RSB BONDCO LLC BALTIMORE GAS AND ELECTRIC COMPANY $[ ] RATE STABILIZATION BONDS UNDERWRITING AGREEMENT
Exhibit
1.1
BALTIMORE
GAS AND ELECTRIC COMPANY
$[ ]
RATE STABILIZATION BONDS
[_______________],
2007
[______________]
As
representative[s] of the several Underwriters
named
in
Schedule II hereto
[Address[es]]
Ladies
and Gentlemen:
1. Introduction.
RSB
BondCo LLC, a Delaware limited liability company (the “Issuer”), proposes
to issue and sell
$[ ]
aggregate principal amount of its Rate Stabilization Bonds (the “Bonds”),
identified in Schedule I hereto. The Issuer and Baltimore
Gas and Electric Company, a Maryland corporation and the Issuer’s direct parent
(“BGE”), hereby confirm their agreement with the several Underwriters (as
defined below) as set forth herein.
The
term
“Underwriters” as used herein shall be deemed to mean the entity or
several entities named in Schedule II hereto and any underwriter
substituted as provided in Section 7 hereof and the term “Underwriter”
shall be deemed to mean any one of such Underwriters. If the entity
or entities listed in Schedule I hereto (the “Representatives”)
are the same as the entity or entities listed in Schedule II hereto, then
the terms “Underwriters” and “Representatives”, as used herein,
shall each be deemed to refer to such entity or entities. All
obligations of the Underwriters hereunder are several and not
joint. If more than one entity is named in Schedule I hereto,
any action under or in respect of this underwriting agreement (“Underwriting
Agreement”) may be taken by such entities jointly as the Representatives or
by one of the entities acting on behalf of the Representatives and such action
will be binding upon all the Underwriters.
Capitalized
terms used and not otherwise defined in this Underwriting Agreement shall have
the meanings given to them in the Indenture (as defined below).
2. Description
of the Bonds. The
Bonds
will be issued pursuant to an indenture to be dated as of [______________],
2007, as supplemented by one or more series supplements thereto (as so
supplemented, the “Indenture”), between the Issuer and
[ ],
as indenture trustee (the “Indenture Trustee”). The Bonds will
be obligations of the Issuer and will be supported by rate stabilization
property (as more fully described in the Qualified Rate Order relating to the
Bonds, the “Rate Stabilization Property”), to be sold to the Issuer by
BGE pursuant to the Rate Stabilization Property Purchase and Sale Agreement,
to
be dated on or about
[_____________],
2007, between BGE and the Issuer (the “Sale Agreement”). The
Rate Stabilization Property securing the Bonds will be serviced pursuant to
the
Rate Stabilization Property Servicing Agreement, to be dated on or about
[____________], 2007, between BGE, as servicer, and the Issuer, as owner of
the
Rate Stabilization Property sold to it pursuant to the Sale Agreement (the
“Servicing Agreement”).
3. Representations
and Warranties of the Issuer. The
Issuer represents and warrants to each of the Underwriters that:
(a) The
Issuer and the Bonds meet the requirements for the use of Form S-3 under
the
Securities Act of 1933, as amended (the “Securities Act”), and the
Issuer, in its capacity as co-registrant and issuing entity with respect
to the
Bonds, and BGE, in its capacity as co-registrant, depositor and sponsor with
respect to the Bonds, have filed with the Securities and Exchange Commission
(the “Commission”) a registration statement on such form on March 16,
2007 (Registration No. 333-141366), as amended by Amendment No. 1 thereto
filed on May 7, 2007 and Amendment No. 2 thereto filed on June [7], 2007,
including a prospectus and a form of prospectus supplement, for the registration
under the Securities Act of up to
$[ ]
aggregate principal amount of the Bonds. Such registration statement,
as so amended (“Registration Statement No. 333-141366”), has been
declared effective by the Commission and no stop order suspending such
effectiveness has been issued under the Securities Act and no proceedings
for
that purpose have been instituted or are pending or, to the knowledge of
the
Issuer, threatened by the Commission. No rate stabilization bonds
registered with the Commission under the Securities Act pursuant to Registration
Statement No. 333-141366 have been previously
issued. References herein to the term “Registration Statement”
shall be deemed to refer to Registration Statement No. 333-141366,
including any amendment thereto, all documents incorporated by reference
therein
pursuant to Item 12 of Form S-3 (“Incorporated Documents”) and any
information in a prospectus or a prospectus supplement deemed or retroactively
deemed to be a part thereof pursuant to Rule 430B (“Rule 430B”) or 430C
(“Rule 430C”) under the Securities Act that has not been superseded or
modified. References herein to the term “Registration Statement” without
reference to a time means the Registration Statement as of the Applicable
Time
(as defined below), which the parties agree will be the time of the first
“contract of sale” (within the meaning of Rule 159 under the Securities Act) for
the Bonds and shall be considered the “Effective Date” of the
Registration Statement relating to the Bonds. For purposes of this
definition, information contained in a form of prospectus or prospectus
supplement that is deemed retroactively to be a part of the Registration
Statement pursuant to Rule 430B or Rule 430C shall be considered to be included
in the Registration Statement as of the time specified in Rule 430B or Rule
430C, as appropriate. The final prospectus and the final prospectus
supplement relating to the Bonds, as filed with the Commission pursuant to
Rule
424(b) under the Securities Act (“Rule 424(b)”), are referred to herein
as the “Final Prospectus”; and the most recent preliminary prospectus and
prospectus supplement that omitted information to be included upon pricing
in a
form of prospectus filed with the Commission pursuant to Rule 424(b) and
that
was used after the initial effectiveness of the Registration Statement and
prior
to the Applicable Time is referred to herein as the “Pricing
Prospectus.”
-2-
(b) (i)
At the earliest time after the filing of the Registration Statement that
the
Issuer or another offering participant made a bona fide offer (within
the meaning of Rule 164(h)(2) under the Securities Act) of the Bonds and
(ii) at
the date hereof, the Issuer was not and is not an “ineligible
issuer,” as defined in Rule 405 under the Securities Act.
(c) At
the time the Registration Statement initially became effective, at the time
of
each amendment thereto for the purposes of complying with Section 10(a)(3)
of the Securities Act (whether by the filing of any post-effective amendment
to
the Registration Statement or form of prospectus or prospectus supplement
deemed
to be a part thereof or any Incorporated Documents) and, at the Effective
Date,
the Registration Statement and, at the Closing Date (as defined below), the
Indenture fully complied and will fully comply in all material respects with
the
applicable requirements of the Securities Act, the Trust Indenture Act of
1939,
as amended (the “Trust Indenture Act”), and, in each case, the applicable
rules and regulations of the Commission thereunder; the Registration Statement,
at each of the aforementioned dates, did not and will 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, in the light
of the
circumstances under which they were made, not misleading. At the
Applicable Time and the Closing Date, (i) the Registration Statement and
the
Pricing Prospectus fully complied and will fully comply in all material respects
with the applicable requirements of the Securities Act, the Trust Indenture
Act
and, in each case, the applicable rules and regulations of the Commission
thereunder, (ii) the Registration Statement does not and will not include
any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein
not
misleading and (iii) the Incorporated Documents, taken together as a whole,
fully complied or will fully comply in all material respects with the applicable
provisions of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), and the applicable rules and regulations of the Commission
thereunder; and as of its date, and on the date of its filing and at the
Closing
Date, the Final Prospectus does not and will not include any untrue statement
of
a material fact or omit to state any material fact necessary in order to
make
the statements therein, in the light of the circumstances under which they
were
made, not misleading; provided that the foregoing representations and warranties
in this paragraph (c) shall not apply to any Underwriter Information or to
any
statements in or omissions from any Statements of Eligibility on Form T-1
(or
amendments thereto) of the Indenture Trustee under the Indenture filed as
exhibits to the Registration Statement or Incorporated Documents or to any
statements or omissions made in or the Final Prospectus relating to The
Depository Trust Company (“DTC”) Book-Entry-Only System that are based
solely on information contained in published reports of the
DTC. References herein to the term the “Underwriter
Information” with respect to any Underwriter shall mean statements in or
omissions from the Registration Statement, the Pricing Prospectus, the Pricing
Term Sheet (as defined in Section 5(b) hereof), any Issuer Free Writing
Prospectus (as defined in Section 3(e) hereof) or the Final Prospectus, as
the
case may be, as they may be amended or supplemented, made in reliance
upon and in conformity with information furnished in writing to the Issuer
or
BGE by, or on behalf of, such Underwriter through the Representatives expressly
for use in connection with the preparation thereof, it being understood and
agreed that the only
-3-
such information furnished by any Underwriter consists of the information
set
forth in Schedule IV hereto.
(d) As
of its date, at the Applicable Time and on the date of its filing, if
applicable, and at the Closing Date, the Pricing Prospectus and each Issuer
Free
Writing Prospectus (other than the Pricing Term Sheet), considered together,
did
not include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light
of
the circumstances under which they were made, not misleading (except that
(i)
the principal amount of the Bonds, the tranches, the initial principal balances,
the scheduled final payment dates, the final maturity dates, the expected
average lives, the Expected Amortization Schedule described in the Pricing
Prospectus supersede any previously issued descriptions of such information
and
(ii) the interest rate, price to the public and underwriting discounts and
commissions for each tranche was not included in the Pricing
Prospectus). The Pricing Term Sheet, as of its issue date and at all
subsequent times through the completion of the public offer and sale of the
Bonds, considered together with the Pricing Prospectus and each other Issuer
Free Writing Prospectus, did not include any untrue statement of a material
fact
or omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. The two preceding sentences do not apply to any
Underwriter Information.
(e)
References herein to the term “Issuer Free Writing Prospectus” shall mean
any “issuer free writing prospectus,” as defined in Rule 433(h) under the
Securities Act, relating to the Bonds, in the form filed or required to be
filed
with the Commission or, if not required to be filed, in the form retained
in the
Issuer’s records pursuant to Rule 433(g) under the Securities
Act. References herein to the term “Free Writing Prospectus”
shall mean a free writing prospectus, as defined in Rule 405 under
the
Securities Act. References herein to the term “Applicable
Time” shall mean
[ ],
eastern time, on the date hereof, except that if, subsequent to such Applicable
Time, the Issuer, BGE and the Underwriters have determined that the information
contained in the Pricing Prospectus or any Issuer Free Writing Prospectus
issued
prior to such Applicable Time included an untrue statement of a material
fact or
omitted 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 and have terminated their old purchase contracts and entered into
new
purchase contracts with purchasers of the Bonds, then “Applicable Time” will
refer to the first of such times when such new purchase contracts are entered
into. The Issuer represents, warrants and agrees that it has treated
and agrees that it will treat each of the free writing prospectuses listed
on
Schedule III hereto as an Issuer Free Writing Prospectus, and that each
such Free Writing Prospectus has fully complied and will fully comply with
the
applicable requirements of Rules 164 and 433 under the Securities Act, including
timely filing with the Commission where required, legending and record
keeping.
(f) Each
Issuer Free Writing Prospectus, as of its issue date and at all subsequent
times
through the Closing Date or until any earlier date that the Issuer notified
or
notifies the Representatives as described in the next sentence, did not,
does
not and will not include any information that conflicted, conflicts or will
conflict with the
-4-
information
then contained in the Registration Statement. If at any time
following issuance of an Issuer Free Writing Prospectus there occurred or
occurs
an event or development as a result of which such Issuer Free Writing Prospectus
conflicted or would conflict with the information then contained in the
Registration Statement or included or would include an untrue statement of
a
material fact or omitted or would omit to state a material fact necessary
in
order to make the statements therein, in the light of the circumstances
prevailing at that subsequent time, not misleading, (i) BGE or the Issuer
has
promptly notified or will promptly notify the Representatives and (ii) BGE
or
the Issuer has promptly amended or will promptly amend or supplement such
Issuer
Free Writing Prospectus to eliminate or correct such conflict, untrue statement
or omission. The foregoing two sentences do not apply to any
Underwriter Information.
(g) The
Issuer has been duly formed and is validly existing as a limited liability
company in good standing under the Limited Liability Company Act of the State
of
Delaware, as amended, with full limited liability company power and authority
to
execute, deliver and perform its obligations under this Underwriting Agreement,
the Bonds, the Sale Agreement, the Servicing Agreement, the Indenture, the
LLC
Agreement, the Administration Agreement and the other agreements and instruments
contemplated by the Pricing Prospectus or the Final Prospectus (collectively,
the “Issuer Documents”) and to own its properties and conduct its
business as described in the Pricing Prospectus or the Final Prospectus;
the
Issuer has been duly qualified as a foreign limited liability company for
the
transaction of business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts any business
so
as to require such qualification, except where failure to so qualify or to
be in
good standing would not have a material adverse effect on the business,
properties or financial condition of the Issuer; the Issuer has conducted
and
will conduct no business in the future that would be inconsistent with the
description of the Issuer’s business set forth in the Pricing Prospectus or the
Final Prospectus; the Issuer is not a party to or bound by any agreement
or
instrument other than the Issuer Documents and other agreements or instruments
incidental to its formation; the Issuer has no material liabilities or
obligations other than those arising out of the transactions contemplated
by the
Issuer Documents and as described in the Pricing Prospectus or the Final
Prospectus; BGE is the beneficial owner of all of the limited liability company
interests of the Issuer; and based on current law, the Issuer is not classified
as an association taxable as a corporation for United States federal income
tax
purposes.
(h) The
issuance and sale of the Bonds by the Issuer, the purchase of the Rate
Stabilization Property by the Issuer from BGE and the consummation of the
transactions herein contemplated by the Issuer, and the fulfillment of the
terms
hereof on the part of the Issuer to be fulfilled, will not (i) result in
a
breach of any of the terms or provisions of, or constitute a default under
the
Issuer’s Certificate of Formation or the LLC Agreement (collectively, the
“Issuer Charter Documents”) or any indenture, mortgage, deed of trust or
other agreement or instrument to which the Issuer is a party or (ii) violate
any
applicable law or any judgment, order or decree of any governmental body,
agency
or court to which the Issuer or its property may be subject.
-5-
(i) This
Underwriting Agreement has been duly authorized, executed and delivered by
the
Issuer, which has the necessary limited liability company power and authority
to
execute, deliver and perform its obligations under this Underwriting Agreement,
and constitutes a valid and binding agreement of the Issuer, enforceable
against
the Issuer in accordance with its terms, except as the enforceability thereof
may be limited by bankruptcy, insolvency, reorganization, receivership,
moratorium or other similar laws relating to or affecting creditors’ or secured
parties’ rights generally and by general principles of equity (including
concepts of materiality, reasonableness, good faith and fair dealing),
regardless of whether considered in a proceeding in equity or at law; and
limitations on enforceability of rights to indemnification or contribution
by
federal or state securities laws or regulations or by public
policy.
(j) The
Issuer (i) is not in violation of the Issuer Charter Documents,
(ii) is not in default and no event has occurred which, with notice or
lapse of time or both, would constitute such a default, in the due performance
or observance of any term, covenant or condition contained in any indenture,
mortgage, deed of trust or other agreement or instrument to which it is a
party
or by which it is bound or to which any of its properties is subject, except
for
any such defaults that would not, individually or in the aggregate, have
a
material adverse effect on its business, property or financial condition,
and
(iii) is not in violation of any applicable law or any judgment, order or
decree of any governmental body, agency or court to which it or its property
may
be subject, except for any such violations that would not, individually or
in
the aggregate, have a material adverse effect on its business, property or
financial condition.
(k) The
Indenture has been duly authorized by the Issuer and, on the Closing Date,
will
have been duly executed and delivered by the Issuer and will be a valid and
binding instrument, enforceable against the Issuer in accordance with its
terms,
except as the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium or other similar laws relating to
or
affecting creditors’ or secured parties’ rights generally and by general
principles of equity (including concepts of materiality, reasonableness,
good
faith and fair dealing), regardless of whether considered in a
proceeding in equity or at law and subject to limitations on enforceability
of
rights to indemnification by federal or state securities laws or regulations
or
by public policy. On the Closing Date, the Indenture will
(i) comply as to form in all material respects with the requirements of the
Trust Indenture Act and (ii) conform in all material respects to the
description thereof in the Pricing Prospectus and the Final
Prospectus.
(l) The
Bonds have been duly authorized by the Issuer for issuance and sale to the
Underwriters pursuant to this Underwriting Agreement and, when executed by
the
Issuer and authenticated by the Indenture Trustee in accordance with the
Indenture and delivered to the Underwriters against payment therefor in
accordance with the terms of this Underwriting Agreement, will constitute
valid
and binding obligations of the Issuer entitled to the benefits of the Indenture
and enforceable against the Issuer in accordance with their terms, except
as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
receivership, moratorium or other similar laws relating to or affecting
creditors’ or secured parties’ rights generally and by general principles of
equity (including concepts of materiality, reasonableness, good faith and
fair
dealing),
-6-
regardless
of whether considered in a proceeding in equity or at law and subject to
limitations on enforceability of rights to indemnification by federal or
state
securities laws or regulations or by public policy, and the Bonds conform
in all
material respects to the description thereof in the Pricing Prospectus and
the
Final Prospectus. The Issuer has all requisite limited liability
company power and authority to issue, sell and deliver the Bonds in accordance
with and upon the terms and conditions set forth in this Underwriting Agreement
and in the Pricing Prospectus and the Final Prospectus.
(m) Other
than as set forth or contemplated in the Pricing Prospectus and the Final
Prospectus, there is no litigation or governmental proceeding to which the
Issuer is a party or to which any property of the Issuer is subject or which
is
pending or, to the knowledge of the Issuer, threatened against the Issuer
that
would reasonably be expected to, individually or in the aggregate, result
in a
material adverse effect on the Issuer’s business, property or financial
condition.
(n) Other
than any necessary action of the Public Service Commission of Maryland (the
“PSC”), any filings required under the Rate Stabilization Law or the
Initial Qualified Rate Order or as otherwise set forth or contemplated in
the
Pricing Prospectus and the Final Prospectus, no approval, authorization,
consent
or order of any public board or body (except such as have been already obtained
and other than in connection or in compliance with the provisions of applicable
blue-sky laws or securities laws of any state, as to which the Issuer makes
no
representations or warranties) is legally required for the issuance and sale
by
the Issuer of the Bonds.
(o) Neither
the Issuer nor BGE is, and, after giving effect to the sale and issuance
of the
Bonds, will not be, an “investment company” within the meaning of the Investment
Company Act of 1940, as amended (the “1940 Act”).
(p) PricewaterhouseCoopers
LLP (“PwC”), who have performed certain agreed upon procedures with
respect to certain statistical and structural information contained in the
Pricing Prospectus and the Final Prospectus, are independent public accountants
as required by the Securities Act and the applicable rules and regulations
of
the Commission thereunder.
(q) Each
of the Sale Agreement, the Servicing Agreement, the Administration Agreement
and
LLC Agreement has been duly authorized by the Issuer, and when executed and
delivered by the Issuer and the other parties thereto, will constitute a
valid
and legally binding agreement of the Issuer, enforceable against the Issuer
in
accordance with its terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency, reorganization, receivership, moratorium or other
similar laws relating to or affecting creditors’ or secured parties’ rights
generally and by general principles of equity (including concepts of
materiality, reasonableness, good faith and fair dealing), regardless of
whether
considered in a proceeding in equity or at law, and subject to limitations
on
enforceability of rights to indemnification by federal or state securities
laws
or regulations or by public policy.
-7-
4. Representations
and Warranties of BGE. BGE
represents and warrants to each of the Underwriters that:
(a) BGE
and the Bonds meet the requirements for the use of Form S-3 under the Securities
Act, and the Issuer, in its capacity as co-registrant and issuing entity
with
respect to the Bonds, and BGE, in its capacity as co-registrant, depositor
and
sponsor with respect to the Bonds, have filed Registration Statement
No. 333-141366 with the Commission for the
registration under the Securities Act of up to
$[ ]
aggregate principal amount of the Bonds. Registration Statement
No. 333-141366 has been declared effective by the
Commission and no stop order suspending such effectiveness has been issued
under
the Securities Act and no proceedings for that purpose have been instituted
or
are pending or, to the knowledge of BGE, threatened by the Commission. No
rate
stabilization bonds registered with the Commission under the Securities Act
pursuant to Registration Statement No. 333-141366 have been
previously issued.
(b) At
the earliest time after the filing of the Registration Statement that the
Issuer
or another offering participant made a bona fide offer (within the
meaning of Rule 164(h)(2) under the Securities Act) of the Bonds and (ii)
at the
date hereof, BGE was not and is not an “ineligible issuer,” as defined in Rule
405 under the Securities Act.
(c) At
the time the Registration Statement initially became effective, at the time
of
each amendment thereto for the purposes of complying with Section 10(a)(3)
of the Securities Act (whether by the filing of any post-effective amendment
to
the Registration Statement or form of prospectus or prospectus supplement
deemed
to be a part thereof or any Incorporated Documents) and, at the Effective
Date,
the Registration Statement and, at the Closing Date, the Indenture fully
complied and will fully comply in all material respects with the applicable
requirements of the Securities Act, the Trust Indenture Act and, in each
case,
the applicable rules and regulations of the Commission thereunder; the
Registration Statement, at each of the aforementioned dates, did not and
will
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, in the light of the circumstances under which they were made, not
misleading. At the Applicable Time and the Closing Date, (i) the
Registration Statement and the Pricing Prospectus fully complied and will
fully
comply in all material respects to the requirements of the Securities Act,
the
Trust Indenture Act and, in each case, the applicable rules and regulations
of
the Commission thereunder, (ii) the Registration Statement does not and will
not include any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to
make
the statements therein not misleading and (iii) the Incorporated Documents,
taken together as a whole, fully complied or will fully comply in all material
respects with the applicable provisions of the Exchange Act and the applicable
rules and regulations of the Commission thereunder; and as of its date, and
on
the date of its filing, and at the Closing Date, the Final Prospectus does
not
and will 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, in the light of the circumstances under which they were
made, not misleading; provided, that the foregoing representations and
warranties in this paragraph (c) shall not apply to any Underwriter Information
or to any statements in or omissions from any
-8-
Statement
of Eligibility on Form T-1, or amendments thereto, of the Indenture Trustee
under the Indenture filed as exhibits to the Registration Statement or
Incorporated Documents or to any statements or omissions made in the
Registration Statement or Final Prospectus relating to the DTC Book-Entry-Only
System that are based solely on information contained in published reports
of
DTC.
(d) As
of its date, at the Applicable Time, on the date of its filing, if applicable,
and on the Closing Date, the Pricing Prospectus and each Issuer Free Writing
Prospectus (other than the Pricing Term Sheet), considered together, did
not
include any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading (except that (i)
the
principal amount of the Bonds, the tranches, the initial principal balances,
the
scheduled final payment dates, the final maturity dates, the expected average
lives, the Expected Amortization Schedule and the Expected Sinking Fund Schedule
described in the Pricing Prospectus supersede any previously issued descriptions
of such information and (ii) the interest rate, price to the public and
underwriting discounts and commissions for each tranche was not included
in the
Pricing Prospectus). The Pricing Term Sheet, as of its issue date and
at all subsequent times through the completion of the public offer and sale
of
the Bonds, considered together with the Pricing Prospectus and each other
Issuer
Free Writing Prospectus, did not include any untrue statement of a material
fact
or omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. The two preceding sentences do not apply to any
Underwriter Information. BGE represents, warrants and agrees that it
has treated and agrees that it will treat each of the free writing prospectuses
listed on Schedule III hereto as an Issuer Free Writing Prospectus, and
that each such Issuer Free Writing Prospectus has fully complied and will
fully
comply with the applicable requirements of Rules 164 and 433 under the
Securities Act, including timely filing with the Commission where required,
legending and record keeping
(e) Each
Issuer Free Writing Prospectus, as of its issue date and at all subsequent
times
through the completion of the public offer and sale of the Bonds or until
any
earlier date that the Issuer or BGE notified or notifies the Representatives
as
described in the next sentence, did not, does not and will not include any
information that conflicted, conflicts or will conflict with the information
then contained in the Registration Statement. If at any time
following issuance of an Issuer Free Writing Prospectus there occurred or
occurs
an event or development as a result of which such Issuer Free Writing Prospectus
conflicted or would conflict with the information then contained in the
Registration Statement or included or would include an untrue statement of
a
material fact or omitted or would omit to state a material fact necessary
in
order to make the statements therein, in the light of the circumstances
prevailing at that subsequent time, not misleading, (i) BGE or the Issuer
has
promptly notified or will promptly notify the Representatives and (ii) BGE
or
the Issuer has promptly amended or will promptly amend or supplement such
Issuer
Free Writing Prospectus to eliminate or correct such conflict, untrue statement
or omission. The foregoing two sentences do not apply to any
Underwriter Information.
-9-
(f) BGE
has been duly formed and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its formation, has the corporate power
and
authority to own, lease and operate its properties and to conduct its business
as presently conducted and as set forth in or contemplated by the Pricing
Prospectus or the Final Prospectus, and is qualified as a foreign corporation
to
transact business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing
of
property or the conduct of business, except where the failure to so qualify or
be in good standing would not have a material adverse effect on the business,
property or financial condition of BGE and its subsidiaries considered as
a
whole. BGE is the beneficial owner of all of the limited liability
company interests of the Issuer.
(g) BGE
has no significant subsidiaries within the meaning of Rule 1-02(w) of
Regulation S-X.
(h) The
transfer by BGE of all of its rights and interests under the Qualified Rate
Order relating to the Bonds to the Issuer and the consummation of the
transactions herein contemplated by BGE, and the fulfillment of the terms
hereof
on the part of BGE to be fulfilled, will not (i) result in a breach of any
of
the terms or provisions of, or constitute a default under, BGE’s articles of
incorporation or bylaws (collectively, the “BGE Charter Documents”) or in
a material breach of any of the terms of, or constitute a material default
under, any indenture, mortgage, deed of trust or other agreement or instrument
to which BGE is a party or (ii) violate any applicable law or any judgment,
order or decree of any governmental body, agency or court to which BGE or
its
property may be subject.
(i) This
Underwriting Agreement has been duly authorized, executed and delivered by
BGE,
which has the necessary corporate power and authority to execute, deliver
and
perform its obligations under this Underwriting Agreement, and
constitutes a valid and binding obligation of BGE, enforceable
against BGE in accordance with its terms, except as the enforceability thereof
may be limited by bankruptcy, insolvency, reorganization, receivership,
moratorium or other similar laws relating to or affecting creditors’ or secured
parties’ rights generally and by general principles of equity (including
concepts of materiality, reasonableness, good faith and fair dealing),
regardless of whether considered in a proceeding in equity or at law, and
limitations on enforceability of rights to indemnification or contribution
by
federal or state securities laws or regulations or by public
policy.
(j) BGE
(i) is not in violation of the BGE Charter Documents, (ii) is not in
default and no event has occurred which, with notice or lapse of time or
both,
would constitute such a default, in the due performance or observance of
any
term, covenant or condition contained in any indenture, mortgage, deed of
trust
or other agreement or instrument to which it is a party or by which it is
bound
or to which any of its properties is subject, except for any such defaults
that
would not, individually or in the aggregate, have a material adverse effect
on
the business, property or financial condition of BGE and its subsidiaries
considered as a whole, or (iii) is not in violation of any applicable law
or any judgment, order or decree of any governmental body, agency or court
to
which it
-10-
or
its
property may be subject, except for any such violations that would not,
individually or in the aggregate, have a material adverse effect on the
business, property or financial condition of BGE and its subsidiaries considered
as a whole.
(k) Other
than as set forth or contemplated in the Pricing Prospectus and the Final
Prospectus, there is no litigation or governmental proceeding to which BGE
or
any of its subsidiaries is a party or to which any property of BGE or any
of its
subsidiaries is subject or which is pending or, to the knowledge of BGE,
threatened against BGE or any of its subsidiaries that would reasonably be
expected to, individually or in the aggregate, result in a material adverse
effect on the Issuer’s business, property, or financial condition or on BGE’s
ability to perform its obligations under the Sale Agreement and the Servicing
Agreement.
(l) Other
than any necessary action of the PSC, any filings required under the Rate
Stabilization Act (as such term is defined in the Pricing Prospectus) or
the
Initial Qualified Rate Order or as otherwise set forth or contemplated in
the
Pricing Prospectus, no approval, authorization, consent or order of any public
board or body (except such as have been already obtained and other than in
connection or in compliance with the provisions of applicable blue-sky laws
or
securities laws of any state, as to which BGE makes no representations or
warranties) is legally required for the issuance and sale by the Issuer of
the
Bonds.
(m) Neither
BGE nor the Issuer is, and, after giving effect to the sale and issuance
of the
Bonds, neither BGE nor the Issuer will be, an “investment company” within the
meaning of the 1940 Act.
(n) Each
of the Sale Agreement, the Servicing Agreement and the Administration Agreement
has been duly authorized by BGE, and when executed and delivered by BGE and
the
other parties thereto will constitute a valid and legally binding agreement
of
BGE, enforceable against BGE in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
receivership, moratorium or other similar laws relating to or affecting
creditors’ or secured parties’ rights generally and by general principles of
equity (including concepts of materiality, reasonableness, good faith and
fair
dealing), regardless of whether considered in a proceeding in equity or at
law,
and subject to limitations on enforceability of rights to indemnification
by
federal or state securities laws or regulations or by public
policy.
(o) There
are no Maryland transfer taxes related to the transfer of the Rate Stabilization
Property or the issuance and sale of the Bonds to the Underwriters pursuant
to
this Underwriting Agreement required to be paid at or prior to the Closing
Date
by BGE or the Issuer.
5. Investor
Communications.
(a) The
Issuer and BGE represent and agree that, unless they obtain the prior consent
of
the Representatives, and each Underwriter represents and agrees that, unless
it
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obtains
the prior consent of the Issuer and BGE and the Representatives, it has not
made
and will not make any offer relating to the Bonds that would constitute an
Issuer Free Writing Prospectus, or that would otherwise constitute a “free
writing prospectus,” required to be filed by the Issuer or BGE, as applicable,
with the Commission or retained by the Issuer or BGE, as applicable, under
Rule
433 under the Securities Act; provided that the prior written consent of
the
parties hereto shall be deemed to have been given in respect of the Pricing
Term
Sheet and each other Free Writing Prospectus identified in Schedule III
hereto.
(b) BGE
and the Issuer (or the Representatives at the direction of the Issuer) will
prepare a final pricing term sheet relating to the Bonds (the “Pricing Term
Sheet”), containing only information that describes the final pricing terms
of the Bonds and otherwise in a form consented to by the Representatives,
and
will file the Pricing Term Sheet within the period required by Rule
433(d)(5)(ii) under the Securities Act following the date such final pricing
terms have been established for all classes of the offering of the
Bonds. The Pricing Term Sheet is an Issuer Free Writing Prospectus
for purposes of this Underwriting Agreement.
(c) Each
Underwriter may provide to investors one or more of the Free Writing
Prospectuses, including the Pricing Term Sheet, subject to the following
conditions:
(i) Unless
preceded or accompanied by a prospectus satisfying the requirements of Section
10(a) of the Securities Act, an Underwriter shall not convey or deliver any
Written Communication (as defined in Rule 405 under the Securities Act) to
any
person in connection with the initial offering of the Bonds, unless such
Written
Communication (A) is made in reliance on Rule 134 under the Securities Act,
(B)
constitutes a prospectus satisfying the requirements of Rule 430B, (C) is
an
Issuer Free Writing Prospectus listed on Schedule III hereto or (D) is an
Underwriter Free Writing Prospectus (as defined below)..
An
“Underwriter
Free Writing
Prospectus” means any free writing prospectus that contains only preliminary or
final terms of the Rate Stabilization Bonds and is not required to be filed
by
BGE or the Issuer pursuant to Rule 433 under the Securities Act and that
contains information substantially the same as the information contained
in the
Pricing Prospectus or the Pricing Term Sheet (including, without limitation,
(1)
the class, size, rating, price, CUSIPs, coupon, yield, spread, benchmark,
status
and/or legal maturity date of the Bonds, the weighted average life, expected
first and final payment dates, trade date, settlement date, transaction parties,
credit enhancement, roadshow details, ERISA eligibility, legal investment
status, payment window of one or more classes of Bonds and (2) a column or
other
entry showing the syndicate structure or the status of the subscriptions
for the
Bonds, both for the Bonds as a whole and for each Underwriter’s retention and/or
expected pricing parameters of the Bonds).
-12-
(ii) Each
Underwriter shall comply with all applicable laws and regulations in connection
with the use of any Free Writing Prospectus and the Pricing Term Sheet,
including but not limited to Rules 164 and 433 under the Securities
Act.
(iii) All
Free Writing Prospectuses provided to investors, whether or not filed with
the
Commission, shall bear a legend that includes substantially the following
statement:
THE
ISSUER AND BGE HAVE FILED A REGISTRATION STATEMENT (INCLUDING A PROSPECTUS)
WITH
THE SEC FOR THE OFFERING TO WHICH THIS COMMUNICATION RELATES. BEFORE
YOU INVEST, YOU SHOULD READ THE PROSPECTUS IN THAT REGISTRATION STATEMENT
AND
OTHER DOCUMENTS ISSUER HAS FILED WITH THE SEC FOR MORE COMPLETE INFORMATION
ABOUT ISSUER AND THE OFFERING. YOU MAY GET THESE DOCUMENTS FOR FREE
BY VISITING ▇▇▇▇▇ ON THE SEC WEB SITE AT ▇▇▇.▇▇▇.▇▇▇. ALTERNATIVELY,
ISSUER, ANY UNDERWRITER OR ANY DEALER PARTICIPATING IN THE OFFERING WILL
ARRANGE
TO SEND YOU THE BASE PROSPECTUS IF YOU REQUEST IT BY CALLING _________ TOLL-FREE
AT 1-8_________ OR EMAILING _________ AT __________________.
The
Issuer and the Representatives shall have the right to require additional
specific legends or notations to appear on any Free Writing Prospectus, the
right to require changes regarding the use of terminology and the right to
determine the types of information appearing therein with the approval of,
in
the case of the Issuer, the Representatives and, in the case of the
Representatives, the Issuer (which in either case shall not be unreasonably
withheld or delayed).
(iv) Each
Underwriter covenants with the Issuer and BGE that after the Final Prospectus
is
available such Underwriter shall not distribute any written information
concerning the Bonds to an investor unless such information is preceded or
accompanied by the Final Prospectus or by notice to the investor that the
Final
Prospectus is available for free by visiting ▇▇▇▇▇ on the Commission’s website
at ▇▇▇.▇▇▇.▇▇▇.
(v) Each
Underwriter agrees and covenants that (A) no information that is conveyed
to
investors has been or will be inconsistent with the information contained
in the
Registration Statement, the Pricing Prospectus and each Issuer Free Writing
Prospectus and (B) if an Underwriter shall use an Underwriter Free Writing
Prospectus, the liability arising from its use, if any, shall be the sole
responsibility of such Underwriter using such Underwriter Free Writing
Prospectus unless such Underwriter Free Writing Prospectus was consented
to in
advance by BGE; provided,
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however,
that, for the avoidance of doubt, (1) this clause (v) shall not constitute
an
obligation of such Underwriter to indemnify the Issuer or BGE, including
under
or in a manner similar the obligations contained in Section 11(b) hereof
and (2)
no Underwriter shall be responsible for any “issuer information” (as defined in
Rule 433(h)(2) under the Securities Act) giving rise to such liability that
was
provided by the Issuer or BGE for inclusion in the Registration Statement,
the
Pricing Prospectus or any Issuer Free Writing Prospectus or was otherwise
previously provided by the Issuer or BGE to such Underwriter for use in such
Underwriter Free Writing Prospectus.
6. Purchase
and Sale. On
the
basis of the representations and warranties herein contained, and subject
to the
terms and conditions herein set forth, the Issuer shall sell to each of the
Underwriters, and each Underwriter shall purchase from the Issuer, at the
time
and place herein specified, severally and not jointly, at the purchase price
set
forth in Schedule I hereto, the principal amount of the Bonds set forth
opposite such Underwriter’s name in Schedule II hereto. The
Underwriters agree to make a public offering of the Bonds. The Issuer
shall pay (in the form of a discount to the principal amount of the offered
Bonds) to the Underwriters a commission equal to
$[ ].
7. Time
and Place of Closing. Delivery
of the Bonds against payment of the aggregate purchase price therefor by
wire
transfer in federal funds shall be made at the place, on the date and at
the
time specified in Schedule I hereto, or at such other place, time and
date as shall be agreed upon in writing by the Issuer and the
Representatives. The hour and date of such delivery and payment are
herein called the “Closing Date.” The Bonds shall be delivered
to DTC or to [_______________], as custodian for DTC, in fully registered
global
form registered in the name of Cede & Co., for the respective accounts
specified by the Representatives not later than the close of business on
the
business day preceding the Closing Date or such other time as may be agreed
upon
by the Representatives. The Issuer agrees to make the Bonds available
to the Representatives for checking purposes not later than
[ ] P.M. New York Time on the last business
day preceding the Closing Date at the place specified for delivery of the
Bonds
in Schedule I hereto, or at such other place as the Issuer may
specify.
If
any
Underwriter shall fail or refuse to purchase and pay for the aggregate principal
amount of Bonds that such Underwriter has agreed to purchase and pay for
hereunder, the Issuer shall immediately give notice to the other Underwriters
of
the default of such Underwriter, and the other Underwriters shall have the
right
within 24 hours after the receipt of such notice to determine to purchase,
or to
procure one or more others, who are members of the National Association of
Securities Dealers, Inc. (“NASD”) (or, if not members of the NASD, who
are not eligible for membership in the NASD and who agree (i) to make no
sales within the United States, its territories or its possessions or to
persons
who are citizens thereof or residents therein and (ii) in making sales to
comply with the NASD’s Conduct Rules) and satisfactory to the Issuer, to
purchase, upon the terms herein set forth, the aggregate principal amount
of
Bonds that such defaulting Underwriter had agreed to purchase. If any
non-defaulting Underwriter or Underwriters shall determine to exercise such
right, such Underwriter or Underwriters shall give written notice to the
Issuer
of the determination in that regard within 24 hours after receipt of notice
of
any such default, and thereupon the Closing Date shall be postponed for such
period, not exceeding three business days, as the Issuer shall
determine. If in the event of such a default no non-defaulting
Underwriter shall give such notice, then this Underwriting Agreement may
be
-14-
terminated
by the Issuer, upon like notice given to the non-defaulting Underwriters,
within
a further period of 24 hours. If in such case the Issuer shall not
elect to terminate this Underwriting Agreement it shall have the right,
irrespective of such default:
(a) to
require each non-defaulting Underwriter to purchase and pay for the respective
aggregate principal amount of Bonds that it had agreed to purchase hereunder
as
hereinabove provided and, in addition, the aggregate principal amount of
Bonds
that such defaulting Underwriter shall have so failed to purchase up to an
aggregate principal amount of Bonds equal to one-tenth (1/10) of the aggregate
principal amount of Bonds that such non-defaulting Underwriter has otherwise
agreed to purchase hereunder, and/or
(b) to
procure one or more persons, reasonably acceptable to the Representatives,
who
are members of the NASD (or, if not members of the NASD, who are not eligible
for membership in the NASD and who agree (i) to make no sales within the
United States, its territories or its possessions or to persons who are citizens
thereof or residents therein and (ii) in making sales to comply with the
NASD’s Conduct Rules), to purchase, upon the terms herein set forth, either all
or a part of the aggregate principal amount of Bonds that such defaulting
Underwriter had agreed to purchase or that portion thereof that the remaining
Underwriters shall not be obligated to purchase pursuant to the foregoing
clause
(a).
In
the
event the Issuer shall exercise its rights under clause (a) and/or (b) above,
the Issuer shall give written notice thereof to the non-defaulting Underwriters
within such further period of 24 hours, and thereupon the Closing Date shall
be
postponed for such period, not exceeding three business days, as the Issuer
shall determine.
In
the
computation of any period of 24 hours referred to in this Section 7, there
shall
be excluded a period of 24 hours in respect of each Saturday, Sunday or legal
holiday that would otherwise be included in such period of time.
Any
action taken by the Issuer or BGE under this Section 7 shall not relieve
any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Underwriting Agreement. Termination by the
Issuer under this Section 7 shall be without any liability on the part of
the
Issuer, BGE or any non-defaulting Underwriter, except as otherwise provided
in
Sections 8(a)(ii) and 11 hereof.
8. Covenants.
(a) Covenants
of the Issuer.
The
Issuer covenants and agrees
with the several Underwriters that:
(i) If,
during such period of time (not exceeding nine months) after the Final
Prospectus has been filed with the Commission pursuant to Rule 424(b) as
in the
opinion of Counsel for the Underwriters (as defined in Section 8(a)(vi) hereof)
a prospectus covering the Bonds is required by law to be delivered in connection
with sales by an Underwriter or dealer (including in circumstances where
such
requirement may be satisfied pursuant to Rule 172 under the Securities Act),
any
event relating to or affecting the Issuer, the Bonds or the Rate Stabilization
Property or of which the Issuer shall be
-15-
advised
in writing by the Representatives shall occur that in the Issuer’s reasonable
judgment after consultation with Counsel for the Underwriters should
be set forth in a supplement to, or an amendment of, the Final Prospectus
in
order to make the Final Prospectus not misleading in the light of the
circumstances when it is delivered to a purchaser (including in circumstances
where such requirement may be satisfied pursuant to Rule 172 under the
Securities Act), the Issuer will, at its expense, amend or supplement the
Final
Prospectus by either (A) preparing and furnishing to the Underwriters at
the Issuer’s expense a reasonable number of copies of a supplement or
supplements or an amendment or amendments to the Final Prospectus or
(B) making an appropriate filing pursuant to Section 13 or Section 15 of
the Exchange Act, which will supplement or amend the Final Prospectus so
that,
as supplemented or amended, it 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 the light of the circumstances when the Final Prospectus
is delivered to a purchaser (including in circumstances where such requirement
may be satisfied pursuant to Rule 172 under the Securities Act), not misleading;
provided that should such event relate solely to the activities of any of
the
Underwriters, then such Underwriters shall assume the expense of preparing
and
furnishing any such amendment or supplement.
(ii) The
Issuer or BGE will, except as herein provided, pay or cause to be paid all
expenses and taxes (except transfer taxes) in connection with (A) the
preparation and filing of the Registration Statement, the Pricing Prospectus
and
the Final Prospectus, (B) the issuance and delivery of the Bonds as
provided in Section 7 hereof (including, without limitation, reasonable
fees and disbursements of Counsel for the Underwriters and all trustee, rating
agency and PSC financial advisor fees), (C) the qualification of the Bonds
under blue-sky laws (including counsel fees not to exceed $6,000), (D) the
printing and delivery to the Underwriters of reasonable quantities of the
Registration Statement and, except as provided in Section 8(a)(iv) hereof,
of
the Pricing Prospectus and the Final Prospectus and (E) any amendment or
supplement to the Registration Statement, Pricing Prospectus, or any Issuer
Free
Writing Prospectus required to be filed with the Commission to correct any
untrue statement of a material fact or omission of any statement necessary
to
make the statements therein, in the light of the circumstances in which they
were made, not misleading, the result of which requires the reforming of
any
Contracts of Sale of the Bonds made by the Underwriters (including any damages
or other amounts payable in connection with legal and contractual
liability). The Issuer shall not, however, be required to pay any
amount for any expenses of the Underwriters or for any fees and expenses
of
counsel for the PSC’s financial advisor, except that, if this Underwriting
Agreement shall be terminated in accordance with the provisions of Section
10 or
12 hereof, the Issuer will reimburse the Underwriters for the reasonable
fees
and disbursements of Pillsbury ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ LLP, who are acting
as
counsel for the Underwriters (“Counsel for the Underwriters”), and will
reimburse the Underwriters for their reasonable out-of-pocket expenses, in
an
aggregate amount not exceeding
$[ ],
incurred in contemplation of the performance of this Underwriting
Agreement. The Issuer shall not in any event be liable to any of the
several Underwriters for damages on account of loss of anticipated
profits.
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(iii) During
the period from the date of this Underwriting Agreement to the date that
is five
days after the Closing Date, the Issuer will not, without the prior written
consent of the Representatives, offer, sell or contract to sell, or otherwise
dispose of, directly or indirectly, or announce the offering of, any
asset-backed securities (other than the Bonds).
(iv) To
the extent, if any, that any rating necessary to satisfy the condition set
forth
in Section 9(z) hereof is conditioned upon the furnishing of documents or
the
taking of other actions by the Issuer on or after the Closing Date, the Issuer
shall furnish such documents and take such other actions.
(v) For
a period from the date of this Underwriting Agreement until the retirement
of
the Bonds or until such time as the Underwriters shall cease to maintain
a
secondary market in the Bonds, whichever occurs first, the Issuer shall file
with the Commission, and to the extent permitted by and consistent with the
Issuer’s obligations under applicable law, make available on the website
associated with the Issuer’s parent, such periodic reports, if any, as are
required (without regard to the number of holders of Bonds to the extent
permitted by and consistent with the Issuer’s obligations under applicable law)
from time to time under Section 13 or 15(d) of the Exchange Act, and the
Issuer shall not voluntarily suspend or terminate its filing obligations
with
the Commission. The Issuer shall also, to the extent permitted by and
consistent with the Issuer’s obligations under applicable law, include in the
periodic and other reports to be filed with the Commission as provided above,
such information as required by Section [3.07(g)] of the Indenture with respect
to the Bonds. To the extent that the Issuer’s obligations are
terminated or limited by an amendment to Section [3.07(g)] of the Indenture,
or
otherwise, such obligations shall be correspondingly terminated or limited
hereunder.
(vi) The
Issuer will not file any amendment to the Registration Statement or amendment
or
supplement to the Final Prospectus during the period when a prospectus relating
to the Bonds is required to be delivered under the Securities Act without
prior
notice to the Underwriters or to Counsel for the Underwriters shall reasonably
object by written notice to BGE and the Issuer.
(b) Covenants
of BGE.
BGE
covenants and agrees with the
several Underwriters that, to the extent that the Issuer has not already
performed such act pursuant to Section 8(a) hereof:
(i) BGE,
in its capacity as sponsor with respect to the Bonds, will upon request promptly
deliver to the Representatives and Counsel to the Underwriters a signed copy
of
the Registration Statement as originally filed or, to the extent a signed
copy
is not available, a conformed copy, certified by an officer of BGE to be
in the
form as originally filed, including all Incorporated Documents and exhibits
and
all amendments thereto.
-17-
(ii) BGE,
in its capacity as sponsor with respect to the Bonds, will deliver to the
Underwriters, as soon as practicable after the date hereof, as many copies
of
the Pricing Prospectus and the Final Prospectus as they may reasonably
request.
(iii) BGE,
in its capacity as sponsor with respect to the Bonds, will cause the Pricing
Prospectus and the Final Prospectus to be filed with the Commission pursuant
to
Rule 424(b) as soon as practicable and advise the Underwriters of any stop
order
suspending the effectiveness of the Registration Statement or the institution
of
any proceeding therefor of which Issuer shall have received
notice. The Issuer will use its reasonable best efforts to prevent
the issuance of any such stop order and, if issued, to obtain as soon as
possible the withdrawal thereof. The Issuer has complied and will comply
with
Rule 433 under the Securities Act in connection with the offering of the
Bonds.
(iv) As
soon as practicable, but not later than [14] months after the date hereof,
BGE,
in its capacity as sponsor with respect to the Bonds, will make generally
available to its security holders, an earnings statement (which need not
be
audited) that will satisfy the provisions of Section 11(a) of the Securities
Act
with respect to the Bonds.
(v) BGE,
in its capacity as sponsor with respect to the Bonds, will furnish such proper
information as may be lawfully required and otherwise cooperate in qualifying
the Bonds for offer and sale under the blue-sky laws of such jurisdictions
as
the Representatives may designate; provided that neither the Issuer nor BGE
shall be required to qualify as a foreign limited liability company or dealer
in
securities, to file any consents to service of process under the laws of
any
jurisdiction, or meet any other requirements deemed by the Issuer or BGE,
as
applicable, to be unduly burdensome.
(vi) BGE
will not file any amendment to the Registration Statement or amendment or
supplement to the Final Prospectus during the period when a prospectus relating
to the Bonds is required to be delivered under the Securities Act without
prior
notice to the Underwriters or to which Counsel for the Underwriters shall
reasonably object by written notice to BGE and the Issuer.
(vii) To
the extent permitted by applicable law and the agreements and instruments
that
bind BGE, BGE will use its reasonable best efforts to cause the Issuer to
comply
with the covenants set forth in Section 8(a) hereof.
(viii) BGE
will use its reasonable best efforts to prevent the issuance by the Commission
of any stop order suspending the effectiveness of the Registration Statement
and, if issued, to obtain as soon as possible the withdrawal
thereof.
(ix) If,
during such period of time (not exceeding nine months) after the Final
Prospectus has been filed with the Commission pursuant to Rule 424(b) as
in the
opinion of Counsel for the Underwriters a prospectus covering the Bonds is
required by law to be delivered in connection with sales by an Underwriter
or
dealer (including in circumstances where such requirement may be satisfied
pursuant to Rule 172 under the Securities Act), any event relating to or
affecting BGE, the Bonds or the Rate Stabilization Property or of which BGE
shall be advised in writing by the Representatives shall occur that in BGE’s
reasonable judgment after consultation with Counsel for the Underwriters
should
be set forth in a supplement to, or an amendment of, the Final Prospectus
in
order to make the Final Prospectus not misleading in the light of the
circumstances when it is delivered to a purchaser (including in circumstances
where such requirement may be satisfied pursuant to Rule 172 under the
-18-
Securities
Act), BGE will cause the Issuer, at BGE’s or the Issuer’s expense, to amend or
supplement the Final Prospectus by either (A) preparing and furnishing to
the Underwriters at BGE’s or the Issuer’s expense a reasonable number of copies
of a supplement or supplements or an amendment or amendments to the Final
Prospectus or (B) causing the Issuer to make an appropriate filing pursuant
to Section 13 or 15(d) of the Exchange Act, which will supplement or amend
the
Final Prospectus so that, as supplemented or amended, it 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 the light of the circumstances
when
the Final Prospectus is delivered to a purchaser (including in circumstances
where such requirement may be satisfied pursuant to Rule 172 under the
Securities Act), not misleading; provided that should such event relate solely
to the activities of any of the Underwriters, then such Underwriters shall
assume the expense of preparing and furnishing any such amendment or
supplement.
(x) During
the period from the date of this Underwriting Agreement to the date that
is five
days after the Closing Date, BGE will not, without the prior written consent
of
the Representatives, offer, sell or contract to sell, or otherwise dispose
of,
directly or indirectly, or announce the offering of, any asset-backed securities
(other than the Bonds).
(xi) BGE
will cause the proceeds for the issuance and sale of the Bonds to be applied
for
the purposes described in the Pricing Prospectus and the Final
Prospectus.
(xii) To
the extent, if any, that any rating necessary to satisfy the condition set
forth
in Section 9(z) of this Underwriting Agreement is conditioned upon the
furnishing of documents or the taking of other actions by BGE on or after
the
Closing Date, BGE shall furnish such documents and take such other
actions.
9. Conditions
to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Bonds shall be subject to
the
accuracy of the representations and warranties on the part of the Issuer
and BGE
contained in this Underwriting Agreement, on the part of BGE contained in
Article [III] of the Sale Agreement, and on the part of BGE contained in
Section
[6.01] of the Servicing Agreement, in each case as of the Closing Date, to
the
accuracy of the statements of the Issuer and BGE made in any certificates
pursuant to the provisions hereof, to the performance by the Issuer and BGE
of
their obligations hereunder, and to the following additional
conditions:
(a) The
Final Prospectus shall have been filed with the Commission pursuant to Rule
424(b) prior to 5:30 P.M., New York time, on the second business day after
the
-19-
date
of
this Underwriting Agreement. In addition, all material required to be filed
by
the Issuer or BGE pursuant to Rule 433(d) under the Securities Act that was
prepared by either of them or that was prepared by any Underwriter and timely
provided to the Issuer or BGE shall have been filed with the Commission within
the applicable time period prescribed for such filing by such Rule 433(d)
under
the Securities Act.
(b) No
stop order suspending the effectiveness of the Registration Statement shall
be
in effect, and no proceedings for that purpose shall be pending before, or
threatened by, the Commission on the Closing Date; and the Underwriters shall
have received one or more certificates, dated the Closing Date and signed
by an
officer of BGE and the Issuer, as appropriate, to the effect that no such
stop
order is in effect and that no proceedings for such purpose are pending before,
or to the knowledge of BGE or the Issuer, as the case may be, threatened
by, the
Commission.
(c) Pillsbury
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ LLP, Counsel for the Underwriters, shall have furnished
to
the Representatives their written opinion (substantially in the form attached
as
Exhibit A hereto), dated the Closing Date, with respect to the issuance
and sale of the Bonds, the Indenture, the other Issuer Documents, the
Registration Statement and other related matters; and such counsel shall
have
received such papers and information as they may reasonably request to enable
them to pass upon such matters.
(d) ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ & Finger, P.A., special Delaware counsel for the Issuer, shall have
furnished to the Representatives their written opinion (substantially in
the
form attached as Exhibit B hereto), dated the Closing Date, regarding the
filing of a voluntary bankruptcy petition.
(e) ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ & Finger, P.A., special Delaware counsel for BGE and the Issuer,
shall have furnished to the Representatives their written opinion (substantially
in the form attached as Exhibit C hereto), dated the Closing Date,
regarding certain Delaware Uniform Commercial Code matters.
(f) ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ Raysman & ▇▇▇▇▇▇▇ LLP, counsel for the Issuer and BGE, shall have
furnished to the Representatives their written opinion (substantially in
the
form attached as Exhibit D hereto), dated the Closing Date, regarding
certain matters with respect to the Issuer and BGE.
(g) Miles
& Stockbridge LLP, special Maryland counsel for the Issuer and BGE, shall
have furnished to the Representatives their written opinion (substantially
in
the form attached as Exhibit E hereto), dated the Closing Date, regarding
certain Maryland corporate matters.
(h) ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ Raysman & ▇▇▇▇▇▇▇ LLP, counsel for the Issuer and BGE, shall have
furnished to the Representatives their written opinion (substantially in
the
form attached as Exhibit F hereto), dated the Closing Date, to the effect
that a court sitting in bankruptcy would not order the substantive consolidation
of the assets and liabilities of the Issuer with those of BGE in connection
with
a bankruptcy, reorganization or other insolvency proceeding involving
BGE.
-20-
(i) Miles
& Stockbridge LLP, special Maryland counsel for the Issuer and BGE, shall
have furnished to the Representatives their written opinion (substantially
in
the form attached as Exhibit G hereto), dated the Closing Date, regarding
certain Maryland constitutional matters relating to the Rate Stabilization
Property.
(j) ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ Raysman & ▇▇▇▇▇▇▇ LLP, counsel for the Issuer and BGE, shall have
furnished to the Representatives their written opinion (substantially in
the
form attached as Exhibit H hereto), dated the Closing Date, regarding
certain federal tax matters.
(k) Miles
& Stockbridge LLP, special Maryland counsel for BGE, shall have furnished to
the Representatives their written opinion (substantially in the form attached
as
Exhibit I hereto), dated the Closing Date, to the effect that the Rate
Stabilization Property is not subject to the lien of BGE’s Mortgage and Deed of
Trust, dated as of February 1, 1919, as subsequently supplemented, amended
and
restated as of June 20, 1995 and as further supplemented.
(l) Miles
& Stockbridge LLP, special Maryland counsel for the Issuer and BGE, shall
have furnished to the Representatives their written opinion (substantially
in
the form attached as Exhibit J hereto), dated the Closing Date, with
respect to the characterization of the transfer of the Rate Stabilization
Property by BGE to the Issuer as a “true sale” for Maryland law
purposes.
(m) ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ Raysman & ▇▇▇▇▇▇▇ LLP, counsel for the Issuer and BGE, shall have
furnished to the Representatives its written respective opinions (substantially
in the form attached as Exhibit K hereto), dated the Closing Date,
regarding certain federal constitutional matters relating to the Rate
Stabilization Property.
(n) ▇▇▇▇▇▇
& ▇▇▇▇▇▇ LLP, counsel for the Indenture Trustee, shall have furnished to the
Representatives their written opinions (each substantially in the form attached
as Exhibit L hereto), dated the Closing Date, regarding certain matters
relating to the Indenture Trustee.
(o) Miles
& Stockbridge LLP, special Maryland counsel for BGE and the Issuer, shall
have furnished to the representatives their opinion (substantially in the
form
attached as Exhibit M hereto), dated the Closing Date, regarding certain
Maryland regulatory issues.
(p) Miles
& Stockbridge LLP, special Maryland counsel for the Issuer and BGE, shall
have furnished to the Representatives their written opinion (substantially
in
the form attached as Exhibit N hereto), dated the Closing Date, regarding
enforceability and certain Maryland perfection and priority issues.
(q) ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ Raysman & ▇▇▇▇▇▇▇ LLP, counsel for the Issuer and BGE, shall have
furnished to the Representatives their written opinion (substantially in
the
form attached as Exhibit O hereto), dated the Closing Date, regarding
certain bankruptcy matters relating to the Issuer.
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(r) ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ & Finger, P.A., counsel for the Issuer and BGE, shall have furnished
to the Representatives their written opinion (substantially in the form attached
as Exhibit P hereto), dated the Closing Date, regarding certain matters
of Delaware law.
(s) Miles
& Stockbridge LLP, special Maryland counsel for the Issuer and BGE, shall
have furnished to the Representatives their written opinion (substantially
in
the form attached as Exhibit Q hereto), dated the Closing Date, regarding
certain Maryland tax matters.
(t) ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ Raysman & ▇▇▇▇▇▇▇ LLP, counsel for the Issuer and BGE, shall have
furnished to the Representatives their written opinion (substantially in
the
form attached as Exhibit R hereto), dated the Closing Date, regarding
negative assurances and other matters.
(u) ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ Raysman & ▇▇▇▇▇▇▇ LLP, counsel for the Issuer and BGE, shall have
furnished to the Representatives their written opinion (substantially in
the
form attached as Exhibit S hereto), dated the Closing Date, with respect
to the characterization of the transfer of the Rate Stabilization Property
by
BGE to the Issuer as a “true sale” under federal bankruptcy law.
(v) ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ Raysman & ▇▇▇▇▇▇▇ LLP, counsel for the Issuer and BGE, shall have
furnished to the Representatives their written opinion (substantially in
the
form attached as Exhibit T hereto), dated the Closing Date, regarding the
constitutionality of the Rate Stabilization Act under the United States
constitution.
(w) On
or before the Closing Date, PwC shall have furnished to the Representatives
one
or more agreed upon procedure reports regarding certain calculations and
computations relating to the Bonds, in form or substance reasonably satisfactory
to the Representatives, in each case in respect of which the Representatives
shall have made specific requests therefor and shall have provided
acknowledgment or similar letters to PwC reasonably necessary in order for
PwC
to issue such reports.
(x) Subsequent
to the respective dates as of which information is given in each of the
Registration Statement, the Pricing Prospectus and the Final Prospectus,
there
shall not have been any change specified in the reports required
by Section 9(v) hereof which is, in the judgment of the
Representatives, so material and adverse as to make it impracticable or
inadvisable to proceed with the offering or the delivery of the Bonds as
contemplated by the Registration Statement and the Final
Prospectus.
(y) The
LLC Agreement, the Administrative Agreement, the Sale Agreement, the Servicing
Agreement and the Indenture and any amendment or supplement to any of the
foregoing shall have been executed and delivered.
(z) Since
the respective dates as of which information is given in each of the
Registration Statement, the Pricing Prospectus and the Final Prospectus and
as
of the Closing Date there shall have been no (i) material adverse change in
the business, property or financial condition of BGE and its subsidiaries,
taken
as a whole, or the Issuer or (ii) adverse development concerning the
business or assets of BGE and its subsidiaries, taken as a whole, or the
-22-
Issuer
which would be reasonably likely to result in a material adverse change in
the
prospective business, property or financial condition of BGE and its
subsidiaries, taken as a whole, whether or not in the ordinary course of
business, or the Issuer or (iii) development which would be reasonably
likely to result in a material adverse change in the Rate Stabilization
Property, the Bonds or the Qualified Rate Order.
(aa) At
the Closing Date, (i) the Bonds shall be rated at least “Aaa”, “AAA”, and
“AAA” by ▇▇▇▇▇’▇ Investors Service, Inc. (“Moody’s”), Standard &
Poor’s, a division of the ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. (“S&P”), and
Fitch, Inc. (“Fitch”), respectively, and the Issuer shall have delivered
to the Underwriters a letter from each such rating agency, or other evidence
satisfactory to the Underwriters, confirming that the Bonds have such ratings,
and (ii) none of ▇▇▇▇▇’▇, S&P and Fitch shall have, since the date of
this Underwriting Agreement, downgraded or publicly announced that it has
under
surveillance or review, with possible negative implications, its ratings
of the
Bonds.
(bb) The
Issuer and BGE shall have furnished or caused to be furnished to the
Representatives at the Closing Date certificates of officers of BGE and the
Issuer, reasonably satisfactory to the Representatives, as to the accuracy
of
the representations and warranties of the Issuer and BGE herein, in the Sale
Agreement, the Servicing Agreement and the Indenture at and as of the Closing
Date, as to the performance by the Issuer and BGE of all of their obligations
hereunder to be performed at or prior to such Closing Date and as to such
other
matters as the Representatives may reasonably request, including as to the
matters set forth in Section 9(y) and 9(cc) hereof.
(cc) An
issuance advice letter, in a form consistent with the provisions of the
Qualified Rate Order, shall have been filed with the PSC and shall have become
effective.
(dd) On
or prior to the Closing Date, the Issuer shall have delivered to the
Representatives evidence, in form and substance reasonably satisfactory to
the
Representatives, that appropriate filings have been or are being made in
accordance with the Rate Stabilization Law, the Qualified Rate Order and
other
applicable law reflecting the grant of a security interest by the Issuer
in the
collateral relating to the Bonds to the Indenture Trustee, including the
filing
of the requisite notices in the office of the Maryland State Department of
Assessments and Taxation.
(ee) On
or prior to the Closing Date, BGE shall have funded the capital subaccount
of
the Issuer with cash in an amount equal to
$[ ].
(ff) The
Issuer and BGE shall have furnished or caused to be furnished to the Rating
Agencies at the Closing Date such opinions and certificates as the Rating
Agencies shall have reasonably requested prior to such Closing
Date.
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10. Conditions
of Issuer’s Obligations. The obligation of the Issuer to deliver
the Bonds shall be subject to the conditions that no stop order suspending
the
effectiveness of the Registration Statement shall be in effect at the Closing
Date and no proceeding for that purpose shall be pending before, or threatened
by, the Commission at the Closing Date and the issuance advice letter described
in Section 9(bb) shall have become effective. In case these
conditions shall not have been fulfilled, this Underwriting Agreement may
be
terminated by the Issuer upon notice thereof to the Underwriters. Any
such termination shall be without liability of any party to any other party
except as otherwise provided in Sections 8(a)(ii) and 11 hereof.
11. Indemnification
and Contribution.
(a) BGE
and the Issuer, jointly and severally, shall indemnify, defend and hold harmless
each Underwriter, each Underwriter’s officers and directors, each person who
controls any Underwriter within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act from and against any and all losses,
claims, damages or liabilities, joint or several, to which they or any of
them
may become subject under the Securities Act or any other statute or common
law
and shall reimburse each such Underwriter and controlling person for any
reasonable legal or other expenses (including, to the extent hereinafter
provided, reasonable counsel fees) as and when incurred by them in connection
with investigating any such losses, claims, damages or liabilities or in
connection with defending any actions, insofar as such losses, claims, damages,
liabilities, expenses or actions arise out of or are based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or any omission or alleged omission to state therein
a
material fact required to be stated therein or necessary to make the statements
therein not misleading, (ii) any untrue statement or alleged untrue statement
of
a material fact contained in the Pricing Prospectus, the Final Prospectus,
and,
together with the Pricing Prospectus, the Issuer Free Writing Prospectuses,
collectively, or any omission or alleged omission to state therein a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading or (iii) any information prepared
by
or on behalf of BGE or the Issuer and provided to the Underwriters; provided,
however, that the indemnity agreement contained in this Section 11 shall
not
apply to any such losses, claims, damages, liabilities, expenses or actions
arising out of, or based upon, any such untrue statement or alleged untrue
statement, or any such omission or alleged omission, in each case if such
statement or omission was made in reliance upon and in conformity with any
Underwriter Information or based upon, statements in or omissions from that
part
of the Registration Statement that shall constitute the Statement of Eligibility
under the Trust Indenture Act of the Indenture Trustee with respect to any
indenture qualified pursuant to the Registration Statement; and provided
further, that the indemnity agreement contained in this Section 11 shall
not
inure to the benefit of any Underwriter (or of any officer or director of
such
Underwriter or of any person controlling such Underwriter within the meaning
of
Section 15 of the Securities Act) on account of any such losses, claims,
damages, liabilities, expenses or actions, joint or several, arising from
the
sale of the Bonds to any person if a copy of the Pricing Prospectus (including
any amendment or supplement thereto if any amendments or supplements thereto
shall have been furnished to the Underwriters at or prior to the time of
the
sale involved) (exclusive of the Incorporated Documents) shall not have been
given or sent to such person by or on
-24-
behalf
of
such Underwriter with or prior to the sale of the Bonds to such person unless
the alleged omission or alleged untrue statement was not corrected in the
Pricing Prospectus (including any amendment or supplement thereto if any
amendments or supplements thereto shall have been furnished to the Underwriters
at or prior to the time of the sale involved) at the time of such
sale. The indemnity agreement of BGE and Issuer contained in this
Section 11 and the representations and warranties of the Issuer and BGE
contained in Sections 3 and 4 hereof shall remain operative and in full
force and effect regardless of any termination of this Underwriting Agreement
or
of any investigation made by or on behalf of any Underwriter, its officers
or
its directors or any such controlling person [or affiliate,] and shall survive
the delivery of the Bonds.
(b) Each
Underwriter shall severally indemnify, defend and hold harmless BGE and the
Issuer, each of BGE’s and Issuer’s officers, directors, and managers, and each
person who controls the Issuer or BGE within the meaning of Section 15 of
the
Securities Act or Section 20 of the Exchange Act, from and against any and
all
losses, claims, damages or liabilities, joint or several, to which they or
any
of them may become subject under the Securities Act or any other statute
or
common law and shall reimburse each of them for any reasonable legal or other
expenses (including, to the extent hereinafter provided, reasonable counsel
fees) as and when incurred by them in connection with investigating any such
losses, claims, damages or liabilities or in connection with defending any
actions, insofar as such losses, claims, damages, liabilities, expenses or
actions arise out of or are based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
or
any omission or alleged omission to state therein a material fact required
to be
stated therein or necessary to make the statements therein not misleading
or
(ii) any untrue statement or alleged untrue statement of a material fact
contained in the Pricing Prospectus, the Final Prospectus and, together with
the
Pricing Prospectus, the Issuer Free Writing Prospectuses, collectively, or
any
omission or alleged omission to state therein a material fact necessary to
make
the statements therein, in the light of the circumstances under which they
were
made, not misleading; if such statement or omission was made in reliance
upon
and in conformity with any Underwriter Information. The indemnity
agreement of the respective Underwriters contained in this Section 11 and
the
representations and warranties of the Underwriters contained in Section 5
hereof
shall remain operative and in full force and effect regardless of any
termination of this Underwriting Agreement or of any investigation made by
or on
behalf of BGE or the Issuer, their directors, managers or officers, any such
Underwriter or any such controlling person, and shall survive the delivery
of
the Bonds.
(c) BGE
and the several Underwriters each shall, upon the receipt of notice of the
commencement of any action against it or any person controlling it as aforesaid,
in respect of which indemnity may be sought on account of any indemnity
agreement contained herein, promptly give written notice of the commencement
thereof to the party or parties against whom indemnity shall be sought under
subparagraph (a) or (b) above, but the failure to notify such indemnifying
party
or parties of any such action shall not relieve such indemnifying party or
parties from any liability hereunder to the extent such indemnifying party
or
parties is or are not materially prejudiced as a result of such failure to
notify and in any event shall not relieve such indemnifying party or parties
from any
-25-
liability
which it or they may have to the indemnified party otherwise than on account
of
such indemnity agreement. In case such notice of any such action
shall be so given, such indemnifying party shall be entitled to participate
at
its own expense in the defense, or, if it so elects, to assume (in conjunction
with any other indemnifying parties) the defense of such action, in which
event
such defense shall be conducted by counsel chosen by such indemnifying party
or
parties and reasonably satisfactory to the indemnified party or parties who
shall be defendant or defendants in such action, and such defendant or
defendants shall bear the fees and expenses of any additional counsel retained
by them; but if the indemnifying party shall elect not to assume the defense
of
such action, such indemnifying party will reimburse such indemnified party
or
parties for the reasonable fees and expenses of any counsel retained by them;
provided, however, if the defendants in any such action (including impleaded
parties) include both the indemnified party and the indemnifying party and
counsel for the indemnifying party shall have reasonably concluded that there
may be a conflict of interest involved in the representation by a single
counsel
of both the indemnifying party and the indemnified party, the indemnified
party
or parties shall have the right to select separate counsel, satisfactory
to the
indemnifying party, whose reasonable fees and expenses shall be paid by such
indemnifying party, to participate in the defense of such action on behalf
of
such indemnified party or parties (it being understood, however, that the
indemnifying party shall not be liable for the fees and expenses of more
than
one separate counsel (in addition to local counsel) representing the indemnified
parties who are parties to such action). Each of BGE, the Issuer and
the several Underwriters agrees that without the other party’s prior written
consent, which consent shall not be unreasonably withheld or delayed, it
will
not settle, compromise or consent to the entry of any judgment in any claim
in
respect of which indemnification may be sought under the indemnification
provisions of this Underwriting Agreement, unless such settlement, compromise
or
consent (i) includes an unconditional release of such other party from all
liability arising out of such claim 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 such other party.
(d) If
the indemnification provided for in subparagraph (a) or (b) above shall be
unenforceable under applicable law by an indemnified party, each indemnifying
party agrees to contribute to such indemnified party with respect to any
and all
losses, claims, damages, liabilities and expenses for which each such
indemnification provided for in subparagraph (a) or (b) above shall be
unenforceable, in such proportion as shall be appropriate to reflect
(i) the relative benefits received by BGE and the Issuer on the one hand
and the Underwriters on the other hand from the offering of the Bonds pursuant
to this Underwriting Agreement or (ii) if an allocation solely on the basis
provided by clause (i) is not permitted by applicable law or is inequitable
or
against public policy, in such proportion as is appropriate to reflect not
only
the relative benefits referred to in clause (i) above but also the relative
fault of each indemnifying party on the one hand and the indemnified party
on
the other in connection with the statements or omissions which have resulted
in
such losses, claims, damages, liabilities and expenses and (iii) any other
relevant equitable considerations; provided, however, that no indemnified
party
guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Securities Act) shall be entitled to contribution from any indemnifying
party not guilty of such fraudulent misrepresentation. Relative fault
shall be determined by reference to, among other
things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by such indemnifying party or the indemnified party and each such
party’s relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. BGE, the Issuer
and each of the Underwriters agree that it would not be just and equitable
if
contribution pursuant to this subparagraph (d) were to be determined by pro
rata
allocation or by any other method of allocation which does not take account
of
the equitable considerations referred to above. Notwithstanding the
provisions of this Section 11, no Underwriter shall be required to contribute
in
excess of the amount equal to the excess of (i) the total underwriting
fees, discounts and commissions received by it, over (ii) the amount of any
damages which such Underwriter has otherwise been required to pay by reason
of
any such untrue or alleged untrue statement or omission or alleged
omission. The obligations of each Underwriter to contribute pursuant
to this Section 11 are several and not joint and shall be in the same proportion
as such Underwriter’s obligation to underwrite Bonds is to the total number of
Bonds set forth in Schedule II hereto.
12. Termination. This
Underwriting Agreement may be terminated at any time prior to the Closing
Date
with respect to the Bonds by the Representatives by written notice to the
Issuer
if after the date hereof and at or prior to the Closing Date (a) there
shall have occurred any general suspension of trading in securities on the
New
York Stock Exchange (“NYSE”) or there shall have been established by the
NYSE, or the over-the-counter market, or by the Commission any general
limitation on prices for such trading or any general restrictions on the
distribution of securities, or a general banking moratorium declared by New
York
or federal authorities or (b) there shall have occurred any
(i) material outbreak of hostilities (including, without limitation, an act
of terrorism) or (ii) declaration by the United States of war or national
or international calamity or crisis, including, but not limited to, a material
escalation of hostilities that existed prior to the date of this Underwriting
Agreement or (iii) material adverse change in the financial markets in the
United States, and the effect of any such event specified in clause (a) or
(b) above on the financial markets of the United States shall be such as
to
materially and adversely affect, in the reasonable judgment of the
Representatives, their ability to proceed with the public offering or the
delivery of the Bonds on the terms and in the manner contemplated by the
Final
Prospectus. Any termination hereof pursuant to this Section 12
shall be without liability of any party to any other party except as otherwise
provided in Sections 8(a)(ii) and 11 hereof.
13. Absence
of Fiduciary Relationship. Each
of
the Issuer and BGE acknowledges and agrees that the Underwriters are acting
solely in the capacity of an arm’s length contractual counterparty to the Issuer
and BGE with respect to the offering of the Bonds contemplated hereby (including
in connection with determining the terms of the offering) and not as a financial
advisor or a fiduciary to, or an agent of, the Issuer or
BGE. Additionally, none of the Underwriters is advising the Issuer or
BGE as to any legal, tax, investment, accounting or regulatory matters in
any
jurisdiction. The Issuer and BGE shall consult with their own
advisors concerning such matters and shall be responsible for making their
own
independent investigation and appraisal of the transactions contemplated
hereby,
and the Underwriters shall have no responsibility or liability to the Issuer
or
BGE with respect thereto. Any review by the Underwriters of the
Issuer or BGE, the transactions contemplated hereby or other matters
-27-
relating
to such transactions will be performed solely for the benefit of the
Underwriters and shall not be on behalf of the Issuer or BGE.
14. Notices. All
communications hereunder will be in writing and may be given by United States
mail, courier service, telecopy, telefax or facsimile (confirmed by telephone
or
in writing in the case of notice by telecopy, telefax or facsimile) or any
other
customary means of communication, and any such communication shall be effective
when delivered, or if mailed, three days after deposit in the United States
mail
with proper postage for ordinary mail prepaid, and if sent to the
Representatives, to it at the address specified in Schedule I
hereto; and if sent to BGE, to it at c/o Constellation Energy Group, Inc.,
▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇, Attention: Treasurer; and if sent to the Issuer, to it at
[ ]. The
parties hereto, by notice to the others, may designate additional or different
addresses for subsequent communications.
15. Successors. This
Underwriting Agreement will inure to the benefit of and be binding upon the
parties hereto and their respective successors and the officers and directors,
controlling persons and affiliates referred to in Section 11 hereof, and no
other person will have any right or obligation hereunder.
16. Applicable
Law. This
Underwriting Agreement will be governed by and construed in accordance with
the
laws of the State of New York.
17. Counterparts. This
Underwriting Agreement may be signed in any number of counterparts, each
of
which shall be deemed an original, which taken together shall constitute
one and
the same instrument.
18. Integration. This
Underwriting Agreement supersedes all prior agreements and understandings
(whether written or oral) among the Issuer, BGE and the Underwriters, or
any of
them, with respect to the subject matter hereof.
If
the
foregoing is in accordance with your understanding of our agreement, please
sign
and return to us the enclosed duplicate hereof, whereupon this letter and
your
acceptance shall represent a binding agreement among BGE, the Issuer and
the
several Underwriters.
Very
truly yours,
By: ________________
Name:
Title:
-28-
BALTIMORE
GAS AND ELECTRIC COMPANY
By: ________________
Name:
Title:
The
foregoing Underwriting Agreement is
hereby
confirmed and accepted as of the
date
specified in Schedule I hereto.
-29-
[ ]
By: _______________
Name:
Title:
[ ]
By: _______________
Name:
Title:
[ ]
By: _______________
Name:
Title:
-30-
SCHEDULE
I
Underwriting
Agreement dated [____________], 2007
Registration
Statement
No. 333-[ ]
Representatives:
c/o
[Bookrunner]
Address:
Attention:
Title,
Purchase Price and Description of Bonds:
Title:
Rate
Stabilization Bonds
|
Total
Principal Amount of Tranche
|
Bond
Rate
|
Price
to Public
|
Underwriting
Discounts and Commissions
|
Proceeds
to Issuer
|
|
|
Per
Tranche A-1 Bond
|
$
|
%
|
%
|
%
|
$
|
|
Per
Tranche A-2 Bond
|
$
|
%
|
%
|
%
|
$
|
|
Per
Tranche A-3 Bond
|
$
|
%
|
%
|
%
|
$
|
|
Per
Tranche A-4 Bond
|
$
|
%
|
%
|
%
|
$
|
|
Per
Tranche A-5 Bond
|
$
|
%
|
%
|
%
|
$
|
|
Total
|
$
|
$
|
|
Original
Issue Discount (if any):
|
$[ ]
|
|
Redemption
provisions:
|
|
|
Other
provisions:
|
|
|
Closing
Date, Time and Location:
|
[ ]
|
I-1
SCHEDULE
II
Principal
Amount of Bonds to be Purchased
|
Principal
Amount
(in
millions)
|
|||||||||||
|
Underwriter
|
Tranche
▇-▇
|
▇▇▇▇▇▇▇
▇-▇
|
▇▇▇▇▇▇▇
▇-▇
|
Tranche
A-4
|
Tranche
A-5
|
Total
|
|||||
|
Total
|
|||||||||||
II-1
SCHEDULE
III
Schedule
of Issuer Free Writing Prospectuses
A. Free
Writing Prospectuses not required to be filed
Electronic
Road Show
B. Free
Writing Prospectuses Required to be filed pursuant to Rule 433
Preliminary
Term Sheet
Pricing
Term Sheet
III-1
SCHEDULE
IV
DESCRIPTIVE
LIST OF UNDERWRITER PROVIDED INFORMATION
A: Pricing
Prospectus
[to
come]
B. Final
Prospectus
[to
come]
IV-1
EXHIBIT
A
Opinion
regarding the issuance and sale of the Bonds, the Indenture,
the
Issuer Documents, the Registration Statement and other related
matters
[to
come]
A-1
EXHIBIT B
Opinion
regarding Delaware LLC Bankruptcy Issues
[to
come]
B-1
EXHIBIT
C
Opinion
regarding Delaware Uniform Commercial Code Matters
[to
come]
C-1
EXHIBIT
D
Issuer
Matters Opinion
[to
come]
D-1
EXHIBIT
E
Opinion
regarding Corporate Matters
[to
come]
E-1
EXHIBIT F
Substantive
Nonconsolidation
[to
come]
F-1
EXHIBIT
G
Opinion
regarding Maryland Constitutional Matters
[to
come]
G-1
EXHIBIT
H
Opinion
regarding Federal Tax Matters
[to
come]
H-1
EXHIBIT I
Mortgage
Opinion
[to
come]
I-1
EXHIBIT
J
Maryland
True Sale Opinion
[to
come]
J-1
EXHIBIT
K
Opinion
regarding Federal Constitutional Matters
[to
come]
K-1
EXHIBIT L
Opinion
regarding the Indenture Trustee
[to
come]
L-1
EXHIBIT
M
Opinion
regarding Maryland Regulatory Issues
[to
come]
M-1
EXHIBIT
N
Enforceability
Opinion
[to
come]
N-1
EXHIBIT
O
Opinion
regarding Certain Bankruptcy and Creditors’ Rights Issues
Involving
Issuer Limited Liability Company Agreement
[to
come]
O-1
EXHIBIT
P
Opinion
regarding Delaware Law Matters
[to
come]
P-1
EXHIBIT
Q
Opinion
regarding Maryland Tax Matters
[to
come]
Q-1
EXHIBIT
R
10b-5/Fair
Summary Matters
[to
come]
R-1
EXHIBIT
S
Federal
Bankruptcy Law True Sale Opinion
[to
come]
S-1
EXHIBIT
T
Constitutionality
of Rate Stabilization Act
Under
United States Constitution Opinion
[to
come]
T-1