EXECUTION COPY

Exhibit 10.4.2.

 

ADMINISTRATION AGREEMENT

 

This Administration Agreement, dated as of March 1, 2005, is made by and between
CEC Funding, LLC, a Delaware limited liability company (the “Note Issuer”), and
Commonwealth Electric Company, a Massachusetts corporation, as Administrator
(the “Administrator”).

 

RECITALS

 

A. WHEREAS, the Note Issuer is issuing the Notes pursuant to the Note Indenture
dated as of March 1, 2005 (as amended, modified or supplemented from time to
time in accordance with the provisions thereof, the “Note Indenture”;
capitalized terms used herein and not defined herein shall have the meanings
assigned such terms in the Note Indenture), between the Note Issuer and The Bank
of New York, as Note Trustee (in such capacity, the “Note Trustee”).

 

B. WHEREAS, the Note Issuer has entered into certain agreements in connection
with the issuance of the Notes, including (i) a Transition Property Purchase and
Sale Agreement dated as of March 1, 2005 (the “Sale Agreement”), between the
Note Issuer and Commonwealth Electric Company, as Seller (in such capacity, the
“Seller”), (ii) a Transition Property Servicing Agreement dated as of March 1,
2005 (the “Servicing Agreement”), between the Note Issuer and Commonwealth
Electric Company, as Servicer (in such capacity, the “Servicer”), (iii) an
Underwriting Agreement dated as of February 15, 2005 (the “Underwriting
Agreement”), among the Note Issuer, Commonwealth Electric Company, BEC Funding
II, LLC, Boston Edison Company, and the Underwriters named therein, (iv) the
Note Indenture, (v) a Note Purchase Agreement dated as of March 1, 2005 (the
“Note Purchase Agreement”) between the Note Issuer and Massachusetts RRB Special
Purpose Trust 2005-1 (the “Trust”) and (vi) a Fee and Indemnity Agreement dated
as of March 1, 2005 (the “Fee Agreement”) among BEC Funding II, LLC, the Bank of
New York (Delaware) as Delaware Trustee, the Massachusetts Development Finance
Agency, the Massachusetts Health and Educational Facilities Authority, the Bank
of New York as Certificate Trustee, the Note Issuer, and the Trust (the Sale
Agreement, the Servicing Agreement, the Underwriting Agreement, the Note
Indenture, the Note Purchase Agreement and the Fee Agreement, all as amended or
modified from time to time, are hereinafter referred to collectively as the
“Related Agreements”);

 

C. WHEREAS, pursuant to the Related Agreements, the Note Issuer is required to
perform certain duties in connection with the Notes and the collateral therefor
pledged pursuant to the Note Indenture (the “Collateral”) and to maintain its
existence and comply with applicable laws;

 

D. WHEREAS, the Note Issuer has no employees, other than its officers, and does

 

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not intend to hire any additional employees, and consequently desires to have
the Administrator perform certain duties of the Note Issuer referred to in the
preceding clause, and to provide such additional services consistent with the
terms of this Agreement and the Related Agreements as the Note Issuer may from
time to time request; and

 

E. WHEREAS, the Administrator has the capacity to provide the services and the
facilities required hereby and is willing to perform such services and provide
such facilities for the Note Issuer on the terms set forth herein;

 

NOW, THEREFORE, in consideration of the mutual covenants contained herein, and
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties agree as follows:

 

ARTICLE I.

 

Duties of Administrator

 

Section 1.01 Appointment of Administrator: Acceptance of Appointment. The Note
Issuer hereby appoints the Administrator, and the Administrator hereby accepts
such appointment, to perform the Administrator’s obligations pursuant to this
Agreement on behalf of and for the benefit of the Note Issuer in accordance with
the terms of this Agreement and applicable law.

 

Section 1.02 Duties with Respect to the Related Agreements (a) The Administrator
agrees to perform all its duties as Administrator hereunder in accordance with
the terms of this Agreement and applicable law. In addition, the Administrator
shall consult with the Note Issuer regarding the Note Issuer’s duties under the
Related Agreements. Unless otherwise notified in writing by the Note Issuer, the
Administrator shall prepare for execution by the Note Issuer, or shall cause the
preparation by other appropriate Persons of all such documents, reports,
filings, instruments, certificates and opinions as it shall be the duty of the
Note Issuer to prepare, file or deliver pursuant to any Related Agreement. In
furtherance of the foregoing, the Administrator shall take all appropriate
action that it is the duty of the Note Issuer to take pursuant to the Note
Indenture including, without limitation, such of the foregoing as are required
with respect to the following matters under the Note Indenture (references are
to sections of the Note Indenture):

 

(1) the preparation of or obtaining of the documents and instruments required
for authentication of the Notes, if any, and delivery of the same to the Note
Trustee (Section 2.03);

 

(2) the duty to keep the Note Register and to give the Note Trustee notice of
any appointment of a new Note Registrar and the location, or change in location,
of the Note Register (Section 2.05);

 

(3) the fixing or causing to be fixed of any special record date and the
notification of each affected Noteholder with respect to special record dates,
payment

 

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dates, and the amount of defaulted interest (plus interest on such defaulted
interest) to be paid, if any (Section 2.08(c));

 

(4) the preparation, obtaining or filing of the instruments, opinions and
certificates and other documents required for the release of collateral (Section
2.11);

 

(5) the duty to cause newly appointed Paying Agents, if any, to deliver to the
Note Trustee the instrument specified in the Note Indenture regarding funds held
in trust (Section 3.03);

 

(6) the direction to Paying Agents to pay to the Note Trustee all sums held in
trust by such Paying Agents (Section 3.03);

 

(7) the preparation and filing of all documents and instruments necessary to
maintain the Note Issuer’s existence, rights and franchises as a limited
liability company under the laws of the State of Delaware (unless the Note
Issuer becomes, or any successor Note Issuer under the Note Indenture is or
becomes, organized under the laws of any other State or of the United States of
America, in which case the Administrator will prepare and file all documents and
instruments necessary to maintain such Note Issuer’s existence, rights and
franchises under the laws of such other jurisdiction) (Section 3.04);

 

(8) the obtaining and preservation of the Note Issuer’s qualification to do
business in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of the Note Indenture, the
Notes, the Collateral and each other instrument or agreement included in the
Collateral (Section 3.04);

 

(9) the preparation of all supplements and amendments to the Note Indenture,
filings with the DTE pursuant to the Statute, financing statements, continuation
statements, instruments of further assurance and other instruments, in
accordance with Section 3.05 of the Note Indenture, necessary to protect the
Collateral (Section 3.05);

 

(10) the obtaining of the Opinions of Counsel and the delivery of such Opinions
of Counsel, in accordance with Section 3.06 of the Note Indenture, as to the
Collateral, and the annual delivery of the Officer’s Certificate and certain
other statements, in accordance with Section 3.09 of the Note Indenture, as to
compliance with the Note Indenture (Section 3.06 and 3.09);

 

(11) the identification to the Note Trustee in an Officer’s Certificate of any
Person with whom the Note Issuer has contracted to perform its duties under the
Note Indenture (Section 3.07(b));

 

(12) the preparation and filing of all documents required under the Statute
relating to the transfer of the ownership or security interest in the Transition
Property (Section 3.07(i));

 

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(13) the annual preparation and delivery of an Officer’s Certificate to the Note
Trustee, the Certificate Trustee, the Agencies and the Rating Agencies as to
compliance with conditions and covenants under the Note Indenture (Section
3.09);

 

(14) the preparation and obtaining of documents and instruments required for the
release of the Note Issuer from its obligations under the Note Indenture
(Section 3.11(b));

 

(15) the delivery of notice to the Note Trustee and the Rating Agencies of each
Event of Default and each default by the Servicer or Seller of its obligations
under the Servicing Agreement or the Sale Agreement, respectively (Sections
3.07(d) and 3.9);

 

(16) the preparation of an Officer’s Certificate and Independent Certificate
relating to (i) the satisfaction and discharge of the Note Indenture under
Section 4.01 of the Note Indenture or (ii) the exercise of the Legal Defeasance
Option or the Covenant Defeasance Option under Section 4.02 of the Note
Indenture (Sections 4.01 and 4.02);

 

(17) the furnishing to the Note Trustee of (i) each Record Date with respect to
each Series and (ii) the names and addresses of Noteholders during any period
when the Note Trustee is not the Note Registrar (Section 7.01);

 

(18) to the extent not required to be performed by the Servicer, the preparation
and, after execution by the Note Issuer, the Delaware Trustee or the Certificate
Trustee (as the case may be), the filing with the SEC and the Note Trustee of
the annual reports and of the information, documents and other reports,
including filings on behalf of the Trust pursuant to the Certificate Indenture,
the Declaration of Trust or otherwise, required to be filed on a periodic basis
with, and summaries thereof as may be required by rules and regulations
prescribed by, the Commission and the transmission of such summaries, as
necessary, to the Noteholders (Sections 3.07(h) and 7.03);

 

(19) the notification of the Note Trustee if and when the Notes are listed on
any stock exchange (Section 7.04);

 

(20) the opening of one or more segregated trust accounts in the Note Trustee’s
name, the preparation of Issuer Orders, and the obtaining of Opinions of Counsel
and the taking of all other actions necessary with respect to investment and
reinvestment of funds in the Collection Account (Section 8.02 and 8.03);

 

(21) the preparation of Issuer Requests and Officers’ Certificates and the
obtaining of an Opinion of Counsel and Independent Certificates, if necessary,
for the release of the Collateral (Section 8.04 and 8.05);

 

(22) the preparation of Issuer Orders and the obtaining of Officers’
Certificates with respect to the execution of supplemental indentures (Sections
9.01 and 9.02);

 

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(23) the preparation of new Notes conforming to any supplemental indenture
(Section 9.04);

 

(24) the notification of the Note Trustee of any redemption of the Notes
(Sections 10.01 and 10.04);

 

(25) the preparation of all Officer’s Certificates and Independent Certificates
with respect to any requests by the Note Issuer to the Note Trustee to take any
action under the Note Indenture (Section 11.01(a));

 

(26) the preparation and delivery of Officers’ Certificates for the release of
property from the lien of the Note Indenture (Section 11.01(b));

 

(27) the notification of the Note Trustee of any notice received by the Note
Issuer from the Noteholders (Section 11.04); and

 

(28) the recording of the Note Indenture, if applicable, and the obtaining of an
Opinion of Counsel in connection therewith (Section 11.14).

 

(b) The Administrator shall also take all appropriate action that it is the duty
of the Note Issuer to take pursuant to the Underwriting Agreement including,
without limitation, the following matters (references are to sections of the
Underwriting Agreement):

 

(a) to the extent not already delivered, the delivery to the Underwriters and
counsel for the Underwriters under the Underwriting Agreement, of copies of the
Registration Statement (as defined in the Underwriting Agreement) (Section
5(a)(iii));

 

(b) so long as delivery of a prospectus by an Underwriter or dealer may be
required by the Act, the delivery to the Underwriters and counsel for the
Underwriters of as many copies of any Preliminary Final Prospectus and the Final
Prospectus and any supplement thereto as the Underwriters may reasonably request
(Section 5(a)(iii));

 

(c) to the extent not required to be performed by the Servicer, the preparation
and, after execution by the Note Issuer, the filing with the SEC of reports on
Form SR as required by Rule 463 under the Act, and the delivery of such reports
on Form SR, as filed with the Commission, to the Underwriters (Section
5(a)(iii));

 

(d) the preparation and, after execution by the Note Issuer, the filing of all
documents and instruments necessary to qualify the Certificates for sale under
the laws of such jurisdictions as the Underwriters may designate, and the
maintenance of such qualifications in effect so long as required for the
distribution of the Certificates, subject to the qualifications, limitations and
exceptions set forth in the Underwriting Agreement (Section 5(a)(iv));

 

(e) the arrangement for the determination of the legality of the Certificates
for purchase by institutional investors (Section 5(a)(iv));

 

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(f) to the extent not already performed by the Servicer, the delivery to the
Representatives of 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 (Section
5(a)(vi));

 

(g) so long as any of the Certificates are outstanding, and to the extent not
already performed by the Servicer, the delivery to the Underwriters of (i) a
copy of any filings with the DTE pursuant to the Financing Order including, but
not limited to, any Issuance Advice Letters and (ii) from time to time, any
information concerning the Note Issuer to the extent readily available, that the
Underwriters may reasonably request (Section 5(a)(vii)); and

 

(h) to the extent, if any, that any rating necessary to satisfy the condition
set forth in Section 6(r) of the Underwriting Agreement is conditioned upon the
furnishing of documents or the taking of other actions by the Note Issuer on or
after the Closing Date (as defined in the Underwriting Agreement), the delivery
of such documents and the taking of such actions (Section 5(a)(viii)).

 

Section 1.03 Additional Duties. (a) In addition to the duties of the
Administrator set forth above, the Administrator shall perform such calculations
and shall prepare for execution by the Note Issuer or shall cause the
preparation by other appropriate persons of all such documents, reports,
filings, instruments, certificates and opinions as it shall be the duty of the
Note Issuer to prepare, file or deliver pursuant to the Related Agreements, and
at the request of the Note Issuer shall take all appropriate action that it is
the duty of the Note Issuer to take pursuant to the Related Agreements. Subject
to Section 5.01 of this Agreement, and in accordance with the directions of the
Note Issuer, the Administrator shall administer, perform or supervise the
performance of such other activities in connection with the Collateral and the
Related Agreements as are not covered by any of the foregoing provisions and as
are expressly requested by the Note Issuer and are reasonably within the
capability of the Administrator.

 

(b) In carrying out the foregoing duties or any of its other obligations under
this Agreement, the Administrator may enter into transactions with or otherwise
deal with any of its Affiliates; provided, however, that the terms of any such
transactions or dealings shall be, in the Administrator’s reasonable opinion, no
less favorable to the Note Issuer than would be available from unaffiliated
parties.

 

Section 1.04 Non-Ministerial Matters. (a) With respect to matters that in the
reasonable judgment of the Administrator are non-ministerial, the Administrator
shall not take any action unless the Administrator shall have notified the Note
Issuer of the proposed action and the Note Issuer shall have consented. For the
purpose of the preceding sentence, “non-ministerial matters” shall include,
without limitation:

 

(1) the amendment of, or any supplement to, the Note Indenture;

 

(2) the initiation of any claim or lawsuit by the Note Issuer and the compromise
of any action, claim or lawsuit brought by or against the Note Issuer (other
than in connection with the collection of the RTC Charge);

 

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(3) the amendment, change or modification of the Related Agreements;

 

(4) the appointment of successor Note Registrars, successor Paying Agents and
successor Note Trustees pursuant to the Note Indenture or the appointment of
successor Administrators or successor Servicers, or the consent to the
assignment by the Note Registrar, Paying Agent or Note Trustee of its
obligations under the Note Indenture; and

 

(5) the removal of the Note Trustee.

 

(b) Notwithstanding anything to the contrary in this Agreement, the
Administrator shall not be obligated to, and hereby agrees that it shall not,
take any action that the Note Issuer directs the Administrator not to take on
its behalf.

 

Section 1.05 Records. The Administrator shall maintain appropriate books of
account and records relating to services performed hereunder, which books of
account and records shall be accessible for inspection by the Note Issuer and
the Note Trustee at any time during normal business hours.

 

ARTICLE II.

 

Facilities

 

Section 2.01 Facilities. During the term of this Agreement, the Administrator
shall make available to or provide the Note Issuer with such facilities as are
necessary to conduct the business of the Note Issuer and to comply with the
terms of the Related Agreements. Such facilities shall include office space to
serve as the principal place of business of the Note Issuer. Initially such
office space will be located at One NSTAR Way, Westwood, Massachusetts 02090.
All facilities provided to the Note Issuer hereunder shall be provided without
warranty of any kind.

 

ARTICLE III.

 

Compensation

 

Section 3.01 Compensation. As compensation for the performance of the
Administrator’s obligations under this Agreement, including the provision of
facilities pursuant to Section 2.01, the Administrator shall be entitled to a
fee of $45,478 for each semi-annual period, payable on the Payment Date as
defined in Section 1.01(a) of the Note Indenture. In addition, the Note Issuer
shall reimburse the Administrator for all filing fees and expenses, legal fees,
fees of outside auditors and other out-of-pocket expenses incurred by the
Administrator in the course of performing its duties hereunder. The
Administrator’s compensation and other expenses payable hereunder shall be paid
from the Collection Account pursuant to Section 8.02(d) of the Note Indenture,
and the Administrator shall have no recourse against the Note Issuer for payment
of such amounts other than in accordance with Section 8.02 of the Note
Indenture.

 

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ARTICLE IV.

 

Additional Information

 

Section 4.01 Additional Information To Be Furnished to Note Issuer. The
Administrator shall furnish to the Note Issuer from time to time such additional
information regarding the Collateral as the Note Issuer shall reasonably
request.

 

ARTICLE V.

 

Miscellaneous Provisions

 

Section 5.01 Independence of Administrator. For all purposes of this Agreement,
the Administrator shall be an independent contractor and shall not be subject to
the supervision of the Note Issuer with respect to the manner in which it
accomplishes the performance of its obligations hereunder. Unless expressly
authorized by the Note Issuer, the Administrator shall have no authority to act
for or represent the Note Issuer in any way and shall not otherwise be deemed an
agent of the Note Issuer.

 

Section 5.02 No Joint Venture. Nothing contained in this Agreement shall (a)
constitute the Administrator and the Note Issuer as members of any partnership,
joint venture, association, syndicate, unincorporated business or other separate
entity, (b) be construed to impose any liability as such on any of them or (c)
be deemed to confer on any of them any express, implied or apparent authority to
incur any obligation or liability on behalf of the others.

 

Section 5.03 Other Activities of Administrator. Nothing herein shall prevent the
Administrator or its Affiliates from engaging in other businesses or, in its
sole discretion, from acting in a similar capacity as an administrator for any
other person or entity even though such person or entity may engage in business
activities similar to those of the Note Issuer.

 

Section 5.04 Term of Agreement: Resignation and Removal of Administrator. (a)
This Agreement shall continue in force for one year and one day after the
retirement of all Notes issued pursuant to the Note Indenture.

 

(b) Subject to Sections 5.04(e) and 5.04(f), the Administrator may resign its
duties hereunder by providing the Note Issuer with at least 60 days prior
written notice.

 

(c) Subject to Sections 5.04(e) and 5.04(f), the Note Issuer may remove the
Administrator without cause by providing the Administrator with at least 60 days
prior written notice.

 

(d) Subject to Sections 5.04(e) and 5.04(f), at the sole option of the Note
Issuer, the Administrator may be removed immediately upon written notice of
termination from the Note Issuer to the Administrator if any of the following
events shall occur:

 

(1) the Administrator shall default in the performance of any of its duties
under this Agreement and, after notice of such default, shall not cure such
default within ten days (or, if such default is curable but cannot be cured in
such time, shall not give within ten days such assurance of cure as shall be
reasonably satisfactory to the Note Issuer);

 

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(2) a court having jurisdiction in the premises shall enter a decree or order
for relief, and such decree or order shall not have been vacated within 60 days,
in respect of the Administrator in any involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect or
appoint a receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official for the Administrator or any substantial part of its property
or order the winding-up or liquidation of its affairs; or

 

(3) the Administrator shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, shall
consent to the entry of an order for relief in an involuntary case under any
such law, or shall consent to the appointment of a receiver, liquidator,
assignee, trustee, custodian, sequestrator or similar official for the
Administrator or any substantial part of its property, shall consent to the
taking of possession by any such official of any substantial part of its
property, shall make any general assignment for the benefit of creditors or
shall fail generally to pay its debts as they become due.

 

The Administrator agrees that if any of the events specified in clause (2) or
(3) of this Section shall occur, it shall give written notice thereof to the
Note Issuer and the Note Trustee within seven days after the happening of such
event.

 

(e) No resignation or removal of the Administrator pursuant to this Section 5.04
shall be effective until (1) a successor Administrator shall have been appointed
by the Note Issuer and (2) such successor Administrator shall have agreed in
writing to be bound by the terms of this Agreement in the same manner as the
Administrator is bound hereunder.

 

(f) The appointment of any successor Administrator shall be effective only after
satisfaction of the Rating Agency Condition with respect to the proposed
appointment.

 

Section 5.05 Action upon Termination, Resignation or Removal. Promptly upon the
effective date of termination of this Agreement pursuant to Section 5.04(a) or
the resignation or removal of the Administrator pursuant to Sections 5.04(b) or
5.04(c), respectively, the Administrator shall be entitled to be paid all fees
accruing to it and expenses accrued by it in the performance of its duties
hereunder through the date of such termination, resignation or removal, to the
extent permitted under Article III. The Administrator shall forthwith upon such
termination pursuant to Section 5.04(a) deliver to the Note Issuer all property
and documents of or relating to the Collateral then in the custody of the
Administrator. In the event of the resignation or removal of the Administrator
pursuant to Sections 5.04(b) or 5.04(c), respectively, the Administrator shall
cooperate with the Note Issuer and take all reasonable steps requested to assist
the Note Issuer in making an orderly transfer of the duties of the
Administrator.

 

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Section 5.06 Notices. Unless otherwise specifically provided herein, all
notices, directions, consents and waivers required under the terms and
provisions of this Administration Agreement shall be in English and in writing,
and any such notice, direction, consent or waiver may be given by United States
mail, courier service, 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:

 

  (a) if to the Note Issuer, to

 

CEC Funding, LLC

One NSTAR Way

Westwood, MA 02090

Attention: President

 

Facsimile: (781) 441-8013

Telephone: (781) 441-8900

 

  (b) if to the Administrator, to

 

Commonwealth Electric Company

One NSTAR Way

Westwood, MA 02090

Attention: Manager, Corporate Finance

Facsimile: (781) 441-8013

Telephone: (781) 441-8127

 

  (c) if to the Note Trustee, to

 

The Bank of New York

101 Barclay Street

Floor 8 West

New York, NY 10286

Attention: Asset Backed Finance Unit

Facsimile: (212) 815-5544

Telephone: (212) 815-5286

 

or to such other address as any party shall have provided to the other parties
in writing. Any notice required to be in writing hereunder shall be deemed given
if such notice is mailed by certified mail, postage prepaid, telecopied or
hand-delivered to the address of such party as provided above, except that
notices to the Note Trustee are effective only upon receipt.

 

Section 5.07 Amendments. This Agreement may be amended in writing by the
Administrator and the Note Issuer with the written consent of the Note Trustee,
but without the

 

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consent of any of the Noteholders or Certificateholders, to cure any ambiguity,
to correct or supplement any provisions in this Agreement or for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions in this Agreement or of modifying in any manner the rights of the
Noteholders or the Certificateholders; provided, however, that such action shall
not, as evidenced by an Officer’s Certificate delivered to the Note Trustee,
adversely affect in any material respect the interests of any Noteholder or
Certificateholder.

 

This Agreement may also be amended in writing from time to time by the
Administrator and the Note Issuer with the written consent of the Note Trustee
and the written consent of the Holders of Notes evidencing not less than a
majority of the Outstanding Amount of the Notes of all Series, for the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of the
Noteholders or the Certificateholders; provided, however, that no such amendment
shall increase or reduce in any manner the amount of, or accelerate or delay the
timing of, RTC Charge Collections without the consent of the Holders of all the
outstanding Notes.

 

Promptly after the execution of any such amendment and the requisite consents,
the Administrator shall furnish written notification of the substance of such
amendment to the Note Trustee and each of the Rating Agencies.

 

Approval by Noteholders of the substance of any proposed amendment or consent
shall constitute sufficient consent of the Noteholders pursuant to this Section,
and it shall not be necessary that Noteholders approve of the particular form of
any amendment or consent.

 

Prior to its consent to any amendment to this Agreement, the Note Trustee shall
be entitled to receive and rely upon an Opinion of Counsel stating that such
amendment is authorized or permitted by this Agreement. The Note Trustee may,
but shall not be obligated to, enter into any such amendment which affects the
Note Trustee’s own rights, duties or immunities under this Agreement or
otherwise.

 

Section 5.08 Successors and Assigns. This Agreement may not be assigned by the
Administrator unless such assignment is previously consented to in writing by
the Note Issuer and the Note Trustee and is subject to the satisfaction of the
Rating Agency Condition in respect thereof. An assignment with such consent and
satisfaction, if accepted by the assignee, shall bind the assignee hereunder in
the same manner as the Administrator is bound hereunder. Notwithstanding the
foregoing, this Agreement may be assigned by the Administrator without the
consent of the Note Issuer and the Note Trustee to a corporation or other
organization that is a successor (by merger, consolidation or purchase of
assets) to the Administrator, provided that such successor organization executes
and delivers to the Note Issuer and the Note Trustee an agreement in which such
corporation or other organization agrees to be bound hereunder by the terms of
said assignment in the same manner as the Administrator is bound hereunder and
the Rating Agency Condition is satisfied. Subject to the foregoing, this
Agreement shall bind any successors or assigns of the parties hereto.

 

Section 5.09 Limitations on Rights of Others. The provisions of this Agreement
are solely for the benefit of the Administrator, the Note Issuer, the Trust, the
Note Trustee, the

 

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Noteholders, the Certificate Trustee, the Certificateholders, the Delaware
Trustee and the Agencies. The Noteholders and the Certificateholders shall be
entitled to enforce their rights and remedies against the Administrator under
this agreement solely through a cause of action brought for their benefit by the
Note Trustee or the Certificate Trustee, as the case may be, and nothing in this
Agreement, whether express or implied, shall be construed to give to any other
Person any legal or equitable right, remedy or claim in the Transition Property
or under or in respect of this Agreement or any covenants, conditions or
provisions contained herein, except for the indemnities specifically provided in
Section 5.15. The Persons listed in this section as having the benefit of this
Agreement and the indemnified Persons listed in Section 5.15 shall have rights
of enforcement with respect to this Agreement.

 

Section 5.10 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS, WITHOUT REFERENCE TO ITS CONFLICT
OF LAW PROVISIONS AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

 

Section 5.11 Headings. The section headings hereof have been inserted for
convenience of reference only and shall not be construed to affect the meaning,
construction or effect of this Agreement.

 

Section 5.12 Counterparts. This Agreement may be executed in counterparts, each
of which when so executed shall together constitute but one and the same
agreement.

 

Section 5.13 Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other jurisdiction.

 

Section 5.14 Nonpetition Covenants. Notwithstanding any prior termination of
this Agreement or the Note Indenture, but subject to the DTE’s right to order
the sequestration and payment of revenues arising with respect to the Transition
Property notwithstanding any bankruptcy, reorganization or other insolvency
proceedings with respect to the Seller of the Transition Property pursuant to
Section 1H(d)(5) of the Statute, the Administrator, solely in its capacity as a
creditor of the Note Issuer, shall not, prior to the date which is one year and
one day after the termination of the Note Indenture with respect to the Note
Issuer, petition or otherwise invoke or cause the Note Issuer or the Trust to
invoke the process of any court or government authority for the purpose of
commencing or sustaining an involuntary case against the Note Issuer or the
Trust under any Federal or state bankruptcy, insolvency or similar law or
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or
other similar official of the Note Issuer or the Trust or any substantial part
of the property of the Note Issuer or the Trust, or, to the fullest extent
permitted by law, ordering the winding up or liquidation of the affairs of the
Note Issuer or the Trust.

 

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Section 5.15 Indemnification. The Administrator shall indemnify the Note Issuer,
the Note Trustee, the Delaware Trustee, the Certificate Trustee, the Trust, the
Agencies, and their respective officers, officials, directors, managers,
employees and agents (each an “Indemnified Person”) for, and defend and hold
harmless each such Person from and against, any and all liabilities,
obligations, actions, suits, claims, losses, damages, payments, costs or
expenses of any kind whatsoever that may be imposed on, incurred by or asserted
against any such Person as a result of the Administrator’s willful misconduct or
gross negligence in the performance of its duties or observance of its covenants
under this Agreement. The Noteholders and the Certificateholders shall be
entitled to enforce their rights and remedies against the Administrator under
this indemnification solely through a cause of action brought for their benefit
by the Note Trustee or the Certificate Trustee, as the case may be. The
Administrator will not, without the prior written consent of the Indemnified
Person, 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 may be sought under this Section 5.15, (whether
or not the Indemnified Person is an actual or potential party to such claim or
action) unless such settlement, compromise or consent includes an unconditional
release of the Indemnified Person from all liability arising out of such claim,
action, suit or proceeding. The indemnification obligations of the Administrator
under this Section 5.15 shall survive the termination of this Agreement and the
resignation or removal of the Note Trustee or Certificate Trustee.

 

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IN WITNESS WHEREOF, the parties have caused this Administration Agreement to be
duly executed and delivered under seal as of the day and year first above
written.

 

CEC FUNDING, LLC, as Note Issuer By:   /s/    EMILIE O’NEIL            

Name: Emilie O’Neil

   

Title: Assistant Treasurer

COMMONWEALTH ELECTRIC COMPANY,

as Administrator

By:   /s/    PHILIP J. LEMBO            

Name: Philip J. Lembo

   

Title: Assistant Treasurer

 

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