Commonwealth Edison Company First Mortgage 5.40% Bonds, Series 105, due 2011 UNDERWRITING AGREEMENT
Exhibit 1.1
First Mortgage 5.40% Bonds, Series 105, due 2011
December 13, 2006
To the Representatives named in
Schedule I hereto of the Underwriters
named in Schedule II hereto
Schedule I hereto of the Underwriters
named in Schedule II hereto
Ladies and Gentlemen:
1. Introductory. Commonwealth Edison Company, an Illinois corporation (the “Company”),
proposes to issue and sell from time to time First Mortgage Bonds (the “Mortgage Bonds”). The
Mortgage Bonds will be issued by the Company under its Mortgage, dated as of July 1, 1923, as
amended and supplemented through the date hereof and as further supplemented by the Supplemental
Indenture dated as of December 1, 2006 (the “Supplement”) from the Company to BNY Midwest Trust
Company, as trustee (the “Trustee”), and ▇.▇. ▇▇▇▇▇▇▇, as co-trustee (the “Co-Trustee”). As used
herein, the term “Mortgage” refers to the Company’s Mortgage referred to above together with any
and all amendments or supplements thereto, including the Supplement. The Company proposes to sell
to the underwriters named in Schedule II hereto (the “Underwriters”), for whom you are acting as
Representatives (the “Representatives”), one series of Mortgage Bonds in the aggregate principal
amount and with the terms specified in Part A of Schedule I hereto (such series referred to herein
as the “Purchased Bonds”).
2. Representations and Warranties of the Company. As of the date of this Agreement, the
Applicable Time of Sale and the Closing Date, the Company represents and warrants to, and agrees
with, the Underwriters that:
(a) The Company has filed with the Securities and Exchange Commission (the “Commission”) an
automatic shelf registration statement on Form S-3 (Registration No. 333-133966) relating to
unsecured notes and first mortgage bonds, which include the Purchased Bonds (the “Securities”), and
the offering thereof from time to time in accordance with Rule 415 under the Securities Act of
1933, as amended (the “Act”). Such registration statement became effective upon filing under Rule
462(e) under the Act. Such registration statement, including all documents incorporated therein by
reference, as from time to time amended or supplemented pursuant to the Act or the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), including by any information contained in
any prospectus, preliminary prospectus supplement or prospectus supplement that is deemed to be a
part of the Registration Statement pursuant to Rule 430B, are referred to herein as the
“Registration Statement,” and the prospectus relating to the Securities, including all documents
incorporated therein by reference, as from time to time amended or supplemented pursuant to the Act
or the Exchange Act, including by any preliminary
prospectus supplement relating to the Purchased Bonds or the Prospectus Supplement (as defined
below), is referred to herein as the “Prospectus”; provided, however, that a supplement to the
Prospectus relating to an offering of Securities, other than the Purchased Bonds, shall be deemed
to have supplemented the Prospectus only with respect to the offering of the other Securities to
which it relates. All documents filed by the Company with the Commission pursuant to the Exchange
Act and incorporated by reference in the Registration Statement or the Prospectus, as aforesaid,
are hereinafter referred to as the “Incorporated Documents.”
(b) (i) At the time of filing the Registration Statement, (ii) at the time of the most recent
amendment thereto for the purposes of complying with Section 10(a)(3) of the Act (whether such
amendment was by post-effective amendment, incorporated report filed pursuant to Sections 13 or
15(d) of the Exchange Act or form of prospectus), and (iii) at the time the Company or any person
acting on its behalf (within the meaning, for this clause only, of Rule 163(c)) made any offer
relating to the Securities in reliance on the exemption in Rule 163, the Company was a “well-known
seasoned issuer” as defined in Rule 405. The Company agrees to pay the fees required by the
Commission relating to the Securities within the time required by Rule 456(b)(1) without regard to
the proviso therein and otherwise in accordance with Rules 456(b) and 457(r). In addition, (x) at
the earliest time after the filing of the Registration Statement that the Company or another
offering participant made a bona fide offer (within the meaning of Rule 164(h)(2)) of the Purchased
Bonds and (y) as of the date of this Agreement (with such date being used as the determination date
for purposes of this clause (y)), the Company was not and is not an Ineligible Issuer (as defined
in Rule 405), without taking account of any determination by the Commission pursuant to Rule 405
that it is not necessary that the Company be considered an Ineligible Issuer.
(c) The Registration Statement, the Prospectus and the Mortgage, at the time the Registration
Statement became effective complied, as of the date hereof comply and as of the Closing Date (as
hereinafter defined) will comply, in all material respects with the applicable requirements of the
Act, the Exchange Act and the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”),
and the rules and regulations of the Commission under such Acts; the Incorporated Documents, as of
their respective dates of filing with the Commission, complied and will comply as to form in all
material respects with the requirements of the Exchange Act and the rules and regulations of the
Commission thereunder; the Registration Statement, at the time it became effective under the Act
and as of the “new effective date” with respect to the Purchased Bonds pursuant to, and within the
meaning of, Rule 430B(f)(2) under the Act, did 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 not misleading; and the Prospectus, at the time the Registration Statement became
effective, did not, as of the date hereof does not and as of the Closing Date will not, include an
untrue statement of a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading;
provided, however, that the representations and warranties in this Section 2(c) shall not apply to
(i) that part of the Registration Statement which constitutes the Statements of Eligibility and
Qualification (Forms T-1 and T-2) under the Trust Indenture Act or (ii) statements in or omissions
from the Registration Statement or the Prospectus made in reliance upon and in conformity with the
Provided Statements (as defined in Section 8(b) below).
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(d) The Disclosure Package (as defined below in Section 4(d)) did not, as of the time and date
designated as the “Applicable Time of Sale” in Part C of Schedule I hereto (the “Applicable Time of
Sale”), include an untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the representation and warranty made in this Section
2(d) shall not apply to statements in or omissions from the Disclosure Package made in reliance
upon and in conformity with the Provided Statements.
(e) The Company has not made and will not make (other than the final term sheet prepared and
filed pursuant to Section 4(b) hereof) any offer relating to the Purchased Bonds that would
constitute a “free writing prospectus” (as defined in Rule 405 under the Act), without the prior
consent of the Representatives; the Company will comply with the requirements of Rule 433 under the
Act with respect to any such free writing prospectus; any such free writing prospectus will not, as
of its issue date and through the Closing Date, include any information that is inconsistent with
the information contained in the Registration Statement and the Prospectus, and any such free
writing prospectus, when taken together with the information contained in the Registration
Statement, the Disclosure Package and the Prospectus, did not, when issued or filed pursuant to
Rule 433 under the Act, include an untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the circumstances under which they
were made, not misleading. For the purposes of clarity, nothing in this Section 2(e) shall
restrict the Company from making any filings required in order to comply with its reporting
obligations under the Exchange Act or the rules and regulations of the Commission promulgated
thereunder.
(f) PricewaterhouseCoopers LLP, the accountants who certified certain of the financial
statements included or incorporated by reference in the Prospectus, are independent registered
public accountants as required by the Act and the rules and regulations of the Commission
thereunder.
(g) The financial statements included or incorporated by reference in the Disclosure Package
and the Prospectus present fairly in all material respects the financial position, results of
operations and cash flows of the Company at the respective dates and for the respective periods
specified and, except as otherwise stated in the Disclosure Package and the Prospectus, such
financial statements have been prepared in conformity with generally accepted accounting principles
applied on a consistent basis during the periods involved. The Company has no material contingent
obligation which is not disclosed in the Disclosure Package and the Prospectus.
(h) Except as set forth in or contemplated by the Disclosure Package and the Prospectus, no
material transaction has been entered into by the Company otherwise than in the ordinary course of
business and no materially adverse change has occurred in the condition, financial or otherwise, of
the Company, in each case since the respective dates as of which information is given in the
Disclosure Package and the Prospectus.
(i) The Company has been duly incorporated and is validly existing as a corporation in good
standing under the laws of the State of Illinois with corporate power and
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authority to own its properties and conduct its business as described in the Disclosure
Package and the Prospectus.
(j) Each significant subsidiary of the Company, as defined in Rule 1-02 of Regulation S-X of
the Commission (each a “Significant Subsidiary”), has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the jurisdiction of its incorporation;
all of the issued and outstanding capital stock of each Significant Subsidiary has been duly and
validly issued and is fully paid and non-assessable; and all of the capital stock of each
Significant Subsidiary is owned by the Company free and clear of any pledge, lien, encumbrance,
claim or equity.
(k) Neither the Company nor any Significant Subsidiary is in violation of its articles or
certificate of incorporation, or in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any mortgage or any material contract,
lease, note or other instrument to which it is a party or by which it may be bound, or materially
in violation of any law, administrative regulation or administrative, arbitration or court order to
which it is subject or bound, except in each case to such extent as may be set forth in the
Disclosure Package and the Prospectus; and the execution and delivery of this Agreement, the
incurrence of the obligations herein set forth and the consummation of the transactions herein
contemplated will not conflict with or constitute a breach of, or default under, the articles of
incorporation or by-laws of the Company or any mortgage, contract, lease, note or other instrument
to which the Company or any Significant Subsidiary is a party or by which it or any Significant
Subsidiary may be bound, or any law, administrative regulation or administrative, arbitration or
court order to which it is subject or bound.
(l) The Company has filed with the Illinois Commerce Commission (the “ICC”) a petition with
respect to the issuance and sale of the Purchased Bonds and the ICC has issued its order that
authorizes and approves such issuance and sale. No consent of or approval by any other public
board or body or administrative agency, federal or state, is necessary to authorize the issuance
and sale of the Purchased Bonds, except as may be required under the blue sky laws of any
jurisdiction in connection with the purchase and distribution of the Purchased Bonds by the
Underwriters in the manner contemplated herein and in the Disclosure Package and the Prospectus.
(m) There is no pending or threatened suit or proceeding before any court or governmental
agency, authority or body or any arbitration involving the Company or any of its Significant
Subsidiaries required to be disclosed in the Prospectus which is not adequately disclosed in the
Prospectus.
(n) This Agreement has been duly authorized, executed and delivered by the Company.
(o) The Mortgage has been duly authorized by the necessary corporate action and duly qualified
under the Trust Indenture Act; and the Mortgage has been duly authorized and, assuming due
authorization, execution and delivery of the Supplement by the Trustee and due execution and
delivery of the Supplement by the Co-Trustee, when executed and delivered by the Company, will
constitute a legal, valid and binding instrument enforceable against the
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Company in accordance with its terms (subject, as to the enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, fraudulent transfer, moratorium or other laws
affecting creditors’ rights generally from time to time in effect and to general principles of
equity).
(p) The issuance and sale of the Purchased Bonds by the Company in accordance with the terms
of this Agreement have been duly authorized; the Purchased Bonds, when executed and authenticated
in accordance with the provisions of the Mortgage and delivered to and paid for by the
Underwriters, will have been duly executed and delivered by the Company and will constitute the
legal, valid and binding obligations of the Company entitled to the benefits of the Mortgage
(subject, as to the enforcement of remedies, to applicable bankruptcy, reorganization, insolvency,
fraudulent transfer, moratorium or other laws affecting creditors’ rights generally from time to
time in effect and to general principles of equity), and the holders of the Purchased Bonds will be
entitled to the payment of principal and interest as therein provided; and the statements under the
headings “Description of the Bonds” in the Disclosure Package and the Prospectus Supplement (as
defined below) and “Description of Bonds” in the Disclosure Package and the Prospectus fairly
summarize the matters therein described.
(q) The franchise granted to the Company by the City Council of the City of Chicago under an
ordinance effective January 1, 1992, is valid and subsisting and duly authorizes the Company to
engage in the electric utility business conducted by it in such City; and the several franchises of
the Company outside the City of Chicago are valid and subsisting and authorize the Company to carry
on its utility business in the several communities, capable of granting franchises, located in the
territory served by the Company outside the City of Chicago (with immaterial exceptions).
(r) The Company has good and sufficient title to all property described or referred to in the
Mortgage and purported to be conveyed thereby, subject only to the lien of the Mortgage and
permitted liens as therein defined (except as to property released from the lien of the Mortgage in
connection with the sale or other disposition thereof, and certain other exceptions which are not
material in the aggregate); the Mortgage has been duly filed for recordation in such manner and in
such places as is required by law in order to give constructive notice of, establish, preserve and
protect the lien of the Mortgage; the Mortgage constitutes a valid, direct first mortgage lien on
substantially all property (including franchises) now owned by the Company, except property
expressly excepted by the terms of the Mortgage, subject to permitted liens as defined therein; and
the Mortgage will constitute a valid, direct first mortgage lien on all property of the character
of that now subject to the lien of the Mortgage hereafter acquired by the Company, subject to
permitted liens as defined in the Mortgage, and to liens, if any, existing or placed on such
after-acquired property at the time of the acquisition thereof.
(s) The Company maintains systems of internal accounting controls sufficient to provide
reasonable assurance that transactions are executed in accordance with management’s general or
specific authorizations, transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to maintain asset
accountability, access to assets is permitted only in accordance with management’s general or
specific authorizations, and the recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with respect to any differences.
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(t) The Company maintains disclosure controls and procedures (as such term is defined in Rule
13a-15(e) under the Exchange Act) that comply with the requirements of the Exchange Act, such
disclosure controls and procedures have been designed to ensure that material information relating
to the Company is made known to the Company’s principal executive officer and principal financial
officer by others within those entities, and such disclosure controls and procedures are effective.
Any certificate signed by any officer of the Company and delivered to you or to counsel for
the Underwriters in connection with the offering of the Purchased Bonds shall be deemed a
representation and warranty by the Company to each Underwriter as to the matters covered thereby.
3. Purchase, Offering and Delivery — Closing Date. Subject to the terms and conditions herein
set forth, the Company agrees to sell to each Underwriter, and each Underwriter agrees, severally
and not jointly, to purchase from the Company at the purchase price set forth in Schedule I hereto,
the principal amount of the Purchased Bonds set forth opposite each Underwriter’s name in Schedule
II hereto. It is understood that the Underwriters propose to offer the Purchased Bonds for sale to
the public as set forth in the Disclosure Package, the Prospectus, Prospectus Supplement (as
hereinafter defined) relating to the Purchased Bonds and the final term sheet contemplated by
Section 4(b) hereof. The time and date of delivery and payment shall be the time and date
specified in Schedule I hereto; provided, however, that such time or date may be accelerated or
extended by agreement between the Company and the Representatives or as provided in Section 9
hereof. The time and date of such delivery and payment are herein referred to as the “Closing
Date.” Delivery of the Purchased Bonds shall be made to the Representatives for the respective
accounts of the several Underwriters against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order of the Company by wire transfer
payable in same-day funds to the account specified by the Company. Delivery of the Purchased Bonds
shall be made through the facilities of The Depository Trust Company.
4. Agreements. The Company agrees with the several Underwriters that:
(a) Promptly following the execution of this Agreement, the Company will cause the Prospectus,
including as part thereof a prospectus supplement relating to the Purchased Bonds (the “Prospectus
Supplement”), to be filed with the Commission pursuant to Rule 424 under the Act within the
applicable time period prescribed for such filing by the rules and regulations under the Act, and
the Company will promptly advise the Representatives when such filing has been made. Prior to such
filing, the Company will cooperate with the Representatives in the preparation of the Prospectus
Supplement to assure that the Representatives have no reasonable objection to the form or content
thereof when filed.
(b) The Company shall prepare a final term sheet, containing solely a description of the
Purchased Bonds, substantially in the form of Annex I hereto and approved by the Representatives,
and shall file such term sheet pursuant to Rule 433(d) under the Act within the time period
prescribed by such rule; and shall file promptly all other material required to be filed by the
Company with the Commission pursuant to Rule 433(d) under the Act.
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(c) The Company will promptly advise the Representatives (i) when any amendment to the
Registration Statement shall have become effective, (ii) of any request by the Commission for any
amendment of the Registration Statement or amendment or supplement to the Prospectus or for any
additional information, (iii) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any notice objecting to its use or the
institution or threatening of any proceeding for that purpose and (iv) of the receipt by the
Company of any notification with respect to the suspension of the qualification of the Purchased
Bonds for sale in any jurisdiction or the initiation or threatening of any proceeding for such
purpose. The Company will not file any amendment to the Registration Statement or amendment or
supplement to the Prospectus unless the Company has furnished the Representatives a copy for their
review prior to filing and will not file any such proposed amendment or supplement without the
consent of the Representatives, which consent shall not be unreasonably withheld. The Company will
use its best efforts to prevent the issuance of any such stop order and, if issued, to obtain as
soon as possible the withdrawal thereof.
(d) If, at any time when a prospectus relating to the Purchased Bonds is required to be
delivered under the Act (including circumstances when such requirement may be satisfied pursuant to
Rule 172), any event occurs as a result of which the Prospectus as then amended or supplemented
would include an untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under which they were made, not
misleading, or if it shall be necessary to amend or supplement the Registration Statement or the
Prospectus to comply with the Act or the Exchange Act or the rules and regulations of the
Commission under such Acts, the Company promptly will prepare and file with the Commission, subject
to paragraph (c) of this Section 4, an amendment or supplement that will correct such statement or
omission or an amendment or supplement that will effect such compliance. If, prior to the Closing
Date, there occurs an event or development as a result of which the Disclosure Package (as defined
below) would include an untrue statement of a material fact or would omit to state a material fact
necessary in order to make the statements therein, in the light of the circumstances when the
Disclosure Package is delivered to a purchaser, not misleading, the Company promptly will notify
the Representatives so that any use of the Disclosure Package may cease until it is amended or
supplemented, and will promptly prepare an amendment or supplement that will correct such statement
or omission. “Disclosure Package” shall mean (i) the preliminary prospectus supplement, including
the base prospectus, as amended and supplemented to the Applicable Time of Sale, (ii) the final
term sheet contemplated by Section 4(b) hereof, and (iii) any Issuer Free Writing Prospectus (as
defined in Section 8(a) below). Notwithstanding any provision hereof to the contrary, each document
included in the Disclosure Package shall be deemed to include all documents (including any Current
Report on Form 8-K (other than any information furnished under Items 2.02, 7.01 or 9.01 of any such
Current Report on Form 8-K)) incorporated therein by reference, whether any such Incorporated
Document is filed before or after the document into which it is incorporated, so long as the
Incorporated Document is filed sufficiently before the Applicable Time of Sale to permit conveyance
to the investor.
(e) The Company will furnish without charge to (i) each of the Representatives and counsel for
the Underwriters a signed copy of the Registration Statement (but without exhibits incorporated by
reference), as originally filed, all amendments thereto filed prior to the Closing Date and all
Incorporated Documents (including exhibits, other than exhibits
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incorporated by reference), (ii) each other Underwriter a conformed copy of the Registration
Statement (but without exhibits), as originally filed, all amendments thereto (but without
exhibits) and all Incorporated Documents (but without exhibits other than the Company’s latest
Annual Report to shareholders) and (iii) each Underwriter as many copies of the Prospectus, the
Prospectus Supplement thereto and, so long as delivery of a prospectus or supplement thereto by an
Underwriter or dealer may be required under the Act (including circumstances when such requirement
may be satisfied pursuant to Rule 172), any amendments thereof and supplements thereto (but without
Incorporated Documents or exhibits), as soon as available and in such quantities as the
Representatives may reasonably request.
(f) The Company will arrange, if necessary, for the qualification of the Purchased Bonds for
sale under the laws of such jurisdictions within the United States as the Representatives may
designate, provided, that in no event shall the Company be obligated to qualify to do business in
any jurisdiction where it is not now so qualified or take any action that would subject it to
service of process in suits (other than those arising out of the offering or sale of the Purchased
Bonds) in any jurisdiction where it is not now so subject. The Company will promptly advise the
Representatives of the receipt by the Company of any notification with respect to the qualification
of the Purchased Bonds for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose.
(g) The Company agrees to pay the costs and expenses relating to the following matters: (i)
the preparation of the Prospectus, the issuance of the Purchased Bonds and the fees of the Trustee
or Co-Trustee; (ii) the preparation, printing or reproduction and filing of the Registration
Statement (including financial statements and exhibits thereto), the Prospectus and each amendment
or supplement thereto, and any Issuer Free Writing Prospectus (as defined in Section 8(a) below);
(iii) the printing (or reproduction) and delivery (including postage, air freight charges and
charges for counting and packaging) of such copies of the Prospectus, and all amendments or
supplements to it, as may be reasonably requested for use in connection with the offering and sale
of the Purchased Bonds; (iv) the preparation, printing, authentication, issuance and delivery of
certificates for the Purchased Bonds, including any stamp or transfer taxes in connection with the
original issuance and sale of the Purchased Bonds; (v) the printing (or reproduction) and delivery
of this Agreement, any blue sky memorandum and all other agreements or documents printed (or
reproduced) and delivered in connection with the offering of the Purchased Bonds; (vi) any
registration or qualification of the Purchased Bonds for offer and sale under the securities or
blue sky laws of the several states (including filing fees and the reasonable fees and expenses of
counsel for the Underwriters relating to such registration and qualification); (vii) the
transportation and other expenses incurred by or on behalf of Company representatives in connection
with presentations to prospective purchasers of the Purchased Bonds; (viii) the fees and expenses
of the Company’s accountants and counsel (including local and special counsel); (ix) the fees and
expenses of any rating agencies rating the Purchased Bonds; and (x) all other costs and expenses
incident to the performance by the Company of its obligations hereunder.
(h) During the period beginning from the date of this Agreement and continuing to and
including the later of (i) the termination of trading restrictions on the Purchased Bonds, as
notified to the Company by the Representatives, and (ii) the Closing Date, the Company will not
offer, sell, contract to sell or otherwise dispose of any debt securities of the
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Company which mature more than one year after the Closing Date and which are substantially
similar to the Purchased Bonds, without the prior written consent of the Representatives; provided,
however, that in no event shall the foregoing period extend more than fifteen calendar days from
the date of this Agreement.
(i) The Company acknowledges and agrees that in connection with the offering or sale of the
Purchased Bonds or any other services the Underwriters may be deemed to be providing hereunder,
notwithstanding any preexisting relationship, advisory or otherwise, between the parties or any
oral representations or assurances previously or subsequently made by the Underwriters: (i) no
fiduciary or agency relationship between the Company and any other person, on the one hand, and the
Underwriters, on the other, exists by reason of this Agreement; (ii) the relationship between the
Company, on the one hand, and the Underwriters, on the other, is entirely and solely commercial,
based on arms-length negotiations; (iii) any duties and obligations that the Underwriters may have
to the Company in connection with the purchase and sale of the Purchased Bonds shall be limited to
those duties and obligations specifically stated herein or that arise as a result of the purchase
and sale of the Purchased Bonds pursuant hereto under the U.S. federal securities laws or any
applicable rules of the National Association of Securities Dealers, Inc.; and (iv) the Underwriters
and their respective affiliates may have interests that differ from those of the Company.
(j) The Company will file timely such reports pursuant to the Exchange Act as are necessary in
order to make generally available to its securityholders as soon as practicable an earnings
statement (which need not be audited) covering a period of at least 12 months beginning after the
date of this Agreement and satisfying the provisions of Section 11(a) of the Act and Rule 158.
5. Conditions to the Obligations of the Underwriters. The obligations of the Underwriters to
purchase and pay for the Purchased Bonds shall be subject to the accuracy of the representations
and warranties on the part of the Company contained herein as of the date hereof, the Applicable
Time of Sale and the Closing Date, to the accuracy of the statements of the Company made in any
certificates pursuant to the provisions hereof, to the performance by the Company of its
obligations hereunder and to the following additional conditions:
(a) The Prospectus Supplement shall have been filed with the Commission pursuant to Rule
424(b) under the Act within the applicable time period prescribed for such filing by the rules and
regulations under the Act and in accordance with Section 4(a) hereof; the final term sheet
contemplated by Section 4(b) hereof, and any other material required to be filed by the Company
pursuant to Rule 433(d) under the Act, shall have been filed with the Commission within the
applicable time periods prescribed for such filings by Rule 433; and no stop order suspending the
effectiveness of the Registration Statement shall be in effect and no proceedings for that purpose
shall then be pending before, or threatened by, the Commission.
(b) The Company shall have furnished to the Representatives the opinion of Sidley Austin LLP,
counsel for the Company, dated the Closing Date and addressed to the Representatives, in form and
substance satisfactory to each of the Representatives and their counsel.
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(c) The Representatives shall have received from Winston & ▇▇▇▇▇▇ LLP, counsel for the
Underwriters, such opinion or opinions, dated the Closing Date, with respect to the issuance and
sale of the Purchased Bonds, the Mortgage, the Registration Statement, the Prospectus and other
related matters as the Representatives may reasonably require, and the Company shall have furnished
to such counsel such documents as they request for the purpose of enabling them to pass upon such
matters.
(d) The Company shall have furnished to the Representatives a certificate of the Company,
signed by the Chief Financial Officer, the Treasurer or Assistant Treasurer of the Company, dated
the Closing Date, to the effect that the signer of such certificate has carefully examined the
Prospectus, any amendment or supplement to the Prospectus and this Agreement and that:
(i) the representations and warranties of the Company in this Agreement are true and
correct in all material respects on and as of the Closing Date with the same effect as if
made on the Closing Date, and the Company has complied with all the agreements and satisfied
all the conditions on its part to be performed or satisfied hereunder at or prior to the
Closing Date;
(ii) since the date of the most recent financial statements included in the Disclosure
Package and the Prospectus (exclusive of any amendment or supplement thereto), there has
been no material adverse change in the financial condition, business or properties of the
Company and its subsidiaries, taken as a whole, whether or not arising from transactions in
the ordinary course of business, except as set forth in or contemplated by the Disclosure
Package and the Prospectus (exclusive of any amendment or supplement thereto); and
(iii) no stop order suspending the effectiveness of the Registration Statement or any
notice objecting to its use has been issued and no proceedings for that purpose have been
initiated or, to his or her knowledge, threatened by the Commission.
(e) On the date hereof and on the Closing Date, the Company shall have requested and caused
PricewaterhouseCoopers LLP to furnish to the Representatives letters, dated respectively the date
hereof and the Closing Date, in form and substance satisfactory to the Representatives.
(f) Subsequent to the date of this Agreement, or if earlier, the respective dates as of which
information is given in the Registration Statement, the Disclosure Package and the Prospectus,
there shall not have been (i) any change or decrease specified in the letter referred to in
paragraph (e) of this Section 5 or (ii) any change, or any development involving a prospective
change, in or affecting the financial condition, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Disclosure Package or the Prospectus
(exclusive of any amendment or supplement thereto) the effect of which, in any case referred to in
clause (i) or (ii) above, is, in the sole judgment of the Representatives, so material and adverse
as to make it impractical or inadvisable to proceed with the public offering or delivery of the
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Purchased Bonds as contemplated by the Disclosure Package or the Prospectus (exclusive of any
amendment or supplement thereto).
(g) On the Closing Date, (i) the Purchased Bonds shall be rated Baa2 by ▇▇▇▇▇’▇ Investors
Service, Inc. and BBB by Standard & Poor’s Ratings Services, and the Company shall have delivered
to the Representatives evidence satisfactory to the Representatives confirming that the Purchased
Bonds have such ratings, and (ii) subsequent to the date of this Agreement, there shall not have
occurred a downgrading in the rating assigned to the Purchased Bonds or any of the Company’s first
mortgage bonds or commercial paper by any “nationally recognized statistical rating agency”, as
that term is defined by the Commission for purposes of Rule 436(g)(2) under the Act, and no such
securities rating agency, each of which have previously publicly announced that it has under
surveillance, review or watch, with possible negative implications, its rating of the Purchased
Bonds or any of the Company’s other debt securities, shall have publicly announced a further level
of surveillance, review or watch, as the case may be.
(h) Prior to the Closing Date, the Company shall have furnished to the Representatives such
further information, certificates and documents as the Representatives may reasonably request.
If any of the conditions specified in this Section 5 shall not have been fulfilled in all
material respects when and as provided in this Agreement, or if any of the opinions or certificates
mentioned above or elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Representatives and their counsel, this Agreement and all
obligations of the Underwriters hereunder may be canceled at, or at any time prior to, the Closing
Date by the Representatives. Notice of such cancellation shall be given to the Company in writing
or by telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 5 will be delivered at the office of
counsel for the Company, at Sidley Austin LLP, ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, on
the Closing Date.
6. Conditions of Company’s Obligation. The obligation of the Company to deliver the Purchased
Bonds upon payment therefor shall be subject to the following conditions:
On the Closing Date, the order of the ICC referred to in subparagraph (l) of Section 2 hereof
shall be in full force and effect substantially in the form as entered by the ICC; the Mortgage
shall be qualified under the Trust Indenture Act as and to the extent required by such Act; and no
stop order suspending the effectiveness of the Registration Statement shall be in effect and no
proceedings for that purpose shall then be pending before, or threatened by, the Commission.
In case any of the conditions specified above in this Section 6 shall not have been fulfilled,
this Agreement may be terminated by the Company by delivering written notice of termination to the
Representatives. Any such termination shall be without liability of any party to any other party
except to the extent provided in Sections 7 and 8 hereof.
11
7. Reimbursement of Underwriters’ Expenses. If the sale of the Purchased Bonds provided for
herein is not consummated because any condition to the obligations of the Underwriters or the
Company set forth in Section 5 and Section 6 hereof, respectively, is not satisfied, because of any
termination pursuant to Section 10 hereof, or because of any refusal, inability or failure on the
part of the Company to perform any agreement herein or comply with any provisions hereof other than
by reason of a default by any of the Underwriters, the Company will reimburse the Underwriters
severally upon demand for all out-of-pocket expenses (including reasonable fees and disbursements
of counsel) that shall have been incurred by them in connection with the proposed purchase and sale
of the Purchased Bonds.
8. Indemnification and Contribution. (a) The Company agrees to indemnify and hold harmless
each Underwriter, the directors, officers, employees and agents of each Underwriter and each person
who controls any Underwriter within the meaning of either the Act or the Exchange Act against any
and all losses, claims, damages or liabilities, joint or several, to which they or any of them may
become subject under the Act, the Exchange Act or other federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement as originally filed or in any
amendment thereof, any preliminary prospectus or the Prospectus, or in any amendment thereof or
supplement thereto, any “issuer free writing prospectus” (as defined in Rule 433 under the Act and
being hereinafter referred to as an “Issuer Free Writing Prospectus”), or any “issuer information”
filed or required to be filed pursuant to Rule 433(d) under the Act, 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 agrees to reimburse each
such indemnified party, as incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any such untrue statement or
alleged untrue statement or omission or alleged omission made therein in reliance upon and in
conformity with the Provided Statements. This indemnity agreement will be in addition to any
liability which the Company may otherwise have.
(b) Each Underwriter severally and not jointly agrees to indemnify and hold harmless the
Company and each of its directors, officers, employees and agents, and each person who controls the
Company within the meaning of either the Act or the Exchange Act, to the same extent as the
foregoing indemnity from the Company to each Underwriter, but only with reference to written
information relating to such Underwriter furnished to the Company by or on behalf of such
Underwriter through the Representatives specifically for inclusion in the documents referred to in
the foregoing indemnity. This indemnity agreement will be in addition to any liability which any
Underwriter may otherwise have. The Company acknowledges that the statements set forth (i) in the
last paragraph of the cover page of the Prospectus Supplement regarding the delivery of the
Purchased Bonds, and (ii) under the heading “Underwriting” in the Prospectus Supplement, (A) the
first paragraph under the sub-heading “–Commissions and Discounts” related to concessions and
discounts and (B) the paragraphs under the sub-heading “–Price Stabilization and Short Positions”
related to stabilization, over-allotments, syndicate covering transactions and penalty bids
(collectively, the “Provided Statements”), constitute the only information furnished in writing by
or on behalf of the Underwriters for inclusion in the
12
Registration Statement, any preliminary prospectus or the Prospectus (or in any amendment or
supplement thereto), or any Issuer Free Writing Prospectus.
(c) Promptly after receipt by an indemnified party under this Section 8 of notice of the
commencement of any action, such indemnified party will, if a claim in respect thereof is to be
made against the indemnifying party under this Section 8, notify the indemnifying party in writing
of the commencement thereof; but the failure so to notify the indemnifying party (i) will not
relieve it from liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the indemnifying party
of substantial rights and defenses; and (ii) will not, in any event, relieve the indemnifying party
from any obligations to any indemnified party other than the indemnification obligation provided in
paragraph (a) or (b) above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party’s choice at the indemnifying party’s expense to represent the indemnified party
in any action for which indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel retained by the
indemnified party or parties except as set forth below); provided, however, that such counsel shall
be satisfactory to the indemnified party. Notwithstanding the indemnifying party’s election to
appoint counsel to represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the indemnifying party shall
bear the reasonable fees, costs and expenses of such separate counsel if (i) the use of counsel
chosen by the indemnifying party to represent the indemnified party would present such counsel with
a conflict of interest; (ii) the actual or potential defendants in, or targets of, any such action
include both the indemnified party and the indemnifying party and the indemnified party shall have
reasonably concluded that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the indemnifying party; (iii)
the indemnifying party shall not have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of the institution of such
action; or (iv) the indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. An indemnifying party will not, without the
prior written consent of the indemnified parties, settle or compromise or consent to the entry of
any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect
of which indemnification or contribution may be sought hereunder (whether or not the indemnified
parties are actual or potential parties to such claim or action) unless such settlement, compromise
or consent (i) includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding and (ii) does not include a statement as to,
or an admission of, fault, culpability or a failure to act by or on behalf of an indemnified party.
(d) In the event that the indemnity provided in paragraph (a) or (b) of this Section 8 is
unavailable or insufficient to hold harmless an indemnified party under section (a) or (b) above,
then the Company and the Underwriters agree to contribute to the aggregate losses, claims, damages
and liabilities (including legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively “Losses”) to which the Company and one or more of
the Underwriters may be subject in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and by the Underwriters on the other from the
offering of the Purchased Bonds. If the allocation provided by the
13
immediately preceding sentence is unavailable for any reason, the Company and the Underwriters
shall contribute in such proportion as is appropriate to reflect not only such relative benefits
but also the relative fault of the Company on the one hand and of the Underwriters on the other in
connection with the statements or omissions which resulted in such Losses, as well as any other
relevant equitable considerations. Benefits received by the Company shall be deemed to be equal to
the total net proceeds from the offering (before deducting expenses) of the Purchased Bonds
received by it, and benefits received by the Underwriters shall be deemed to be equal to the total
purchase discounts and commissions with respect to the Purchased Bonds, in each case set forth on
the cover of the Prospectus. Relative fault shall be determined by reference to, among other
things, whether any untrue or any alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information provided by the Company on the one
hand or the Underwriters on the other, the intent of the parties and their relative knowledge,
information and opportunity to correct or prevent such untrue statement or omission; provided,
however, that in no case shall any Underwriters (except as may be provided in any agreement among
the Underwriters relating to the offering of the Purchased Bonds) be responsible for any amount in
excess of the purchase discount or commission applicable to the Purchased Bonds purchased by such
Underwriters hereunder; provided, further, that each Underwriter’s obligation to contribute to
Losses hereunder shall be several and not joint. The Company and the Underwriters agree that it
would not be just and equitable if contribution were determined by pro rata allocation or any other
method of allocation which does not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes
of this Section 8, each person who controls an Underwriter within the meaning of either the Act or
the Exchange Act and each director, officer, employee and agent of an Underwriter shall have the
same rights to contribution as such Underwriter, and each person who controls the Company within
the meaning of either the Act or the Exchange Act and each officer, director, employee or agent of
the Company shall have the same rights to contribution as the Company, subject in each case to the
applicable terms and conditions of this paragraph (d).
9. Default by an Underwriter. If any one or more Underwriters shall fail to purchase and pay
for any of the Purchased Bonds agreed to be purchased by such Underwriter or Underwriters hereunder
and such failure to purchase shall constitute a default in the performance of its or their
obligations under this Agreement, the remaining Underwriters shall be obligated severally to take
up and pay for (in the respective proportions which the amount of the Purchased Bonds set forth
opposite their names in Schedule II hereto bears to the aggregate amount of the Purchased Bonds set
forth opposite the names of all the remaining Underwriters) the Purchased Bonds which the
defaulting Underwriter or Underwriters agreed but failed to purchase, provided, however, that in
the event that the aggregate principal amount of Purchased Bonds which the defaulting Underwriter
or Underwriters agreed but failed to purchase shall exceed 10% of the aggregate principal amount of
the Purchased Bonds set forth in Schedule II hereto, the remaining Underwriters shall have the
right to purchase all, but shall not be under any obligation to purchase any, of the Purchased
Bonds, and if such nondefaulting Underwriters do not purchase all the Purchased Bonds, this
Agreement will terminate without liability to any nondefaulting Underwriter or the Company. In the
event of a default by any Underwriter as set forth in this Section 9, the Closing Date shall be
postponed for such period, not exceeding five business days,
14
as the Representatives shall determine in order that the required changes in the Registration
Statement and the Prospectus Supplement or in any other documents or arrangements may be effected.
Nothing contained in this Agreement shall relieve any defaulting Underwriter of its liability, if
any, to the Company or any nondefaulting Underwriter for damages occasioned by its default
hereunder.
10. Termination. This Agreement shall be subject to termination in the absolute discretion of
the Representatives, by notice given to the Company prior to delivery of and payment for the
Purchased Bonds, if at any time after the date hereof and prior to the delivery of and payment for
the Purchased Bonds (i) trading in Exelon Corporation’s common stock shall have been suspended by
the Commission or the New York Stock Exchange or trading in securities generally on the New York
Stock Exchange shall have been suspended or limited or minimum prices shall have been established
on such Exchange; (ii) a banking moratorium shall have been declared either by federal or New York
State authorities; (iii) a major disruption of settlements of securities or clearance services in
the United States shall have occurred; or (iv) there shall have occurred any outbreak or escalation
of hostilities, declaration by the United States of a national emergency or war or other calamity
or crisis the effect of which on financial markets is such as to make it, in the sole judgment of
the Representatives, impracticable or inadvisable to proceed with the offering or delivery of the
Purchased Bonds as contemplated by the Disclosure Package and the Prospectus.
11. Representations and Indemnities to Survive. The respective agreements, representations,
warranties, indemnities and other statements of the Company or its officers and of the Underwriters
set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of the Underwriters or the Company or any of the officers,
directors or controlling persons referred to in Section 8 hereof, and will survive delivery of and
payment for the Purchased Bonds. The provisions of Sections 7 and 8 hereof shall survive the
termination or cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing and effective only on receipt,
and, if sent to the Representatives, will be mailed, delivered or telefaxed to them at the
addresses specified in Schedule I hereto, or, if sent to the Company, will be mailed, delivered or
telefaxed to Commonwealth Edison Company, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇, Attention: Senior Vice President, Chief Financial Officer and Treasurer (fax no.:
(▇▇▇) ▇▇▇-▇▇▇▇), with a copy to Exelon Corporation, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
Floor, ▇.▇. ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Director of Finance (fax no.:
(▇▇▇) ▇▇▇-▇▇▇▇) and a copy to Commonwealth Edison Company, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: General Counsel (fax no.: (▇▇▇) ▇▇▇-▇▇▇▇).
13. Successors. This Agreement will inure to the benefit of and be binding upon the parties
hereto and their respective successors and assigns and the officers and directors and controlling
persons referred to in Section 8 hereof, and no other person will have any right or obligation
hereunder. The term “successors and assigns” as used in this Agreement shall not include any
purchaser, as such purchaser, of any of the Purchased Bonds from any of the Underwriters.
15
14. Representations, Warranty and Agreement of the Underwriters. The Representatives
represent and warrant to the Company that they are authorized to act as the representatives of the
Underwriters in connection with this financing, and the Representatives’ execution and delivery of
this Agreement and any action under this Agreement taken by such Representatives will be binding
upon all Underwriters. Each Underwriter represents and warrants to, and agrees with, the Company
and each other Underwriter that it has not made, and will not make (other than one or more term
sheets relating to the Purchased Bonds containing information not inconsistent with the final term
sheet prepared and filed pursuant to Section 4(b) hereof) any offer relating to the Purchased Bonds
that would constitute an “issuer free writing prospectus” (as defined in Rule 433 of the Act) or
that would otherwise constitute a “free writing prospectus” under Rule 433 under the Act required
to be filed with the Commission, without the prior consent of the Company and the Representatives.
15. Interpretation When No Representatives. In the event no Underwriters are named in
Schedule II hereto, the term “Underwriters” shall be deemed for all purposes of this Agreement to
be the Representative or Representatives named as such in Schedule I hereto, the principal amount
of the Purchased Bonds to be purchased by any such Underwriter shall be that set opposite its name
in Schedule I hereto and all references to the “Underwriters” shall be deemed to be the
Representative or Representatives named in Schedule I hereto.
16. Counterparts. This Agreement may be executed in one or more counterparts, each of which
shall constitute an original and all of which together shall constitute one and the same
instrument.
17. Applicable Law. This Agreement will be governed by and construed in accordance with the laws
of the State of New York applicable to contracts made and to be performed within the State of New
York.
16
If the foregoing is in accordance with your understanding of our agreement, please sign and
return to us the enclosed duplicate hereof, whereupon this Agreement and your acceptance shall
represent a binding agreement between the Company and each of the several Underwriters.
| Very truly yours, COMMONWEALTH EDISON COMPANY |
||||
| By: | /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | |||
| Name: | ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | |||
| Title: | Senior Vice President, Chief Financial Officer and Treasurer | |||
The foregoing Agreement is hereby confirmed and accepted as of the date first above written.
BANC OF AMERICA SECURITIES LLC
By:
|
/s/ ▇▇▇▇ ▇▇▇▇▇ | |||
| Name: ▇▇▇▇ ▇▇▇▇▇ | ||||
| Title: Principal |
DEUTSCHE BANK SECURITIES INC.
By:
|
/s/ ▇▇▇▇▇ ▇▇▇▇ | |||
| Name: ▇▇▇▇▇ ▇▇▇▇ | ||||
| Title: Managing Director |
By:
|
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ | |||
| Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ | ||||
| Title: Director |
UBS SECURITIES LLC
By:
|
/s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ | |||
| Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ | ||||
| Title: Managing Director |
By:
|
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇ | |||
| Name: ▇▇▇▇ ▇▇▇▇▇▇▇ | ||||
| Title: Director |
For themselves and the other several Underwriters named in Schedule II hereto.
Signature Page to Underwriting Agreement
SCHEDULE I
Representatives:
|
Banc of America Securities LLC | |
| Deutsche Bank Securities Inc. | ||
| UBS Securities LLC |
A. Purchased Bonds
Purchase Price and Description of the Purchased Bonds:
Principal Amount: |
$345,000,000 | |
Purchase Price: |
99.189% | |
Interest Rate: |
5.40% | |
Public Offering Price: |
99.789% | |
Underwriting Discount: |
0.600% | |
Selling Concession: |
0.350% | |
Reallowance to Dealers: |
0.125% | |
Maturity: |
December 15, 2011 | |
Sinking Fund Provisions: |
None |
Redemption Provisions:
The Company may, at its option, redeem the Purchased Bonds in whole or in part at any time at
a redemption price equal to the greater of:
| • | 100% of the principal amount of the Purchased Bonds to be redeemed, plus accrued interest on such Bonds to the redemption date, or | ||
| • | as determined by the Quotation Agent, the sum of the present values of the remaining scheduled payments of principal and interest on the Purchased Bonds to be redeemed (not including any portion of payments of interest accrued as of the redemption date) discounted to the redemption date on a semi-annual basis at the Adjusted Treasury Rate plus 15 basis points, plus accrued interest on those Purchased Bonds to the redemption date. |
The redemption price will be calculated assuming a 360-day year consisting of twelve 30-day months.
Schedule I
B. Definitions
For purposes of Part A above, the following terms shall have the following meanings:
“Adjusted Treasury Rate” means, with respect to any redemption date, the rate per year equal
to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price
for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for the redemption date.
“Business Day” means any day that is not a day on which banking institutions in New York City
are authorized or required by law or regulation to close.
“Comparable Treasury Issue” means the United States Treasury security selected by the
Quotation Agent as having a maturity comparable to the remaining term of the Purchased Bonds that
would be used, at the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the remaining term of
those Bonds.
“Comparable Treasury Price” means, with respect to any redemption date:
| • | the average of the Reference Treasury Dealer Quotations for that redemption date, after excluding the highest and lowest of the Reference Treasury Dealer Quotations; or | ||
| • | if the trustee obtains fewer than three Reference Treasury Dealer Quotations, the average of all Reference Treasury Dealer Quotations so received. |
“Quotation Agent” means the Reference Treasury Dealer appointed by the Company.
“Reference Treasury Dealer” means (1) each of Banc of America Securities LLC, Deutsche Bank
Securities Inc., UBS Securities LLC, and their respective successors, unless any of them ceases to
be a primary U.S. Government securities dealer in the United States (“Primary Treasury Dealer”), in
which case the Company shall substitute another Primary Treasury Dealer; and (2) any other Primary
Treasury Dealer selected by the Company.
“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer
and any redemption date, the average, as determined by the trustee, of the bid and asked prices for
the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the trustee by that Reference Treasury Dealer at 5:00 p.m., New York City
time, on the third Business Day preceding that redemption date.
C. Other Provisions relating to the Purchased Bonds:
Time and Date of Delivery and Payment:
Time
and Date — 9:00 a.m., Central Time, Tuesday, December 19, 2006
Schedule I
Place of Delivery :
Delivery —
|
Sidley Austin LLP | |
| ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | ||
| ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ |
Office for Examination of Purchased Bonds:
Office of Sidley Austin LLP
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Applicable Time of Sale pursuant to Section 2(d) of the Underwriting Agreement:
1:10 p.m., Eastern Time, Wednesday, December 13, 2006
Address for Notices to Representatives pursuant to Section 12 of Underwriting Agreement:
Banc of America Securities LLC
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: High Grade Debt Capital Markets Transaction Management
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: High Grade Debt Capital Markets Transaction Management
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Deutsche Bank Securities Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Debt Capital Markets – Syndicate Desk
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Debt Capital Markets – Syndicate Desk
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
UBS Securities LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Fixed Income Syndicate
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Fixed Income Syndicate
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Schedule I
SCHEDULE II
| Principal Amount | ||||
| Name of Underwriter | of Purchased Bonds | |||
Banc of America Securities LLC |
$ | 103,500,000 | ||
Deutsche Bank Securities Inc. |
$ | 103,500,000 | ||
UBS Securities LLC |
$ | 103,500,000 | ||
▇▇▇▇▇▇▇ Capital Markets, Inc. |
$ | 17,250,000 | ||
Loop Capital Markets, LLC |
$ | 17,250,000 | ||
Total |
$ | 345,000,000 | ||
Schedule II
Annex I
FORM OF FIXED RATE TERM SHEET
Issuer:
|
Commonwealth Edison Company | |
Ratings:
|
Baa2 (Review for Downgrade) (Moody’s); | |
| BBB (CreditWatch with Negative Implications) (S&P) | ||
| BBB+ (Ratings Watch Negative) (Fitch) | ||
Principal Amount:
|
$345,000,000 | |
Title of Securities:
|
First Mortgage 5.40% Bonds, Series 105, due 2011 | |
Legal Format:
|
SEC-Registered (Registration No. 333-133966) | |
Settlement Date:
|
December 19, 2006 | |
Maturity Date:
|
December 15, 2011 | |
Issue Price:
|
99.789% of principal amount, plus accrued interest, if any, from December 19, 2006 | |
Coupon:
|
5.40% | |
Benchmark Treasury:
|
4.500% due November 30, 2011 | |
Spread to Benchmark:
|
+90 basis points (0.90%) | |
Treasury Yield:
|
4.549% | |
Reoffer Yield:
|
5.449% | |
Interest Payment Dates:
|
Semi-annually on June 15 and December 15, commencing on June 15, 2007 | |
Redemption Provisions: |
||
Make-whole call:
|
At any time at a discount rate of Treasury rate plus 15 basis points | |
CUSIP:
|
202795 HP8 | |
Joint Book-Running
|
Banc of America Securities LLC | |
Managers:
|
Deutsche Bank Securities Inc. | |
| UBS Securities LLC | ||
Co-Managers:
|
▇▇▇▇▇▇▇ Capital Markets, Inc. | |
| Loop Capital Markets, LLC |
The issuer has filed a registration statement (including a prospectus) with the U.S.
Securities and Exchange Commission (SEC) for this offering. Before you invest, you should read the
prospectus for this offering in that registration statement, and other documents the issuer has
filed with the SEC for more complete information about the issuer and this offering. You may get
these documents for free by searching the SEC online database (▇▇▇▇▇®) at ▇▇▇.▇▇▇.▇▇▇.
Alternatively, you may obtain a copy of the prospectus from Banc of America Securities LLC by
calling 1-800-294-1322, Deutsche Bank Securities Inc. by calling ▇-▇▇▇-▇▇▇-▇▇▇▇, or UBS Securities
LLC by calling ▇-▇▇▇-▇▇▇-▇▇▇▇, ext. 1088.
Annex I