Exhibit 1(a)
$200,000,000
BALTIMORE GAS AND ELECTRIC COMPANY
MEDIUM-TERM NOTES
SERIES H
FORM OF AGENCY AGREEMENT
__________, 1998
▇▇▇▇▇▇ Brothers
▇▇▇▇▇▇ Brothers Inc.
3 World Financial ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
1. INTRODUCTION. Baltimore Gas and Electric Company, a Maryland
corporation (the "Company"), confirms its agreement with ▇▇▇▇▇▇ Brothers, ▇▇▇▇▇▇
Brothers Inc., and ▇▇▇▇▇▇▇, Sachs & Co. (individually, an "Agent" and
collectively, the "Agents") with respect to the issue and sale from time to time
by the Company of up to $200,000,000 aggregate principal amount of its
Medium-Term Notes, Series H registered under the registration statement referred
to in Section 2(a) (the "Notes"). The Notes will be issued under an indenture,
dated as of July 1, 1985, as supplemented by the Supplemental Indentures dated
as of October 1, 1987, and January 26, 1993, respectively (the "Indenture"),
between the Company and The Bank of New York (successor to Mercantile-Safe
Deposit and Trust Company) (the "Trustee").
The Notes shall have the maturity ranges (which shall be from nine
months to thirty years), annual interest rates, redemption provisions and other
terms set forth in the Prospectus referred to in Section 2(a) as it may be
supplemented from time to time. The Notes will be issued, and the terms thereof
established, from time to time by the Company in accordance with the Indenture,
the Notes and the Procedures (as defined in Section 3(d) hereof).
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to, and agrees with, each Agent as follows:
(a) A registration statement on Form S-3 (No. 333-____), covering
$200 million principal amount of the Notes, including a
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prospectus, has been filed with the Securities and Exchange Commission
("Commission") and has become effective. Such registration statement, including
(i) the prospectus included therein dated ________, 1998 (such prospectus
including each document incorporated by reference therein, as may be amended or
supplemented from time to time, is hereinafter called the "Prospectus") and (ii)
all documents filed as part thereof or incorporated by reference therein, as may
be amended or supplemented from time to time, are hereinafter called the
"Registration Statement." Any reference in this Agreement to amending or
supplementing the Prospectus shall be deemed to include the filing of materials
incorporated by reference in the Prospectus after the Closing Date and any
reference in this Agreement to any amendment or supplement to the Prospectus
shall be deemed to include any such materials incorporated by reference in the
Prospectus after the Closing Date.
(b) The Registration Statement conforms in all respects to the
requirements of the Securities Act of 1933, as amended ("Act"), and the
pertinent published rules and regulations of the Commission thereunder ("33 Act
Rules and Regulations") and the Trust Indenture Act of 1939, as amended ("Trust
Indenture Act"), and does not include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, and on the Closing Date, and at each
of the times of (i) acceptance referred to in Section 6(a) hereof, (ii) delivery
referred to in Section 6(e) hereof and (iii) amendment or supplement referred to
in Section 6(b) hereof (the Closing Date and each such time being herein
sometimes referred to as "Representation Date"), the Registration Statement and
the Prospectus will conform in all respects to the requirements of the Act, the
Trust Indenture Act and the 33 Act Rules and Regulations and none of such
documents will contain an untrue statement of a material fact or will omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading, except that the foregoing does not apply to
statements or omissions in such document based upon written information
furnished to the Company by any Agent specifically for use therein. The
documents incorporated by reference in the Registration Statement or the
Prospectus pursuant to Item 12 of Form S-3 of the Act, at the time they were
filed with the Commission, complied in all material respects with the
requirements of the Securities Exchange Act of 1934, as amended ("Exchange
Act"), and the pertinent published rules and regulations thereunder ("Exchange
Act Rules and Regulations"). Any additional documents deemed to be incorporated
by reference in the Prospectus will, when they are filed with the Commission,
comply in all material respects with the requirements of the Exchange Act and
the Exchange Act Rules and Regulations and will not contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
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3. APPOINTMENT AS AGENT; SOLICITATIONS AS AGENT.
(a) Subject to the terms and conditions stated herein, the Company
hereby appoints each of the Agents as an agent of the Company for the purpose of
soliciting or receiving offers to purchase the Notes from the Company by others.
(b) On the basis of the representations and warranties contained
herein, but subject to the terms and conditions herein set forth, each Agent
agrees, as agent of the Company, to use all reasonable efforts when requested by
the Company to solicit offers to purchase the Notes upon the terms and
conditions set forth in the Prospectus, as from time to time amended or
supplemented.
Upon receipt of notice from the Company as contemplated by Section
4(b) hereof, each Agent shall suspend its solicitation of purchases of Notes
until such time as the Company shall have furnished it with an amendment or
supplement to the Registration Statement or the Prospectus, as the case may be,
contemplated by Section 4(b) and shall have advised each Agent that such
solicitation may be resumed.
The Company reserves the right, in its sole discretion, to suspend
solicitation of offers to purchase the Notes commencing at any time for any
period of time or permanently. Upon receipt of notice from the Company, the
Agents will use their best efforts promptly to suspend solicitation of offers to
purchase Notes from the Company, but in no event later than one business day
after notice, until such time as the Company has advised the Agents that such
solicitation may be resumed. For the purpose of the foregoing sentence,
"business day" shall mean any day which is not a Saturday or a Sunday or a day
on which banking institutions in The City of New York and the City of Baltimore
are authorized or required by law or executive order to be closed.
The Agents are authorized to solicit offers to purchase Notes only
in fully registered form, in minimum denominations of $1,000 and integral
multiples of $1,000 in excess thereof, and at a purchase price which, unless
otherwise specified in a supplement to the Prospectus, shall be equal to 100% of
the principal amount thereof. Each Agent shall communicate to the Company,
orally or in writing, each reasonable offer to purchase Notes received by it as
Agent. The Company shall have the sole right to accept offers to purchase the
Notes and may reject any such offer, in whole or in part. Each Agent shall have
the right, in its discretion reasonably exercised, without notice to the
Company, to reject any offer to purchase Notes received by it, in whole or in
part, and any such rejection shall not be deemed a breach of its agreement
contained herein.
No Note which the Company has agreed to sell pursuant to this Agreement
shall be deemed to have been purchased and paid for, or sold, by the Company
until such Note shall have been
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delivered to the purchaser thereof against payment by such purchaser.
(c) At the time of delivery of, and payment for, any Notes sold by
the Company as a result of a solicitation made by, or offer to purchase received
by, an Agent, the Company agrees to pay such Agent a commission in accordance
with the schedule set forth in Exhibit A hereto.
(d) Administrative procedures respecting the sale of Notes (the
"Procedures") shall be agreed upon from time to time by the Agents and the
Company. The initial Procedures, which are set forth in Exhibit B hereto, shall
remain in effect until changed by agreement among the Company and the Agents.
Each Agent and the Company agree to perform the respective duties and
obligations specifically provided to be performed by each of them herein and in
the Procedures. The Company will furnish a copy of the Procedures as from time
to time in effect to the Trustee which will act as the authenticating agent and
the agent for payment, registration and notice with respect to the Notes
pursuant to the Indenture and the agent for calculating interest rates with
respect to floating rate notes pursuant to the Interest Calculation Agency
Agreement dated as of _________(the "Interest Calculation Agency Agreement").
(e) The documents required to be delivered by Section 5 hereof
shall be delivered at the offices of the Company, ▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇, not later than 5:00 P.M., Baltimore time, on the
date of this Agreement or at such later time as may be mutually agreed by the
Company and the Agents, which in no event shall be later than the time at which
the Agents commence solicitation of purchases of Notes hereunder, such time and
date being herein called the "Closing Date."
4. CERTAIN AGREEMENTS OF THE COMPANY. The Company agrees with the Agents
that it will furnish to ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Agents, one
signed copy of the Registration Statement, including all exhibits and all
documents incorporated by reference, in the form it became effective and of all
amendments thereto and that, in connection with each offering of Notes, it will
take the following actions:
(a) From the time solicitation regarding sale of the Notes is begun until all of
the Notes have been sold (i) the Company will advise each Agent promptly of any
proposal to amend or supplement the Registration Statement or the Prospectus by
means of a post-effective amendment, sticker, or supplement (except
post-effective amendment, supplements, and stickers relating solely to interest
rates or maturities of Notes) but not by means of incorporation of document(s)
by reference into the Registration Statement or the Prospectus; (ii) the Company
will afford the Agents a reasonable opportunity to comment on any such proposed
post-effective amendment, sticker, or supplement; (iii) the Company will advise
each Agent of the filing of any such post-effective amendment, sticker, or
supplement; and (iv) the Company
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will (x) advise each Agent of the institution by the Commission of any stop
order proceedings in respect of the Registration Statement or of any part
thereof, (y) use its best efforts to prevent the issuance of any such stop
order, and (z) if a stop order is issued, to obtain its lifting as soon as
possible.
(b) If from the time solicitation regarding sale of the Notes is
begun until all of the Notes have been sold, the Company shall determine that it
is necessary to suspend solicitation of the Notes because of the occurrence of
an event that results in the Prospectus either (x) including an untrue statement
of a material fact or omitting to state any material fact necessary to make the
statements in such Prospectus, in light of the circumstances under which they
were made when such Prospectus was delivered, not misleading, or (y) failing to
comply with the Act, then the Company will promptly notify each Agent to suspend
solicitation of purchases of the Notes. Notwithstanding Section 4(a) if the
Company shall determine to amend or supplement the Registration Statement or
Prospectus to correct such result, it will advise each Agent promptly and afford
the Agents a reasonable opportunity to discuss and comment upon the nature of
the disclosure in such amendment or supplement. Notwithstanding the foregoing,
if at the time of any notification to suspend solicitations (i) this Agreement
shall be in effect and any Agent shall own any of the Notes with the intention
of reselling them, or (ii) the Company has accepted an offer to purchase Notes
but the related settlement has not occurred, then the Company, subject to the
provisions of Section 4(a) of this Agreement, will promptly prepare and file
with the Commission an amendment or supplement which will correct such statement
or omission or effect such compliance.
(c) The Company, during the period when a prospectus relating to
the Notes is required to be delivered under the Act, will furnish to each Agent
promptly after timely filing with the Commission all documents required to be
filed pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act (except
those filings associated with employee benefit plans). The Company will
immediately notify each Agent of any downgrading in the rating of the Notes or
any other debt securities of the Company, or any proposal to downgrade the
rating of the Notes or any other debt securities of the Company, by any
"nationally recognized statistical rating organization" (as defined for purposes
of Rule 436(g) under the Act), as soon as the Company learns of such downgrading
or proposal to downgrade.
(d) The Company will furnish to each Agent copies of the
Registration Statement, including all exhibits except those incorporated by
reference, any related preliminary prospectus, any related preliminary
prospectus supplement, the Prospectus and all amendments and supplements to such
documents, in each case as soon as available and in such quantities as are
reasonably requested.
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(e) The Company will use its best efforts to obtain the
qualification of the Notes for sale and the determination of their eligibility
for investment under the laws of such jurisdictions as the Agents designate and
will continue such qualifications in effect so long as required for the
distribution; provided, however, that the Company shall not be required to
qualify as a foreign corporation or to file any consent to service of process
under the laws of any jurisdiction or to comply with any other requirements
deemed by the Company to be unduly burdensome.
(f) So long as any Notes are outstanding, the Company will furnish
to the Agents: (i) as soon as practicable after the end of each fiscal year, a
copy of its annual report to shareholders for such year, (ii) as soon as
available, a copy of each report or definitive proxy statement of the Company
filed with the Commission under the Exchange Act or mailed to shareholders, and
(iii) from time to time, such other information concerning the Company as you
may reasonably request.
(g) The Company will pay all expenses incident to the performance
of its obligations under this Agreement, and will reimburse each Agent for any
expenses (including Blue Sky fees and disbursements of counsel which will not in
the aggregate exceed $6,000) incurred by it in connection with qualification of
the Notes for sale and determination of their eligibility for investment under
the laws of such jurisdictions as such Agent may designate and the printing of
memoranda relating thereto, for any filing fees charged by investment rating
agencies for the rating of the Notes, for any filing fee of the National
Association of Securities Dealers, Inc. relating to the Notes, and for the
reasonable fees and disbursements of counsel to the Agents.
(h) Not later than 45 days after the end of the 12-month period
beginning at the end of any fiscal quarter of the Company in which the Closing
Date or any other Representation Date occurs, the Company will make generally
available to its security holders an earnings statement (which need not be
audited) covering such 12-month period which will satisfy the provisions of
Section 11(a) of the Act.
5. CONDITIONS OF OBLIGATIONS OF AGENTS. The obligation of each Agent under
this Agreement at any time to solicit offers to purchase the Notes is subject to
the accuracy of the representations and warranties of the Company herein on the
date hereof, on each Representation Date and on the date of each such
solicitation, to the accuracy of the statements of the Company's officers made
pursuant to the provisions hereof on each such date, to the performance by the
Company of its obligations hereunder on or prior to each such date, and to each
of the following additional conditions precedent:
(a) No stop order suspending the effectiveness of the Registration
Statement or of any part thereof shall have been issued and no proceedings for
that purpose shall have been
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instituted or, to the knowledge of the Company or any Agent, shall be
contemplated by the Commission.
(b) Neither the Registration Statement nor the Prospectus, as
amended or supplemented as of any Representation Date or date of such
solicitation, as the case may be, shall contain any untrue statement of fact
which, in the opinion of any Agent, is material or omits to state a fact which,
in the opinion of such Agent, is material and is required to be stated therein
or is necessary to make the statements therein not misleading.
(c) There shall not have occurred (i) any suspension or limitation
of trading in securities generally on the New York Stock Exchange other than a
temporary suspension in trading to provide for an orderly market, or any setting
of minimum prices for trading on such exchange, or any suspension of trading of
any securities of the Company on any exchange or in the over-the-counter market;
(ii) any banking moratorium declared by Federal or New York authorities; or
(iii) any outbreak or escalation of major hostilities in which the United States
is involved, any declaration of war by Congress or any other substantial
national or international calamity or emergency if, in the reasonable judgment
of such Agents, the effect of any such outbreak, escalation, declaration,
calamity or emergency makes it impractical or inadvisable to proceed with
solicitations of purchases of, or sales of, Notes.
(d) At the Closing Date, the Agents shall have received an
opinion, dated the Closing Date, of a counsel for the Company, to the effect
that:
(i) The Company and Constellation Enterprises, Inc. have
been duly incorporated and are validly existing as corporations in
good standing under the laws of the State of Maryland, with power
and authority (corporate and other) to own their respective
properties and conduct their respective businesses as described in
the Prospectus; and the Company is duly qualified to do business
as a foreign corporation in good standing in the Commonwealth of
Pennsylvania and all other jurisdictions in which the conduct of
its business or the ownership of its properties requires such
qualification and the failure to do so would have a material and
adverse impact on its financial condition;
(ii) The Indenture has been duly authorized, executed and
delivered by the Company, and is a valid instrument, legally
binding on the Company, enforceable in accordance with its terms,
except as limited by bankruptcy, insolvency, or other laws
affecting the enforcement of creditors' rights and by general
principles of equity;
(iii) The issuance and sale of Notes have been duly
authorized by all necessary corporate action of the Company. The
Notes (assuming that they have been duly
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authenticated by the Trustee or a duly designated Authentication
Agent under the Indenture, which fact counsel need not verify by
an inspection of the Notes), when issued in accordance with the
provisions of this Agreement and the Indenture, will be duly
issued and constitute legal, valid and binding obligations of the
Company enforceable in accordance with their terms and are
entitled to the benefits provided by the Indenture, except as
limited by bankruptcy, insolvency or other laws affecting the
enforcement of creditors' rights and by general principles of
equity;
(iv) The Registration Statement has become effective under
the Act and (a) to the best of such counsel's knowledge, no stop
order suspending the effectiveness of the Registration Statement
has been issued and no proceedings for that purpose have been
instituted or are pending or contemplated under the Act; (b) the
Registration Statement (as of its effective date) and the
Prospectus (as of the date of this Agreement) appeared to comply
as to form in all material respects with the requirements of Form
S-3 under the Act and the 33 Act Rules and Regulations and the
Trust Indenture Act; (c) such counsel has no reason to believe
that either the Registration Statement as of its effective date or
the Prospectus as of the date of this Agreement 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 not misleading; (d) the descriptions in the
Registration Statement and Prospectus of statutes, legal and
governmental proceedings and contracts and other documents are
accurate and fairly present the information required to be shown;
and (e) such counsel does not know of any legal or governmental
proceedings required to be described in the Prospectus which are
not described as required, nor of any contracts or documents of a
character required to be described in the Registration Statement
or Prospectus or to be filed as exhibits to the Registration
Statement which are not described or filed as required; it being
understood that such counsel, in addressing the matters covered in
this paragraph (iv), need express no opinion as to the financial
statements or other financial and statistical information
contained in the Registration Statement or the Prospectus or
incorporated therein or attached as an exhibit thereto or as to
the Statement of Eligibility and Qualification on Form T-1 of the
Trustee under the Indenture;
(v) The approval of the Public Service Commission of
Maryland necessary for the valid issuance by the Company of Notes
pursuant to this Agreement has been obtained and continues in full
force and effect. The Company has received the approval of the
Federal Energy Regulatory Commission ("FERC") for the issuance of
Notes on or before
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December 31, [1998] with maturities of not more than 12 months
after the date of issuance and the approval of FERC will be
required for the issuance of any Notes having such maturities
after December 31, [1998]. Such counsel knows of no other
approval of any other regulatory authority which is legally
required for the valid offering, issuance, sale and delivery of
the Notes by the Company under this Agreement (except that such
opinion need not pass upon the requirements of state securities
acts);
(vi) To the best of such counsel's knowledge and belief,
the consummation of the transactions contemplated in this
Agreement and the compliance by the Company with all the terms of
the Indenture did not and will not result in a breach of any of
the terms or provisions of, or constitute a default under, the
Company's Charter or By-Laws or any indenture, mortgage or deed of
trust or other agreement or instrument to which the Company is a
party;
(vii) Each of this Agreement, the Interest Calculation
Agency Agreement and the Letter of Representations has been duly
authorized, executed and delivered by the Company;
(viii) The Indenture is duly qualified under the Trust
Indenture Act;
(ix) The issuance, sale and delivery of the Notes as
contemplated by this Agreement are not subject to the approval of
the Commission under the provisions of the Public Utility Holding
Company Act of 1935, as amended (the "1935 Act"); and
(x) The Notes and Indenture conform as to legal matters
with the statements concerning them in the Registration Statement
and Prospectus under the caption "DESCRIPTION OF NOTES" and on the
cover page of the Prospectus.
(e) At the Closing Date, the Agents shall have received a
certificate, dated the Closing Date, of the Chairman of the Board, Vice
Chairman, President or any Vice President and a principal financial or
accounting officer of the Company in which such officers, to the best of their
knowledge after reasonable investigation and relying upon opinions of counsel to
the extent legal matters are involved, shall state that (i) the representations
and warranties of the Company in this Agreement are true and correct in all
material respects, (ii) the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied hereunder at
or prior to the Closing Date, (iii) no stop order suspending the effectiveness
of the Registration Statement or of any part thereof has been issued and no
proceedings for that purpose have been instituted or are contemplated by the
Commission, and (iv) subsequent to the date of the most recent financial
statements
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set forth or incorporated by reference in the Prospectus, there has been no
material adverse change in the financial position or in the financial results of
operations of the Company, except as set forth or contemplated in the Prospectus
or as described in such certificate.
(f) At the Closing Date, the Agents shall have received a letter,
dated the Closing Date, of PricewaterhouseCoopers LLP, confirming that they are
independent pubic accountants within the meaning of the Act and the 33 Act Rules
and Regulations, and stating in effect that:
(i) In their opinion, the consolidated financial statements
and supporting schedules audited by them which are included in the
Company's Form 10-K ("Form 10-K"), which is incorporated by
reference in the Registration Statement comply in form in all
material respects with the applicable accounting requirements of
the Act and the 33 Act Rules and Regulations and the Exchange Act
and the Exchange Act Rules and Regulations;
(ii) On the basis of procedures specified in such letter
(but not an audit in accordance with generally accepted auditing
standards), including reading the minutes of meetings of the
shareholders, the Board of Directors and the Executive Committee
of the Company since the end of the year covered by the Form 10-K
as set forth in the minute books through a specified date not more
than five days prior to the Closing Date, performing the
procedures specified in Statement on Auditing Standards No. 71,
Interim Financial Information, on the unaudited interim
consolidated financial statements of the Company incorporated by
reference in the Registration Statement, if any, and reading the
latest available unaudited interim consolidated financial
statements of the Company, and making inquiries of certain
officials of the Company who have responsibility for financial and
accounting matters as to whether the latest available financial
statements not incorporated by reference in the Registration
Statement are prepared on a basis substantially consistent with
that of the audited consolidated financial statements incorporated
in the Registration Statement, nothing has come to their attention
that has caused them to believe that (1) any unaudited
consolidated financial statements incorporated by reference in the
Registration Statement do not comply in form in all material
respects with the applicable requirements of the Act and the 33
Act Rules and Regulations and the Exchange Act and the Exchange
Act Rules and Regulations or any material modifications should be
made to those unaudited consolidated financial statements for them
to be in conformity with generally accepted accounting principles;
(2) at the date of the latest available balance sheet not
incorporated by reference in the Registration Statement there was
any change in the capital stock, change in long-term debt or
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decrease in consolidated net assets or common shareholders' equity
as compared with the amounts shown in the latest balance sheet
incorporated by reference in the Registration Statement or for the
period from the closing date of the latest income statement
incorporated by reference in the Registration Statement to the
closing date of the latest available income statement read by them
there were any decreases, as compared with the corresponding
period of the previous year, in operating revenues, operating
income, net income, the ratio of earnings to fixed charges
(measured on the most recent twelve month period), or in earnings
per share of common stock except in all instances of changes or
decreases that the Registration Statement discloses have occurred
or may occur, or which are described in such letter; or (3) at a
specified date not more than five days prior to the Closing Date,
there was any change in the capital stock or long-term debt of the
Company or, at such date, there was any decrease in net assets of
the Company as compared with amounts shown in the latest balance
sheet incorporated by reference in the Registration Statement, [or
for the period from the closing date of the latest income
statement incorporated by reference in the Registration Statement
to a specified date not more than five days prior to the Closing
Date, there were any decreases as compared with the corresponding
period of the previous year, in operating revenues, operating
income, net income or in earnings applicable to common stock,]
except in all cases for instances of changes or decreases that the
Registration Statement discloses have occurred or may occur, or
which are described in such letter; and
(iii) Certain specified procedures have been applied to
certain financial or other statistical information (to the extent
such information was obtained from the general accounting records
of the Company) set forth or incorporated by reference in the
Registration Statement and that such procedures have not revealed
any disagreement between the financial and statistical information
so set forth or incorporated and the underlying general accounting
records of the Company, except as described in such letter.
(g) The Agents shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇,
counsel for the Agents, an opinion dated the Closing Date, with respect to the
matters referred to in paragraph 5(d) subheadings (ii), (iii), (iv)b, (v),
(vii), (viii) and (x) and such other related matters as you may require and the
Company shall have furnished to such counsel such documents as they request for
the purpose of enabling them to pass on such matters.
In rendering such opinion, ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ may rely, as to
the incorporation of the Company, the approval of the Public Service Commission
of Maryland required for the issuance, sale and delivery of the Notes, and all
other matters governed
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by the laws of the State of Maryland, the applicability of the 1935 Act and the
approval of FERC for the issuance, sale and delivery of the Notes upon the
opinion of Counsel for the Company referred to above.
In addition, such counsel shall state that such counsel has
participated in conferences with officers, counsel and other representatives of
the Company, representatives of the independent certified public accountants for
the Company and representatives of the Agents at which the contents of the
Registration Statement and the Prospectus and related matters were discussed;
and, although such counsel is not passing upon and does not assume
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement and Prospectus (except as to the matters
referred to in their opinion rendered pursuant to subheading (x) above), on the
basis of the foregoing (relying as to materiality to a large extent upon the
opinions of officers, counsel and other representatives of the Company), no
facts have come to the attention of such counsel which lead such counsel to
believe that either the Registration Statement (as of its effective date) or the
Prospectus (as of the date of this Agreement), contained an untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary to make such statements therein not misleading (it being
understood that such counsel need make no comment with respect to the financial
statements and other financial and statistical information included in the
Registration Statement or Prospectus or incorporated therein or as to the
Statement of Eligibility and Qualification on Form T-l of the Trustee under the
Indenture).
(h) The approval of the Public Service Commission of Maryland
necessary for the valid issuance of Notes by the Company pursuant to this
Agreement has been obtained and continues in full force and effect. The Company
has received the approval of FERC for the issuance of Notes on or before
December 31, [1998] with maturities of not more than 12 months after the date of
issuance and the approval of FERC will be obtained before the issuance of any
Notes having such maturities after December 31, [1998].
The Company will furnish the Agents with such conformed copies of
such opinions, certificates, letters and documents as the Agents reasonably
request.
6. ADDITIONAL COVENANTS OF THE COMPANY. The Company agrees that:
(a) Each acceptance by the Company of an offer for the purchase of
Notes shall be deemed to be an affirmation that its representations and
warranties contained in this Agreement are true and correct at the time of such
acceptance, it being understood that such representations and warranties shall
relate to the Registration Statement and the Prospectus as amended or
supplemented at each such time. Each such acceptance by the
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Company of an offer for the purchase of Notes shall be deemed to constitute an
additional representation, warranty and agreement by the Company that, as of the
settlement date for the sale of such Notes, after giving effect to the issuance
of such Notes and of any other Notes to be issued on or prior to such settlement
date, the aggregate amount of Notes which have been issued and sold by the
Company will not exceed the amount of Notes registered pursuant to the
Registration Statement.
(b) From the time solicitation regarding the sale of the Notes is
begun until all of the Notes have been sold, each time the Company (i) amends or
supplements the Registration Statement or the Prospectus (other than in
reference solely to interest rates or maturities of Notes) by means of a
post-effective amendment, sticker, or supplement but not by means of
incorporation of document(s) by reference into the Registration Statement or the
Prospectus; (ii) files an annual report on Form 10-K under the Exchange Act;
(iii) files its quarterly reports on Form 10-Q under the Exchange Act; and (iv)
files a report on Form 8-K under the Exchange Act (the date of filing each of
the aforementioned documents is referred to as a "Representation Date"); the
Company shall furnish the Agents (but in the case of (iv) above only if
requested by the Agents) with a certificate of the Chairman, Vice Chairman,
President or any Vice President and a principal financial or accounting officer
of the Company, in form satisfactory to the Agents, to the effect that on the
Representation Date, to the best of their knowledge after reasonable
investigation and relying upon opinions of counsel to the extent legal matters
are involved, (i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects; (ii) the Company has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied hereunder at or prior to the Representation Date; (iii)
no stop order suspending the effectiveness of the Registration Statement or of
any part thereof has been issued and no proceedings for that purpose have been
instituted or are contemplated by the Commission; and (iv) subsequent to the
date of the most recent financial statements set forth or incorporated by
reference in the Prospectus, there has been no material adverse change in the
financial position or in the financial results of operations of the Company,
except as set forth in or contemplated by the Prospectus or as described in such
certificate.
(c) From the time solicitation regarding the sale of the Notes is
begun until all of the Notes have been sold, at each Representation Date
referred to in Section 6(b) (i) or (ii) and, only if requested by the Agents, at
each Representation Date referred to in Section 6(b) (iii) or (iv), the Company
shall concurrently furnish the Agents with a written opinion or opinions of
counsel for the Company, dated the Representation Date or the date of such
filing, in form satisfactory to the Agents, to the effect set forth in Section
5(d) hereof, but modified, as necessary, to relate to the Registration Statement
and the Prospectus as then amended or supplemented; PROVIDED,
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HOWEVER, that in lieu of such opinion, counsel may furnish the Agents with a
letter to the effect that the Agents may rely on a prior opinion delivered under
Section 5(d) or this Section 6(c) to the same extent as if it were dated the
date of such letter (except that statements in such prior opinion shall be
deemed to relate to the Registration Statement and the Prospectus as amended or
supplemented at such Representation Date).
(d) From the time solicitation regarding the sale of the Notes is
begun until all of the Notes have been sold, at each Representation Date
referred to in Section 6(b) (i) or (ii) and, only if requested by the Agents, at
each Representation Date referred to in Section 6(b) (iii) or (iv), but in each
case only if such documents referred to in Section 6(b) include additional
financial information, the Company shall cause PricewaterhouseCoopers LLP or
successor thereto concurrently to furnish the Agents with a letter, addressed
jointly to the Company and the Agents and dated the Representation Date or the
date of such filing, in form and substance satisfactory to the Agents, to the
effect set forth in Section 5(f) hereof but modified to relate to the
Registration Statement and the Prospectus as amended or supplemented at such
Representation Date, with such changes as may be necessary to reflect changes in
the financial statements and other information derived from the accounting
records of the Company; PROVIDED, HOWEVER, that if the Registration Statement or
the Prospectus is amended or supplemented solely to include financial
information as of and for a fiscal quarter, Coopers & ▇▇▇▇▇▇▇ may limit the
scope of such letter to the unaudited financial statements included in such
amendment or supplement unless there is contained therein any other accounting,
financial or statistical information that, in the reasonable judgment of the
Agents, should be covered by such letter, in which event such letter shall also
cover such other information and procedures as shall be agreed upon by the
Agents.
(e) On each settlement date for the sale of Notes, the Company
shall, if requested by an Agent that solicited or received the offer to purchase
any Notes being delivered on such settlement date, furnish such Agent with a
written opinion of a counsel for the Company, dated the date of delivery
thereof, in form satisfactory to such Agent, to the effect set forth in clauses
(i), (ii), (iii) and (v) of Section 5(d) hereof, but modified, as necessary, to
relate to the Prospectus as amended or supplemented at such settlement date and
except that such opinion shall state that the Notes being sold by the Company on
such settlement date, when delivered against payment therefor as provided in the
Indenture and this Agreement, will have been duly executed, authenticated,
issued and delivered and will constitute valid and legally binding obligations
of the Company enforceable in accordance with their terms, subject only to the
exceptions as to enforcement set forth in clauses (ii) and (iii) of Section 5(d)
hereof, and conform to the description thereof contained in the Prospectus as
amended or supplemented at such settlement date.
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(f) The Company agrees that any obligation of a person who has
agreed to purchase Notes to make payment for and take delivery of such Notes
shall be subject to (i) the accuracy, on the related settlement date fixed
pursuant to the Procedures, of the Company's representations and warranties
deemed to be made to the Agents pursuant to Section 2 and the last sentence of
subsection (a) of this Section 6; (ii) the satisfaction, on such settlement
date, of each of the conditions set forth in Sections 5(a), (b), (c) and (h), it
being understood that under no circumstance shall any Agent have any duty or
obligation to exercise the judgment permitted under Section 5(b) or (c) on
behalf of any such person; (iii) the absence of any change or development
involving a prospective change, not contemplated by the Prospectus, in or
affecting particularly the business or properties of the Company which
materially impairs the investment quality of the Notes; and (iv) no downgrading
in the rating of the Company's debt securities by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule 436(g) under
the Act).
7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company will indemnify and hold harmless each Agent and
each person if any, who controls either Agent within the meaning of the Act or
the Exchange Act against any losses, claims, damages or liabilities, joint or
several, to which such Agent or such controlling person may become subject,
under the Act, 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 any material fact contained in
the Registration Statement or the Prospectus, or any related preliminary
prospectus 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 not misleading; and will reimburse each Agent and each
such controlling person for any legal or other expenses reasonably incurred by
such Agent or such controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company will not be liable to such Agent or controlling person in any
such case to the extent that any such loss, claim, damage or liability arises
out of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in any such documents in reliance upon and in
conformity with written information furnished to the Company by such Agent or
such controlling person specifically for use therein unless such loss, claim,
damage or liability arises out of the offer or sale of Notes occurring after
such Agent or controlling person has notified the Company in writing that such
information should no longer be used therein. This indemnity agreement will be
in addition to any liability which the Company may otherwise have.
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(b) Each Agent will indemnify and hold harmless the Company, each
of its directors, each of its officers who have signed the Registration
Statement and each person, if any, who controls the Company within the meaning
of the Act or the Exchange Act, against any losses, claims, damages or
liabilities to which the Company or any such director, officer or controlling
person may become subject, under the Act, 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 any material
fact contained in the Registration Statement or the Prospectus, or any related
preliminary prospectus or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such Agent
specifically for use therein; and will reimburse any legal or other expenses
reasonably incurred by the Company or any such director, officer or controlling
person in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that such Agent will not be liable to the Company or any such director, officer
or controlling person in any such case to the extent that any such loss, claim,
damage or liability arises out of the offer or sale of Notes occurring after
such Agent has notified the Company in writing that such information should no
longer be used therein. This indemnity agreement will be in addition to any
liability which such Agent may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 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 (a) and (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under this Section. In case any such action is brought against any indemnified
party, and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it may wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel satisfactory to such indemnified
party (who may, with the consent of the indemnified party, be counsel to the
indemnifying party) and who shall not be counsel to any other indemnified party
who may have interests conflicting with those of such indemnified party, and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party under this Section for any legal or other
expenses subsequently incurred by such indemnified party in
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connection with the defense thereof other than reasonable costs of
investigation.
(d) If recovery is not available under the foregoing
indemnification provisions of this Section for any reason other than as
specified therein, the parties entitled to indemnification by the terms thereof
shall be entitled to contribution to liabilities and expenses, except to the
extent that contribution is not permitted under Section ll(f) of the Act. In
determining the amount of contribution to which the respective parties are
entitled, there shall be considered the relative benefits received by each party
from the offering of the Notes (taking into account the portion of the proceeds
of the offering realized by each), the parties' relative knowledge and access to
information concerning the matter with respect to which the claim was asserted,
the opportunity to correct and prevent any statement or omission, and any other
equitable considerations appropriate under the circumstances. The Company and
the Agents and such controlling persons agree that it would not be equitable if
the amount of such contribution were determined by pro rata or per capita
allocation (even if the Agents and such controlling persons were treated as one
entity for such purpose). Notwithstanding the provisions of this subsection (d),
no Agent or controlling person shall be required to make contribution hereunder
which in the aggregate exceeds the total public offering price of the Notes,
distributed to the public through it pursuant to this Agreement or upon resale
of Notes purchased by it from the Company, less the aggregate amount of any
damages which such Agent or such controlling person has otherwise been required
to pay in respect to the same claim or substantially similar claim. 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. The obligations of each Agent and each
controlling person in this subsection (d) to contribute are several, in the same
proportion which the amount of the Notes which are the subject of the action and
which were distributed to the public through such Agent or such controlling
person pursuant to this Agreement bears to the total amount of such Notes
distributed to the public through any other Agent or controlling person pursuant
to this Agreement, and not joint.
8. STATUS OF EACH AGENT. In soliciting offers to purchase the Notes from
the Company pursuant to this Agreement and in assuming its other obligations
hereunder (other than offers to purchase pursuant to Section 11), each Agent is
acting individually and not jointly and is acting solely as agent for the
Company and not as principal. Each Agent will use all reasonable efforts to
assist the Company in obtaining performance by each purchaser whose offer to
purchase Notes from the Company has been solicited by such Agent and accepted by
the Company, but such Agent shall have no liability to the Company in the event
any such purchase is not consummated for any reason. If the Company shall
default on its obligations to deliver Notes to a purchaser whose offer it has
accepted, the Company (i) shall
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hold the Agents harmless against any loss, claim or damage arising from or as a
result of such default by the Company, and (ii), in particular, shall pay to the
Agents any commission to which they would be entitled in connection with such
sale.
9. SURVIVAL OF CERTAIN REPRESENTATIONS AND OBLIGATIONS. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers and of the Agents set forth in or made pursuant to this
Agreement will remain in full force and effect, regardless of any investigation,
or statement as to the results thereof, made by or on behalf of any Agent, the
Company or any of their respective representatives, officers or directors or any
controlling person and will survive delivery of and payment for the Notes. If
this Agreement is terminated pursuant to Section 10 or for any other reason, the
Company shall remain responsible for the expenses to be paid or reimbursed by it
pursuant to Section 4(g) and the obligations of the Company under Sections 4(f)
and (h) and the respective obligations of the Company and the Agents pursuant to
Section 7 shall remain in effect. In addition, if any such termination shall
occur either (i) at a time when any Agent shall own any of the Notes with the
intention of reselling them or (ii) after the Company has accepted an offer to
purchase Notes and prior to the related settlement, the obligations of the
Company under the last sentence of Section 4(b), under Sections 4(a), 4(c),
4(d), 4(e), 6(a), 6(e) and 6(f) and, in the case of a termination occurring as
described in (ii) above, under Section 3(c) and under the last sentence of
Section 8, shall also remain in effect.
10. TERMINATION. This Agreement may be terminated for any reason at any
time by the Company as to any Agent or, in the case of either Agent, by such
Agent insofar as this Agreement relates to such Agent, upon the giving of one
day's written notice of such termination to the other parties hereto. Any
settlement with respect to Notes placed by an Agent occurring after termination
of this Agreement shall be made in accordance with the Procedures and each Agent
agrees, if requested by the Company, to take the steps therein provided to be
taken by such Agent in connection with such settlement.
11. OTHER SALES AND PURCHASES OF NOTES. From time to time, any Agent may
agree with the Company to purchase all or a portion of Notes from the Company as
an underwriter (acting either alone or in conjunction with one or more
investment banking firms) for resale to the public. In this event, such purchase
shall be made in accordance with the terms of a separate agreement to be entered
into between such Agent and the Company in substantially the form attached
hereto as Exhibit C.
Without the oral consent (confirmed in writing) of the Company,
neither Agent shall have the right to purchase all or a portion of the Notes for
its own account. In the event the Company consents to such purchase, the
purchase shall be made in accordance with the terms of a separate agreement to
be entered
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into between such Agent and the Company in substantially the form attached
hereto as Exhibit D.
Nothing in this Agreement shall prohibit the sale of all or a
portion of Notes directly by the Company to any person or entity without the
involvement of either of the Agents or from entering into similar agreements
with other firms as agents.
The Company will not appoint another agent without providing each
Agent with at least one business day's notice.
12. NOTICES. Except as otherwise provided herein, all notices and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if delivered by overnight mail or transmitted by any standard form of
telecommunication. Notices to ▇▇▇▇▇▇ Brothers Inc. shall be delivered or
telecopied to it at 3 World Financial Center, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇-▇▇▇▇, telecopier, (▇▇▇) ▇▇▇-▇▇▇▇, Attention: Medium-Term Note Department;
notices to ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. shall be delivered or telecopied to it at ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, telecopier, (▇▇▇) ▇▇▇-▇▇▇▇, Attention:
Registration Department; and notices to the Company shall be delivered or
telecopied to it at ▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
telecopier, (▇▇▇) ▇▇▇-▇▇▇▇, Attention: Treasurer, 8th Floor, Gas and Electric
Building, or in the case of any party hereto, to such other address or person as
such party shall specify to each other party by a notice given in accordance
with the provisions of this Section 12. Any such notice shall take effect at the
time of receipt.
13. SUCCESSORS. This Agreement will inure to the benefit of and be binding
upon the parties hereto, their respective successors, the officers and directors
and controlling persons referred to in Section 7 and, to the extent provided in
Section 6(f), any person who has agreed to purchase Notes from the Company, and
no other person will have any right or obligation hereunder.
14. GOVERNING LAW; COUNTERPARTS. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York. This Agreement
may be executed in counterparts and the executed counterparts shall together
constitute a single instrument.
If the foregoing correctly sets forth our agreement, please indicate your
acceptance hereof in the space provided for that purpose below.
Very truly yours,
BALTIMORE GAS AND ELECTRIC COMPANY
By: ____________________________
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CONFIRMED AND ACCEPTED, as of the
date first above written:
▇▇▇▇▇▇ BROTHERS INC.
By: ____________________
▇▇▇▇▇▇▇, ▇▇▇▇▇ & CO.
________________________
▇▇▇▇▇▇▇, Sachs & Co.
Exhibit A
to Agency Agreement
The Company agrees to pay either Agent a commission equal to the following
percentage of the principal amount of Notes sold to purchasers solicited by such
Agent:
Commission Rate
(as a percentage of
TERM PRINCIPAL AMOUNT)
----------------------------------- -----------------
9 months to less than 12 months .125
12 months to less than 18 months .15
18 months to less than 24 months .20
2 years to less than 3 years .25
3 years to less than 4 years .35
4 years to less than 5 years .45
5 years to less than 7 years .50
7 years to less than 10 years .55
10 years to less than 15 years .60
15 years to less than 20 years .65
20 years through 30 years .75
Exhibit B
to Agency Agreement
ADMINISTRATIVE PROCEDURES
The Medium-Term Notes, Series H due from nine months to thirty years from
their issue dates (the "Notes") are to be offered on a continuing basis by
Baltimore Gas and Electric Company (the "Company"). ▇▇▇▇▇▇ Brothers Inc. and
▇▇▇▇▇▇▇, Sachs & Co. as agents (individually, an "Agent" and collectively, the
"Agents") have each agreed to use all reasonable efforts to solicit purchases of
the Notes. Neither Agent will be obligated to purchase Notes for its own account
and neither may do so without the written consent of the Company. The Notes are
being sold pursuant to an Agency Agreement, dated as of ____________ (the
"Agency Agreement"), among the Company and the Agents, and will be issued
pursuant to an Indenture, between the Company and The Bank of New York
(successor to Mercantile-Safe Deposit and Trust Company), dated as of July 1,
1985 as supplemented by the Supplemental Indentures dated as of October 1, 1987
and January 26, 1993, respectively (the "Indenture"). The Notes will rank
equally with all other unsecured and unsubordinated indebtedness of the Company
and will have been registered with the Securities and Exchange Commission (the
"Commission").
The Company has designated The Bank of New York (the "Bank") as
the agency for payment, registration and notice concerning the Notes in
accordance with Section 5.02 of the Indenture and as the Authentication Agent
for the Notes in accordance with Section 2.02 of the Indenture. The Company has
also designated the Bank as the Calculation Agent with respect to the issuance
of floating rate notes pursuant to the Interest Calculation Agency Agreement
between the Company and the Bank dated __________.
Administrative procedures and specific terms of the offering are
explained below. Internal administrative and record-keeping responsibilities
will be handled for the Company by its Financial Services Unit of the Finance
Department. The Company will advise the Agents in writing of those persons
handling administrative responsibilities with whom the Agents are to communicate
regarding offers to purchase Notes and the details of their delivery. Unless
otherwise designated, the Notes will be issued as Global Securities registered
in the name of The Depository Trust Company or a nominee thereof (referred to as
"Book Entry Notes"). Procedures pertaining specifically to Book-Entry Notes and,
as the case may be, Notes issued in definitive form ("Certificated Notes") will
be explained separately below.
I. GENERAL PROCEDURES
AGGREGATE
PRINCIPAL AMOUNT: $200,000,000
ISSUE DATE:
Each Note will be dated the date of its authentication. Each
Note will also bear an original issue date (the "Issue
Date") which, with respect to any Note (or portion thereof),
shall mean the date of its original issuance and shall be
specified therein. The Issue Date shall remain the same for
all Notes
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subsequently issued upon transfer, exchange or substitution
of a Note, regardless of their dates of authentication.
MATURITIES:
Each Note will mature on a Business Day (as defined below),
selected by the purchaser and agreed to by the Company,
which will range from nine months to thirty years after the
Issue Date. Each Note bearing interest at a rate determined
by reference to an interest rate formula (a "Floating Rate
Note") will mature on an Interest Payment Date (as defined
below).
"Business Day" means any day other than a Saturday or Sunday
that (a) is not a day on which banking institutions in
Baltimore, Maryland, or in New York, New York, are
authorized or obligated by law or executive order to be
closed, and (b) with respect to LIBOR Notes only, is a day
on which dealings in deposits in U.S. dollars are transacted
in the London interbank market.
PRICE TO PUBLIC:
Each Note will be issued at 100% of principal amount (unless
otherwise indicated in a pricing supplement).
DENOMINATIONS:
The minimum denominations of the Notes will be $1,000 and
integral multiples of $1,000 in excess thereof (see "Special
Procedures for Book-Entry Notes Denominations" for
information relating to Book-Entry Notes).
REGISTRATION:
Notes will be issued only in fully registered form as either
a Book-Entry Note or a Certificated Note. Certificated Notes
may be presented for registration of transfer or exchange at
the Bank's New York office.
INTEREST PAYMENTS:
Each Note bearing interest at a fixed rate (a "Fixed Rate
Note") will bear interest from its Issue Date if interest
has not been paid on the Note or from the most recent
Interest Payment Date to which interest has been paid at the
fixed rate per annum stated on the face thereof, payable
semi-annually on May 1 and November 1 of each year (each an
"Interest Payment Date" with respect to such Fixed Rate
Note), and at Stated Maturity, and, if applicable, upon
redemption or repurchase.
Special provisions are set forth in the Prospectus relating
to Floating Rate Notes. Interest rates are determined by
reference to the interest rate formula stated therein and
payable in arrears on such dates as specified therein (each
an "Interest Payment Date" with respect to such Floating
Rate Note).
Interest on Fixed Rate Notes (including payments for partial
periods) will be computed and paid on the basis of a 360-day
year of twelve 30-day months and will not accrue on the 31st
day of any month. Interest will be payable to the person in
whose name the Note is registered at the close of business
on April 15 or October 15, (whether or not such date is a
Business Day) with respect to
-B3-
Fixed Rate Notes or the fifteenth day (whether or not a
Business Day) with respect to Floating Rate Notes (the
"Record Dates"), next preceding the respective Interest
Payment Date; provided, however, that interest payable at
Stated Maturity and, if applicable, upon redemption or
repurchase will be payable to the person to whom principal
shall be payable. The first payment of interest on any Note
originally issued between a Record Date and an Interest
Payment Date will be made on the Interest Payment Date
following the next succeeding Record Date. All interest
payments (excluding interest payments made at Stated
Maturity and, if applicable, upon redemption and repurchase)
will be made by check mailed to the person entitled thereto
as provided above; except that holders of over $5 million in
principal amount of the Notes may receive interest payments
by wire upon at least one Business Day's written notice to
the Bank.
On the fifth Business Day immediately preceding each
Interest Payment Date, the Bank will furnish the Company
with the total amount of the interest payments to be made on
such Interest Payment Date. The Bank will provide monthly to
the Company's Financial Services Unit a list of the
principal and interest to be paid on Notes maturing in the
next succeeding month. On the Interest Payment Date (unless
the Interest Payment Date is not a Business Day, then the
immediately succeeding Business Day), the Company will
transfer to the Bank, via the Federal Reserve wire system,
immediately available funds sufficient to make such interest
payments. The Bank will assume responsibility for
withholding taxes on interest paid as required by law.
ACCEPTANCE OF
OFFERS:
Each Agent will promptly advise the Company of each
reasonable offer to purchase Notes received by it, other
than those rejected by such Agent. Each Agent may, in its
discretion reasonably exercised, without notice to the
Company, reject any offer received by it, in whole or in
part. The Company will have the sole right to accept offers
to purchase Notes and may reject any such offer, in whole or
in part. If the Company rejects an offer, the Company will
promptly notify the Agent involved.
SETTLEMENT:
All offers accepted by the Company will be settled on the
third Business Day next succeeding the date of acceptance
unless otherwise agreed by any purchaser and the Company.
The settlement date shall be specified upon receipt of an
offer.
CONFIRMATION:
For each accepted offer, the Presenting Agent will issue a
confirmation to the purchaser, with a copy to the Company's
Financial Services Unit and the Bank, setting forth the
Purchase Information and delivery and payment instructions.
REDEMPTION AT
COMPANY'S OPTION:
Except as otherwise specified in the applicable Pricing
Supplement and on the Notes, the Notes will not be
redeemable prior to their Stated Maturity. If so specified,
such Note will be redeemable at the option of the Company on
or after a specified date at a specified price or prices
(which may include a
-B4-
premium) together with accrued interest thereon payable to,
but excluding, the date fixed for redemption. The Notes will
be redeemable in whole or in part (whether or not any other
Notes of the same series are redeemed), in increments of
$1,000 on notice by mail given not more than 60 nor less
than 30 days prior to the date fixed for redemption. If
there is a partial redemption, the Bank will issue a new
Note on the same terms.
Upon presentation of each Note at the date fixed for
redemption, the Bank (or any other duly appointed paying
agent) will pay the principal amount (at a price, expressed
as a percent of the principal amount, specified on the Note
and in the applicable Pricing Supplement) redeemed thereof,
together with accrued interest due on the amount redeemed at
the date fixed for redemption. Such payment shall be made in
immediately available funds, provided that the Note is
presented to the Bank (or any such paying agent) in time for
the Bank (or any such paying agent) to make payments in such
funds in accordance with its normal procedures. On the date
fixed for redemption (unless the date fixed for redemption
is not a Business Day, then the immediately succeeding
Business Day), the Company will provide the Bank (and any
such paying agent), via the Federal Reserve wire transfer
system, with immediately available funds sufficient for the
Bank to make such payment. Notes presented at the date fixed
for redemption will be canceled by the Bank as provided in
the Indenture.
REPURCHASE AT
HOLDER'S OPTION:
Except as otherwise specified in the applicable Pricing
Supplement and on the Notes, the Company is not required to
repurchase the Notes from the holders prior to the Stated
Maturity. If so specified, Notes will be redeemable at the
option of the holder, in whole or in part, in increments of
$1,000, on the dates and at the prices specified therein,
together with accrued interest to, but excluding, the
repurchase date. For Book-Entry Notes, holders must deliver
a written notice to the Bank at least 30, but no more than
60 days prior to the date of repurchase, but no later than
5:00 p.m. New York City time on the last day for giving
notice. The written notice must specify the principal amount
to be repurchased and must be signed by a duly authorized
officer of the Depositary participant (signature
guaranteed). For Certificated Notes, holders must complete
the "Option to Elect Repayment" on the reverse of the Note
and then deliver the Note to the Bank at least 30, but no
more than 45 days prior to the date of the repurchase, but
no later than 5:00 p.m. New York City time on the last day
for giving notice. All notices are irrevocable. If there is
a partial redemption, the Bank will issue a new Note on the
same terms.
On the repurchase date, the Bank (or any other duly
appointed paying agent) will repurchase the Note from the
holder at the specified price, together with any accrued
interest, payment to be made in immediately available funds.
The Company will provide the Bank (and any such paying
agent), via the Federal Reserve wire transfer system, with
immediately available funds sufficient for the Bank to make
such repurchases. Repurchased Notes will be canceled by the
Bank as provided in the Indenture.
-B5-
REMARKETED NOTES:
Procedures related to Remarketed Notes will be added at the
time any notes are issued.
MATURITY:
Upon presentation of each Note at maturity the Bank (or any
other duly appointed paying agent) will pay the principal
amount thereof, together with accrued interest due at
maturity. Such payment shall be made in immediately
available funds, provided that the Note is presented to the
Bank (or any such paying agent) in time for the Bank (or any
such paying agent) to make payments in such funds in
accordance with its normal procedures. On the maturity date,
the Company will provide the Bank (and any such paying
agent), via the Federal Reserve wire transfer system, with
immediately available funds sufficient for the Bank to make
such payment. Notes presented at maturity will be canceled
by the Bank as provided in the Indenture.
PROCEDURE FOR
RATE OR REDEMPTION
CHANGES:
The Company and the Agents will discuss from time to time
the rates to be borne by, and the redemption and repurchase
provisions, if any, of, the Notes that may be sold as a
result of the solicitation of offers by the Agents. Once any
Agent has recorded any indication of interest in Notes upon
certain terms, and communicated with the Company, if the
Company plans to accept an offer to purchase Notes upon such
terms, it will prepare a sticker reflecting the terms of
such Notes and, after confirming such terms with such Agent,
will arrange to have the Prospectus, as then amended or
supplemented, and bearing such sticker, filed with the
Commission and will supply at least 10 copies of the
Prospectus, as then amended or supplemented, and bearing
such sticker, to the Presenting Agent. No settlements with
respect to Notes upon such terms may occur prior to such
filing and the Agents will not, prior to such filing, mail
confirmations to customers who have offered to purchase
Notes upon such terms. After such filing, sales, mailing of
confirmations and settlements may occur with respect to
Notes upon such terms, subject to the provisions of
"Delivery of Prospectus" below.
If the Company decides to post rates (which may include the
presence or absence of redemption and repurchase provisions)
and a decision has been reached to change interest rates or
redemption or repurchase provisions, if any, the Company
will promptly notify each Agent. Each Agent will forthwith
suspend solicitation of purchases. At that time, the Agents
will recommend and the Company will establish rates to be so
"posted." Following establishment of posted rates and prior
to the filing described in the following sentence, the
Agents may only record indications of interest in purchasing
Notes at the posted rates. Once any Agent has recorded any
indication of interest in Notes at the posted rates and
communicated with the Company, if the Company plans to
accept an offer at the posted rate, it will prepare a
sticker reflecting such posted rates and, after confirming
such terms with such Agent, will arrange to have the
Prospectus, and bearing such sticker, filed with the
Commission and will supply at least 10 copies of the
Prospectus, as then amended or supplemented, to the
Presenting Agent. No settlements at the posted rates may
occur prior to such filing and the Agents will not, prior to
-B6-
such filing, mail confirmations to customers who have
offered to purchase Notes at the posted rates. After such
filing, sales, mailing of confirmations and settlements may
resume, subject to the provisions of "Delivery of
Prospectus" below.
Outdated stickers, and copies of the Prospectus to which
they are attached (other than those retained for files),
will be destroyed.
SUSPENSION OF
SOLICITATION;
AMENDMENT OR
SUPPLEMENT:
As provided in the Agency Agreement, the Company may suspend
solicitation of purchases at any time and, upon receipt of
at least one Business Day's prior notice from the Company,
the Agents will each forthwith suspend solicitation until
such time as the Company has advised them that solicitation
of purchases may be resumed.
If the Agents receive the notice from the Company
contemplated by Section 4(b) of the Agency Agreement, they
will promptly suspend solicitation and will only resume
solicitation as provided in the Agency Agreement. If the
Company decides to amend or supplement the Registration
Statement or the Prospectus relating to the Notes, it will
promptly advise each Agent and will furnish each Agent with
the proposed amendment or supplement in accordance with the
terms of the Agency Agreement. The Company will promptly
file such amendment or supplement; provide the Agents with
copies of any such amendment or supplement; confirm to the
Agents that such amendment or supplement has been filed with
the Commission; and advise the Agents that solicitation may
be resumed.
Any such suspension shall not affect the Company's
obligations under the Agency Agreement; and in the event
that at the time the Company suspends solicitation of
purchases there shall be any offers already accepted by the
Company outstanding for settlement, the Company will have
the sole responsibility for fulfilling such obligations. The
Company will in addition promptly advise the Agents and the
Bank if such offers are not to be settled and if copies of
the Prospectus as in effect at the time of the suspension
may not be delivered in connection with the settlement of
such offers.
DELIVERY OF
PROSPECTUS:
A copy of the Prospectus, as most recently amended or
supplemented on the date of delivery thereof (except as
provided below), must be delivered to a purchaser prior to
or together with the earlier of delivery of (i) the written
confirmation provided for above, and (ii) any Note purchased
by such purchaser. The Company shall ensure that the
Presenting Agent receives copies of the Prospectus and each
amendment or supplement thereto (including appropriate
pricing stickers) in such quantities and within such time
limits as will enable the Presenting Agent to deliver such
confirmation or Note to a purchaser as contemplated by these
procedures and in compliance with the preceding sentence.
If, since the date of acceptance of a purchaser's offer, the
-B7-
Prospectus shall have been supplemented solely to reflect
any sale of Notes on terms different from those agreed to
between the Company and such purchaser or a change in posted
rates not applicable to such purchaser, such purchaser shall
not receive the Prospectus as supplemented by such new
supplement, but shall receive the Prospectus as supplemented
to reflect the terms of the Notes being purchased by such
purchaser and otherwise as most recently amended or
supplemented on the date of delivery of the Prospectus.
AUTHENTICITY OF
SIGNATURES:
The Company will cause the Bank to furnish the Agents from
time to time with the specimen signatures of each of the
Bank's officers, employees or agents who have been
authorized by the Bank to authenticate Notes, but the Agents
will have no obligation or liability to the Company or the
Bank in respect of the authenticity of the signature of any
officer, employee or agent of the Company or the Bank on any
Note.
ADVERTISING COST:
The Company will determine with the Agents the amount of
advertising that may be appropriate in offering the Notes.
Advertising expenses will be paid by the Company.
II. SPECIAL PROCEDURES FOR BOOK-ENTRY NOTES
Each Note may be represented by either a Global Security
delivered to the Bank, as agent for the Depository Trust
Company ("DTC"), and recorded in the book-entry system
maintained by DTC or a certificate delivered to the Holder
thereof or a Person designated by such Holder. An owner of a
Book-Entry Note will not be entitled to receive a
certificate representing such Note. In connection with the
qualification of the Book-Entry Notes for eligibility in the
book-entry system maintained by DTC, the Bank will perform
the custodial, document control and administrative functions
described below, in accordance with its respective
obligations under a Letter of Representations from the
Company and the Bank to DTC and a Medium-Term Note
Certificate Agreement previously entered into between the
Bank and DTC, and its obligations as a participant in DTC,
including DTC's Same-Day Funds Settlement System ("SDFS").
Except as otherwise set forth in this Exhibit B, Book-Entry
Notes will be issued in accordance with the administrative
procedures set forth in this section.
ISSUANCE:
On any date of settlement (as defined under "Settlement"
below), for one or more Fixed Rate Book-Entry Notes, the
Company will issue a single Global Security in fully
registered form without coupons representing up to
$200,000,000 principal amount of all of such Notes that have
the same original issuance date, interest rate and Stated
Maturity. Similarly, on any settlement date for one or more
Floating Rate Book-Entry Notes, the Company will issue a
single Global Security representing up to $200,000,000
principal amount of all of such Notes that have the same
interest rate formula, original issuance date, Initial
Interest Rate, Interest Payment Dates, Index Maturity,
Spread or Spread Multiplier, minimum interest rate (if any),
maximum interest rate (if
-B8-
any) and Stated Maturity. Each Global Security will be dated
and issued as of the date of its authentication by the Bank,
as authenticating agent. Each Global Security will have an
interest accrual date (the "Interest Accrual Date"), which
will be (i) with respect to an original Global Security (or
any portion thereof), its original issuance date and (ii)
with respect to any Global Security (or portion thereof)
issued subsequently upon exchange of a Global Security or in
lieu of a destroyed, lost or stolen Global Security, the
most recent Interest Payment Date to which interest has been
paid or duly provided for on the predecessor Global Security
or Securities (or if no such payment or provision has been
made, the original issuance date of the predecessor Global
Security), regardless of the date of authentication of such
subsequently issued Global Security. No Global Security will
represent (i) both Fixed Rate and Floating Rate Book-Entry
Notes or (ii) any Certificated Note.
IDENTIFICATION
NUMBERS:
The Company will arrange, on or prior to commencement of a
program for the offering of Book-Entry Notes, with the CUSIP
Service Bureau of Standard & Poor's Corporation (the "CUSIP
Service Bureau") for the reservation of a series of CUSIP
numbers (including tranche numbers), consisting of
approximately 900 CUSIP numbers and relating to Global
Securities representing the Book-Entry Notes. The Company
will obtain from the CUSIP Service Bureau a written list of
such series of reserved CUSIP numbers and will deliver to
the Bank and DTC such written list of 900 CUSIP numbers of
such series. The Company will assign CUSIP numbers to Global
Securities as described below under Settlement Procedure
"B." DTC will notify the CUSIP Service Bureau periodically
of the CUSIP numbers that the Company has assigned to Global
Securities. At any time when fewer than 100 of the reserved
CUSIP numbers remain unassigned to Global Securities, and if
it deems necessary, the Company will reserve additional
CUSIP numbers for assignment to Global Securities
representing Book-Entry Notes. Upon obtaining such
additional CUSIP numbers the Company shall deliver such
additional CUSIP numbers to the Bank and DTC.
REGISTRATION:
Each Global Security will be registered in the name of Cede
& Co., as nominee for DTC, on the Securities Register
maintained under the Indenture governing such Global
Security. The beneficial owner of a Book-Entry Note (or one
or more indirect participants in DTC designated by such
owner) will designate one or more participants in DTC (with
respect to such Note, the "Participants") to act as agent or
agents for such owner in connection with the book-entry
system maintained by DTC, and DTC will record in book-entry
form, in accordance with instructions provided by such
Participants, a credit balance with respect to such Note in
the account of such Participants. The ownership interest of
such beneficial owner in such Note will be recorded through
the records of such Participants or through the separate
records of such Participants and one or more indirect
participants in DTC.
TRANSFERS:
Transfers of a Book-Entry Note will be accomplished by book
entries made by DTC and, in turn, by Participants (and in
certain cases, one or more indirect participants in DTC)
acting on behalf of beneficial transferors and transferees
of such Note.
-B9-
CONSOLIDATION
AND EXCHANGE:
The Bank may deliver to DTC and the CUSIP Service Bureau at
any time a written notice of consolidation specifying (i)
the CUSIP numbers of two or more Outstanding Global
Securities that represent (A) Fixed Rate Book-Entry Notes
having the same original issuance date, interest rate and
Stated Maturity and with respect to which interest has been
paid to the same date or (B) Floating Rate Book-Entry Notes
having the same interest rate formula, original issuance
date, Initial Interest Rate, Interest Payment Dates, Index
Maturity, Spread or Spread Multiplier, minimum interest rate
(if any), maximum interest rate (if any) and Stated Maturity
and with respect to which interest has been paid to the same
date, (ii) a date, occurring at least thirty days after such
written notice is delivered and at least thirty days before
the next Interest Payment Date for such Book-Entry Notes, on
which such Global Securities shall be exchanged for a single
replacement Global Security and (iii) a new CUSIP number,
obtained from the Company, to be assigned to such
replacement Global Security. Upon receipt of such a notice,
DTC will send to its participants (including the Bank) a
written reorganization notice to the effect that such
exchange will occur on such date. Prior to the specified
exchange date, the Bank will deliver to the CUSIP Service
Bureau a written notice setting forth such exchange date and
the new CUSIP number and stating that, as of such exchange
date, the CUSIP numbers of the Global Securities to be
exchanged will no longer be valid. On the specified exchange
date, the Bank will exchange such Global Securities for a
single Global Security bearing the new CUSIP number and a
new Interest Accrual Date, and the CUSIP numbers of the
exchanged Global Securities will, in accordance with CUSIP
Service Bureau procedures, be canceled and not immediately
reassigned. Notwithstanding the foregoing, if the Global
Securities to be exchanged exceed $200,000,000 in aggregate
principal amount, one Global Security will be authenticated
and issued to represent each $200,000,000 of principal
amount of the exchanged Global Securities and an additional
Global Security will be authenticated and issued to
represent any remaining principal amount of such Global
Securities (see "Denominations" below).
DENOMINATIONS:
Book-Entry Notes will be issued in principal amount of
$1,000, or any amount in excess thereof that is an integral
multiple of $1,000. Global Securities representing one or
more Book-Entry Notes will be denominated in principal
amounts not in excess of $200,000,000.
INTEREST:
GENERAL. Interest on each Book-Entry Note will accrue from
the Interest Accrual Date of the Global Security
representing such Note. Each payment of interest on a
Book-Entry Note will include interest accrued through the
date preceding, as the case may be, the Interest Payment
Date, Stated Maturity or redemption; provided, however, that
if the Interest Reset Dates with respect to any such Note
are daily or weekly, interest payable on any Interest
Payment Date, other than interest payable on any date on
which principal for such Note is payable, will include
interest accrued from but excluding the second preceding
Record Date to and including the next preceding Record Date.
Interest payable at the Stated Maturity or upon redemption
of a Book-Entry
-B10-
Note will be payable to the Person to whom the principal of
such Note is payable. Standard & Poor's Corporation will use
the information received in the pending deposit message
described under Settlement Procedure "C" below in order to
include the amount of any interest payable and certain other
information regarding the related Global Security in the
appropriate weekly bond report published by Standard &
Poor's Corporation.
On the first Business Day of January, April, July and
October of each year the Bank will deliver to the Company
and DTC a written list of Regular Record Dates and Interest
Payment Dates that will occur with respect to Floating Rate
Book-Entry Notes during the six-month period beginning on
such first Business Date. Promptly after each Interest
Determination Date (as defined in the Prospectus) for
Floating Rate Notes, the Bank, acting as the calculation
agent for Floating Rate Notes, will notify Standard & Poor's
Corporation of the interest rates determined on such
Interest Determination Date.
PAYMENTS OF
PRINCIPAL
AND INTEREST:
PAYMENTS OF INTEREST ONLY. Promptly after each Record Date,
the Bank will deliver to the Company and DTC a written
notice specifying by CUSIP number the amount of interest to
be paid on each Global Security on the following Interest
Payment Date (other than an Interest Payment Date coinciding
with Maturity) and the total of such amounts. DTC will
confirm the amount payable on each Global Security on such
Interest Payment Date by reference to the daily bond reports
published by Standard & Poor's Corporation. The Company will
pay to the Bank, as paying agent, the total amount of
interest due on such Interest Payment Date (other than at
Maturity), and the Bank will pay such amount to DTC at the
times and in the manner set forth below under "Manner of
Payment."
PAYMENTS AT MATURITY. On or about the first Business Day of
each month, the Bank will deliver to the Company and DTC a
written list of principal and interest to be paid on each
Global Security maturing in the following month. The
Company, the Bank and DTC will confirm the amounts of such
principal and interest payments with respect to each such
Global Security on or about the fifth Business Day preceding
the Maturity of such Global Security. The Company will pay
to the Bank, as the paying agent, the principal amount of
such Global Security, together with interest due at such
Maturity. The Bank will pay such amount to DTC at the times
and in the manner set forth below under "Manner of Payment."
Promptly after payment to DTC of the principal and interest
due at the Maturity of such Global Security, the Bank will
cancel such Global Security and deliver it to the Company
with an appropriate debit advice. On the first Business Date
of each month, the Bank will prepare a written statement
indicating the total principal amount of Outstanding Global
Securities for which it serves as paying agent and
authenticating agent as of the immediately preceding
Business Day.
PAYMENTS UPON REDEMPTION. The Company, the Bank and DTC will
confirm the purchase price and accrued interest payable for
each Global Security to be
-B11-
redeemed by the Company on or about the fifth Business Day
preceding the redemption of such Global Security.
PAYMENTS UPON REPURCHASE. The Bank will notify the Company
in a timely manner, but no later that the fifth Business Day
following the end of the applicable notice period for the
holders, of the receipt of notice for holders requesting
repurchase of Notes. The Company, the Bank and DTC will
confirm the purchase price and accrued interest payable for
each Global Security to be repurchased by the Company on or
about the fifth Business Day preceding the redemption of
such Global Security.
MANNER OF PAYMENT. The total amount of any principal and
interest due on Global Securities on any Interest Payment
Date or at Maturity, including Redemption and Repurchase,
shall be paid by the Company to the Bank in funds available
for use by the Bank as of 9:30 A.M. (New York City time) on
such date. The Company will make such payment on such Global
Securities by instructing the Bank to withdraw funds from an
account maintained by the Company at the Bank. The Company
will confirm such instructions in writing to the Bank. For
maturity, redemption or any other principal payments: prior
to 10:00 A.M. (New York City time) on such date or as soon
as possible thereafter, the Bank will make such payments to
DTC in same day funds in accordance with DTC's Same Day
Funds Settlement Paying Agent Operating Procedures. For
interest payments: the Bank will make such payments to DTC
in accordance with existing arrangements between DTC and the
Bank. DTC will allocate such payments to its participants in
accordance with its existing operating procedures. Neither
the Company (either as issuer or as Paying Agent) nor the
Bank shall have any direct responsibility or liability for
the payment by DTC to such Participants of the principal of
and interest on the Book-Entry Notes.
The amount of any taxes required under applicable law to be
withheld from any interest payment on a Book-Entry Note will
be determined and withheld by the Participant, indirect
participant in DTC or other Person responsible for
forwarding payments and materials directly to the beneficial
owner of such Note.
SETTLEMENT
PROCEDURES:
Settlement Procedures with regard to each Book-Entry Note
sold by the Company through an Agent, as agent, shall be as
follows:
A. The Presenting Agent will advise the Company by
telephone, and confirm in writing by facsimile transmission
the following settlement information:
1. Exact name in which Note is to be registered
("Registered Owner").
2. Exact address of the Registered Owner and address
for payments of principal and interest, if any.
3. Taxpayer identification number of the Registered
Owner.
-B12-
4. Principal amount of the Note (and, if multiple Notes
are to be issued, denominations thereof).
5. Settlement date.
6. Stated Maturity.
7. Issue Price.
8. Issue date.
9. Trade date.
10. The DTC Participant account number of such Agent.
11. Interest rate:
(a) Fixed Rate Notes:
i) interest rate
(b) Floating Rate Notes:
i) interest rate basis
ii) initial interest rate
iii) spread and/or spread multiplier, if any
iv) interest rate reset periods and dates
v) interest payment dates
vi) index maturity
vii) maximum and minimum interest rates,
if any
viii) record dates
ix) interest determination dates
12. The dates and related prices on or after which the
Notes are redeemable at the option of the Company, and
additional redemption or repurchase provisions, if any.
13. Wire transfer information.
14. Presenting Agent's commission (to be paid in the
form of a discount from the proceeds remitted to the Company
upon settlement.)
B. The Company will assign a CUSIP number to the Global
Security representing such Note and then advise the Bank in
writing by facsimile transmission of the information set
forth in Settlement Procedure "A" above, such CUSIP number
and the name of such Agent. The Original Issuance
Instructions will be accompanied by a letter signed by any
Officer of the Company giving the Bank authority to
authenticate the Notes in the manner set forth in the
Original Issuance Instructions.
-B13-
C. The Bank will enter a pending deposit message through
DTC's Participant Terminal System, providing the following
settlement information to DTC, the Presenting Agent,
Standard & Poor's Corporation and, upon request, the Trustee
under the Indenture pursuant to which such Note is to be
issued:
1. The information set forth in Settlement Procedure
"A."
2. Identification as a Fixed Rate Book-Entry Note or a
Floating Rate Book-Entry Note.
3. Initial Interest Payment Date for such Note, number
of days by which such date succeeds the related "DTC Record
Date" (which term means the Regular Record Date except in
the case of floating rate notes which reset daily or weekly
in which case it means the date 5 calendar days immediately
preceding the Interest Payment Date) and amount of interest
payable on such Interest Payment Date.
4. Frequency of interest payments (monthly,
semiannually, quarterly, etc.).
5. CUSIP number of the Global Security representing
such Note.
6. Whether such Global Security will represent any
other Book-Entry Note (to the extent known at such time).
D. The Bank, as authentication agent, will complete and
authenticate the note certificate evidencing the Global
Security representing such Book-Entry Note.
E. DTC will credit such Note to the Bank's participant
account at DTC.
F. The Bank will enter an SDFS deliver order through DTC's
Participant Terminal System instructing DTC to (i) debit
such Note to the Bank's participant account and credit such
Note to the Presenting Agent's participant account and (ii)
debit the Presenting Agent's settlement account and credit
the Bank's settlement account for an amount equal to the
price of such Note less the Presenting Agent's commission.
G. The Presenting Agent will enter an SDFS deliver order
through DTC's Participant Terminal System instructing DTC
(i) to debit such Note to the Presenting Agent's participant
account and credit such Note to the participant accounts of
the Participants with respect to such Note and (ii) debit
the settlement accounts of such Participants and credit the
settlement account of the Presenting Agent for an amount
equal to the price of such Note.
H. Transfers of funds in accordance with SDFS deliver orders
described in Settlement Procedures "F" and "G" will be
settled in accordance with SDFS operating procedures in
effect on the settlement date.
-B14-
I. The Bank will credit to an account of the Company
maintained at the Bank funds available for immediate use in
the amount transferred to the Bank in accordance with
Settlement Procedure "F."
J. The Presenting Agent will deliver to the purchaser a copy
of the most recent Prospectus applicable to the Note with or
prior to any written offer of Notes and the confirmation and
payment by the purchaser of the Note. The Presenting Agent
will confirm the purchase of such Note to the purchaser
either by transmitting to the Participants with respect to
such Note a confirmation order or orders through DTC's
institutional delivery system or by mailing a written
confirmation to such purchaser.
SETTLEMENT
PROCEDURES
TIMETABLE:
For orders of Book-Entry Notes solicited by an Agent, as
agent, and accepted by the Company for settlement,
Settlement Procedures "A" through "J" set forth above shall
be completed as soon as possible but not later than the
respective times (New York City time) set forth below:
SETTLEMENT
PROCEDURES TIME (New York)
----------- ------------------------------
A - B 11:00 A.M. on the Sale Date
C 2:00 P.M. on the Sale Date
D 9:00 A.M. on the Settlement Date
E 10:00 A.M. on the Settlement Date
F - G 2:00 P.M. on the Settlement Date
H 4:45 P.M. on the Settlement Date
I - J 5:00 P.M. on the Settlement Date
If a sale is to be settled more than one Business Day
after the sale date, Settlement Procedures "▇," "▇" and "C"
shall be completed as soon as practicable but no later than
11:00 A.M. and 2:00 P.M., as the case may be, on the first
Business Day after the sale date. If the initial interest
rate for a Floating Rate Book-Entry Note has not been
determined at the time that Settlement Procedure "A" is
completed, Settlement Procedures "B" and "C" shall be
completed as soon as such rate has been determined but no
later than 11:00 A.M. and 12:00 Noon, respectively, on the
second Business Day before the settlement date. Settlement
Procedure "I" is subject to extension in accordance with any
extension of Fedwire closing deadlines and in the other
events specified in the SDFS operating procedures in effect
on the settlement date.
If settlement of a Book-Entry Note is rescheduled or
canceled, the Bank will deliver to DTC, through DTC's
Participant Terminal System, a cancellation message to such
effect by no later than 2:00 P.M. on the Business Day
immediately preceding the scheduled settlement date.
-B15-
FAILURE TO SETTLE:
If the Bank fails to enter an SDFS deliver order with
respect to a Book-Entry Note pursuant to Settlement
Procedure "F," the Bank may deliver to DTC, through DTC's
Participant Terminal System, as soon as practicable a
withdrawal message instructing DTC to debit such Note to the
Bank's participant account. DTC will process the withdrawal
message, provided that the Bank's participant account
contains a principal amount of the Global Security
representing such Note that is at least equal to the
principal amount to be debited. If a withdrawal message is
processed with respect to all the Book-Entry Notes
represented by a Global Security, the Bank will ▇▇▇▇ such
Global Security "canceled," make appropriate entries in the
Bank's records and send such canceled Global Security to the
Company. The CUSIP number assigned to such Global Security
shall, in accordance with CUSIP Service Bureau procedures,
be canceled and not immediately reassigned. If a withdrawal
message is processed with respect to one or more, but not
all, of the Book-Entry Notes represented by a Global
Security, the Bank will exchange such Global Security for
two Global Securities, one of which shall represent such
Book-Entry Note or Notes and shall be canceled immediately
after issuance and the other of which shall represent the
other Book-Entry Notes previously represented by the
surrendered Global Security and shall bear the CUSIP number
of the surrendered Global Security.
If the purchase price for any Book-Entry Note is not timely
paid to the Participants with respect to such Note by the
beneficial purchasers thereof (or a Person, including an
indirect participant in DTC, acting on behalf of such
purchaser), such Participants and, in turn, the Agent for
such Note may enter SDFS deliver orders through DTC's
Participant Terminal System reversing the orders entered
pursuant to Settlement Procedures "F" and "G," respectively.
Thereafter, the Bank will deliver the withdrawal message and
take the related actions described in the preceding
paragraph.
Notwithstanding the foregoing, upon any failure to settle
with respect to a Book-Entry Note, DTC may take any actions
in accordance with its SDFS operating procedures then in
effect. In the event of a failure to settle with respect to
one or more, but not all, of the Book-Entry Notes to have
been represented by a Global Security, the Bank will
provide, in accordance with Settlement Procedure "D," for
the authentication and issuance of a Global Security
representing the other Book-Entry Notes to have been
represented by such Global Security and will make
appropriate entries in its records.
III. SPECIAL PROCEDURES FOR CERTIFICATED NOTES
The Notes may be issued in physical form as
Certificated Notes. The following Settlement Procedures
relate specifically to the issuance of Certificated Notes.
DETAILS FOR
SETTLEMENT:
A. For each offer accepted by the Company, the Agent who
presented such offer (the "Presenting Agent") shall
communicate to (i) the Company's Financial
-B16-
Services Unit and (ii) the Bank by telephone, facsimile
transmission or other acceptable means the following
information (the "Purchase Information"):
1. Exact name in which the Note or Notes are to be
registered ("registered owner").
2. Exact address of registered owner and address for
payment of principal and interest, if any.
3. Taxpayer identification number of registered owner.
4. Principal amount of the Note (and if multiple Notes
are to issued, denominations thereof).
5. Settlement date.
6. Stated Maturity.
7. Issue Price.
8. Issue date.
9. Trade date.
10.Interest rate:
(a) Fixed Rate Notes:
i) interest rate
(b) Floating Rate Notes:
i) interest rate basis
ii) initial interest rate
iii) spread and/or spread multiplier, if any
iv) interest rate reset periods and dates
v) interest payment dates
vi) index maturity
vii) maximum and minimum interest rates, if any
viii) record dates
ix) interest determination dates
11. The dates and related prices on or after which the
Notes are redeemable at the option of the Company, and
additional redemption or repurchase provisions, if any.
12. Wire transfer information.
-B17-
13. Presenting Agent's commission (to be paid in the
form of a discount from the proceeds remitted to the Company
upon settlement).
14. Instructions for delivery of Note(s).
The Issue Date of, and the settlement date for, Notes will
be the same. Before accepting any offer to purchase Notes to
be settled in less than three days, the Company shall verify
that the Bank will have adequate time to prepare and
authenticate the Notes.
B. After receiving the details for each accepted offer from
the Presenting Agent, the Company will, after recording the
details and any necessary calculations, confirm the Purchase
Information by telephone, facsimile transmission or other
acceptable means, to the Bank.
C. The Bank will complete the Note assigning to and entering
on, each Note a transaction number and authenticating the
Note.
D. The Bank will deliver the Notes to the Presenting Agent,
pursuant to the delivery instructions from the Company. The
Bank will retain a copy of the Note. The Presenting Agent
will cause to be wire transferred to a bank account
designated by the Company immediately available funds in the
amount of the principal of the Notes, less the applicable
commission.
E. The Presenting Agent, as the Company's agent, will
deliver the Notes against payment by such purchasers in
immediately available funds in the principal amount of the
Notes. Delivery of any confirmation or a Note will be made
in compliance with "Delivery of Prospectus."
F. The Bank will automatically forward a copy of the Notes
to the Company unless notified of a fail (See "Fails").
SETTLEMENT
PROCEDURES
TIMETABLE:
For offers accepted by the Company, Settlement Procedures
"A" through "F" set forth above shall be completed on or
before the respective times set forth below:
-B18-
SETTLEMENT
PROCEDURES TIME (New York)
---------- ---------------------------------------
A - B 11:00 A.M. on the Next Business Day
after the Trade Date
C 3:00 P.M. on the Business Date prior to
Settlement Date
D 2:15 P.M. on the Settlement Date
E 3:00 P.M. on the Settlement Date
F 5:00 P.M. on the Business Day after the
Settlement Date
FAILS:
In the event that a purchaser shall fail to accept delivery
of and make payment for a Note on the settlement date, the
Presenting Agent will notify the Bank and the Company, by
telephone, confirmed in writing. If the Note has been
delivered to the Presenting Agent, as the Company's agent,
the Presenting Agent shall return such Note to the Bank. If
funds have been advanced for the purchase of such Note, the
Agent will, immediately upon receipt of such Note, debit the
account of the Company for the amount so advanced and the
Company shall refund the payment previously made by the
Presenting Agent in immediately available funds. Such
payments will be made on the settlement date, if possible,
and in any event not later than the Business Day following
the settlement date. If such fail shall have occurred for
any reason other than the failure of the Presenting Agent to
provide a confirmation to the purchaser, the Company will
reimburse the Presenting Agent on an equitable basis for its
loss of the use of funds during the period when they were
credited to the account of the Company. Immediately upon
receipt of the Note in respect of which the fail occurred,
the Bank will make appropriate entries to reflect the fact
that the Note was never issued and will ▇▇▇▇ the Note
"Canceled." The Presenting Agent will not be entitled to any
commission with respect to any Note which the purchaser does
not accept or make payment for.
Exhibit C
to Agency Agreement
BALTIMORE GAS AND ELECTRIC COMPANY
MEDIUM-TERM NOTES, SERIES H
FORM OF PURCHASE AGREEMENT
INCLUDING
STANDARD PURCHASE PROVISIONS
BALTIMORE GAS AND ELECTRIC COMPANY
MEDIUM-TERM NOTES, SERIES H
PURCHASE AGREEMENT
[Date]
Baltimore Gas and Electric Company
▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Referring to the Medium-Term Notes, Series H of Baltimore Gas and
Electric Company (the "Company") covered by the registration statement on Form
S-3 (No. 333-________), (such registration statement, including (i) the
prospectus included therein, dated _________________, as supplemented by a
prospectus supplement dated ____________ in the form first filed under Rule
424(b) (such prospectus as so supplemented, including each document incorporated
by reference therein is hereinafter called the "Prospectus") and (ii) all
documents filed as part thereof or incorporated by reference therein, is
hereinafter called the "Registration Statement") on the basis of the
representations, warranties and agreements contained in this Agreement, but
subject to the terms and conditions herein set forth, the purchaser or
purchasers named in Schedule A hereto (the "Purchasers") agree to purchase,
severally, and the Company agrees to sell to the Purchasers, severally, the
respective principal amounts of the Company's Medium-Term Notes, Series H having
the terms described below (the "Purchased Notes") set forth opposite the name of
each Purchaser on Schedule A hereto.
The price at which the Purchased Notes shall be purchased from the
Company by the Purchasers shall be ______% of the principal amount plus accrued
interest, if any, from
_____________. The initial public offering price shall be _____% of the
principal amount plus accrued interest, if any, from ____________________. The
Purchased Notes will be offered by the Purchasers as set forth in the Prospectus
Supplement relating to such Purchased Notes.
The Purchased Notes will have the following terms:
Fixed Interest rate (if applicable): _____% per annum
(accruing from )
Floating Interest Rate (if applicable):
Interest Rate Basis: ___________________
Spread: ___________________
Spread Multiplier: ___________________
Index Maturity: ___________________
Initial Interest Rate: ___________________
Maximum Interest Rate: ___________________
Minimum Interest Rate: ___________________
Interest Reset Dates: ___________________
Interest Determination Dates: ___________________
Calculation Agent: ___________________
Interest Payment Dates: ___________________
Stated Maturity: ___________________
Redeemable by the Redemption Prices
Company on or after: (% of Principal Amount):
_____________________ _______________________
_____________________ _______________________
_____________________ _______________________
Subject to Repurchase by
the Company at the option of Repurchase Prices
the holder on: (% of Principal Amount):
_____________________ _______________________
_____________________ _______________________
_____________________ _______________________
The "Closing Date" shall be:
The place to which the
Purchased Notes may be
checked, packaged and
delivered shall be: ________________________
Notices to the Purchasers shall be sent to the following address(es) or
telecopier number(s):
If we are acting as Representative(s) for the several Purchasers named
in Schedule A hereto, we represent that we are authorized to act for such
several Purchasers in connection with the transactions contemplated in this
Agreement, and that, if there are more than one of us, any action under this
Agreement taken by any of us will be binding upon all the Purchasers.
All of the provisions contained in the document entitled "Baltimore Gas
and Electric Company Standard Purchase Provisions", a copy of which has been
previously furnished to us, are hereby incorporated by reference in their
entirety and shall be deemed to be a part of this Agreement to the same extent
as if such provisions had been set forth in full herein.
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed duplicate hereof, whereupon
it will become a binding agreement between the Company and the several
Purchasers in accordance with its terms.
Very truly yours,
[Firm Name]
By ___________________________
Title: _______________________
Acting on behalf of and as
Representative(s) of the
several Purchasers named in
Schedule A hereto.*
The foregoing Purchase
Agreement is hereby confirmed
as of the date first above
written
BALTIMORE GAS AND ELECTRIC COMPANY
By ______________________________
Title: _____________________
_____________
* To be deleted if the Purchase Agreement is not executed by one or more
Purchasers acting as Representative(s) of the Purchasers for purposes of this
Agreement.
SCHEDULE A
NAME OF PURCHASER AMOUNT
------------------ -------
----------
Total $
==========
BALTIMORE GAS AND ELECTRIC COMPANY
STANDARD PURCHASE PROVISIONS
From time to time, Baltimore Gas and Electric Company, a Maryland
corporation ("Company") may enter into purchase agreements that provide for the
sale of designated securities to the purchaser or purchasers named therein. The
standard provisions set forth herein may be incorporated by reference in any
such purchase agreement ("Purchase Agreement"). The Purchase Agreement,
including the provisions incorporated therein by reference, is herein sometimes
referred to as "this Agreement." Unless otherwise defined herein, terms defined
in the Purchase Agreement are used herein as therein defined.
1. INTRODUCTORY. The Company proposes to issue and sell from time to time
its Medium-Term Notes, Series H ("Notes") registered under the registration
statement referred to in Section 2(a). The Notes will be issued under an
Indenture, dated as of July 1, 1985, between the Company and The Bank of New
York (successor to Mercantile-Safe Deposit and Trust Company), as Trustee as
supplemented by the Supplemental Indentures dated as of October 1, 1987 and
January 26, 1993, respectively (the "Indenture"). The Notes will be sold to the
Purchasers for resale in accordance with the terms of the offering determined at
the time of the sale. The Notes involved in any such offering are hereinafter
referred to as the "Purchased Notes," and the firm or firms, as the case may be,
which agree to purchase the same are hereinafter referred to as the "Purchasers"
of such Purchased Notes. The terms "you" and "your" refer to those Purchasers
who sign the Purchase Agreement either on behalf of themselves only or on behalf
of themselves and as representatives of the several Purchasers named in Schedule
A thereto, as the case may be.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to and agrees with each Purchaser that:
(a) A registration statement on Form S-3 (No. 333-________), covering
$200 million principal amount of the Notes, including a prospectus has been
filed with the Securities and Exchange Commission ("Commission") and has
become effective. The terms Registration Statement and Prospectus shall
have the meanings ascribed to them in the Purchase Agreement.
(b) The Registration Statement conforms in all respects to the
requirements of the Securities Act of 1933, as amended ("Act"), and the
pertinent published rules and regulations of the Commission thereunder ("33
Act Rules and Regulations") and the Trust Indenture Act of 1939, as amended
("Trust Indenture Act"), and does not include any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, except
that the foregoing does not
- 2 -
apply to statements or omissions in such document based upon written
information furnished to the Company by any Purchaser specifically for use
therein. The documents incorporated by reference in the Registration
Statement or the Prospectus pursuant to Item 12 of Form S-3 of the Act, at
the time they were filed with the Commission, complied in all material
respects with the requirements of the Securities Exchange Act of 1934, as
amended ("Exchange Act"), and the pertinent published rules and regulations
thereunder ("Exchange Act Rules and Regulations"). Any additional documents
deemed to be incorporated by reference in the Prospectus will, when they
are filed with the Commission, comply in all material respects with the
requirements of the Exchange Act and the Exchange Act Rules and Regulations
and will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
3. DELIVERY AND PAYMENT. The Company will deliver the Purchased Notes to
you for the accounts of the Purchasers, at the offices of the Trustee (at the
place specified in the Purchase Agreement) against payment of the purchase price
by certified or official bank check or checks in same day or New York or
Baltimore Clearing House funds drawn to the order of the Company, at the office
of the Company, ▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, at the time set
forth in this Agreement or at such other time not later than seven full business
days thereafter as you and the Company determine, such time being herein
referred to as the "Closing Date." The Purchased Notes so to be delivered will
be in definitive fully registered form registered in such denominations, of
$1,000 or multiples thereof, and in such names as you request in writing not
later than 3:00 p.m., New York Time, on the third full business day prior to the
Closing Date, or, if no such request is received, in the names of the respective
Purchasers in the amounts agreed to be purchased by them pursuant to this
Agreement. The Company shall make the Purchased Notes available for checking and
packaging at the offices of the Trustee (at the place specified in the Purchase
Agreement) prior to the Closing Date and, unless prevented from doing so by
circumstances beyond its control, not later than 2:00 p.m., New York Time, on
the business day next preceding the Closing Date. If you request that any
Purchased Notes be issued in a name or names other than that of the Purchaser
agreeing to purchase such Purchased Notes hereunder, the Company shall not be
obligated to pay any transfer taxes resulting therefrom. The Notes may also be
represented by a permanent global Note or Notes, registered in the name of The
Depository Trust Company, as depositary (the "Depositary"), or a nominee of the
Depositary (each such Note represented by a permanent global Note being referred
to herein as a "Book-Entry Note"). Beneficial interests in Book-Entry Notes will
only be evidenced by, and transfers thereof will only be effected through,
records maintained by the Depositary's participants.
- 3 -
4. OFFERING BY THE PURCHASERS. The several Purchasers propose to offer the
Purchased Notes for sale to the public as set forth in the Prospectus.
5. COVENANTS OF THE COMPANY. The Company covenants and agrees with the
several Purchasers that:
(a) It will promptly cause the Prospectus to be filed with the
Commission as required by Rule 424.
(b) For as long as a prospectus relating to the Purchased Notes is
required to be delivered under the Act, if any event relating to or
affecting the Company or of which the Company shall be advised in writing
by the Purchasers shall occur which, in the Company's opinion, should be
set forth in a supplement or amendment to the Prospectus in order either to
make the Prospectus comply with the requirements of the Act or which would
require the making of any change in the Prospectus so that as thereafter
delivered to purchasers such Prospectus will not contain any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading, the Company will promptly amend or
supplement the Prospectus by either (i) preparing and filing with the
Commission supplement(s) or amendment(s) to the Prospectus, or (ii) making
an appropriate filing pursuant to the Exchange Act, which will supplement
or amend the Prospectus so that, as supplemented or amended, the Prospectus
when the Prospectus is delivered to a purchaser will comply with the Act
and will not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading.
Prior to any such filing, the Company shall give oral notice to the
Purchasers.
(c) Not later than 45 days after the end of the 12-month period
beginning at the end of the fiscal quarter of the Company in which the
Closing Date occurs, the Company will make generally available to its
security holders an earnings statement (which need not be audited) covering
such 12-month period which will satisfy the provisions of Section 11(a) of
the Act.
(d) The Company will furnish to you copies of the following documents,
in each case as soon as available after filing and in such quantities as
you reasonably request (i) the Registration Statement relating to the Notes
as originally filed and all pre-effective amendments thereto (at least one
of which will be signed and will include all exhibits except those
incorporated by reference to previous filings with the Commission); (ii)
each prospectus relating to the Purchased Notes; and (iii) during the time
when a
- 4 -
prospectus relating to the Purchased Notes is required to be delivered
under the Act, all post-effective amendments and supplements to the
Registration Statement or Prospectus, respectively (except supplements
relating to securities that are not Purchased Notes).
(e) The Company will use its best efforts to obtain the qualification
of the Purchased Notes for sale and the determination of their eligibility
for investment under the laws of such jurisdictions as you designate and
will continue such qualifications in effect so long as required for the
distribution, provided, however, that the Company shall not be required to
qualify as a foreign corporation or to file any consent to service of
process under the laws of any jurisdiction or to comply with any other
requirements deemed by the Company to be unduly burdensome.
(f) During the period of five years after the Closing Date, the
Company will furnish to you, and upon request, to each of the other
Purchasers: (i) as soon as practicable after the end of each fiscal year, a
copy of its annual report to shareholders for such year, (ii) as soon as
available, a copy of each report or definitive proxy statement of the
Company filed with the Commission under the Exchange Act or mailed to
shareholders, and (iii) from time to time, such other information
concerning the Company as you may reasonably request.
(g) The Company will pay all expenses incident to the performance of
its obligations under this Agreement, and will reimburse the Purchasers for
any expenses (including Blue Sky fees not exceeding $6,000 and
disbursements of counsel) incurred by them in connection with qualification
of the Purchased Notes for sale and determination of their eligibility for
investment under the laws of such jurisdictions as you designate and the
printing of memoranda relating thereto, for any filing fees charged by
investment rating agencies for the rating of the Purchased Notes, for any
expenses incurred in connection with listing the Purchased Notes on a
national securities exchange and for expenses incurred in distributing
prospectuses to the Purchasers, except that if this Agreement is terminated
by the Purchasers under Section 6(c) hereof, the Company shall not be
obligated to reimburse the Purchasers for any of the foregoing expenses.
(h) The Company will not offer or sell any of its other debt
securities which are substantially similar to the Purchased Notes prior to
ten business days after the Closing Date without the consent of the
Purchasers.
6. CONDITIONS OF THE OBLIGATIONS OF THE PURCHASERS. The obligations of the
several Purchasers to purchase and pay for the Purchased Notes will be subject
to the accuracy of the
- 5 -
representations and warranties on the part of the Company herein, to the
accuracy of the statements of Company officers made pursuant to the provisions
hereof, to the performance by the Company of its obligations hereunder and to
the following additional conditions precedent:
(a) Subsequent to the signing of this Agreement, you shall have
received a letter of PricewaterhouseCoopers LLP, dated the Closing Date,
confirming that they are independent public accountants within the meaning
of the Act and the 33 Act Rules and Regulations, and stating in effect
that:
(i) In their opinion, the consolidated financial statements and
supporting schedules audited by them which are included in the
Company's Form 10-K ("Form 10-K"), which is incorporated by reference
in the Registration Statement comply in form in all material respects
with the applicable accounting requirements of the Act and the 33 Act
Rules and Regulations and the Exchange Act and the Exchange Act Rules
and Regulations;
(ii) On the basis of procedures specified in such letter (but not
an audit in accordance with generally accepted auditing standards),
including reading the minutes of meetings of the shareholders, the
Board of Directors and the Executive Committee of the Company since
the end of the year covered by the Form 10-K as set forth in the
minute books through a specified date not more than five days prior to
the Closing Date, performing procedures specified in Statement on
Auditing Standards No. 71, Interim Financial Information, on the
unaudited interim consolidated financial statements of the Company
incorporated by reference in the Registration Statement, if any, and
reading the latest available unaudited interim consolidated financial
statements of the Company, and making inquiries of certain officials
of the Company who have responsibility for financial and accounting
matters as to whether the latest available financial statements not
incorporated by reference in the Registration Statement are prepared
on a basis substantially consistent with that of the audited
consolidated financial statements incorporated in the Registration
Statement, nothing has come to their attention that has caused them to
believe that (1) any unaudited consolidated financial statements
incorporated by reference in the Registration Statement do not comply
in form in all material respects with the applicable requirements of
the Act and the 33 Act Rules and Regulations and the Exchange Act and
the Exchange Act Rules and Regulations or any material modifications
should be made to those unaudited consolidated financial statements
for them to be in conformity with generally accepted accounting
principles; (2) at the date of the latest available balance sheet not
incorporated by
- 6 -
reference in the Registration Statement there was any change in the
capital stock, change in long-term debt or decrease in consolidated
net assets or common shareholders' equity as compared with the amounts
shown in the latest balance sheet incorporated by reference in the
Registration Statement or for the period from the closing date of the
latest income statement incorporated by reference in the Registration
Statement to the closing date of the latest available income statement
read by them there were any decreases, as compared with the
corresponding period of the previous year, in operating revenues,
operating income, net income, the ratio of earnings to fixed charges
(measured on the most recent twelve month period), or in earnings per
share of common stock except in all instances of changes or decreases
that the Registration Statement discloses have occurred or may occur,
or which are described in such letter; or (3) at a specified date not
more than five days prior to the Closing Date, there was any change in
the capital stock or long-term debt of the Company or, at such date,
there was any decrease in net assets of the Company as compared with
amounts shown in the latest balance sheet incorporated by reference in
the Registration Statement, [or for the period from the closing date
of the latest income statement incorporated by reference in the
Registration Statement to a specified date not more than five days
prior to the Closing Date, there were any decreases as compared with
the corresponding period of the previous year, in operating revenues,
operating income, net income or in earnings applicable to common
stock,] except in all cases for changes or decreases which the
Registration Statement discloses have occurred or may occur, or which
are described in such letter; and
(iii) Certain specified procedures have been applied to certain
financial or other statistical information (to the extent such
information was obtained from the general accounting records of the
Company) set forth or incorporated by reference in the Registration
Statement and that such procedures have not revealed any disagreement
between the financial and statistical information so set forth or
incorporated and the underlying general accounting records of the
Company, except as described in such letter.
(b) Prior to the Closing Date, 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 to the knowledge of the Company or you,
shall be contemplated by the Commission.
(c) Subsequent to the date of this Agreement, (i) there shall not have
occurred any change or any development involving a prospective change not
contemplated by the
- 7 -
Prospectus in or affecting particularly the business or properties of the
Company which, in the judgment of a majority in interest of the Purchasers
including you, materially impairs the investment quality of the Purchased Notes,
(ii) no rating of any of the Company's debt securities shall have been lowered
by any recognized rating agency and (iii) trading in securities generally on the
New York Stock Exchange shall not have been suspended nor limited, other than a
temporary suspension in trading to provide for an orderly market, nor shall
minimum prices have been established on such Exchange, a banking moratorium
shall not have been declared either by New York State or Federal authorities and
there shall not have occurred an outbreak or escalation of major hostilities in
which the United States is involved or other substantial national or
international calamity or crisis, the effect of which on the financial markets
of the United States is such as to make it, in your judgment, impracticable to
market the Purchased Notes.
(d) There shall not be in effect on the Closing Date any order of the
Public Service Commission of Maryland which would prevent the issuance, sale and
delivery of the Purchased Notes in accordance with the terms contemplated by
this Agreement.
(e) You shall have received an opinion, dated the Closing Date, of a
counsel for the Company to the effect that:
(i) The Company and Constellation Enterprises, Inc. have been duly
incorporated and are validly existing as corporations in good standing
under the laws of the State of Maryland, with power and authority
(corporate and other) to own their respective properties and conduct their
respective businesses as described in the Prospectus; and the Company is
duly qualified to do business as a foreign corporation in good standing in
the Commonwealth of Pennsylvania and all other jurisdictions in which the
conduct of its business or the ownership of its properties requires such
qualification and the failure to do so would have a material and adverse
impact on its financial condition;
(ii) The Indenture has been duly authorized, executed and delivered by
the Company and is a valid instrument, legally binding on the Company and
enforceable in accordance with its terms, except as limited by bankruptcy,
insolvency, or other laws affecting the enforcement of creditors' rights
and by general principles of equity;
(iii) The issuance and sale of the Purchased Notes have been duly
authorized by all necessary corporate action of the Company. The Purchased
Notes being
- 8 -
delivered to the Purchasers at the Closing (assuming that they have been
duly authenticated by the Trustee or a duly designated Authentication Agent
under the Indenture, which fact counsel need not verify by an inspection of
the Purchased Notes), have been duly issued and constitute legal, valid,
and binding obligations of the Company enforceable in accordance with their
terms, and are entitled to the benefits provided by the Indenture except as
such enforceability or entitlement may be limited by bankruptcy,
insolvency, or other laws affecting the enforcement of creditors' rights
and by general principles of equity;
(iv) The Registration Statement has become effective under the Act
and, (a) to the best of such counsel's knowledge, no stop order suspending
the effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or are pending or
contemplated under the Act; (b) the Registration Statement (as of its
effective date) and the Prospectus (as of the date of this Agreement) and
any amendments or supplements thereto, as of their respective dates,
appeared to comply as to form in all material respects with the
requirements of Form S-3 under the Act and the 33 Act Rules and Regulations
and the Trust Indenture Act; (c) such counsel has no reason to believe that
either the Registration Statement or the Prospectus, or any such amendment
or supplement, as of such respective dates, 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 statement therein not misleading;
(d) the descriptions in the Registration Statement and Prospectus of
statutes, legal and governmental proceedings and contracts and other
documents are accurate and fairly present the information required to be
shown; (e) and such counsel does not know of any legal or governmental
proceedings required to be described in the Prospectus which are not
described as required, or of any contracts or documents of a character
required to be described in the Registration Statement or Prospectus or to
be filed as exhibits to the Registration Statement which are not described
or filed as required; it being understood that such counsel, in addressing
the matters covered in this paragraph (iv) need express no opinion as to
the financial statements or other financial and statistical information
contained in the Registration Statement or the Prospectus or incorporated
therein or attached as an exhibit thereto or as to the Statement of
Eligibility and Qualification on Form T-l of the Trustee under the
Indenture.
(v) The approval of the Public Service Commission of Maryland
necessary for the valid issuance by the Company
- 9 -
of the Purchased Notes pursuant to this Agreement has been obtained and
continues in full force and effect. The Company has received the approval
of FERC for the issuance of Purchased Notes on or before December 31,
[1998] with maturities of not more than 12 months after the date of
issuance and the approval of FERC will be required for the issuance of any
Purchased Notes having such maturities after December 31, [1998] and such
counsel knows of no other approval of any other regulatory authority which
is legally required for the valid offering, issuance, sale and delivery of
the Purchased Notes by the Company under this Agreement (except that such
opinion need not pass upon the requirements of state securities acts);
(vi) To the best of such counsel's knowledge and belief, the
consummation of the transactions contemplated in this Agreement and the
compliance by the Company with all the terms of the Indenture did not and
will not result in a breach of any of the terms and provisions of, or
constitute a default under, the Company's Charter or By-Laws or any
indenture, mortgage or deed of trust or other agreement or instrument to
which the Company is a party;
(vii) Each of this Agreement, the Interest Calculation Agency
Agreement and the Letter of Representations has been duly authorized,
executed and delivered by the Company;
(viii) The Indenture is duly qualified under the Trust Indenture Act;
(ix) The issuance, sale and delivery of the Purchased Notes as
contemplated by this Agreement are not subject to the approval of the
Securities and Exchange Commission under the provisions of the Public
Utility Holding Company Act of 1935 (the "1935 Act"); and
(x) The Notes and Indenture conform as to legal matters with the
statements concerning them in the Registration Statement and Prospectus
under the caption "DESCRIPTION OF NOTES" and on the cover page of the
Prospectus.
(f) The Agents shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel
for the Agents, an opinion dated the Closing Date, with respect to the matters
referred to in paragraph 6(e) subheadings (ii), (iii), (iv)b, (v), (vii), (viii)
and (x) and such other matters as the Agents shall reasonably request and the
Company shall have furnished to such counsel such documents as they request for
the purpose of enabling them to pass on such matters.
- 10 -
In rendering such opinion, ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ may rely, as to the
incorporation of the Company, the approval of the Public Service Commission of
Maryland required for the issuance, sale and delivery of the Purchased Notes and
all other matters governed by the laws of the State of Maryland, the
applicability of the 1935 Act, and FERC approval for the issuance, sale and
delivery of the Purchased Notes, upon the opinion of Counsel for the Company
referred to above.
In addition, such counsel shall state that such counsel has participated in
conferences with officers, counsel and other representatives of the Company,
representatives of the independent public accountants for the Company and
representatives of the Purchasers at which the contents of the Registration
Statement and the Prospectus and related matters were discussed; and, although
such counsel is not passing upon and does not assume responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement and Prospectus (except as to the matters referred to in
their opinion rendered pursuant to subheading (x) above), on the basis of the
foregoing (relying as to materiality to a large extent upon the opinions of
officers, counsel and other representatives of the Company), no facts have come
to the attention of such counsel which lead such counsel to believe that either
the Registration Statement (as of its effective date) or the Prospectus (as of
the date of this Agreement), and any subsequent amendments or supplements
thereto, as of their respective dates, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make such statements therein not misleading (it being understood
that such counsel need make no comment with respect to the financial statements
and other financial and statistical data included in the Registration Statement
or Prospectus or incorporated therein or as to the Statement of Eligibility and
Qualification on Form T-l of the Trustee under the Indenture).
(g) You shall have received a certificate of the Chairman of the
Board,Vice Chairman, President or any Vice President and a principal
financial or accounting officer of the Company, dated the Closing Date, in
which such officers shall state, to the best of their knowledge after
reasonable investigation, and relying on opinions of counsel to the extent
that legal matters are involved, that the representations and warranties of
the Company in this Agreement are true and correct in all material
respects, that the Company has complied with all agreements and satisfied
all conditions on its part to be performed or satisfied at or prior to the
Closing Date, that no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose
have been instituted or are contemplated by the Commission, and that,
subsequent to the date of the most recent financial statements set forth or
incorporated by reference in the Prospectus, there has been
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no material adverse change in the financial position or in the financial
results of operation of the Company except as set forth or contemplated in
the Prospectus or as described in such certificate.
(h) The Company will furnish you with such conformed copies of such
opinions, certificates, letters and documents as you reasonably request.
In case any such condition shall not have been satisfied, this Agreement
may be terminated by you upon notice in writing or by telecopy to the Company
without liability or obligation on the part of the Company or any Purchaser,
except as set forth in Section 10 hereof.
7. CONDITIONS OF THE OBLIGATIONS OF THE COMPANY. The obligations of the
Company to sell and deliver the Purchased Notes are subject to the following
conditions precedent:
(a) Prior to the Closing Date, 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, to the
knowledge of the Company or you, shall be contemplated by the Commission.
(b) There shall not be in effect on the Closing Date any order of the
Maryland Commission or Federal Energy Regulatory Commission which would
prevent the issuance, sale and delivery of the Purchased Notes or which
contains conditions or provisions with respect thereto which are not
acceptable to the Company, it being understood that no order in effect at
the date of this Agreement contains any such unacceptable conditions or
provisions.
If any such condition shall not have been satisfied, then the Company
shall be entitled, by notice in writing or by telecopy to you, to terminate
this Agreement without any liability on the part of the Company or any
Purchaser, except as set forth in Section 10 hereof.
8. INDEMNIFICATION.
(a) The Company will indemnify and hold harmless each Purchaser and
each person, if any, who controls any Purchaser within the meaning of the
Act or Exchange Act against any losses, claims, damages or liabilities,
joint or several, to which such Purchaser or such controlling person may
become subject, under the Act 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 any material
fact contained in the Registration Statement or the Prospectus, or any
related preliminary prospectus or arise out of or are based upon the
omission or alleged omission to state therein a material fact
- 12 -
required to be stated therein or necessary to make the statements therein
not misleading; and will reimburse each Purchaser and each such controlling
person for any legal or other expenses reasonably incurred by such
Purchaser or such controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action; provided,
however, that the Company will not be liable to such Purchaser or
controlling person in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made
in any such documents in reliance upon and in conformity with written
information furnished to the Company by such Purchaser or such controlling
person specifically for use therein unless such loss, claim, damage or
liability arises out of the offer or sale of the Purchased Notes occurring
after such Purchaser or controlling person has notified the Company in
writing that such information should no longer be used therein. This
indemnity agreement will be in addition to any liability which the Company
may otherwise have.
(b) Each Purchaser will indemnify and hold harmless the Company, each
of its directors, each of its officers who have signed the Registration
Statement and each person, if any, who controls the Company within the
meaning of the Act or the Exchange Act, against any losses, claims, damages
or liabilities to which the Company or any such director, officer or
controlling person may become subject, under the Act, 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 any material fact contained in the Registration
Statement or the Prospectus, or any related preliminary prospectus or arise
out of or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only
to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity
with written information furnished to the Company by such Purchaser
specifically for use therein; and will reimburse any legal or other
expenses reasonably incurred by the Company or any such director, officer
or controlling person in connection with investigating or defending any
such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that such Purchaser will not be liable to the
Company, or any such director, officer or controlling person in any such
case to the extent that any such loss, claim, damage or liability arises
out of the offer or sale of Purchased Notes occurring after such Purchaser
has notified the Company in writing that such information should no longer
be used therein. This indemnity agreement will be in
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addition to any liability which such Purchaser may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
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 (a) and (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not
relieve it from any liability which it may have to any indemnified party
otherwise than under this Section. In case any such action is brought
against any indemnified party, and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel satisfactory to such indemnified party (who may, with the
consent of the indemnified party, be counsel to the indemnifying party) and
who shall not be counsel to any other indemnified party who may have
interests conflicting with those of such indemnified party, and after
notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will not
be liable to such indemnified party under this Section for any legal or
other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation.
(d) If recovery is not available under the foregoing indemnification
provisions of this Section, for any reason other than as specified therein,
the parties entitled to indemnification by the terms thereof shall be
entitled to contribution to liabilities and expenses, except to the extent
that contribution is not permitted under Section 11(f) of the Act. In
determining the amount of contribution to which the respective parties are
entitled, there shall be considered the relative benefits received by each
party from the offering of the Purchased Notes (taking into account the
portion of the proceeds of the offering realized by each), the parties'
relative knowledge and access to information concerning the matter with
respect to which the claim was asserted, the opportunity to correct and
prevent any statement or omission, and any other equitable considerations
appropriate under the circumstances. The Company and the Purchasers and
such controlling persons agree that it would not be equitable if the amount
of such contribution were determined by pro rata or per capita allocation
(even if the Purchasers and such controlling persons were treated as one
entity for such purpose). Notwithstanding the provisions of this subsection
(d), no Purchaser or controlling person shall be required to make
contribution hereunder which in the aggregate exceeds the total public
offering price of the Purchased Notes, purchased by the Purchaser under
this
- 14 -
Agreement, less the aggregate amount of any damages which such Purchaser or
such controlling person has otherwise been required to pay in respect of
the same claim or any substantially similar claim. The Purchasers'
obligations to contribute are several in proportion to their respective
underwriting obligations and are not joint.
9. DEFAULT OF PURCHASERS. If any Purchaser or Purchasers default in their
obligations to purchase Purchased Notes hereunder and the aggregate principal
amount of Purchased Notes which such defaulting Purchaser or Purchasers agreed
but failed to purchase is 10% of the principal amount of Purchased Notes or
less, you may make arrangements satisfactory to the Company for the purchase of
such Purchased Notes by other persons, including any of the Purchasers, but if
no such arrangements are made by the Closing Date the non-defaulting Purchasers
shall be obligated severally, in proportion to their respective commitments
hereunder, to purchase the Purchased Notes which such defaulting Purchasers
agreed but failed to purchase. If any Purchaser or Purchasers so default and the
aggregate principal amount of Purchased Notes with respect to which such default
or defaults occur is more than the above percentage and arrangements
satisfactory to you and the Company for the purchase of such Purchased Notes by
other persons are not made within thirty-six hours after such default, this
Agreement will terminate without liability on the part of any non-defaulting
Purchaser or the Company, except as provided in Section 10. In the event that
any Purchaser or Purchasers default in their obligation to purchase Purchased
Notes hereunder, the Company may, by prompt written notice to the non-defaulting
Purchasers, postpone the Closing Date for a period of not more than seven full
business days in order to effect whatever changes may thereby be made necessary
in the Registration Statement or the Prospectus or in any other documents, and
the Company will promptly file any amendments to the Registration Statement or
supplements to the Prospectus which may thereby be made necessary. As used in
this Agreement, the term "Purchaser" includes any person substituted for a
Purchaser under this Section. Nothing herein will relieve a defaulting Purchaser
from liability for its default.
10. SURVIVAL OF CERTAIN REPRESENTATIONS AND OBLIGATIONS. The respective
indemnities, agreements, representations, warranties, and other statements of
the Company or its officers and of the several Purchasers set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation, or statement as to the results thereof, made by or on behalf
of any Purchaser or the Company or any of its officers or directors or any
controlling person, and will survive delivery of and payment for the Purchased
Notes. If this Agreement is terminated pursuant to Section 6, 7 or 9 or if for
any reason the purchase of the Purchased Notes by the Purchasers is not
consummated, the Company shall remain responsible for the expenses to be paid or
reimbursed by it pursuant to Section 5(g).
- 15 -
In addition, in such event the respective obligations of the Company and the
Purchasers pursuant to Section 8 shall remain in effect; provided, however, that
you will use your best efforts to promptly notify each other Purchaser and each
dealer and prospective customer to whom you have delivered a Prospectus for the
Purchased Notes by telephone or telegraph, confirmed by letter in either case,
of such termination or failure to consummate, including in such notice
instructions regarding the continued use of the Registration Statement, the
Prospectus, or any amendment or supplement thereto, or any related preliminary
prospectus.
11. NOTICES. All communications hereunder will be in writing, and, if sent
to the Purchasers will be delivered or telecopied and confirmed to the address
furnished in writing for the purpose of such communications hereunder, or, if
sent to the Company, will be delivered or telecopied and confirmed to it,
attention of Treasurer at ▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
telecopier (▇▇▇) ▇▇▇-▇▇▇▇; provided, however, that any notice to a Purchaser
pursuant to Section 8 will be mailed, delivered or telecopied to such Purchaser
at its address appearing in its Purchasers' Questionnaire.
12. SUCCESSORS. This Purchase 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, and no other
person will have any right or obligation hereunder.
13. CONSTRUCTION. This Purchase Agreement shall be governed by and
construed in accordance with the laws of the State of Maryland.
14. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and it is not necessary that the signatures of all parties appear
on the same counterpart, but such counterparts together shall constitute but one
and the same agreement.
Exhibit D
to Agency Agreement
PURCHASE AGREEMENT
(for purchaser's account)
[Date]
Baltimore Gas and Electric Company
▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
The undersigned agrees to purchase the following principal amount of the
Notes described in the Agency Agreement among Baltimore Gas and Electric
Company, ▇▇▇▇▇▇ Brothers, ▇▇▇▇▇▇ Brothers Inc., and ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. dated
_____________, 1998 (the "Agency Agreement"):
Principal Amount: $ ________________
Fixed Interest Rate (if applicable): ________________%
Floating Interest Rate (if applicable):
Interest Rate Basis: ________________
Spread: ________________
Spread Multiplier: ________________
Index Maturity: ________________
Initial Interest Rate: ________________
Maximum Interest Rate: ________________
Minimum Interest Rate: ________________
Interest Reset Dates: ________________
Interest Determination Dates: ________________
Calculation Agent: ________________
Interest Payment Dates: ________________
Stated Maturity: ________________
Redeemable at the option Redemption Prices
of the Company on or after: (% of Principal Amount):
-------------------------- ----------------------
________________ ________________
________________ ________________
________________ ________________
Subject to repurchase by
the Company at the option Repurchase Prices
of the holder on: (% of Principal Amount):
________________ ________________
________________ ________________
________________ ________________
Discount: ________ % of Principal Amount
Price to be paid
to Company
(in immediately
available funds): $ _______________
Settlement Date: ____________ , 19 ___
Except as otherwise expressly provided therein, all terms used herein which
are defined in the Agency Agreement shall have the same meanings as in the
Agency Agreement. The term Agent, as used in the Agency Agreement, shall be
deemed to refer only to the undersigned for purposes of this Agreement.
This Agreement incorporates by reference Sections 4, 6, 7, 12 and 13 of the
Agency Agreement, the first and last sentences of Section 9 thereof and, to the
extent applicable, the Procedures. You and we agree to perform, to the extent
applicable, our respective duties and obligations specifically provided to be
performed by each of us in the Procedures.
Our obligation to purchase Notes hereunder is subject to the accuracy on
the above Settlement Date of your representations and warranties contained in
Section 2 of the Agency Agreement (it being understood that such representations
and warranties shall relate to the Registration Statement and the Prospectus as
amended at such Settlement Date) and to your performance and observance of all
covenants and agreements contained in Sections 4 and 6 thereof. Our obligation
hereunder is also subject to the following conditions:
(a) the satisfaction, at such Settlement Date, of each of the conditions
set forth in subsections (a), (b) and (d) through (h) of Section 5 of the Agency
Agreement (it being understood that each document so required to be delivered
shall be dated such Settlement Date and that each such condition and the
statements contained in each such document that relate to the Registration
Statement or the Prospectus shall be deemed to relate to the Registration
Statement or the Prospectus, as the case may be, as amended or supplemented at
the time of settlement on such Settlement Date and except that the opinion
described in Section 5(d) of the Agency Agreement shall be modified so as to
state that the Notes being sold on such Settlement Date, when delivered against
payment therefor as provided in the Indenture and this Agreement, will have been
duly executed, authenticated, issued and delivered and will constitute valid and
legally binding obligations of the Company enforceable in accordance with their
terms, subject only to the exceptions as to enforcement set forth in clause (ii)
of Section 5(d) of the Agency Agreement, and will conform to the description
thereof contained in the Prospectus as amended or supplemented at such
Settlement Date); and
(b) there shall not have occurred (i) any change, or any development
involving a prospective change not contemplated by the Prospectus, in or
affecting particularly the business or properties of the Company which, in our
judgment, materially impairs the investment quality of the Notes, (ii) any
downgrading in the rating of the Company's debt securities by any "nationally
recognized statistical rating organization" (as defined for purposes of Rule
436(g) under the Act); (iii) any suspension or limitation of trading, other than
a temporary suspension in trading to provide for an orderly market, in
securities generally on the New York Stock Exchange, or any setting of minimum
prices for trading on such exchange, or any suspension of trading of any
securities of the Company on any exchange or in the over-the-counter market;
(iv) any banking moratorium declared by Federal or New York authorities; or (v)
any outbreak or escalation of major hostilities in which the United States is
involved, any declaration of war by Congress or any other substantial national
or international calamity or emergency if, in our judgment, the effect of any
such outbreak, escalation, declaration, calamity or emergency makes it
impractical or inadvisable to proceed with completion of the sale of and payment
for the Notes.
In further consideration of our agreement hereunder, you agree that between
the date hereof and the above Settlement Date, you will not offer or sell, or
enter into any agreement to sell, any debt securities of the Company in the
United States, other than sales of Notes, borrowings under your revolving credit
agreements and lines of credit, the private placement of securities and
issuances of your commercial paper.
If for any reason our purchase of the above Notes is not consummated, you
shall remain responsible for the expenses to be paid or reimbursed by you
pursuant to Section 4 of the Agency Agreement and the respective obligations of
you and the undersigned pursuant to Section 7 shall remain in effect. If for any
reason our purchase of the above Notes is not consummated other than because of
our default or a failure to satisfy a condition set forth in clause (iii), (iv)
or (v) of paragraph (b) above, you shall reimburse us, severally, for all
out-of-pocket expenses reasonably incurred by us in connection with the offering
of the above Notes and not otherwise required to be reimbursed pursuant to
Section 4 of the Agency Agreement.
This Agreement shall be governed by and construed in accordance with the
laws of the State of Maryland. This Agreement may be executed in counterparts
and the executed counterparts shall together constitute a single instrument.
[Insert Name of Purchaser]
By: __________________________
CONFIRMED AND ACCEPTED, as of
the date first above written:
BALTIMORE GAS AND ELECTRIC COMPANY
By: _______________________________