MASSACHUSETTS RRB SPECIAL PURPOSE TRUST WMECO-1
RATE REDUCTION CERTIFICATES
WMECO FUNDING LLC
WESTERN MASSACHUSETTS ELECTRIC COMPANY
UNDERWRITING AGREEMENT
New York, New York
May [ ], 2001
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 WMECO-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 WMECO-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 on or
about May [ ], 2001 (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 WMECO
Funding LLC Notes (the "Notes"), issued by WMECO Funding LLC, a Delaware limited
liability company (the "Note Issuer"), and the payments received with respect
thereto. The Notes will be issued pursuant to a Note Indenture dated on or about
May [ ], 2001 (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 on or about May [ ], 2001 (the "Note Purchase Agreement"),
between the Note Issuer and the Trust. The Certificates will represent
fractional undivided beneficial interests in the underlying 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 Western Massachusetts
Electric Company, a Massachusetts corporation (the "Company"), pursuant to a
Transition Property Purchase and Sale Agreement dated on or about May [ ], 2001
(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 on or about May [ ], 2001 (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 Underwriting Agreement
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.
(A) The Note Issuer, the Notes and the
Certificates meet the requirements for the use of
Form S-3 and Rule 415 under the Securities Act of
1933, as amended (the "Act"), and the Note Issuer has
filed with the Securities and Exchange Commission
(the "SEC") a registration statement (file number
333-59118) 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 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
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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.
(B) The Note Issuer, the Notes and the
Certificates meet the requirements for the use of
Form S-3 and Rule 415 under the Act and the Note
Issuer has filed with the SEC a registration
statement (file number 333-59118) 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 in
accordance with Rule 424(a), 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 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
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thereto) will, comply in all material respects with the
applicable requirements of the Act, the Securities Exchange
Act of 1934, as amended (the "Exchange Act") and the Trust
Indenture Act of 1939, as amended (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 (A) that part of the
Registration Statement which shall constitute the Statements
of Eligibility and Qualification (Form T-1) under the Trust
Indenture Act of the Note Trustee and the Certificate Trustee
or (B) the information contained in or omitted from the
Registration Statement or the Final Prospectus (or any
supplement thereto) under the heading "Underwriting" 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), as specified in Section 8(b) of this
Agreement. 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
"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
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
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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 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.
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4. DELIVERY AND PAYMENT. Delivery of and payment for the Certificates
shall be made at 9:00 AM Eastern Time on May [ ], 2001 (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 (Eastern Time) 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 (A) when
the Registration Statement, if not effective at the Execution
Time, and any amendment thereto, shall have become effective,
(B) when the Final Prospectus, and any supplement thereto,
shall have been filed with the SEC pursuant to Rule 424(b),
(C) when, prior to termination of the offering of the
Certificates, any amendment to the Registration Statement
shall have been filed or become effective, (D) of any request
by the SEC for any amendment of the Registration Statement or
supplement to the Final Prospectus or for any additional
information, (E) 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 (F) 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
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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 (A) prepare and file with the SEC, subject to
the second sentence of paragraph (a)(i) of this Section 5, an
amendment or supplement which will correct such statement or
omission or effect such compliance and (B) 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
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 designate, will
maintain such qualifications in effect so long as required for
the distribution of the Certificates or requested by the
Representatives 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.
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(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 (A) 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, (B) a
copy of any filings with the Massachusetts Department of
Telecommunications 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 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
permitted by the Finance Order and described in the Prospectus
including 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-
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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 (A) as soon as available, a
copy of each report of the Trust filed with the SEC under the
Exchange Act, or mailed to Certificateholders, (B) a copy of
any filings with the DTE pursuant to the Financing Order,
including, but not limited to, any Advice Letters, and (C)
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 (A) prepare and file with
the SEC, subject to the second sentence of paragraph (a)(i) of
this Section 5, an amendment or supplement which will correct
such statement or omission or effect such compliance and (B)
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 certificates 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 Time, on the date of
determination of the public offering price, if such determination
occurred at or prior to 3:00 PM Eastern Time on such date, or (ii)
12:00 Noon Eastern 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 Time on such date; if filing of the
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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 Day,
▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, outside counsel for the Company, and portions of
which may be delivered by in-house counsel for the Company, as the
Representatives may agree, 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 as described in the
Registration Statement and the Prospectus, and to execute,
deliver and perform its obligations under this Agreement, the
Sale Agreement, the Servicing Agreement and the Administration
Agreement;
(ii) the Sale Agreement, the Servicing Agreement
and the Administration Agreement have been duly authorized,
executed and delivered by, 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, after having
made inquiry of officers of the Company, 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 affiliates, or challenging
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 of a character required to be described in the
Registration Statement or the Final Prospectus, or to be filed
as an exhibit to the Registration Statement, which is not
described or filed as required;
(iv) this Agreement has been duly authorized,
executed and delivered by the Company;
(v) no consent, approval, authorization or order
of any Massachusetts or federal 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
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(as defined in Section 1.01 of the Servicing Agreement), the
Public Utility Holding Company Act of 1935, as amended (the
"1935 Act") 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, 2000 or
any Form 10-Q or Form 8-K of the Company filed subsequent to
such date, (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;
(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;
(viii) to the extent described in the Final
Prospectus, the Sale Agreement, the Servicing Agreement and
the Administration Agreement, conform to the descriptions
thereof contained therein; and
(ix) the statements included in the Final
Prospectus under the headings "The Seller and Servicer" (other
than under the subheading "Billing and
11
Collections" as to which such counsel need not express any
opinion) and "Servicing," to the extent that they constitute
matters of Massachusetts or federal laws or legal conclusions
with respect thereto, fairly summarize the matters described
therein.
In rendering such opinion, such counsel may rely (x) 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 (y) 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 Day,
▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, outside counsel for the Note Issuer, and portions
of which may be delivered by in-house counsel for the Note Issuer, as
the Representatives may agree, and portions of which may be delivered
by ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & 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 and is qualified to do business in The Commonwealth
of Massachusetts (and is registered as a foreign limited
liability company in The Commonwealth of Massachusetts);
(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);
12
(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, the
Limited Liability Company Agreement, and the Notes conform to
the descriptions thereof contained therein;
(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;
(vi) 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 or the Financing Order 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;
(vii) 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
State Agencies," "Federal Income Tax Consequences" and "State
Taxation," and to the extent statements contained under the
subheadings "Certificateholders could experience payment
delays or losses as a result of amendment, repeal or
invalidation of the restructuring statute or breach of the
Commonwealth pledge--Legislative or executive actions" and
"--Court decisions" under the caption "Risk Factors" represent
the opinions of ▇▇▇▇▇▇ & Dodge LLP, or (B) the financial
statements including the notes thereto or other financial data
contained in the Final Prospectus as to which such counsel
need
13
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 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 State
Agencies," "Federal Income Tax Consequences" and "State
Taxation," and to the extent statements contained under the
subheadings "Certificateholders could experience payment
delays or losses as a result of amendment, repeal or
invalidation of the restructuring statute or breach of the
Commonwealth pledge--Legislative or executive actions" and
"--Court decisions" under the caption "Risk Factors" represent
the opinions of ▇▇▇▇▇▇ & Dodge LLP, or (B) the financial
statements including the notes thereto or other financial data
contained in the Final Prospectus as to which such counsel
need express no opinion);
(viii) this Agreement has been duly authorized,
executed and delivered by the Note Issuer;
(ix) 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, the 1935 Act 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;
(x) neither the execution and delivery of this
Agreement, the Sale Agreement, the Servicing Agreement, the
Note Indenture, the Note Purchase Agreement, the
Administration Agreement or the Fee and Indemnity Agreement,
nor the issuance and sale of the Notes, nor the consummation
of the transactions contemplated by this Agreement, the 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, the 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
14
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 court,
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Note Issuer, or
any of its properties;
(xi) Upon the giving of value by the Note Trustee
to the Note Issuer with respect to the Collateral, (A) the
Note Indenture creates in favor of the Note Trustee a security
interest in the rights of the Note Issuer in the Collateral,
(B) 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 (C) such security interest is perfected; and
(xii) the Note Issuer is not, and after giving
effect to the offering and sale of the Certificates and the
application of the proceeds thereof as described in the Final
Prospectus, will not be, 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 (x) 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 (y) 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 ▇▇▇▇▇▇ & Dodge LLP or ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP, both
co-special counsel for the Trust and the Agencies, and portions of
which may be delivered by ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & 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,
Clearstream and Euroclear, as to which they shall be entitled
to express no opinion) and in the
15
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., ss. 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, deliver
and perform all of its obligations under the Declaration of
Trust and the issuance resolution of such Agency;
(iv) 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;
(v) 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);
(vi) 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, 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);
(vii) 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-assessable 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
16
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;
(viii) 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 WMECO 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);
(ix) the Certificate Indenture has been duly
qualified under the Trust Indenture Act of 1939, as amended;
(x) the statements included in the Final
Prospectus under the headings "The Trust," "The State
Agencies" and "Description of the Certificates" fairly
summarize the matters described therein (other than matters
related to DTC, Clearstream or Euroclear, as to which they
shall be entitled to 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": "Certificateholders
could experience payment delays or losses as a result of
amendment, repeal or invalidation of the restructuring statute
or breach of the Commonwealth pledge--Legislative or executive
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;
(xi) 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;
(xii) to the knowledge of such counsel, the
Registration Statement and the Final Prospectus (other than
(A) the financial statements including the notes thereto and
other financial data contained therein, (B) information
contained under the captions "The Note Issuer" and "The Seller
and Servicer," (C) information regarding DTC, Clearstream and
Euroclear and (D) the statement of eligibility of the Trustee
on Form T-l and the documents incorporated by
17
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 have come to such
counsel's attention which would cause such counsel to believe
that the Registration Statement (other than (A) the financial
statements including the notes thereto or other financial data
contained therein, (B) information contained under the
captions "The Note Issuer" and "The Seller and Servicer," (C)
information regarding DTC, Clearstream 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 including the notes thereto or other
financial data contained therein, (B) information contained
under the captions "The Note Issuer" and "The Seller and
Servicer," (C) information regarding DTC, Clearstream 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;
(xiii) 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;
(xiv) 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
18
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, Delaware or federal court, state regulatory
body, administrative agency or other governmental
instrumentality having jurisdiction over the Trust, or any of
its properties;
(xv) neither the execution and delivery of the
Declaration of Trust and the certificate the form of which is
attached hereto as Appendix A (the "Appendix A Certificate"),
nor the consummation of the transactions contemplated by the
Declaration of Trust and the Appendix A Certificate, nor the
fulfillment of the terms of the Declaration of Trust and the
Appendix A Certificate by the Agencies will (A) conflict with
or breach any of the material terms or provisions, 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 or (B) violate any Massachusetts or
federal law, order, rule or regulation applicable to the
Agencies or the decision 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; and
(xvi) 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
▇▇▇▇▇▇▇▇ Ronon ▇▇▇▇▇▇▇ & ▇▇▇▇▇, LLP, counsel to the Note Trustee, dated
the Closing Date, in form and substance reasonably satisfactory to the
Representatives, to the effect that:
(i) the Note Trustee is duly organized and validly
existing as a state banking institution in good standing under
the laws of the State of New York, with full corporate trust
power and authority to enter into and perform its obligations
under the Note Indenture;
19
(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
▇▇▇▇▇▇▇▇ Ronon ▇▇▇▇▇▇▇ & ▇▇▇▇▇, LLP, 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 duly organized and
validly existing as a state banking institution in good
standing under the laws of the State of New York, with full
corporate trust power and authority to enter into and perform
its obligations under the Note Indenture;
(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
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, 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
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;
(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);
(iii) the Delaware Trustee has duly executed the
Certificates issued on the Closing Date on behalf of the
Trust;
20
(h) The Representatives shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ & ▇▇▇▇ 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 (A) 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 (B) 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 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
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;
(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
21
(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 (A) 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 (B) the Transition Property,
except as set forth in or contemplated in the Final Prospectus
(exclusive of any supplement thereto).
(k) At the Closing Date, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 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, that they consent to the inclusion of their report on the
audited financial statements of the Issuer and the reference to them as
experts under the heading "Experts" in the Basic Prospectus and the
Final Prospectus, 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(g) 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, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 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 or the Certificates as contemplated
by the Registration Statement (exclusive of any amendment thereof) and
the Final Prospectus (exclusive of any supplement thereto).
22
(m) The Representatives shall have received on the Closing
Date an opinion letter or letters of Day, ▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, 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 ▇▇▇▇▇▇ & Dodge LLP, special counsel to
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 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 Day, ▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, outside counsel
for the Company, and portions of which may be delivered by in-house
counsel for the Company, as the Representatives may agree, 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 ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ 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; 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 ▇▇▇▇▇▇ & 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 and/or takings clause defense.
(q) The Representatives shall have received on the Closing
Date an opinion letter or letters of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, 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
23
the Note Issuer's Sole Member (as defined in the Limited Liability
Company Agreement) and the affirmative vote of all of the Directors
(including the Independent Directors (as defined in the Limited
Liability Company Agreement)), as provided in Section 2.07(b) of the
Limited Liability Company Agreement of the Note Issuer, is required,
and (y) such provision, contained in Section 2.07(b) of the Limited
Liability Company 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 Limited Liability Company 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 copies, certified to the
satisfaction of the Representatives, of the Financing Order 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, including being included as
addressees of, or receiving a letter entitling the Representatives to
rely on, each legal opinion addressed to the rating agencies or the
parties to the transactions and each related certificate, if any.
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 Day, ▇▇▇▇▇ & ▇▇▇▇▇▇, LLP, Hartford, Connecticut, on
the Closing Date.
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,
24
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 issuance 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, officials, officers, members, consultants,
counsel, 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
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
25
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 officials, counsel, consultants,
agents and employees, 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 second full paragraph, the second sentence
of the fourth full paragraph and the fifth full paragraph under the
heading "Underwriting" or the third full paragraph (other than the last
sentence thereof) under the heading "Plan of Distribution" in 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 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
26
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. The relative benefits received by the Company or 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 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
27
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 the Agencies prior to delivery of and payment for the
Certificates, if prior to such time there shall have occurred (a) any change, or
any development involving a prospective change, in or affecting (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, in the judgment of the Representatives,
materially impairs the investment quality of the Certificates or makes it
impractical or inadvisable to market the Certificates; (b) a suspension or
material limitation in trading in securities generally on the New York Stock
Exchange; (c) a suspension or material limitation in trading in the securities
of the Company;
28
(d) a general moratorium on commercial banking activities shall have been
declared either by federal, New York state or Massachusetts state authorities;
or (e) any outbreak or escalation of hostilities involving the United States or
the declaration by the United States of a national emergency or war or other
calamity or crisis 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,
if to the Company, to:
Western Massachusetts Electric Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Assistant Treasurer-Finance
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Western Massachusetts Electric Company
c/o Northeast Utilities Service Company
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Assistant Treasurer-Finance
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Note Issuer, to:
29
WMECO Funding LLC
c/o Western Massachusetts Electric Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Assistant Treasurer-Finance
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Western Massachusetts Electric Company
c/o Northeast Utilities Service Company
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Assistant Treasurer-Finance
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇;
if sent to the Agencies, to:
Massachusetts Development Finance Agency
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
and
Massachusetts Health and Educational Facilities Authority
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
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.
14. APPLICABLE LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of New York.
30
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.
31
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,
WESTERN MASSACHUSETTS ELECTRIC
COMPANY
By:
-------------------------------------
Name:
Title:
WMECO FUNDING LLC
By:
-------------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED
on behalf of each of the Underwriters
▇▇▇▇▇▇ BROTHERS INC.
By:
--------------------------------------
(▇▇▇▇▇▇ Brothers Inc.)
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
By:
--------------------------------------
(▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.)
S-1
SCHEDULE I TO THE
UNDERWRITING AGREEMENT
Underwriting Agreement dated May [ ], 2001
Registration Statement No. 333-59118
Representative(s):
▇▇▇▇▇▇ Brothers Inc.
Three World Financial Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Title: Massachusetts RRB Special Purpose Trust WMECO-1
$[ ] Rate Reduction Certificates
Principal ▇▇▇▇▇▇, Price to Public, Underwriting Discounts and Commissions and
Proceeds to Trust:
Scheduled
Underwriting Final Final
Total Principal Discounts and Proceeds to Distribution Termination
Amount Price to Public Commissions Trust Date Date
--------------- --------------- --------------- --------------- ------------ ------------
Per Class A-1
Certificate $ % % % ___/___/___ ___/___/___
--------------- --------------- --------------- ---------------
Total $ $ $ $
Original Issue Discount (if any): $_____________
Redemption provisions: Optional Redemption and Mandatory
Redemption as set forth in Article X of
the Note Indenture
Closing Date, Time and Location: May [ ], 2001
9:00 a.m., Eastern Time
Hartford, Connecticut
Type of Offering: Delayed Offering
SCHEDULE II TO THE
UNDERWRITING AGREEMENT
PRINCIPAL AMOUNT OF CERTIFICATES TO BE PURCHASED
Class A-1
Underwriters Certificates Total
--------------------------------- ----------------- -----------------
▇▇▇▇▇▇ Brothers Inc. $ $
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. $ $
$ $
$ $
$ $
$ $
$ $
$ $
$ $
$ $
$ $
TOTAL......................... $ $
----------------- -----------------
$ $
================= =================
APPENDIX A TO THE
UNDERWRITING AGREEMENT
CERTIFICATE OF THE AGENCIES PURSUANT
TO FINANCING ORDER APPROVING FINAL TERMS AND
CONDITIONS OF WMECO FUNDING LLC NOTES AND
MASSACHUSETTS RRB SPECIAL PURPOSE TRUST
WMECO-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 WMECO Funding LLC Notes (the "Notes") and the
Massachusetts RRB Special Purpose Trust WMECO-1 Rate Reduction Certificates (the
"Certificates"), as set forth in the underwriting agreement dated as of May [ ],
2001 by and among WMECO Funding LLC, Western Massachusetts Electric Company and
▇▇▇▇▇▇ Brothers Inc. and ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., as representatives (the
"Representatives") of the several Underwriters named therein (the "Underwriting
Agreement").
In furtherance of this approval, the Agencies authorize the
Massachusetts RRB Special Purpose Trust WMECO-1, a Delaware business trust (the
"Trust"), to issue the Certificates and otherwise comply with the terms and
conditions of the Underwriting Agreement.
WMECO Funding LLC, Western Massachusetts Electric 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: May [ ], 2001
MASSACHUSETTS DEVELOPMENT FINANCE
AGENCY
By:
-------------------------------------
Name:
Title:
MASSACHUSETTS HEALTH AND
EDUCATIONAL FACILITIES AUTHORITY
By:
-------------------------------------
Name:
Title: