under this
Declaration. After the execution of any such amendment, the Delaware Trustee
shall furnish a copy thereof to the rating agencies named in the Certificate
Indenture.
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SECTION 7.6 Amendments With Consent of Holders. This Declaration may be
amended from time to time by the Delaware Trustee and the Agencies with the
consent of the Certificate Trustee and the holders of Certificates whose
Certificates evidence not less than a majority of the outstanding principal
amount of each affected class of the Certificates as of the close of business on
the preceding Certificate payment date (which consent, whether given pursuant to
this Section 7.6 or pursuant to any other provision of this Declaration or the
Certificate Indenture, shall be conclusive and binding on such Certificate
holder and on all future holders of such Certificates and of any Certificates
issued upon the transfer thereof or in exchange thereof or in lieu thereof
whether or not notation of such consent is made upon the Certificates) (and with
prior notice to the rating agencies named in the Certificate Indenture) for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Declaration, or of modifying in any manner the rights
of the holders of the Certificates; provided, however, that no such amendment
shall (a) increase or reduce in any manner the amount of, or accelerate or delay
the timing of, payments that shall be required to be made on any Certificate
without the consent of the holder thereof; (b) adversely affect the rating of
any of the Certificates without the consent of the holders of all of the
outstanding principal amount of such affected Certificates; or (c) reduce the
aforesaid majority required to consent to any such amendment, without the
consent of all of the holders of the Certificates then outstanding. Prior to the
execution of any such amendment, supplement or consent, the Delaware Trustee
shall furnish written notification of the substance of such amendment,
supplement or consent to the rating agencies named in the Certificate Indenture.
After the execution of any such amendment, supplement or consent, the Delaware
Trustee shall furnish a copy thereof to the rating agencies named in the
Certificate Indenture.
SECTION 7.7 Form of Amendments.
(a) Promptly after the execution of any amendment, supplement or
consent pursuant to Sections 7.5 and 7.6, the Delaware Trustee shall furnish
written notification of the substance of such amendment or consent to the
Certificate Trustee and the Agencies.
(b) The manner of obtaining such consents (and any other consents
of holders of the Certificates provided for in this Declaration or in any other
Basic Document) and of evidencing the authorization of the execution thereof by
holders of the Certificates shall be subject to such reasonable requirements as
the Delaware Trustee may prescribe to the extent not inconsistent with the
provisions of the Basic Documents.
(c) Promptly after the execution of any amendment to the
Certificate of Trust, the Delaware Trustee shall cause the filing of such
amendment with the Secretary of State of the State of Delaware.
(d) Prior to the execution of any amendment to this Declaration,
the Delaware Trustee shall receive an opinion of counsel to the effect that (i)
the execution of such amendment is authorized or permitted by this Declaration
and (ii) such execution will not adversely affect the treatment of the Trust as
a "grantor trust" for federal income tax purposes.
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(e) The Delaware Trustee may, but shall not be obligated to,
enter into any such amendment that affects and only affects the Delaware
Trustee's own rights, duties or immunities under this Declaration or otherwise.
SECTION 7.8 Counterparts. This Declaration may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute one and the same instrument.
SECTION 7.9 Successors. All covenants and agreements contained herein
shall be binding upon, and inure to the benefit of the Agencies, the Trust and
the Delaware Trustee and their respective successors and permitted assigns, all
as herein provided.
SECTION 7.10 No Petition Covenant. Notwithstanding any other provision
of this Declaration or any Basic Document and notwithstanding any prior
termination of this Declaration, the Trust (or the Delaware Trustee on behalf of
the Trust) and the Agencies shall not, prior to the date which is one year and
one day after the termination of this Declaration, acquiesce, petition or
otherwise invoke or cause the Trust to invoke the process of any governmental
authority for the purpose of commencing or sustaining a case against the Trust
under any federal or state bankruptcy, insolvency or similar law or appointing a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Trust or any substantial part of its property, or
ordering the winding up or liquidation of the affairs of the Trust.
SECTION 7.11 Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
SECTION 7.12 Governing Law. THIS DECLARATION SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
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IN WITNESS WHEREOF, the Delaware Trustee and the Agencies have
caused this Declaration of Trust to be duly executed by duly authorized
officers, all as of the day and year first above written.
Massachusetts Development Finance
Agency, as a Settlor
By: /s/ David T. Slatery
--------------------------------
Name: David T. Slatery
Title: General Counsel
Massachusetts Health and
Education Facilities Authority, as a
Settlor
By: /s/ David J. MacKenzie
--------------------------------
Name: David J. MacKenzie
Title: General Counsel
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
By: /s/ Cheryl L. Laser
--------------------------------
Name: Cheryl L. Laser
Title: Assistant Vice President
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EXHIBIT A TO THE
DECLARATION OF TRUST
CERTIFICATE OF TRUST OF
MASSACHUSETTS RRB SPECIAL PURPOSE TRUST BEC-1
THIS CERTIFICATE OF TRUST of Massachusetts RRB Special Purpose Trust
BEC-1 (the "Trust"), dated as of July 28, 1999, is being duly executed and filed
by the undersigned, as trustees, to form a not-for-profit business trust under
the Delaware Business Trust Act (12 Del. C., Section 3801 et seq.) (the "Act").
1. Name. The name of the not-for-profit business trust formed hereby is
"Massachusetts RRB Special Purpose Trust BEC-1."
2. Delaware Trustee. The name and business address of the trustee of
the Trust in the State of Delaware is The Bank of New York (Delaware),White Clay
Center, Route 273, Newark, Delaware 19711.
3. Effective Date. This Certificate of Trust shall be effective as of
the date filed.
4. Series. The Trust shall be a series Trust and shall issue series of
beneficial interests having separate rights, powers and duties with respect to
property or obligations of the Trust, as provided in Section 3804 and 3806(b)(2)
of the Act, such that the debts, liabilities, obligations and expenses incurred,
contracted for or otherwise existing with respect to a particular series shall
be enforceable against the assets of such series only, and not against the
assets of the Trust generally or any other series.
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IN WITNESS WHEREOF, the undersigned, being the sole trustees of the
Trust, have executed this Certificate of Trust in accordance with Section
3811(a) of the Act.
THE BANK OF NEW YORK (DELAWARE), not in
its individual capacity but solely as Delaware Trustee
By:
Name:
Title:
THE BANK OF NEW YORK, not in its individual
capacity but solely as Certificate Trustee
By:
Name:
Title:
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