Exhibit 10.3.1

EXECUTION COPY

 

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BEC FUNDING II, LLC,

as Note Issuer

and

MASSACHUSETTS RRB SPECIAL PURPOSE TRUST 2005-1,

as Certificate Issuer

 

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NOTE PURCHASE AGREEMENT

Dated as of March 1, 2005

 

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NOTE PURCHASE AGREEMENT (this “Agreement”) dated as of March 1, 2005, between
BEC FUNDING II, LLC, a Delaware limited liability company (the “Note Issuer”),
and MASSACHUSETTS RRB SPECIAL PURPOSE TRUST 2005-1, a Delaware statutory trust
(the “Certificate Issuer “) formed under the Declaration of Trust.

 

RECITALS

 

A. Capitalized terms used herein without definition shall have the meanings
ascribed to them in that certain Note Indenture (the “Note Indenture”), dated as
of March 1, 2005, between Note Issuer and The Bank of New York, a New York
banking corporation, as trustee (the “Note Trustee”); which is incorporated
herein by this reference.

 

B. On the Issuance Date, and on the terms set forth herein, the Note Issuer has
agreed to sell to the Certificate Issuer and the Certificate Issuer has agreed
to purchase from the Note Issuer $265,500,000 in principal amount of BEC Funding
II, LLC Notes (the “Notes”), issued pursuant to the Note Indenture.

 

AGREEMENT

 

NOW, THEREFORE, on the terms and conditions set forth below and for good and
valuable, consideration, the receipt and adequacy of which is hereby
acknowledged, the Note Issuer and the Certificate Issuer agree as follows:

 

1. SALE OF NOTES

 

a. Authorization of Notes.

 

On or before the Issuance Date, the Note Issuer shall have caused to be
authorized pursuant to the Note Indenture the issuance of the Notes in such
classes and principal amounts as set forth in Schedule 1(a) attached hereto and
incorporated herein by this reference.

 

b. Issuance and Purchase.

 

On the basis of the representations, warranties and covenants contained in this
Agreement and in the Note Indenture, (collectively, the “Note Purchase
Documents”), and subject to the terms and conditions of the Note Purchase
Documents, the Note Issuer agrees to issue and sell to the Certificate Issuer,
and the Certificate Issuer agrees to purchase from the Note Issuer, the Notes
set forth in Schedule 1(a) hereto. The purchase price of each class of Notes is
set forth in Schedule 1(a) attached hereto, and the aggregate purchase price of
the Notes shall be an amount equal to the proceeds net of underwriting discounts
and commissions to the Certificate Issuer set forth in Schedule I to the
Underwriting Agreement dated as of February 15, 2005 (the “Underwriting
Agreement”), among Boston Edison Company, the Note Issuer, Commonwealth Electric
Company, CEC Funding, LLC, and Lehman Brothers Inc. and Goldman, Sachs & Co.

 

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c. Delivery

 

Delivery of, and payment of the purchase price for the Notes shall be made by
federal wire transfer of immediately available funds as early as possible after
9:00 a.m. (E.S.T.) on the Issuance Date to an account designated by the Note
Issuer not later than the Business Day prior to the Issuance Date.

 

2. CONDITIONS PRECEDENT

 

The obligations of the Certificate Issuer to purchase the Notes under this
Agreement are subject to the satisfaction of each of the following conditions:

 

a. All the representations and warranties of the Note Issuer contained in this
Agreement shall be true and correct in all material respects on the Issuance
Date with the same force and effect as if made on and as of the Issuance Date.

 

b. Neither the Notes nor the Certificates shall have received a lower rating by
any Rating Agency than that on which the Notes or the Certificates,
respectively, were marketed.

 

c. The Certificate Trustee, on behalf of the Certificate Issuer, shall have
received on the Issuance Date an Officer’s Certificate dated the Issuance Date
confirming the matters set forth in Sections 2(a) and 2(b).

 

d. The Certificate Trustee, on behalf of the Certificate Issuer, shall have
received a copy of the executed Note Indenture (certified by an Authorized
Officer of the Note Issuer) which shall have been entered into by the Note
Issuer and the Note Trustee.

 

e. The Note Issuer shall not have failed on or prior to the Issuance Date to
perform or comply in any material respect with any of the agreements herein
contained and required to be performed or complied with by the Note Issuer on or
prior to the Issuance Date.

 

3. REPRESENTATIONS AND WARRANTIES

 

To induce the Certificate Issuer to enter into this Agreement and to purchase
the Notes, the Note Issuer represents and warrants to the Certificate Issuer on
the date of this Agreement that the following statements are true and correct:

 

a. The Note Issuer has been duly formed and is validly existing and in good
standing as a limited liability company under the laws of the State of Delaware
and has the limited liability company power and authority to carry on its
business as described in the Registration Statement covering the Notes (the
“Registration Statement”) and to own its properties, and is registered to
transact business in the Commonwealth of Massachusetts.

 

b. This Agreement has been duly authorized, executed and delivered by the Note
Issuer.

 

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c. The Note Indenture has been duly authorized by the Note Issuer and, on the
Issuance Date, will have been validly executed and delivered by the Note Issuer.
When the Note Indenture has been duly executed and delivered by the Note Issuer,
the Note Indenture will be a valid and binding agreement of the Note Issuer,
enforceable against the Note Issuer in accordance with its terms except as (i)
the enforceability thereof may be limited by bankruptcy, insolvency, moratorium,
reorganization, fraudulent transfer and other laws relating to or affecting
creditors’ rights generally and (ii) the availability of equitable remedies may
be limited by equitable principles of general applicability. On the Issuance
Date, the Note Indenture will conform in all material respects to the
requirements of the Trust Indenture Act, and the rules and regulations of the
Commission applicable to an indenture which is qualified thereunder.

 

d. The Notes have been duly authorized and, on the Issuance Date, will have been
validly executed and delivered by the Note Issuer. When the Notes have been
issued, executed and authenticated in accordance with the provisions of the Note
Indenture and delivered to and paid for by the Certificate Issuer in accordance
with the terms of this Agreement, the Notes will be entitled to the benefits of
the Note Indenture and will be valid and binding obligations of the Note Issuer,
enforceable in accordance with their terms except as (i) the enforceability
thereof may be limited by bankruptcy, insolvency, moratorium, reorganization,
fraudulent transfer and other laws relating to or affecting creditors’ rights
generally and (ii) the availability of equitable remedies may be limited by
equitable principles of general applicability.

 

e. No Default or Event of Default under the Note Indenture would occur as a
result of the sale of the Notes pursuant to the terms hereof.

 

f. The execution, delivery and performance of this Agreement and the other Basic
Documents by the Note Issuer, compliance by the Note Issuer with all provisions
hereof and thereof and the consummation of the transactions contemplated hereby
and thereby will not (i) require any consent, approval, authorization or other
order of, or qualification with, any court or governmental body or agency
(except such as has been obtained or may be required under the laws of the
Commonwealth of Massachusetts, the Statute, the Securities Act, or the
securities or blue sky laws of the various states), (ii) conflict with or
constitute a material breach of any of the terms or provisions of, or a default
under, the limited liability company agreement of the Note Issuer, (iii) violate
or conflict in any material respect with any applicable law or any rule,
regulation, judgment, order or decree of any court or any governmental body or
agency having jurisdiction over the Note Issuer or its property, (iv) result in
the imposition or creation of a lien under, any agreement or instrument to which
the Note Issuer is a party or by which the Note Issuer or its respective
property is bound, except as may be created or imposed under the Basic Documents
and any statutory lien under Section 1H(e) of the Statute.

 

g. To the best knowledge of the Note Issuer, there are no legal or governmental
proceedings pending or threatened to which the Note Issuer is or reasonably
could be a party or to which any of its property is or reasonably could be

 

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subject, which might result, singly or in the aggregate, in a material adverse
effect on the enforceability of the Notes.

 

h. The Note Issuer is not and, after giving effect to the offering and sale of
the Notes and the application of the net proceeds thereof as described in the
Registration Statement, will not be, an “investment company,” as such term is
defined in the Investment Company Act of 1940, as amended.

 

i. The Note Issuer is not and, after giving effect to the offering and sale of
the Notes and the application of the net proceeds thereof as described in the
Registration Statement, will not be, a “holding company,” as such term is
defined in the Public Utilities Holding Company Act of 1935, as amended.

 

j. The Note Issuer has not taken any action that might cause this Agreement or
the issuance or sale of the Notes to violate Regulation T (12 C.F.R. Part 220),
Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of the
Board of Governors of the Federal Reserve System.

 

k. Since the date as of which information is given in the Registration Statement
and other than as set forth in the Registration Statement (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement), (i)
there has not occurred any material adverse change in the assets, business,
management or operations of the Note Issuer and (ii) other than the Notes and as
contemplated by the Basic Documents, the Note Issuer has not incurred any
material liability or obligation, direct or contingent.

 

4. COVENANTS

 

The Note Issuer covenants and agrees that, until payment in full of the Notes,
unless the Delaware Trustee, on behalf of the Certificate Issuer, shall
otherwise give prior written consent, the Note Issuer shall perform all
covenants in this Section 4.

 

a. To advise the Delaware Trustee, as the representative of the Certificate
Issuer, the Agencies and the Certificate Trustee promptly and, if requested by
the Delaware Trustee, on behalf of the Certificate Issuer, the Agencies or the
Certificate Trustee, confirm such advice in writing, of the issuance by the
Commission or any state securities commission of any stop order or an order
suspending the qualification or exemption from qualification of any Note or
Certificate for offering or sale in any jurisdiction in which the Certificates
have been offered or the initiation of any proceeding by the Commission, any
state securities commission or any other federal or state regulatory authority
for such purpose. The Note Issuer shall use its best efforts to prevent the
issuance of any stop order or order suspending the qualification or exemption of
any Note or Certificate under the Securities Act, or any state securities or
blue sky laws and, if at any time the Commission or any state securities
commission or other federal or state regulatory authority shall issue a stop
order or an order suspending the qualification or exemption of any Note or
Certificate under the Securities Act or any state securities or

 

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blue sky laws, the Note Issuer shall use its reasonable efforts to obtain the
withdrawal or lifting of such order at the earliest possible time.

 

b. To the extent permitted by applicable law, not to claim voluntarily the
benefit of any usury laws against the holders of any Notes. To the extent
permitted by applicable law, to resist actively any attempts to claim the
benefit of any usury laws against the holders of any Notes.

 

c. To use its best efforts to do and perform all things required or necessary to
be done and performed under this Agreement by it prior to the Issuance Date and
to satisfy all conditions precedent to the delivery of the Notes.

 

d. At the written request of the Delaware Trustee on behalf of the Certificate
Issuer, the Agencies, or the Certificate Trustee, to provide, or cause to be
provided, to the Delaware Trustee as the representative of the Certificate
Issuer, the Agencies or the Certificate Trustee, as applicable, a copy of any
requested certificate, notice, opinion or other document delivered by the Note
Issuer to the Note Trustee pursuant to the terms of the Note Indenture.

 

5. MISCELLANEOUS

 

a. Fees

 

The Note Issuer agrees to reimburse the Certificate Issuer, the Certificate
Trustee, the Delaware Trustee and the Agencies and their respective officers,
directors and each person, if any, who controls the Certificate Issuer, the
Certificate Trustee, the Delaware Trustee or the Agencies within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act for any and
all fees and expenses (including without limitation the reasonable fees and
expenses of counsel) reasonably incurred by them in connection with enforcing
their rights under this Agreement (including, without limitation, their
respective rights under this Section 5(a)); provided, however, that the Note
Issuer’s obligations pursuant to this Section 5(a) shall be treated as Operating
Expenses under the Note Indenture and shall be payable only to the extent that
funds are available for such Operating Expenses in the priority set forth in
Section 8.02(4) of the Note Indenture.

 

b. Effective Date of Agreement

 

This Agreement shall become effective upon the execution and delivery of this
Agreement by the parties hereto.

 

c. Survival of Representations and Agreements

 

All agreements, representations and warranties made herein shall survive the
execution and delivery of this Agreement and the purchase of the Notes
hereunder. Notwithstanding anything in this Agreement or implied bylaw to the
contrary, the agreements of the Note Issuer set forth in Section 5(a), except as
otherwise expressly provided therein, shall survive the payment of the Notes and
the termination of this Agreement.

 

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d. Notice

 

Unless otherwise specifically provided herein, all notices, directions, consents
and waivers required under the terms and provisions of this Note Purchase
Agreement shall be in English and in writing, and any such notice, direction,
consent or waiver may be given by United States mail, courier service, facsimile
transmission or electronic mail (confirmed by telephone, United States mail or
courier service in the case of notice by facsimile transmission or electronic
mail) or any other customary means of communication, and any such notice,
direction, consent or waiver shall be effective when delivered, or if mailed,
three days after deposit in the United States mail with proper postage for
ordinary mail prepaid,

 

if to the Agencies, to:

 

Massachusetts Development Finance Agency

160 Federal Street

Boston, Massachusetts 02110

Attention: General Counsel

Facsimile: (617) 330-2001

Telephone: (617) 330-[2006]

 

and

 

Massachusetts Health and Educational Facilities Authority

99 Summer Street

10th Floor

Boston, Massachusetts 02110

Attention: General Counsel

Facsimile: (617) 737-8366

Telephone: (617) 737-8377

 

if to the Certificate Issuer, to:

 

The Bank of New York (Delaware), as Delaware Trustee for the Massachusetts RRB
Special Purpose Trust 2005-1

c/o The Bank of New York

101 Barclay Street,

Floor 8 West

New York, New York 10286

Attention: Asset Backed Finance Unit

Facsimile: (212) 815-5544

Telephone: (212) 815-5286

 

(with copies to the Agencies at the addresses listed herein)

 

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if to the Certificate Trustee, to:

 

The Bank of New York

101 Barclay Street

Floor 8 West

New York, New York 10286

Attention: Asset Backed Finance Unit

Facsimile: (212) 815-5544

Telephone: (212) 815-5286

 

if to the Delaware Trustee, to:

 

The Bank of New York (Delaware)

c/o The Bank of New York

101 Barclay Street

Floor 8 West

New York, New York 10286

Attention: Asset Backed Finance Unit

Facsimile: (212) 815-5544

Telephone: (212) 815-5286

 

if to the Note Issuer, to:

 

BEC Funding II, LLC

One NSTAR Way

Westwood, Massachusetts 02090

Attention: President

Facsimile: (781) 441-8013

Telephone: (781) 441-8900

 

if to the Note Trustee, to:

The Bank of New York

101 Barclay Street

Floor 8 West

New York, New York 10286

Attention: Asset Backed Finance Unit

Facsimile: (212) 815-5544

Telephone: (212) 815-5286

 

e. Parties

 

Except as otherwise provided, this Agreement has been and is made solely for the
benefit of the Note Issuer, the Note Trustee, the Certificate Issuer, the
Certificate Trustee, the Delaware Trustee, the Agencies, the officials,
directors and officers of the Certificate Issuer, the Certificate Trustee, the
Delaware Trustee and the Agencies, any controlling persons referred to herein,
the directors, officers and any manager of the Note Issuer (not in their
individual capacities but in their respective capacities as directors, officers
or manager of the Note Issuer) and their respective successors and assigns, all
as and to the extent provided in this Agreement, all of which Persons shall have
rights of enforcement

 

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with respect hereto, and no other Person shall acquire or have any right under
or by virtue of this Agreement, except as contemplated by the Certificate
Indenture and the other Basic Documents. The term “successors and assigns” shall
not include a purchaser of any of the Notes from the Certificate Issuer merely
because of such purchase.

 

f. Governing Law

 

This Agreement shall be governed by, and shall be construed and enforced in
accordance with, the internal laws of the Commonwealth of Massachusetts, without
regard to its conflict of laws principles.

 

g. Severability

 

If any provision of this Agreement shall be prohibited or invalid under
applicable law, the Agreement shall be ineffective only to such extent, without
invalidating the remainder of the Agreement.

 

h. Further Assurances

 

The Note Issuer agrees to execute and deliver such instruments and take such
actions as the Delaware Trustee on behalf of the Certificate Issuer, the
Agencies or the Certificate Trustee may, from time to time, reasonably request
in order to effectuate the purpose and to carry out the terms of this Agreement.

 

i. Headings

 

Section and subsection headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or be given any substantive effect.

 

j. Counterparts

 

This Agreement may be signed in various counterparts which together shall
constitute one and the same instrument.

 

k. Limitation of Liability.

 

It is expressly understood and agreed by the parties hereto that (a) this
Agreement is executed and delivered by The Bank of New York (Delaware), not
individually or personally but solely as Delaware Trustee on behalf of the
Certificate Issuer, in the exercise of the powers and authority conferred and
vested in it, (b) any representations, undertakings and agreements herein made
by the Delaware Trustee on behalf of the Certificate Issuer are made and
intended not as personal representations, undertakings and agreements by The
Bank of New York (Delaware) but are made and intended for the purpose of binding
only the Certificate Issuer, (c) nothing herein contained shall be construed as
creating any liability on The Bank of New York (Delaware), individually or
personally, to perform any covenant either expressed or implied contained
herein, except in its capacity as Delaware Trustee, all such liability, if any,
being expressly waived by the parties who are signatories to this Agreement and
by any Person claiming by, through or under such parties and (d) under no
circumstances shall The Bank of New York (Delaware) be personally liable for the
payment of any indebtedness or expense of the Certificate Issuer or be
personally liable for the breach or failure of any obligation, representation,
warranty or covenant made or undertaken by the Certificate Issuer under this
Agreement; provided, however, that this provision shall not protect The Bank of
New York (Delaware) against any liability that would otherwise be imposed by
reason of willful misconduct, bad faith or gross negligence in the performance
of its obligations and duties under this Agreement.

 

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IN WITNESS WHEREOF; the Note Issuer and the Certificate Issuer have caused this
Note Purchase Agreement to be duly executed by their respective officer or
trustee, all as of the day and year first above written.

 

BEC FUNDING II, LLC,

a Delaware limited liability company

By:   /s/    EMILIE O’NEIL            

Name: Emilie O’Neil

   

Title: Assistant Treasurer

MASSACHUSETTS RRB SPECIAL PURPOSE TRUST 2005-1, a statutory trust organized
under the laws of the State of Delaware By: THE BANK OF NEW YORK (DELAWARE), not
in its individual capacity, but solely as Delaware Trustee By:   /s/    WILLIAM
T. LEWIS            

Name: William T. Lewis

   

Title: Sr. Vice President

 

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SCHEDULE 1(a)

NOTES

 

Class of Notes

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   Principal Amount

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   Purchase Price (%)

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A-1

   $ 42,997,000      99.99102 %

A-2

   $ 60,978,000      99.98911 %

A-3

   $ 104,619,000      99.99380 %

A-4

   $ 56,906,000      99.97295 %     

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Total:

   $ 265,500,000    $ 265,467,614