Registration No.
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SECURITIES AND EXCHANGE COMMISSION
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
BALTIMORE GAS AND ELECTRIC COMPANY
(Exact Name of Registrant as Specified in its Charter)
MARYLAND
(State of Incorporation)
52-0280210
(I.R.S. Employer Identification No.)
DAVID A. BRUNE, VICE PRESIDENT
39 W. LEXINGTON STREET, BALTIMORE, MARYLAND 21201
(410) 234-5511
(Address, including Zip Code, and Telephone Number, including Area Code
of Registrant's Principal Executive Offices and Agent for Service)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: After the
effective date of this Registration Statement as determined by market
conditions.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [ X ]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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PROPOSED PROPOSED
TITLE OF EACH MAXIMUM MAXIMUM
CLASS OF OFFERING AGGREGATE AMOUNT OF
SECURITIES TO AMOUNT TO PRICE OFFERING REGISTRATON
BE REGISTERED BE REGISTERED PER UNIT PRICE FEE
- --------------------------------------------------------------------------------
Medium-Term Notes, $200,000,000 100%* $200,000,000 $55,600
Series H
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* Inserted solely for the purpose of calculating the registration fee.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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PROSPECTUS
$200,000,000
MEDIUM-TERM NOTES SERIES H
[BGE LOGO OMITTED]
BALTIMORE GAS AND ELECTRIC COMPANY
39 W. Lexington Street
Baltimore, Maryland 21201
(410) 234-5000
TERMS OF SALE
THE FOLLOWING TERMS MAY APPLY TO THE NOTES WHICH WE MAY SELL AT ONE OR MORE
TIMES. THE FINAL TERMS FOR EACH NOTE WILL BE INCLUDED IN A PRICING SUPPLEMENT.
WE WILL RECEIVE BETWEEN $199,750,000 AND $198,500,000 OF THE PROCEEDS FROM THE
SALE OF THE NOTES, AFTER PAYING THE AGENTS COMMISSIONS OF BETWEEN $250,000 AND
$1,500,000.
- - Mature 9 months to 30 years
- - Fixed or floating interest rate. The floating interest rate formula may be
based on:
Commercial paper rate
Prime rate
CD rate
Federal Funds effective rate
LIBOR
Treasury rate
CMT rate
- - Remarketing features
- - Certificate or book-entry form
- - Subject to redemption and repurchase at option of BGE or holder
- - Not convertible, amortized or subject to a sinking fund
- - Interest paid on fixed rate notes on May 1 and November 1
- - Interest paid on floating rate notes monthly, quarterly, semi-annually,
or annually
- - Minimum denominations of $1,000, increased in multiples of $1,000
WE URGE YOU TO CAREFULLY READ THIS PROSPECTUS AND THE PRICING SUPPLEMENT WHICH
WILL DESCRIBE THE SPECIFIC TERMS OF THE OFFERING BEFORE YOU MAKE YOUR INVESTMENT
DECISION.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
LEHMAN BROTHERS GOLDMAN, SACHS & CO.
AGENTS
(ONCE THE REGISTRATION STATEMENT IS EFFECTIVE, THE DATE OF THE PROSPECTUS WILL
BE INSERTED HERE)
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TABLE OF CONTENTS
PAGE
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WHERE YOU CAN FIND MORE INFORMATION ........................................ 3
Forward-Looking Statements ............................................. 3
BGE......................................................................... 4
PRICING SUPPLEMENT.......................................................... 4
USE OF PROCEEDS............................................................. 5
RATIO OF EARNINGS TO FIXED CHARGES.......................................... 5
DESCRIPTION OF THE NOTES.................................................... 6
General................................................................. 6
Redemptions............................................................. 6
Repurchases............................................................. 6
Remarketed Notes........................................................ 6
Book-Entry Notes - Registration, Transfer,
and Payment of Interest and Principal................................ 6
Book-Entry Notes - Method of Repurchase................................. 8
Certificate Notes - Registration, Transfer, and
Payment of Interest and Principal..................................... 8
Certificate Notes - Method of Repurchase................................ 8
Interest Rate........................................................... 8
General.......................................................... 8
Fixed Rate Notes................................................. 9
Floating Rate Notes.............................................. 9
General.................................................... 9
Date of Interest Rate Change............................... 9
When Interest Rate Is Determined........................... 10
When Interest Is Paid...................................... 10
Commercial Paper Rate Notes................................ 11
Prime Rate Notes........................................... 11
CD Rate Notes.............................................. 12
Federal Funds Effective Rate Notes......................... 12
LIBOR Notes................................................ 13
Treasury Rate Notes........................................ 14
CMT Rate Notes............................................. 14
Event of Default..................................................... 16
Modification of Indenture............................................ 17
Consolidation, Merger or Sale........................................ 17
PLAN OF DISTRIBUTION........................................................ 17
LEGAL OPINIONS.............................................................. 18
EXPERTS..................................................................... 18
GLOSSARY.................................................................... 19
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C., 20549.
Please call the SEC at 1-800-SEC-0330 for further information on the public
reference room. The SEC maintains an internet site at http://www.sec.gov that
contains reports, proxy and information statements, and other information,
regarding issuers (including BGE) that file documents with the SEC
electronically. Our SEC filings may also be obtained from our web site at
http://www.bge.com.
The SEC allows us to "incorporate by reference" the information we file with
them, which means that we can disclose important information to you by referring
you to those documents. The information incorporated by reference is considered
to be part of this prospectus, and later information that we file with the SEC
will automatically update and supersede this information. We incorporate by
reference the documents listed below and any future filings made with the SEC
under Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934
until we sell all the notes.
- - Annual Report on Form 10-K for the year ended December 31, 1997;
- - Quarterly Reports on Form 10-Q for the quarters ended March 31, 1998 and
June 30, 1998;
- - Current Report on Form 8-K dated June 15, 1998.
This prospectus is part of a registration statement we filed with the SEC.
Any person, including any beneficial owner, may request a copy of these filings,
at no cost, by writing or telephoning us at the following address:
Shareholder Services
Baltimore Gas and Electric Company
39 W. Lexington Street
Baltimore, Maryland 21201
410-783-5920
You should rely only on the information incorporated by reference or provided in
this prospectus or any supplement. We have not authorized anyone else to provide
you with different information. We are not making an offer of these notes in any
state where the offer is not permitted. You should not assume that the
information in this prospectus or any supplement is accurate as of any date
other than the date on the front of those documents.
FORWARD-LOOKING STATEMENTS
We make statements in this prospectus and the documents we incorporate by
reference that are considered forward-looking statements within the meaning of
the Securities Act of 1933 and the Securities Exchange Act of 1934. Sometimes
these statements will contain words such as "believes," "expects," "intends,"
"plans" and other similar words. These statements are not guarantees of our
future performance and are subject to risks, uncertainties and other important
factors that could cause our actual performance or achievements to be materially
different from those we project. These risks, uncertainties and factors include:
- - general economic, business and regulatory conditions;
- - energy supply and demand;
- - competition;
- - federal and state regulations;
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- - availability, terms and use of capital;
- - nuclear and environmental issues;
- - weather; and
- - industry restructuring and cost recovery (including the potential effect of
stranded costs).
Given these uncertainties, you should not place undue reliance on these
forward-looking statements. Please see the documents we incorporate by reference
for more information on these factors. These forward-looking statements
represent our estimates and assumptions only as of the date of this prospectus.
BGE
BGE is a public utility that has served the central Maryland area for over 175
years. BGE produces, purchases and sells electricity and purchases, transports
and sells natural gas. BGE also jointly owns and operates two electric
generating plants and one hydroelectric plant in Pennsylvania.
BGE also has wholly owned subsidiaries that are engaged in several diversified
business activities. We have combined our diversified businesses under
Constellation Enterprises, Inc. They are as follows:
- - Constellation Power Source, Inc. - our power marketing business;
- - Constellation Power, Inc. - our power generation business;
- - Constellation Energy Source, Inc. - our energy products and services
business;
- - BGE Home Products & Services, Inc. and Subsidiaries - our home products,
commercial building systems and residential and small commercial natural
gas brokering business;
- - Constellation Investments, Inc. - our financial investments business; and
- - Constellation Real Estate Group, Inc. - our real estate and senior-living
facilities business.
PRICING SUPPLEMENT
The pricing supplement for each offering of notes will contain the specific
information and terms for that offering. The pricing supplement may also add,
update or change information contained in this prospectus. It is important for
you to consider the information contained in this prospectus and the pricing
supplement in making your investment decision.
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USE OF PROCEEDS
The net proceeds from the sale of the notes will be used for general corporate
purposes relating to our utility business, including repayment of commercial
paper borrowings used to finance construction, other capital expenditures, and
operations. If we do not use the net proceeds immediately, we temporarily invest
them in short-term, interest-bearing obligations. For current information on our
commercial paper balances and average interest rate, see our most recent Form
10-K and 10-Q. See WHERE YOU CAN FIND MORE INFORMATION.
RATIO OF EARNINGS TO FIXED CHARGES
The Ratio of Earnings to Fixed Charges for each of the periods indicated is as
follows:
TWELVE MONTHS TWELVE MONTHS ENDED DECEMBER 31,
ENDED ----------------------------------------------------
JUNE 30, 1998 1997 1996 1995 1994 1993
- ------------- ---- ---- ---- ---- ----
3.11 2.78 3.10 3.21 3.14 3.00
For current information on the Ratio of Earnings to Fixed Charges, please see
our most recent Form 10-K and 10-Q. See WHERE YOU CAN FIND MORE INFORMATION.
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DESCRIPTION OF THE NOTES
GENERAL
We will issue the notes under an indenture between us and the Trustee, The Bank
of New York, dated July 1, 1985 and supplemented on October 1, 1987 and January
26, 1993. This prospectus briefly outlines some of the indenture provisions. If
you would like more information on these provisions, review the indenture and
its supplements that we filed with the SEC. See WHERE YOU CAN FIND MORE
INFORMATION on how to locate the indenture and the supplements. You may also
review the indenture at the Trustee's offices at 101 Barclay Street, New York,
New York.
The indenture does not limit the amount of notes that may be issued. Each series
of notes may differ as to their terms. For current information on our debt
outstanding see our most recent Form 10-K and 10-Q. See WHERE YOU CAN FIND MORE
INFORMATION.
The notes are unsecured and will rank equally with all our unsecured
indebtedness. The notes will be denominated in U.S. dollars and we will pay
principal and interest in U.S. dollars. The notes will not be subject to any
conversion, amortization, or sinking fund. It is anticipated that the notes will
be "book-entry," represented by a permanent global note registered in the name
of The Depository Trust Company, or its nominee. However, we reserve the right
to issue notes in certificate form registered in the name of the noteholders.
In the discussion that follows, whenever we talk about paying principal on the
notes, we mean at maturity, redemption or repurchase. Also, in discussing the
time for notices and how the different interest rates are calculated, all times
are New York City time, unless otherwise noted.
The following terms may apply to each note as specified in the applicable
pricing supplement and the note. The applicable pricing supplement will describe
the terms for the notes including: interest rate, remarketing provisions, our
right to redeem notes, the holders' right to tender notes, and any other
provisions.
REDEMPTIONS
We may redeem notes at our option. Notes may be redeemable in whole or in part
in increments of $1,000 upon no more than 60, and not less than 30, days prior
notice. If we do not redeem all the notes of a series at one time, the Trustee
selects the notes to be redeemed in a manner it determines to be fair.
REPURCHASES
The noteholder may have the right to cause us to repurchase the notes. We will
repurchase the notes in whole or in part in increments of $1,000. The method for
repurchases differs for book-entry and certificate notes, and is discussed on
page 8.
REMARKETED NOTES
We may issue notes with remarketing features that allow holders the option to
sell their notes back to us. In turn, we have the option to retire these notes
or remarket and sell them to new holders.
BOOK-ENTRY NOTES - REGISTRATION, TRANSFER, AND PAYMENT OF INTEREST AND PRINCIPAL
Book-entry notes of a series will be issued in the form of a global note that
will be deposited with The Depository Trust Company, New York, New York ("DTC").
This means that we will not issue certificates to each holder. One global note
will be issued to DTC who will keep a computerized record of its participants
(for example, your broker) whose clients have purchased the
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notes. The participant will then keep a record of its clients who purchased the
notes. Unless it is exchanged in whole or in part for a certificate note, a
global note may not be transferred; except that DTC, its nominees, and their
successors may transfer a global note as a whole to one another.
Beneficial interests in global notes will be shown on, and transfers of global
notes will be made only through, records maintained by DTC and its participants.
DTC has provided us the following information: DTC is a limited-purpose trust
company organized under the New York Banking Law, a "banking organization"
within the meaning of the New York Banking Law, a member of the United States
Federal Reserve System, a "clearing corporation" within the meaning of the New
York Uniform Commercial Code and a "clearing agency" registered under the
provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds
securities that its participants ("Direct Participants") deposit with DTC. DTC
also records the settlement among Direct Participants of securities
transactions, such as transfers and pledges, in deposited securities through
computerized records for Direct Participant's accounts. This eliminates the need
to exchange certificates. Direct Participants include securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations.
DTC's book-entry system is also used by other organizations such as securities
brokers and dealers, banks and trust companies that work through a Direct
Participant. The rules that apply to DTC and its participants are on file with
the SEC.
DTC is owned by a number of its Direct Participants and by the New York Stock
Exchange, Inc., The American Stock Exchange, Inc. and the National Association
of Securities Dealers, Inc.
We will wire principal and interest payments to DTC's nominee. We and the
Trustee will treat DTC's nominee as the owner of the global notes for all
purposes. Accordingly, we, the Trustee and any paying agent will have no direct
responsibility or liability to pay amounts due on the global notes to owners of
beneficial interests in the global notes.
It is DTC's current practice, upon receipt of any payment of principal or
interest, to credit Direct Participants' accounts on the payment date according
to their respective holdings of beneficial interests in the global notes as
shown on DTC's records. In addition, it is DTC's current practice to assign any
consenting or voting rights to Direct Participants whose accounts are credited
with notes on a record date, by using an omnibus proxy. Payments by participants
to owners of beneficial interests in the global notes, and voting by
participants, will be governed by the customary practices between the
participants and owners of beneficial interests, as is the case with notes held
for the account of customers registered in "street name." However, payments will
be the responsibility of the participants and not of DTC, the Trustee or us.
Notes represented by a global note will be exchangeable for certificate notes
with the same terms in authorized denominations only if:
- - DTC notifies us that it is unwilling or unable to continue as depositary
or if DTC ceases to be a clearing agency registered under applicable law
and a successor depositary is not appointed by us within 90 days; or
- - we determine not to require all of the notes of a series to be represented
by a global note and notify the Trustee of our decision.
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BOOK-ENTRY NOTES - METHOD OF REPURCHASE
Participants, on behalf of the owners of beneficial interests in the global
notes, may exercise the repurchase option by delivering written notice to our
paying agent at least 30, but no more than 60, days prior to the date of
repurchase. The paying agent, The Bank of New York, must receive notice by 5:00
p.m. on the last day for giving notice. Procedures for the owners of beneficial
interests in global notes to notify their participants of their desire to have
their note repurchased will be governed by the customary practices of the
participant. The written notice to the paying agent must state the principal
amount to be repurchased. It is irrevocable and a duly authorized officer of the
participant (with signatures guaranteed) must sign it.
CERTIFICATE NOTES - REGISTRATION, TRANSFER,
AND PAYMENT OF INTEREST AND PRINCIPAL
If we issue certificate notes, they will be registered in the name of the
noteholder. The notes may be transferred or exchanged, pursuant to
administrative procedures in the Indenture, without the payment of any service
charge (other than any tax or other governmental charge) by contacting the
paying agent.
Holders of over $5 million in principal amount of notes can request that payment
of principal and interest be wired to them by contacting the paying agent at the
address set forth above at least one business day prior to the payment date.
Otherwise, payments will be made by check.
CERTIFICATE NOTES - METHOD OF REPURCHASE
Noteholders desiring to exercise their repurchase option must notify the paying
agent at least 30 but not more than 45 days prior to the repayment date by
providing the bank:
- - the note, with the section entitled "Option to Elect Repayment" on the
reverse of the note completed; or
- - a fax or letter (first class, postage prepaid) from a member of a national
securities exchange, the National Association of Securities Dealers, or a
bank or trust company in the United States which states the following:
the name of the holder;
the principal amount of the note and the amount to be repurchased;
the certificate number or the maturity and a description of the terms
of the note;
a statement that you wish to sell all or a portion of your note; and
- - a guaranty that the note with the section entitled "Option to Elect
Repayment" on the reverse of the note completed, will be received by the
paying agent within 5 business days.
The note and form must be received by the paying agent by such 5th business day.
Your notice of repurchase is irrevocable.
If you sell a portion of a note, the old note will be canceled and a new note
for the remaining principal amount will be issued to you.
INTEREST RATE
GENERAL
We have provided a GLOSSARY at the end of this prospectus to define the
capitalized words used in discussing the interest rates payable on the notes.
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The interest rate on the notes will either be fixed or floating. The interest
paid will include interest accrued to, but excluding, the date of maturity,
redemption or repurchase. Interest is generally payable to the person in whose
name the note is registered at the close of business on the record date before
each interest payment date. Interest payable at maturity, redemption, or
repurchase, however, will be payable to the person to whom principal is payable.
The first interest payment on any note originally issued between a record date
and interest payment date or on an interest payment date will be made on the
interest payment date after the next record date. Interest payments, other than
those payable at maturity, redemption or repurchase will be paid, at our option,
by check or wire transfer.
FIXED RATE NOTES
Each pricing supplement will designate the fixed rate of interest payable on a
note. Interest will be paid May 1 and November 1, and upon maturity, redemption
or repurchase. If any payment date falls on a day that is not a Business Day,
payment will be made on the next Business Day and no additional interest will be
paid. The record dates for such notes will be April 15 (for interest to be paid
on May 1) and October 15 (for interest to be paid on November 1). Interest
payments will be the amount of interest accrued to, but excluding, each May 1
and November 1. Interest will be computed using a 360-day year of twelve 30-day
months.
FLOATING RATE NOTES
GENERAL
Each floating rate note will have an interest rate formula. The formula may be
based on:
- - the commercial paper rate;
- - the prime rate; the CD rate;
- - the federal funds effective rate;
- - the LIBOR;
- - the Treasury rate;
- - the CMT rate; or
- - another interest rate index.
The applicable pricing supplement will also indicate the Spread and/or Spread
Multiplier, if any. In addition, any floating rate note may have a maximum or
minimum interest rate limitation.
Upon request, the Calculation Agent will provide the current interest rate and,
if different, the interest rate which will become effective on the next Interest
Reset Date.
DATE OF INTEREST RATE CHANGE
The interest rate on each floating rate note may be reset daily, weekly,
monthly, quarterly, semi-annually, or annually. The Interest Reset Date will be:
- - for notes which reset daily, each Business Day;
- - for notes (other than Treasury rate notes) which reset weekly, the
Wednesday of each week;
- - for Treasury rate notes which reset weekly, the Tuesday of each week;
- - for notes which reset monthly, the third Wednesday of each month;
- - for notes which reset quarterly, the third Wednesday of March, June,
September and December;
- - for notes which reset semi-annually, the third Wednesday of the two
months of each year indicated in the applicable pricing supplement; and
- - for notes which reset annually, the third Wednesday of the month of each
year indicated in the applicable pricing supplement.
The initial interest rate or interest rate formula on each note effective until
the first Interest Reset Date will be indicated in the applicable pricing
supplement. Thereafter, the interest rate will be the rate determined on the
next Interest
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Determination Date, as explained below. Each time a new interest rate is
determined, it will become effective on the subsequent Interest Reset Date. If
any Interest Reset Date is not a Business Day, then the Interest Reset Date will
be postponed to the next Business Day. However, in the case of a LIBOR note, if
the next Business Day is in the next calendar month, the Interest Reset Date
will be the immediately preceding Business Day.
WHEN INTEREST RATE IS DETERMINED
The Interest Determination Date for all notes (except Treasury rate notes) is
the second Business Day before the Interest Reset Date.
The Interest Determination Date for Treasury rate notes will be the day of the
week in which the Interest Reset Date falls on which Treasury bills would
normally be auctioned. Treasury bills are usually sold at auction on Monday of
each week, unless that day is a legal holiday, in which case the auction is
usually held on Tuesday. However, the auction may be held on the preceding
Friday. If an auction is held on the preceding Friday, that day will be the
Interest Determination Date pertaining to the Interest Reset Date occurring in
the next week. If an auction date falls on any Interest Reset Date then the
Interest Reset Date will instead be the first Business Day immediately following
the auction date.
WHEN INTEREST IS PAID
Interest is paid as follows:
- - for notes which reset daily or weekly, on the third Wednesday of March,
June, September and December;
- - for notes which reset monthly, on the third Wednesday of each month or on
the third Wednesday of March, June, September and December (as indicated
in the applicable pricing supplement);
- - for notes which reset quarterly, on the third Wednesday of March, June,
September, and December;
- - for notes which reset semi-annually, on the third Wednesday of the two
months specified in the applicable pricing supplement;
- - for notes which reset annually, on the third Wednesday of the month
specified in the applicable pricing supplement; and
- - at maturity, redemption or repurchase.
If interest is payable on a day which is not a Business Day, payment will be
postponed to the next Business Day. However, for LIBOR notes, if the next
Business Day is in the next calendar month, interest will be paid on the
preceding Business Day.
The record date will be 15 calendar days prior to each day interest is paid,
whether or not such day is a Business Day.
The interest payable will be the amount of interest accrued to, but excluding,
the interest payment date. However, for notes on which the interest resets daily
or weekly, the interest payable will include interest accrued to and including
the record date prior to the interest payment date. If the interest payment date
is also a day that principal is due, the interest payable will include interest
accrued to, but exclude, the date of maturity, redemption or repurchase.
The accrued interest for any period is calculated by multiplying the principal
amount of a note by an accrued interest factor. The accrued interest factor is
computed by adding the interest factor calculated for each day in the period to
the date for which accrued interest is being calculated. The interest factor
(expressed as a decimal rounded upwards if necessary, as described below) is
computed by dividing the interest rate (expressed as a decimal rounded upwards
if necessary) applicable to such date by 360, unless
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the notes are Treasury rate notes or CMT rate notes in which case it will be
divided by the actual number of days in the year.
All percentages resulting from any calculation of floating rate notes will be
rounded, if necessary, to the nearest one-hundred thousandth of a percentage
point, with five one-millionths of a percentage point rounded upwards (e.g.,
9.876545% (or .09876545) being rounded to 9.87655% (or .0987655) and 9.876544%
(or .09876544) being rounded to 9.87654% (or .0987654)), and all dollar amounts
used in or resulting from such calculation will be rounded to the nearest cent
(with one-half cent being rounded upwards).
COMMERCIAL PAPER RATE NOTES
Each commercial paper rate note will bear interest at the rate (calculated with
reference to the Commercial Paper Rate and the Spread and/or Spread Multiplier,
if any) specified on the commercial paper rate note and in the applicable
pricing supplement.
"Commercial Paper Rate" means, with respect to any Commercial Paper Interest
Determination Date, the Money Market Yield (calculated as described below) of
the rate on such date for commercial paper having the Index Maturity specified
in the applicable pricing supplement as published in H.15(519) under the heading
"Commercial Paper."
The following procedures will occur if the rate cannot be set as described
above:
(a) If that rate is not published in H.15(519) prior to 9:00 A.M. on the
Calculation Date, then the Commercial Paper Rate will be the Money Market Yield
of the rate on the Commercial Paper Interest Determination Date for commercial
paper having the Index Maturity specified in the applicable pricing supplement
as published in Composite Quotations under the heading "Commercial Paper."
(b) If the rate is not published or in Composite Quotations by 3:00 P.M. on the
Calculation Date, the Commercial Paper Rate for that Commercial Paper Interest
Determination Date will then be calculated by the Calculation Agent in the
following manner.
The Commercial Paper Rate will be calculated as the Money Market Yield of the
average for the offered rates, as of 11:00 A.M., on that date, of three leading
dealers of commercial paper in New York selected for commercial paper having the
applicable Index Maturity placed for an industrial issuer whose bond rating is
"AA," or the equivalent, from a nationally recognized rating agency.
(c) Finally, if fewer than three dealers are quoting as mentioned, the rate of
interest in effect for the applicable period will be the same as the rate of
interest in effect for the prior interest reset period.
PRIME RATE NOTES
Each prime rate note will bear interest at the rate (calculated with reference
to the Prime Rate and the Spread and/or Spread Multiplier, if any) specified on
the prime rate note and in the applicable pricing supplement.
"Prime Rate" means, with respect to any Prime Rate Interest Determination Date,
the rate set forth on such date in H.15(519) under the heading "Bank Prime
Loan."
The following procedures will occur if the rate cannot be set as described
above:
(a) If that rate is not published in H.15(519) prior to 9:00 A.M. on the
Calculation Date, then the Prime Rate will be the average (rounded upwards, if
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necessary, to the next higher one-hundred thousandth of a percentage point) of
the rates of interest publicly announced by each bank that appear on the Reuters
Screen USPRIMEONE Page as its prime rate or base lending rate as in effect for
that Prime Rate Interest Determination Date.
(b) If fewer than four, but more than one, rates appear on the Reuters Screen
USPRIMEONE Page, the Prime Rate will be the average of the prime rates (quoted
on the basis of the actual number of days in the year divided by a 360-day year)
as of the close of business on the Prime Rate Interest Determination Date by
four major money center banks in New York selected by the Calculation Agent.
(c) If fewer than two rates appear, the Prime Rate shall be determined on the
basis of the rates furnished in New York by the appropriate number of substitute
banks or trust companies organized and doing business under the laws of the
United States, or any State thereof, having total equity capital of at least
$500 million and being subject to supervision or examination by a Federal or
State authority, as selected by the Calculation Agent.
(d) Finally, if the banks are not quoting as mentioned above, the rate of
interest in effect for the applicable period will be the same as the rate of
interest in effect for the prior interest reset period.
CD RATE NOTES
Each CD rate note will bear interest at the rate (calculated with reference to
the CD Rate and the Spread and/or Spread Multiplier, if any) specified on the CD
rate note and in the applicable pricing supplement.
"CD Rate" means, with respect to any CD Rate Interest Determination Date, the
rate on that date for negotiable certificates of deposit having the Index
Maturity specified in the applicable pricing supplement as published in
H.15(519) under the heading "CDs (Secondary Market)."
The following procedures will occur if the rate cannot be set as described
above:
(a) If that rate is not published in H.15(519) prior to 9:00 A.M. on the
Calculation Date, then the CD Rate will be the rate on that CD Rate Interest
Determination Date for negotiable certificates of deposit having the applicable
Index Maturity as published in Composite Quotations under the heading
"Certificates of Deposit."
(b) If that rate is not published in Composite Quotations by 3:00 P.M. on that
Calculation Date, the CD Rate for that CD Interest Determination Date shall be
calculated by the Calculation Agent as follows:
The CD Rate will be calculated as the average of the secondary market offered
rates, as of 10:00 A.M., of three leading nonbank dealers of negotiable U.S.
dollar certificates of deposit in New York selected by the Calculation Agent for
negotiable certificates of deposit of major United States money market banks
with a remaining maturity closest to the Index Maturity specified in the
applicable pricing supplement in a denomination of $5,000,000.
(c) Finally, if fewer than three dealers are quoting as mentioned, the rate of
interest in effect for the applicable period will be the same as the rate of
interest in effect for the prior interest reset period.
FEDERAL FUNDS EFFECTIVE RATE NOTES
Each federal funds effective rate note will bear interest at the rate
(calculated with reference to the Federal Funds Effective Rate and the Spread
and/or Spread Multiplier, if any) specified on
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the federal funds effective rate note and in the applicable pricing supplement.
"Federal Funds Effective Rate" means, with respect to any Federal Funds
Effective Interest Determination Date, the rate on such date for Federal Funds
as published in H.15(519) prior to 11:00 A.M. under the heading "Federal Funds
(Effective)."
The following procedures will occur if the rate cannot be set as described
above:
(a) If that rate is not published in H.15(519) prior to 11:00 A.M. on the
Calculation Date, then the Federal Funds Effective Rate will be the rate on that
Federal Funds Effective Interest Determination Date as published in Composite
Quotations under the heading "Federal Funds/Effective Rate."
(b) If that rate is not published in Composite Quotations by 3:00 P.M. on the
Calculation Date, the Federal Funds Effective Rate for that Federal Funds
Effective Interest Determination Date will be calculated by the Calculation
Agent as follows:
The Federal Funds Effective Rate will be the average of the rates, as of 11:00
A.M. on that date, for the last transaction in overnight Federal Funds arranged
by three leading brokers of federal funds transaction in New York selected by
the Calculation Agent.
(c) Finally, if fewer than three brokers are quoting as mentioned above, the
rate of interest in effect for the applicable period will be the same as the
rate of interest in effect for the prior interest reset period.
LIBOR NOTES
Each LIBOR note will bear interest at the rate (calculated with reference to
LIBOR and the Spread and/or Spread Multiplier, if any) specified on the LIBOR
note and in the applicable pricing supplement.
LIBOR will be determined by the Calculation Agent as follows:
(a) With respect to any LIBOR Interest Determination Date, LIBOR will be
determined by either:
(1) the average of the offered rates for deposits of not less than
$1,000,000 in U.S. dollars having the Index Maturity specified in the applicable
pricing supplement, beginning on the second Business Day immediately after that
date, that appear on the Reuters Screen LIBO Page as of 11:00 A.M., London time,
on that date, if at least two offered rates appear on the Reuters Screen LIBO
Page; or
(2) the rate for deposits in U.S. dollars having the Index Maturity
designated in the applicable pricing supplement, beginning on the second London
Business Day immediately after such date, that appears on the Telerate Page 3750
as of 11:00 A.M., London time, on that date.
If neither Reuters Screen LIBO Page nor Telerate Page 3750 is specified in the
applicable pricing supplement, LIBOR will be determined as if Telerate Page 3750
had been specified.
In the case where (1) above applies, if fewer than two offered rates appear on
the Reuters Screen LIBO Page, or, in the case where (2) above applies, if no
rate appears on the Telerate Page 3750, LIBOR for that date will be determined
as follows:
(b) LIBOR will be determined based on the rates at approximately 11:00
A.M., London time, on that LIBOR Interest Determination Date at which deposits
of not less than $1,000,000 in U.S. dollars having the applicable Index Maturity
are offered to prime banks in the London interbank market by four major banks in
the London interbank
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<PAGE>
market selected by the Calculation Agent that in the Calculation Agent's
judgment is representative for a single transaction in such market at such time
(a "Representative Amount"). The offered rates must begin on the second Business
Day immediately after that LIBOR Interest Determination Date.
The Calculation Agent will request the principal London office of each such bank
to provide a quotation of its rate. If at least two such quotations are
provided, LIBOR for such date will be the average of such quotations.
(c) If fewer than two quotations are provided, LIBOR for that date will be the
average of the rates quoted at approximately 11:00 A.M., New York City time, on
such date by three major banks in New York, selected by the Calculation Agent.
The rates will be for loans in U.S. dollars to leading European banks having the
specified Index Maturity beginning on the second Business Day after that date
and in a Representative Amount.
(d) Finally, if fewer than three banks are quoting as mentioned, the rate of
interest in effect for the applicable period will be the same as the rate of
interest in effect for the prior interest reset period.
TREASURY RATE NOTES
Each Treasury rate note will bear interest at the rate (calculated with
reference to the Treasury Rate and the Spread and/or Spread Multiplier, if any)
specified on the Treasury rate note and in the applicable pricing supplement.
"Treasury Rate" means, with respect to any Treasury Interest Determination Date,
the rate for the most recent auction of direct obligations of the United States
("Treasury bills") having the Index Maturity specified in the applicable pricing
supplement as published in H.15(519) under the heading "U.S. Government
Securities/Treasury Bills/Auction Average (Investment)."
The following procedures will occur if the rate cannot be set as described
above:
(a) If that rate is not published in H.15(519) by 9:00 A.M. on the applicable
Calculation Date, the rate will be the auction average rate (expressed as a bond
equivalent, on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) for such auction as otherwise announced by the United
States Department of the Treasury.
(b) If the results of the auction of Treasury bills having the applicable Index
Maturity are not published in H.15(519) by 9:00 A.M., or otherwise published or
reported as provided above by 3:00 P.M., on the Calculation Date, or if no
auction is held in a particular week, then the Treasury Rate shall be calculated
by the Calculation Agent as follows:
The rate will be calculated as a yield to maturity (expressed as a bond
equivalent, on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) of the average of the secondary market bid rates as of
approximately 3:30 P.M. on the Treasury Interest Determination Date, of three
leading primary United States government securities dealers in New York selected
by the Calculation Agent for the issue of Treasury bills with a remaining
maturity closest to the specified Index Maturity.
(c) Finally, if fewer than three dealers are quoting as mentioned, the rate of
interest in effect for the period will be the same as the rate of interest in
effect for the prior interest reset period.
CMT RATE NOTES
Each CMT rate note will bear interest at the rate (calculated with reference to
the
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CMT Rate and the Spread or Spread Multiplier, if any) specified on such CMT rate
note and in the applicable pricing supplement.
"CMT Rate" means, with respect to any CMT Interest Determination Date, the rate
displayed on the Designated CMT Telerate Page under the caption "... Treasury
Constant Maturities.. Federal Reserve Board Release H.15... Mondays
Approximately 3:45 P.M.," under the column for the applicable Index Maturity
designated in the applicable pricing supplement for:
(1) if the Designated CMT Telerate Page is 7055, the rate for the
applicable CMT Interest Determination Date; or
(2) if the Designated CMT Telerate Page is 7052, the week, or the month,
as applicable, ended immediately preceding the week in which the CMT Interest
Determination Date occurs.
The following procedures will occur if the rate cannot be set as described
above:
(a) If no page is specified in the applicable pricing supplement and on the face
of such CMT Rate Note, the Designated CMT Telerate Page shall be 7052, for the
most recent week. If such rate is no longer displayed on the relevant page, or
if it is not displayed by 3:00 P.M. on the related Calculation Date, then the
CMT Rate will be the Treasury constant maturity rate for the applicable Index
Maturity as published in the relevant H.15 (519).
(b) If that rate is no longer published in H.15(519), or is not published by
3:00 P.M. on the related Calculation Date, then the CMT Rate for such CMT
Interest Determination Date will be the Treasury constant maturity rate for the
applicable Index Maturity (or other United States Treasury rate for such Index
Maturity for that CMT Interest Determination Date with respect to such Interest
Reset Date) as may then be published by either the Federal Reserve Board or the
United States Department of the Treasury that the Calculation Agent determines
to be comparable to the rate formerly displayed on the Designated CMT Telerate
Page and published in the relevant H.15(519).
(c) If that information is not provided by 3:00 P.M. on the related Calculation
Date, then the CMT Rate for that CMT Interest Determination Date will be
calculated by the Calculation Agent as follows:
The rate will be calculated as a yield to maturity, based on the average of the
secondary market closing offer side prices as of approximately 3:30 P.M. on that
CMT Interest Determination Date reported, according to their written records, by
three leading primary United States government securities dealers (each, a
"Reference Dealer") in New York selected by the Calculation Agent. These dealers
will be selected from five such Reference Dealers.
The Calculation Agent will eliminate the highest quotation (or, in the event of
equality, one of the highest) and the lowest quotation (or, in the event of
equality, one of the lowest), for the most recently issued direct noncallable
fixed rate obligations of the United States ("Treasury Note") with an original
maturity of approximately the applicable Index Maturity and a remaining term to
maturity of not less than such Index Maturity minus one year.
If two Treasury Notes with an original maturity as described in the preceding
sentence have remaining terms to maturity equally close to the applicable Index
Maturity, the quotes for the Treasury Note with the shorter remaining term to
maturity will be used.
(d) If the Calculation Agent cannot obtain three such Treasury Note quotations,
the CMT Rate for that CMT
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<PAGE>
Interest Determination Date will be calculated by the Calculation Agent as
follows:
The rate will be calculated as a yield to maturity based on the average of the
secondary market offer side prices as of approximately 3:30 P.M. on that CMT
Interest Determination Date of three Reference Dealers in New York selected by
the Calculation Agent using the same method described above, for Treasury Notes
with an original maturity of the number of years that is the next highest to the
applicable Index Maturity with a remaining term to maturity closest to such
Index Maturity and in an amount of at least $100 million.
If three or four (and not five) of the Reference Dealers are quoting as
described above, then the CMT Rate will be based on the average of the offer
prices obtained and neither the highest nor the lowest of such quotes will be
eliminated.
(e) Finally, if fewer than three Reference Dealers are quoting as mentioned, the
rate of interest in effect for the applicable period will be the same as the
rate of interest in effect for the prior interest reset period.
EVENT OF DEFAULT
"Event of Default" means any of the following:
- - failure to pay the principal of (or premium, if any, on) any note of a
series when due and payable;
- - failure to pay for 30 days any interest on any note of any series;
- - failure to perform any other requirements in the notes, or in the
indenture in regard to such notes, for 60 days after notice; or
- - certain events of insolvency.
An Event of Default for a particular series of notes does not necessarily mean
that an Event of Default has occurred for any other series of notes issued under
the indenture. If an Event of Default shall have occurred and be continuing the
Trustee or the holders of at least 25% of the principal amount of the notes of
the series affected by an Event of Default may require us to repay the entire
principal of the notes of such series immediately. Subject to certain
conditions, this requirement may be rescinded by the holders of at least a
majority in aggregate principal amount of the notes of the series.
The Trustee must within 90 days after a default occurs, notify the holders of
the notes of the series of the default if we have not remedied it (default is
defined to include the events specified above without the grace periods or
notice). The Trustee may withhold notice to the holders of such notes of any
default (except in the payment of principal or interest) if it in good faith
considers such withholding in the interest of the holders. We are required to
file an annual certificate with the Trustee, signed by an officer, about any
default by us under any provisions of the indenture.
Subject to the provisions of the indenture relating to its duties in case of
default, the Trustee shall be under no obligation to exercise any of its rights
or powers under the indenture at the request, order or direction of any holders
unless such holders offer the Trustee reasonable indemnity. Subject to the
provisions for indemnification, the holders of a majority in principal amount of
the notes of any series may direct the time, method and place of conducting any
proceedings for any remedy available to, or exercising any trust or power
conferred on, the Trustee with respect to such notes.
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MODIFICATION OF INDENTURE
Under the indenture, our rights and obligations and the rights of the holders of
any notes may be changed. Any change requires the consent of the holders of not
less than 66 2/3% in aggregate principal amount of the outstanding notes of all
series to be affected, voting as one class. However, no changes to the terms of
payment of principal or interest, or reducing the percentage required for
changes, is effective against any holder without its consent.
CONSOLIDATION, MERGER OR SALE
We may not merge or consolidate with any corporation or sell substantially all
of our assets as an entirety unless:
- - we are the continuing corporation or the successor corporation expressly
assumes the payment of principal, and premium, if any, and interest on the
notes and the performance and observance of all the covenants and
conditions of the indenture binding on us; and
- - we, or the successor corporation, are not immediately after the merger,
consolidation, or sale in default in the performance of a covenant or
condition in the indenture.
PLAN OF DISTRIBUTION
We may sell the notes (a) through agents; (b) through underwriters or dealers;
or (c) directly to one or more purchasers.
BY AGENTS
Notes may be sold on a continuing basis through agents designated by us. The
agents agree to use their reasonable efforts to solicit purchases for the period
of their appointment under the terms of an agency agreement between the agents
and us.
For each note and in total, we have set out below the offering price, the
compensation we will pay the agents and the proceeds we will receive, before
deducting expenses of approximately $295,000. The amount of the agents'
commissions depends on the maturity of the note they sell.
PER NOTE
--------
Public Offering Price 100%
Agents' Commissions 0.125% -.75%
----------------
Proceeds to BGE
(before expenses) 99.875% - 99.25%
TOTAL
-----
Public Offering Price $200,000,000
Agents' Commissions $250,000 - $1,500,000
---------------------
Proceeds to BGE
(before expenses) $199,750,000 - $198,500,000
The Agents will not be obligated to make a market in the notes. We cannot
predict the amount of trading or liquidity of the notes.
BY UNDERWRITERS
If underwriters are used in the sale, the notes will be acquired by the
underwriters for their own account. The underwriters may resell the notes in one
or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale. The
obligations of the underwriters to purchase the notes will be subject to certain
conditions. The underwriters will be obligated to purchase all the notes of the
series offered if any of the notes are purchased. Any initial public offering
price and any discounts or concessions allowed or re-allowed or paid to dealers
may be changed from time to time.
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DIRECT SALES
We may also sell notes directly. In this case, no underwriters or agents would
be involved.
GENERAL INFORMATION
In connection with sales by an agent or an underwritten offering, the SEC rules
permit the underwriters or agents to engage in transactions that stabilize the
price of the notes. These transactions may include purchases for the purpose of
fixing or maintaining the price of the notes.
The underwriters or agents may create a short position in the notes in
connection with the offering. That means they sell a larger principal amount of
the notes than is shown on the cover page of the prospectus or the applicable
pricing supplement. If they create a short position, the underwriters or agents
may purchase notes in the open market to reduce the short position.
If the underwriters or agents purchase the notes to stabilize the price or to
reduce their short position, the price of the notes could be higher than it
might be if they had not made such purchases. The underwriters or agents make no
representation or prediction about any effect that the purchases may have on the
price of the notes.
Underwriters, dealers, and agents that participate in the distribution of the
notes may be underwriters as defined in the Securities Act of 1933 (the "Act"),
and any discounts or commissions received by them from us and any profit on the
resale of the notes by them may be treated as underwriting discounts and
commissions under the Act.
We may have agreements with the underwriters, dealers and agents to indemnify
them against certain civil liabilities, including liabilities under the Act, or
to contribute with respect to payments which the underwriters, dealers or agents
may be required to make.
Underwriters, dealers and agents may engage in transactions with, or perform
services for, us or our subsidiaries in the ordinary course of their businesses.
LEGAL OPINIONS
One of our lawyers, will issue an opinion regarding certain legal matters in
connection with the notes offered pursuant to this prospectus. Cahill Gordon &
Reindel (a partnership including a professional corporation), New York, NY will
issue an opinion for any underwriters, dealers or agents. Cahill Gordon &
Reindel will rely on the opinion of our lawyers as to matters of Maryland law
and the applicability of the Public Utility Holding Company Act of 1935.
EXPERTS
PricewaterhouseCoopers LLP, independent accountants, audited our annual
financial statements and schedules incorporated by reference in this prospectus
and elsewhere in the registration statement. These documents are incorporated by
reference herein in reliance upon the authority of PricewaterhouseCoopers LLP as
experts in accounting and auditing.
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GLOSSARY
Set forth below are definitions of some of the terms used in this
Prospectus.
"BUSINESS DAY" means any day other than a Saturday or Sunday that (a) is
not a day on which banking institutions in Baltimore, Maryland, or in New York,
New York, are authorized or obligated by law or executive order to be closed,
and (b) with respect to LIBOR Notes only, is a day on which dealings in deposits
in U.S. dollars are transacted in the London interbank market.
"CALCULATION AGENT" means the entity chosen by us to perform the duties
related to interest rate calculation and resets for floating rate notes.
"CALCULATION DATE" means the date on which the Calculation Agent
calculates an interest rate for a floating rate note, which will be one of the
following:
"PRIME RATE" - tenth day after the related Prime Rate Interest
Determination Date or, if such day is not a Business Day, the next
Business Day.
"CD RATE" - tenth day after the related CD Rate Interest
Determination Date or, if such day is not a Business Day, the next
Business Day.
"CMT RATE" - tenth day after the related CMT Rate Interest
Determination Date or, if such day is not a Business Day, the next
Business Day.
"COMMERCIAL PAPER RATE" - tenth day after the related Commercial
Paper Rate Interest Determination Date or, if such day is not a
Business Day, the next Business Day.
"LIBOR" - the LIBOR Interest Determination Date.
"TREASURY RATE" - tenth day after the related Treasury Rate
Interest Determination Date or, if such day is not a Business Day, the
next Business Day.
"FEDERAL FUNDS EFFECTIVE RATE" - tenth day after the related
Federal Funds Effective Rate Interest Determination Date or, if such
day is not a Business Day, the next Business Day.
"COMPOSITE QUOTATIONS" means the daily statistical release entitled
"Composite 3:30 P.M. Quotations for U.S. Government Securities," or any
successor publication, published by The Federal Reserve Bank of New York.
"DESIGNATED CMT TELERATE PAGE" means the display on the Dow Jones
Telerate Service on the page designated in the applicable pricing supplement and
on the face of such CMT Rate Note (or any other page as may replace such page on
that service) for the purpose of displaying Treasury Constant Maturities as
reported in H.15(519).
"H.15(519)" means the weekly statistical release entitled "Statistical
Release H.15(519), Selected Interest Rates," or any successor publication,
published by the Board of Governors of the Federal Reserve System.
"INDEX MATURITY" means, with respect to a floating rate note, the period
to maturity of the note on which the interest rate formula is based, as
indicated in the applicable pricing supplement.
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<PAGE>
"INTEREST DETERMINATION DATE" means the date as of which the interest
rate for a floating rate note is to be calculated, to be effective as of the
following Interest Reset Date and calculated on the related Calculation Date
(except in the case of LIBOR which is calculated on the related LIBOR Interest
Determination Date). The Interest Determination Dates will be indicated in the
applicable pricing supplement and in the note.
"INTEREST RESET DATE" means the date on which a floating rate note will
begin to bear interest at the variable interest rate determined on any Interest
Determination Date. The Interest Reset Dates will be indicated in the applicable
pricing supplement and in the note.
"MONEY MARKET YIELD" is the yield (expressed as a percentage rounded
upwards, if necessary, to the next higher one-hundred thousandth of a percentage
point) calculated in accordance with the following formula:
D X 360
Money Market Yield = -------------- X 100
360 - (D X M)
where "D" refers to the per annum rate for commercial paper quoted on a bank
discount basis and expressed as a decimal; and "M" refers to the actual number
of days in the period for which interest is being calculated.
"REUTERS SCREEN LIBO PAGE" means the display designated as page "LIBO"
on the Reuters Monitor Money Rates Service (or such other page as may replace
the LIBO page on that service for the purpose of displaying London interbank
offered rates of major banks).
"REUTERS SCREEN USPRIMEONE PAGE" means the display designated as page
USPRIMEONE on the Reuters Monitor Money Rates Service (or such other page as may
replace the USPRIMEONE page on that service for the purpose of displaying prime
rates or base lending rates of major United States banks).
"SPREAD" means the number of basis points specified in the applicable
pricing supplement as being applicable to the interest rate for a floating rate
note.
"SPREAD MULTIPLIER" means the percentage specified in the applicable
pricing supplement as being applicable to the interest rate for a floating rate
note.
"TELERATE PAGE 3750" means the display designated as page "3750" on the
Telerate Service (or such other page as may replace the 3750 page on that
service or such other service or services as may be nominated by the British
Bankers Association for the purpose of displaying London interbank offered rates
for U.S. dollar deposits).
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================================================================================
$200,000,000
[BGE LOGO OMITTED]
Medium-Term Notes
Series H
----------------------------------
PROSPECTUS
(Once the registration statement
is effective, the date of the
Prospectus will be inserted here)
------------------------------------
LEHMAN BROTHERS
GOLDMAN, SACHS & CO.
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Securities and Exchange Commission Registration Fee.............. $55,600
Services of Independent Accountants.............................. 45,000*
Trustee Fees and Expenses........................................ 5,000*
Legal Fees and Expenses.......................................... 55,000*
Debt Securities Rating Fees...................................... 109,000*
Printing and Delivery Expenses................................... 10,000*
Miscellaneous Expenses........................................... 15,400*
---------
Total............................................................ $295,000*
==========
--------------
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The following description of indemnification allowed under Maryland
statutory law is a summary rather than a complete description. Reference is made
to Section 2-418 of the Corporations and Associations Article of the Maryland
Annotated Code, which is incorporated herein by reference, and the following
summary is qualified in its entirety by such reference.
By a Maryland statute, a Maryland corporation may indemnify any
director who was or is a party or is threatened to be made a party to any
threatened, pending, or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative ("Proceeding") by reason of the fact
that he is a present or former director of the corporation and any person who,
while a director of the corporation, is or was serving at the request of the
corporation as a director, officer, partner, trustee, employee, or agent of
another corporation, partnership, joint venture, trust, other enterprise, or
employee benefit plan ("Director"). Such indemnification may be against
judgments, penalties, fines, settlements and reasonable expenses actually
incurred by him in connection with the Proceeding unless it is proven that (a)
the act or omission of the Director was material to the matter giving rise to
the Proceeding and (i) was committed in bad faith, or (ii) was the result of
active and deliberate dishonesty; or (b) the Director actually received an
improper personal benefit in money, property, or services; or (c) in the case of
any criminal action or proceeding, the Director had reasonable cause to believe
his act or omission was unlawful. However, the corporation may not indemnify any
Director in connection with a Proceeding by or in the right of the corporation
if the Director has been adjudged to be liable to the corporation. A Director or
officer who has been successful in the defense of any Proceeding described above
shall be indemnified against reasonable expenses incurred in connection with the
Proceeding. The corporation may not indemnify a Director in respect of any
Proceeding charging improper personal benefits to the Director in which the
Director was adjudged to be liable on the basis that personal benefit was
improperly
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received. Notwithstanding the above provisions, a court of appropriate
jurisdiction, upon application of the Director or officer, may order
indemnification if it determines that in view of all the relevant circumstances,
the Director or officer is fairly and reasonably entitled to indemnification;
however, indemnification with respect to any Proceeding by or in the right of
the corporation or in which liability was adjudged on the basis that personal
benefit was improperly received shall be limited to expenses. A corporation may
advance reasonable expenses to a Director under certain circumstances, including
a written undertaking by or on behalf of such Director to repay the amount if it
shall ultimately be determined that the standard of conduct necessary for
indemnification by the corporation has not been met.
A corporation may indemnify and advance expenses to an officer of the
corporation to the same extent that it may indemnify Directors under the
statute.
The indemnification and advancement of expenses provided or authorized
by this statute may not be deemed exclusive of any other rights, by
indemnification or otherwise, to which a Director or officer may be entitled
under the charter, by-laws, a resolution of shareholders or directors, an
agreement or otherwise.
A corporation may purchase and maintain insurance on behalf of any
person who is or was a Director or officer, whether or not the corporation would
have the power to indemnify a Director or officer against liability under the
provision of this section of Maryland law. Further, a corporation may provide
similar protection, including a trust fund, letter of credit or surety bond, not
inconsistent with the statute.
Article V of the Company's Charter reads as follows:
"A director or officer of the corporation shall not be
personally liable to the corporation or its stockholders for monetary
damages except (i) to the extent that it is proved that the person
actually received an improper benefit or profit in money, property, or
services for the amount of the benefit or profit in money, property or
services actually received or (ii) to the extent that a judgment or
other final adjudication adverse to the person is entered in a
proceeding based on a finding in the proceeding that the person's
action or failure to act was the result of active and deliberate
dishonesty and was material to the cause of action adjudicated in the
proceeding. It is the intent of this Article that the liability of
directors and officers shall be limited to the fullest extent permitted
by the Maryland General Corporation Law, as amended from time to time.
Any repeal or modification of the foregoing paragraph by the
stockholders of the corporation shall not adversely affect any right or
protection of a director or officer of the corporation existing at the
time of such repeal or modification."
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Article IV of the Company's By-Laws reads as follows:
"Each person made or threatened to be made a party to an
action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that such person is or was a
director or officer of the Company, or, at its request, is or was a
director or officer of another corporation, shall be indemnified by the
Company (to the extent indemnification is not otherwise provided by
insurance) against the liabilities, costs and expenses of every kind
actually and reasonably incurred by him as a result of such action,
suit or proceeding, or any threat thereof or any appeal thereon, but in
each case only if and to the extent permissible under applicable common
or statutory law, state or federal. The foregoing indemnity shall not
be inclusive of other rights to which such person may be entitled."
The Directors and officers of the Company are covered by insurance
indemnifying them against certain liabilities which might be incurred by them in
their capacities as such, including certain liabilities arising under the
Securities Act of 1933. The premium for this insurance is paid by the Company.
Also, see indemnification provisions in the Form of Agency Agreement
and the Standard Purchase Provisions, both included in Exhibit 1(a) to this
Registration Statement.
ITEM 16. EXHIBITS.
Reference is made to the Exhibit Index filed as a part of this
Registration Statement.
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the Registration Statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the
II-3
<PAGE>
aggregate, the changes in volume and price represent no more
than a 20% change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the
effective registration statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
Registration Statement or any material change to such information
in the Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the Registration Statement is on Form S-3, Form S-8, or
Form F-3 and the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed with or furnished to the Securities and Exchange
Commission by the Registrant pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 that are incorporated by reference
in the Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to Directors, officers and controlling persons of the
Registrant pursuant to the provisions described under Item 15 above, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a Director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such Director, officer or controlling person in
connection with the securities being registered, the
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<PAGE>
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Baltimore
Gas and Electric Company, the Registrant, certifies that it has reasonable
grounds to believe that it meets all of the requirements for filing on Form S-3
and has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Baltimore, State of
Maryland on the 21st day of October, 1998.
BALTIMORE GAS AND ELECTRIC COMPANY
(Registrant)
By: /s/ DAVID. A. BRUNE
------------------------------
David A. Brune, Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
- ---------------------------- ------------------- ----------------
Principal executive officer
and director:
*C. H. Poindexter Chairman of the October 21, 1998
Board and Director
Principal financial
and accounting officer:
/s/ DAVID A. BRUNE Vice President October 21, 1998
- --------------------
David A. Brune
Directors:
* H. Furlong Baldwin
* Douglas L. Becker
* Beverly B. Byron
* J. Owen Cole
* Dan A. Colussy
* Edward A. Crooke
* James R. Curtiss Directors October 21, 1998
* Jerome W. Geckle
* Freeman A. Hrabowski, III
* Nancy Lampton
* Charles R. Larson
* George V. McGowan
* George L. Russell, Jr.
* Michael D. Sullivan
*By: /s/ DAVID A. BRUNE
---------------------------------
David A. Brune, Attorney-in-Fact
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<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER
- -------
1(a) - Form of Agency Agreement, including Administrative Procedures; and Form
of Purchase Agreement, including Standard Purchase Provisions.
1(b) - Form of Interest Calculation Agency Agreement.
4(a)*- Indenture dated as of July 1, 1985 between the Company and The Bank of
New York (successor to Mercantile-Safe Deposit and Trust Company),
Trustee(Designated as Exhibit 4(a) in File No. 2-98443 Registration
Statement).
4(b)*- Supplemental Indenture dated as of October 1, 1987 between the Company
and The Bank of New York (successor to Mercantile-Safe Deposit and Trust
Company), Trustee (Designated as Exhibit 4(b) in Form 8-K dated November
13, 1987, File No. 1-1910).
4(c)*- Supplemental Indenture dated as of January 26, 1993 between the Company
and The Bank of New York (successor to Mercantile-Safe Deposit and Trust
Company), Trustee (Designated as Exhibit 4(c) in Form 8-K dated January 29,
1993, File No. 1-1910).
4(d) - Form of Medium-Term Note, Series H (Fixed Rate).
4(e) - Form of Medium-Term Note, Series H (Floating Rate).
5 - Opinion of Company Counsel.
12* - Computation of Ratio of Earnings to Fixed Charges (Designated as Exhibit
12 in Form 10-Q for the quarterly period ended June 30, 1998, filed August
13, 1998, File No. 1-1910).
23(a) - Consent of Company Counsel(included in Exhibit 5).
23(b) - Consent of PricewaterhouseCoopers LLP, Independent Accountants.
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<PAGE>
24 - Power of Attorney.
25 - Statement of Eligibility under the Trust Indenture Act of 1939 (Form T-1)
of The Bank of New York (successor to Mercantile-Safe Deposit and Trust
Company), Trustee.
- ------------------
* Incorporated by reference.
II-8
Exhibit 1(a)
$200,000,000
BALTIMORE GAS AND ELECTRIC COMPANY
MEDIUM-TERM NOTES
SERIES H
FORM OF AGENCY AGREEMENT
__________, 1998
Lehman Brothers
Lehman Brothers Inc.
3 World Financial Center
12th Floor
New York, New York 10285-1200
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Dear Sirs:
1. INTRODUCTION. Baltimore Gas and Electric Company, a Maryland
corporation (the "Company"), confirms its agreement with Lehman Brothers, Lehman
Brothers Inc., and Goldman, Sachs & Co. (individually, an "Agent" and
collectively, the "Agents") with respect to the issue and sale from time to time
by the Company of up to $200,000,000 aggregate principal amount of its
Medium-Term Notes, Series H registered under the registration statement referred
to in Section 2(a) (the "Notes"). The Notes will be issued under an indenture,
dated as of July 1, 1985, as supplemented by the Supplemental Indentures dated
as of October 1, 1987, and January 26, 1993, respectively (the "Indenture"),
between the Company and The Bank of New York (successor to Mercantile-Safe
Deposit and Trust Company) (the "Trustee").
The Notes shall have the maturity ranges (which shall be from nine
months to thirty years), annual interest rates, redemption provisions and other
terms set forth in the Prospectus referred to in Section 2(a) as it may be
supplemented from time to time. The Notes will be issued, and the terms thereof
established, from time to time by the Company in accordance with the Indenture,
the Notes and the Procedures (as defined in Section 3(d) hereof).
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to, and agrees with, each Agent as follows:
(a) A registration statement on Form S-3 (No. 333-____), covering
$200 million principal amount of the Notes, including a
<PAGE>
-2-
prospectus, has been filed with the Securities and Exchange Commission
("Commission") and has become effective. Such registration statement, including
(i) the prospectus included therein dated ________, 1998 (such prospectus
including each document incorporated by reference therein, as may be amended or
supplemented from time to time, is hereinafter called the "Prospectus") and (ii)
all documents filed as part thereof or incorporated by reference therein, as may
be amended or supplemented from time to time, are hereinafter called the
"Registration Statement." Any reference in this Agreement to amending or
supplementing the Prospectus shall be deemed to include the filing of materials
incorporated by reference in the Prospectus after the Closing Date and any
reference in this Agreement to any amendment or supplement to the Prospectus
shall be deemed to include any such materials incorporated by reference in the
Prospectus after the Closing Date.
(b) The Registration Statement conforms in all respects to the
requirements of the Securities Act of 1933, as amended ("Act"), and the
pertinent published rules and regulations of the Commission thereunder ("33 Act
Rules and Regulations") and the Trust Indenture Act of 1939, as amended ("Trust
Indenture Act"), and does not include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, and on the Closing Date, and at each
of the times of (i) acceptance referred to in Section 6(a) hereof, (ii) delivery
referred to in Section 6(e) hereof and (iii) amendment or supplement referred to
in Section 6(b) hereof (the Closing Date and each such time being herein
sometimes referred to as "Representation Date"), the Registration Statement and
the Prospectus will conform in all respects to the requirements of the Act, the
Trust Indenture Act and the 33 Act Rules and Regulations and none of such
documents will contain an untrue statement of a material fact or will omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading, except that the foregoing does not apply to
statements or omissions in such document based upon written information
furnished to the Company by any Agent specifically for use therein. The
documents incorporated by reference in the Registration Statement or the
Prospectus pursuant to Item 12 of Form S-3 of the Act, at the time they were
filed with the Commission, complied in all material respects with the
requirements of the Securities Exchange Act of 1934, as amended ("Exchange
Act"), and the pertinent published rules and regulations thereunder ("Exchange
Act Rules and Regulations"). Any additional documents deemed to be incorporated
by reference in the Prospectus will, when they are filed with the Commission,
comply in all material respects with the requirements of the Exchange Act and
the Exchange Act Rules and Regulations and will not contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
<PAGE>
-3-
3. APPOINTMENT AS AGENT; SOLICITATIONS AS AGENT.
(a) Subject to the terms and conditions stated herein, the Company
hereby appoints each of the Agents as an agent of the Company for the purpose of
soliciting or receiving offers to purchase the Notes from the Company by others.
(b) On the basis of the representations and warranties contained
herein, but subject to the terms and conditions herein set forth, each Agent
agrees, as agent of the Company, to use all reasonable efforts when requested by
the Company to solicit offers to purchase the Notes upon the terms and
conditions set forth in the Prospectus, as from time to time amended or
supplemented.
Upon receipt of notice from the Company as contemplated by Section
4(b) hereof, each Agent shall suspend its solicitation of purchases of Notes
until such time as the Company shall have furnished it with an amendment or
supplement to the Registration Statement or the Prospectus, as the case may be,
contemplated by Section 4(b) and shall have advised each Agent that such
solicitation may be resumed.
The Company reserves the right, in its sole discretion, to suspend
solicitation of offers to purchase the Notes commencing at any time for any
period of time or permanently. Upon receipt of notice from the Company, the
Agents will use their best efforts promptly to suspend solicitation of offers to
purchase Notes from the Company, but in no event later than one business day
after notice, until such time as the Company has advised the Agents that such
solicitation may be resumed. For the purpose of the foregoing sentence,
"business day" shall mean any day which is not a Saturday or a Sunday or a day
on which banking institutions in The City of New York and the City of Baltimore
are authorized or required by law or executive order to be closed.
The Agents are authorized to solicit offers to purchase Notes only
in fully registered form, in minimum denominations of $1,000 and integral
multiples of $1,000 in excess thereof, and at a purchase price which, unless
otherwise specified in a supplement to the Prospectus, shall be equal to 100% of
the principal amount thereof. Each Agent shall communicate to the Company,
orally or in writing, each reasonable offer to purchase Notes received by it as
Agent. The Company shall have the sole right to accept offers to purchase the
Notes and may reject any such offer, in whole or in part. Each Agent shall have
the right, in its discretion reasonably exercised, without notice to the
Company, to reject any offer to purchase Notes received by it, in whole or in
part, and any such rejection shall not be deemed a breach of its agreement
contained herein.
No Note which the Company has agreed to sell pursuant to this Agreement
shall be deemed to have been purchased and paid for, or sold, by the Company
until such Note shall have been
<PAGE>
-4-
delivered to the purchaser thereof against payment by such purchaser.
(c) At the time of delivery of, and payment for, any Notes sold by
the Company as a result of a solicitation made by, or offer to purchase received
by, an Agent, the Company agrees to pay such Agent a commission in accordance
with the schedule set forth in Exhibit A hereto.
(d) Administrative procedures respecting the sale of Notes (the
"Procedures") shall be agreed upon from time to time by the Agents and the
Company. The initial Procedures, which are set forth in Exhibit B hereto, shall
remain in effect until changed by agreement among the Company and the Agents.
Each Agent and the Company agree to perform the respective duties and
obligations specifically provided to be performed by each of them herein and in
the Procedures. The Company will furnish a copy of the Procedures as from time
to time in effect to the Trustee which will act as the authenticating agent and
the agent for payment, registration and notice with respect to the Notes
pursuant to the Indenture and the agent for calculating interest rates with
respect to floating rate notes pursuant to the Interest Calculation Agency
Agreement dated as of _________(the "Interest Calculation Agency Agreement").
(e) The documents required to be delivered by Section 5 hereof
shall be delivered at the offices of the Company, 39 W. Lexington Street,
Baltimore, Maryland, 21201, not later than 5:00 P.M., Baltimore time, on the
date of this Agreement or at such later time as may be mutually agreed by the
Company and the Agents, which in no event shall be later than the time at which
the Agents commence solicitation of purchases of Notes hereunder, such time and
date being herein called the "Closing Date."
4. CERTAIN AGREEMENTS OF THE COMPANY. The Company agrees with the Agents
that it will furnish to Cahill Gordon & Reindel, counsel for the Agents, one
signed copy of the Registration Statement, including all exhibits and all
documents incorporated by reference, in the form it became effective and of all
amendments thereto and that, in connection with each offering of Notes, it will
take the following actions:
(a) From the time solicitation regarding sale of the Notes is begun until all of
the Notes have been sold (i) the Company will advise each Agent promptly of any
proposal to amend or supplement the Registration Statement or the Prospectus by
means of a post-effective amendment, sticker, or supplement (except
post-effective amendment, supplements, and stickers relating solely to interest
rates or maturities of Notes) but not by means of incorporation of document(s)
by reference into the Registration Statement or the Prospectus; (ii) the Company
will afford the Agents a reasonable opportunity to comment on any such proposed
post-effective amendment, sticker, or supplement; (iii) the Company will advise
each Agent of the filing of any such post-effective amendment, sticker, or
supplement; and (iv) the Company
<PAGE>
-5-
will (x) advise each Agent of the institution by the Commission of any stop
order proceedings in respect of the Registration Statement or of any part
thereof, (y) use its best efforts to prevent the issuance of any such stop
order, and (z) if a stop order is issued, to obtain its lifting as soon as
possible.
(b) If from the time solicitation regarding sale of the Notes is
begun until all of the Notes have been sold, the Company shall determine that it
is necessary to suspend solicitation of the Notes because of the occurrence of
an event that results in the Prospectus either (x) including an untrue statement
of a material fact or omitting to state any material fact necessary to make the
statements in such Prospectus, in light of the circumstances under which they
were made when such Prospectus was delivered, not misleading, or (y) failing to
comply with the Act, then the Company will promptly notify each Agent to suspend
solicitation of purchases of the Notes. Notwithstanding Section 4(a) if the
Company shall determine to amend or supplement the Registration Statement or
Prospectus to correct such result, it will advise each Agent promptly and afford
the Agents a reasonable opportunity to discuss and comment upon the nature of
the disclosure in such amendment or supplement. Notwithstanding the foregoing,
if at the time of any notification to suspend solicitations (i) this Agreement
shall be in effect and any Agent shall own any of the Notes with the intention
of reselling them, or (ii) the Company has accepted an offer to purchase Notes
but the related settlement has not occurred, then the Company, subject to the
provisions of Section 4(a) of this Agreement, will promptly prepare and file
with the Commission an amendment or supplement which will correct such statement
or omission or effect such compliance.
(c) The Company, during the period when a prospectus relating to
the Notes is required to be delivered under the Act, will furnish to each Agent
promptly after timely filing with the Commission all documents required to be
filed pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act (except
those filings associated with employee benefit plans). The Company will
immediately notify each Agent of any downgrading in the rating of the Notes or
any other debt securities of the Company, or any proposal to downgrade the
rating of the Notes or any other debt securities of the Company, by any
"nationally recognized statistical rating organization" (as defined for purposes
of Rule 436(g) under the Act), as soon as the Company learns of such downgrading
or proposal to downgrade.
(d) The Company will furnish to each Agent copies of the
Registration Statement, including all exhibits except those incorporated by
reference, any related preliminary prospectus, any related preliminary
prospectus supplement, the Prospectus and all amendments and supplements to such
documents, in each case as soon as available and in such quantities as are
reasonably requested.
<PAGE>
-6-
(e) The Company will use its best efforts to obtain the
qualification of the Notes for sale and the determination of their eligibility
for investment under the laws of such jurisdictions as the Agents designate and
will continue such qualifications in effect so long as required for the
distribution; provided, however, that the Company shall not be required to
qualify as a foreign corporation or to file any consent to service of process
under the laws of any jurisdiction or to comply with any other requirements
deemed by the Company to be unduly burdensome.
(f) So long as any Notes are outstanding, the Company will furnish
to the Agents: (i) as soon as practicable after the end of each fiscal year, a
copy of its annual report to shareholders for such year, (ii) as soon as
available, a copy of each report or definitive proxy statement of the Company
filed with the Commission under the Exchange Act or mailed to shareholders, and
(iii) from time to time, such other information concerning the Company as you
may reasonably request.
(g) The Company will pay all expenses incident to the performance
of its obligations under this Agreement, and will reimburse each Agent for any
expenses (including Blue Sky fees and disbursements of counsel which will not in
the aggregate exceed $6,000) incurred by it in connection with qualification of
the Notes for sale and determination of their eligibility for investment under
the laws of such jurisdictions as such Agent may designate and the printing of
memoranda relating thereto, for any filing fees charged by investment rating
agencies for the rating of the Notes, for any filing fee of the National
Association of Securities Dealers, Inc. relating to the Notes, and for the
reasonable fees and disbursements of counsel to the Agents.
(h) Not later than 45 days after the end of the 12-month period
beginning at the end of any fiscal quarter of the Company in which the Closing
Date or any other Representation Date occurs, the Company will make generally
available to its security holders an earnings statement (which need not be
audited) covering such 12-month period which will satisfy the provisions of
Section 11(a) of the Act.
5. CONDITIONS OF OBLIGATIONS OF AGENTS. The obligation of each Agent under
this Agreement at any time to solicit offers to purchase the Notes is subject to
the accuracy of the representations and warranties of the Company herein on the
date hereof, on each Representation Date and on the date of each such
solicitation, to the accuracy of the statements of the Company's officers made
pursuant to the provisions hereof on each such date, to the performance by the
Company of its obligations hereunder on or prior to each such date, and to each
of the following additional conditions precedent:
(a) No stop order suspending the effectiveness of the Registration
Statement or of any part thereof shall have been issued and no proceedings for
that purpose shall have been
<PAGE>
-7-
instituted or, to the knowledge of the Company or any Agent, shall be
contemplated by the Commission.
(b) Neither the Registration Statement nor the Prospectus, as
amended or supplemented as of any Representation Date or date of such
solicitation, as the case may be, shall contain any untrue statement of fact
which, in the opinion of any Agent, is material or omits to state a fact which,
in the opinion of such Agent, is material and is required to be stated therein
or is necessary to make the statements therein not misleading.
(c) There shall not have occurred (i) any suspension or limitation
of trading in securities generally on the New York Stock Exchange other than a
temporary suspension in trading to provide for an orderly market, or any setting
of minimum prices for trading on such exchange, or any suspension of trading of
any securities of the Company on any exchange or in the over-the-counter market;
(ii) any banking moratorium declared by Federal or New York authorities; or
(iii) any outbreak or escalation of major hostilities in which the United States
is involved, any declaration of war by Congress or any other substantial
national or international calamity or emergency if, in the reasonable judgment
of such Agents, the effect of any such outbreak, escalation, declaration,
calamity or emergency makes it impractical or inadvisable to proceed with
solicitations of purchases of, or sales of, Notes.
(d) At the Closing Date, the Agents shall have received an
opinion, dated the Closing Date, of a counsel for the Company, to the effect
that:
(i) The Company and Constellation Enterprises, Inc. have
been duly incorporated and are validly existing as corporations in
good standing under the laws of the State of Maryland, with power
and authority (corporate and other) to own their respective
properties and conduct their respective businesses as described in
the Prospectus; and the Company is duly qualified to do business
as a foreign corporation in good standing in the Commonwealth of
Pennsylvania and all other jurisdictions in which the conduct of
its business or the ownership of its properties requires such
qualification and the failure to do so would have a material and
adverse impact on its financial condition;
(ii) The Indenture has been duly authorized, executed and
delivered by the Company, and is a valid instrument, legally
binding on the Company, enforceable in accordance with its terms,
except as limited by bankruptcy, insolvency, or other laws
affecting the enforcement of creditors' rights and by general
principles of equity;
(iii) The issuance and sale of Notes have been duly
authorized by all necessary corporate action of the Company. The
Notes (assuming that they have been duly
<PAGE>
-8-
authenticated by the Trustee or a duly designated Authentication
Agent under the Indenture, which fact counsel need not verify by
an inspection of the Notes), when issued in accordance with the
provisions of this Agreement and the Indenture, will be duly
issued and constitute legal, valid and binding obligations of the
Company enforceable in accordance with their terms and are
entitled to the benefits provided by the Indenture, except as
limited by bankruptcy, insolvency or other laws affecting the
enforcement of creditors' rights and by general principles of
equity;
(iv) The Registration Statement has become effective under
the Act and (a) to the best of such counsel's knowledge, no stop
order suspending the effectiveness of the Registration Statement
has been issued and no proceedings for that purpose have been
instituted or are pending or contemplated under the Act; (b) the
Registration Statement (as of its effective date) and the
Prospectus (as of the date of this Agreement) appeared to comply
as to form in all material respects with the requirements of Form
S-3 under the Act and the 33 Act Rules and Regulations and the
Trust Indenture Act; (c) such counsel has no reason to believe
that either the Registration Statement as of its effective date or
the Prospectus as of the date of this Agreement contained any
untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make
the statements therein not misleading; (d) the descriptions in the
Registration Statement and Prospectus of statutes, legal and
governmental proceedings and contracts and other documents are
accurate and fairly present the information required to be shown;
and (e) such counsel does not know of any legal or governmental
proceedings required to be described in the Prospectus which are
not described as required, nor of any contracts or documents of a
character required to be described in the Registration Statement
or Prospectus or to be filed as exhibits to the Registration
Statement which are not described or filed as required; it being
understood that such counsel, in addressing the matters covered in
this paragraph (iv), need express no opinion as to the financial
statements or other financial and statistical information
contained in the Registration Statement or the Prospectus or
incorporated therein or attached as an exhibit thereto or as to
the Statement of Eligibility and Qualification on Form T-1 of the
Trustee under the Indenture;
(v) The approval of the Public Service Commission of
Maryland necessary for the valid issuance by the Company of Notes
pursuant to this Agreement has been obtained and continues in full
force and effect. The Company has received the approval of the
Federal Energy Regulatory Commission ("FERC") for the issuance of
Notes on or before
<PAGE>
-9-
December 31, [1998] with maturities of not more than 12 months
after the date of issuance and the approval of FERC will be
required for the issuance of any Notes having such maturities
after December 31, [1998]. Such counsel knows of no other
approval of any other regulatory authority which is legally
required for the valid offering, issuance, sale and delivery of
the Notes by the Company under this Agreement (except that such
opinion need not pass upon the requirements of state securities
acts);
(vi) To the best of such counsel's knowledge and belief,
the consummation of the transactions contemplated in this
Agreement and the compliance by the Company with all the terms of
the Indenture did not and will not result in a breach of any of
the terms or provisions of, or constitute a default under, the
Company's Charter or By-Laws or any indenture, mortgage or deed of
trust or other agreement or instrument to which the Company is a
party;
(vii) Each of this Agreement, the Interest Calculation
Agency Agreement and the Letter of Representations has been duly
authorized, executed and delivered by the Company;
(viii) The Indenture is duly qualified under the Trust
Indenture Act;
(ix) The issuance, sale and delivery of the Notes as
contemplated by this Agreement are not subject to the approval of
the Commission under the provisions of the Public Utility Holding
Company Act of 1935, as amended (the "1935 Act"); and
(x) The Notes and Indenture conform as to legal matters
with the statements concerning them in the Registration Statement
and Prospectus under the caption "DESCRIPTION OF NOTES" and on the
cover page of the Prospectus.
(e) At the Closing Date, the Agents shall have received a
certificate, dated the Closing Date, of the Chairman of the Board, Vice
Chairman, President or any Vice President and a principal financial or
accounting officer of the Company in which such officers, to the best of their
knowledge after reasonable investigation and relying upon opinions of counsel to
the extent legal matters are involved, shall state that (i) the representations
and warranties of the Company in this Agreement are true and correct in all
material respects, (ii) the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied hereunder at
or prior to the Closing Date, (iii) no stop order suspending the effectiveness
of the Registration Statement or of any part thereof has been issued and no
proceedings for that purpose have been instituted or are contemplated by the
Commission, and (iv) subsequent to the date of the most recent financial
statements
<PAGE>
-10-
set forth or incorporated by reference in the Prospectus, there has been no
material adverse change in the financial position or in the financial results of
operations of the Company, except as set forth or contemplated in the Prospectus
or as described in such certificate.
(f) At the Closing Date, the Agents shall have received a letter,
dated the Closing Date, of PricewaterhouseCoopers LLP, confirming that they are
independent pubic accountants within the meaning of the Act and the 33 Act Rules
and Regulations, and stating in effect that:
(i) In their opinion, the consolidated financial statements
and supporting schedules audited by them which are included in the
Company's Form 10-K ("Form 10-K"), which is incorporated by
reference in the Registration Statement comply in form in all
material respects with the applicable accounting requirements of
the Act and the 33 Act Rules and Regulations and the Exchange Act
and the Exchange Act Rules and Regulations;
(ii) On the basis of procedures specified in such letter
(but not an audit in accordance with generally accepted auditing
standards), including reading the minutes of meetings of the
shareholders, the Board of Directors and the Executive Committee
of the Company since the end of the year covered by the Form 10-K
as set forth in the minute books through a specified date not more
than five days prior to the Closing Date, performing the
procedures specified in Statement on Auditing Standards No. 71,
Interim Financial Information, on the unaudited interim
consolidated financial statements of the Company incorporated by
reference in the Registration Statement, if any, and reading the
latest available unaudited interim consolidated financial
statements of the Company, and making inquiries of certain
officials of the Company who have responsibility for financial and
accounting matters as to whether the latest available financial
statements not incorporated by reference in the Registration
Statement are prepared on a basis substantially consistent with
that of the audited consolidated financial statements incorporated
in the Registration Statement, nothing has come to their attention
that has caused them to believe that (1) any unaudited
consolidated financial statements incorporated by reference in the
Registration Statement do not comply in form in all material
respects with the applicable requirements of the Act and the 33
Act Rules and Regulations and the Exchange Act and the Exchange
Act Rules and Regulations or any material modifications should be
made to those unaudited consolidated financial statements for them
to be in conformity with generally accepted accounting principles;
(2) at the date of the latest available balance sheet not
incorporated by reference in the Registration Statement there was
any change in the capital stock, change in long-term debt or
<PAGE>
-11-
decrease in consolidated net assets or common shareholders' equity
as compared with the amounts shown in the latest balance sheet
incorporated by reference in the Registration Statement or for the
period from the closing date of the latest income statement
incorporated by reference in the Registration Statement to the
closing date of the latest available income statement read by them
there were any decreases, as compared with the corresponding
period of the previous year, in operating revenues, operating
income, net income, the ratio of earnings to fixed charges
(measured on the most recent twelve month period), or in earnings
per share of common stock except in all instances of changes or
decreases that the Registration Statement discloses have occurred
or may occur, or which are described in such letter; or (3) at a
specified date not more than five days prior to the Closing Date,
there was any change in the capital stock or long-term debt of the
Company or, at such date, there was any decrease in net assets of
the Company as compared with amounts shown in the latest balance
sheet incorporated by reference in the Registration Statement, [or
for the period from the closing date of the latest income
statement incorporated by reference in the Registration Statement
to a specified date not more than five days prior to the Closing
Date, there were any decreases as compared with the corresponding
period of the previous year, in operating revenues, operating
income, net income or in earnings applicable to common stock,]
except in all cases for instances of changes or decreases that the
Registration Statement discloses have occurred or may occur, or
which are described in such letter; and
(iii) Certain specified procedures have been applied to
certain financial or other statistical information (to the extent
such information was obtained from the general accounting records
of the Company) set forth or incorporated by reference in the
Registration Statement and that such procedures have not revealed
any disagreement between the financial and statistical information
so set forth or incorporated and the underlying general accounting
records of the Company, except as described in such letter.
(g) The Agents shall have received from Cahill Gordon & Reindel,
counsel for the Agents, an opinion dated the Closing Date, with respect to the
matters referred to in paragraph 5(d) subheadings (ii), (iii), (iv)b, (v),
(vii), (viii) and (x) and such other related matters as you may require and the
Company shall have furnished to such counsel such documents as they request for
the purpose of enabling them to pass on such matters.
In rendering such opinion, Cahill Gordon & Reindel may rely, as to
the incorporation of the Company, the approval of the Public Service Commission
of Maryland required for the issuance, sale and delivery of the Notes, and all
other matters governed
<PAGE>
-12-
by the laws of the State of Maryland, the applicability of the 1935 Act and the
approval of FERC for the issuance, sale and delivery of the Notes upon the
opinion of Counsel for the Company referred to above.
In addition, such counsel shall state that such counsel has
participated in conferences with officers, counsel and other representatives of
the Company, representatives of the independent certified public accountants for
the Company and representatives of the Agents at which the contents of the
Registration Statement and the Prospectus and related matters were discussed;
and, although such counsel is not passing upon and does not assume
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement and Prospectus (except as to the matters
referred to in their opinion rendered pursuant to subheading (x) above), on the
basis of the foregoing (relying as to materiality to a large extent upon the
opinions of officers, counsel and other representatives of the Company), no
facts have come to the attention of such counsel which lead such counsel to
believe that either the Registration Statement (as of its effective date) or the
Prospectus (as of the date of this Agreement), contained an untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary to make such statements therein not misleading (it being
understood that such counsel need make no comment with respect to the financial
statements and other financial and statistical information included in the
Registration Statement or Prospectus or incorporated therein or as to the
Statement of Eligibility and Qualification on Form T-l of the Trustee under the
Indenture).
(h) The approval of the Public Service Commission of Maryland
necessary for the valid issuance of Notes by the Company pursuant to this
Agreement has been obtained and continues in full force and effect. The Company
has received the approval of FERC for the issuance of Notes on or before
December 31, [1998] with maturities of not more than 12 months after the date of
issuance and the approval of FERC will be obtained before the issuance of any
Notes having such maturities after December 31, [1998].
The Company will furnish the Agents with such conformed copies of
such opinions, certificates, letters and documents as the Agents reasonably
request.
6. ADDITIONAL COVENANTS OF THE COMPANY. The Company agrees that:
(a) Each acceptance by the Company of an offer for the purchase of
Notes shall be deemed to be an affirmation that its representations and
warranties contained in this Agreement are true and correct at the time of such
acceptance, it being understood that such representations and warranties shall
relate to the Registration Statement and the Prospectus as amended or
supplemented at each such time. Each such acceptance by the
<PAGE>
-13-
Company of an offer for the purchase of Notes shall be deemed to constitute an
additional representation, warranty and agreement by the Company that, as of the
settlement date for the sale of such Notes, after giving effect to the issuance
of such Notes and of any other Notes to be issued on or prior to such settlement
date, the aggregate amount of Notes which have been issued and sold by the
Company will not exceed the amount of Notes registered pursuant to the
Registration Statement.
(b) From the time solicitation regarding the sale of the Notes is
begun until all of the Notes have been sold, each time the Company (i) amends or
supplements the Registration Statement or the Prospectus (other than in
reference solely to interest rates or maturities of Notes) by means of a
post-effective amendment, sticker, or supplement but not by means of
incorporation of document(s) by reference into the Registration Statement or the
Prospectus; (ii) files an annual report on Form 10-K under the Exchange Act;
(iii) files its quarterly reports on Form 10-Q under the Exchange Act; and (iv)
files a report on Form 8-K under the Exchange Act (the date of filing each of
the aforementioned documents is referred to as a "Representation Date"); the
Company shall furnish the Agents (but in the case of (iv) above only if
requested by the Agents) with a certificate of the Chairman, Vice Chairman,
President or any Vice President and a principal financial or accounting officer
of the Company, in form satisfactory to the Agents, to the effect that on the
Representation Date, to the best of their knowledge after reasonable
investigation and relying upon opinions of counsel to the extent legal matters
are involved, (i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects; (ii) the Company has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied hereunder at or prior to the Representation Date; (iii)
no stop order suspending the effectiveness of the Registration Statement or of
any part thereof has been issued and no proceedings for that purpose have been
instituted or are contemplated by the Commission; and (iv) subsequent to the
date of the most recent financial statements set forth or incorporated by
reference in the Prospectus, there has been no material adverse change in the
financial position or in the financial results of operations of the Company,
except as set forth in or contemplated by the Prospectus or as described in such
certificate.
(c) From the time solicitation regarding the sale of the Notes is
begun until all of the Notes have been sold, at each Representation Date
referred to in Section 6(b) (i) or (ii) and, only if requested by the Agents, at
each Representation Date referred to in Section 6(b) (iii) or (iv), the Company
shall concurrently furnish the Agents with a written opinion or opinions of
counsel for the Company, dated the Representation Date or the date of such
filing, in form satisfactory to the Agents, to the effect set forth in Section
5(d) hereof, but modified, as necessary, to relate to the Registration Statement
and the Prospectus as then amended or supplemented; PROVIDED,
<PAGE>
-14-
HOWEVER, that in lieu of such opinion, counsel may furnish the Agents with a
letter to the effect that the Agents may rely on a prior opinion delivered under
Section 5(d) or this Section 6(c) to the same extent as if it were dated the
date of such letter (except that statements in such prior opinion shall be
deemed to relate to the Registration Statement and the Prospectus as amended or
supplemented at such Representation Date).
(d) From the time solicitation regarding the sale of the Notes is
begun until all of the Notes have been sold, at each Representation Date
referred to in Section 6(b) (i) or (ii) and, only if requested by the Agents, at
each Representation Date referred to in Section 6(b) (iii) or (iv), but in each
case only if such documents referred to in Section 6(b) include additional
financial information, the Company shall cause PricewaterhouseCoopers LLP or
successor thereto concurrently to furnish the Agents with a letter, addressed
jointly to the Company and the Agents and dated the Representation Date or the
date of such filing, in form and substance satisfactory to the Agents, to the
effect set forth in Section 5(f) hereof but modified to relate to the
Registration Statement and the Prospectus as amended or supplemented at such
Representation Date, with such changes as may be necessary to reflect changes in
the financial statements and other information derived from the accounting
records of the Company; PROVIDED, HOWEVER, that if the Registration Statement or
the Prospectus is amended or supplemented solely to include financial
information as of and for a fiscal quarter, Coopers & Lybrand may limit the
scope of such letter to the unaudited financial statements included in such
amendment or supplement unless there is contained therein any other accounting,
financial or statistical information that, in the reasonable judgment of the
Agents, should be covered by such letter, in which event such letter shall also
cover such other information and procedures as shall be agreed upon by the
Agents.
(e) On each settlement date for the sale of Notes, the Company
shall, if requested by an Agent that solicited or received the offer to purchase
any Notes being delivered on such settlement date, furnish such Agent with a
written opinion of a counsel for the Company, dated the date of delivery
thereof, in form satisfactory to such Agent, to the effect set forth in clauses
(i), (ii), (iii) and (v) of Section 5(d) hereof, but modified, as necessary, to
relate to the Prospectus as amended or supplemented at such settlement date and
except that such opinion shall state that the Notes being sold by the Company on
such settlement date, when delivered against payment therefor as provided in the
Indenture and this Agreement, will have been duly executed, authenticated,
issued and delivered and will constitute valid and legally binding obligations
of the Company enforceable in accordance with their terms, subject only to the
exceptions as to enforcement set forth in clauses (ii) and (iii) of Section 5(d)
hereof, and conform to the description thereof contained in the Prospectus as
amended or supplemented at such settlement date.
<PAGE>
-15-
(f) The Company agrees that any obligation of a person who has
agreed to purchase Notes to make payment for and take delivery of such Notes
shall be subject to (i) the accuracy, on the related settlement date fixed
pursuant to the Procedures, of the Company's representations and warranties
deemed to be made to the Agents pursuant to Section 2 and the last sentence of
subsection (a) of this Section 6; (ii) the satisfaction, on such settlement
date, of each of the conditions set forth in Sections 5(a), (b), (c) and (h), it
being understood that under no circumstance shall any Agent have any duty or
obligation to exercise the judgment permitted under Section 5(b) or (c) on
behalf of any such person; (iii) the absence of any change or development
involving a prospective change, not contemplated by the Prospectus, in or
affecting particularly the business or properties of the Company which
materially impairs the investment quality of the Notes; and (iv) no downgrading
in the rating of the Company's debt securities by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule 436(g) under
the Act).
7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company will indemnify and hold harmless each Agent and
each person if any, who controls either Agent within the meaning of the Act or
the Exchange Act against any losses, claims, damages or liabilities, joint or
several, to which such Agent or such controlling person may become subject,
under the Act, or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Registration Statement or the Prospectus, or any related preliminary
prospectus or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading; and will reimburse each Agent and each
such controlling person for any legal or other expenses reasonably incurred by
such Agent or such controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company will not be liable to such Agent or controlling person in any
such case to the extent that any such loss, claim, damage or liability arises
out of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in any such documents in reliance upon and in
conformity with written information furnished to the Company by such Agent or
such controlling person specifically for use therein unless such loss, claim,
damage or liability arises out of the offer or sale of Notes occurring after
such Agent or controlling person has notified the Company in writing that such
information should no longer be used therein. This indemnity agreement will be
in addition to any liability which the Company may otherwise have.
<PAGE>
-16-
(b) Each Agent will indemnify and hold harmless the Company, each
of its directors, each of its officers who have signed the Registration
Statement and each person, if any, who controls the Company within the meaning
of the Act or the Exchange Act, against any losses, claims, damages or
liabilities to which the Company or any such director, officer or controlling
person may become subject, under the Act, or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement or the Prospectus, or any related
preliminary prospectus or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such Agent
specifically for use therein; and will reimburse any legal or other expenses
reasonably incurred by the Company or any such director, officer or controlling
person in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that such Agent will not be liable to the Company or any such director, officer
or controlling person in any such case to the extent that any such loss, claim,
damage or liability arises out of the offer or sale of Notes occurring after
such Agent has notified the Company in writing that such information should no
longer be used therein. This indemnity agreement will be in addition to any
liability which such Agent may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under (a) and (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under this Section. In case any such action is brought against any indemnified
party, and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it may wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel satisfactory to such indemnified
party (who may, with the consent of the indemnified party, be counsel to the
indemnifying party) and who shall not be counsel to any other indemnified party
who may have interests conflicting with those of such indemnified party, and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party under this Section for any legal or other
expenses subsequently incurred by such indemnified party in
<PAGE>
-17-
connection with the defense thereof other than reasonable costs of
investigation.
(d) If recovery is not available under the foregoing
indemnification provisions of this Section for any reason other than as
specified therein, the parties entitled to indemnification by the terms thereof
shall be entitled to contribution to liabilities and expenses, except to the
extent that contribution is not permitted under Section ll(f) of the Act. In
determining the amount of contribution to which the respective parties are
entitled, there shall be considered the relative benefits received by each party
from the offering of the Notes (taking into account the portion of the proceeds
of the offering realized by each), the parties' relative knowledge and access to
information concerning the matter with respect to which the claim was asserted,
the opportunity to correct and prevent any statement or omission, and any other
equitable considerations appropriate under the circumstances. The Company and
the Agents and such controlling persons agree that it would not be equitable if
the amount of such contribution were determined by pro rata or per capita
allocation (even if the Agents and such controlling persons were treated as one
entity for such purpose). Notwithstanding the provisions of this subsection (d),
no Agent or controlling person shall be required to make contribution hereunder
which in the aggregate exceeds the total public offering price of the Notes,
distributed to the public through it pursuant to this Agreement or upon resale
of Notes purchased by it from the Company, less the aggregate amount of any
damages which such Agent or such controlling person has otherwise been required
to pay in respect to the same claim or substantially similar claim. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The obligations of each Agent and each
controlling person in this subsection (d) to contribute are several, in the same
proportion which the amount of the Notes which are the subject of the action and
which were distributed to the public through such Agent or such controlling
person pursuant to this Agreement bears to the total amount of such Notes
distributed to the public through any other Agent or controlling person pursuant
to this Agreement, and not joint.
8. STATUS OF EACH AGENT. In soliciting offers to purchase the Notes from
the Company pursuant to this Agreement and in assuming its other obligations
hereunder (other than offers to purchase pursuant to Section 11), each Agent is
acting individually and not jointly and is acting solely as agent for the
Company and not as principal. Each Agent will use all reasonable efforts to
assist the Company in obtaining performance by each purchaser whose offer to
purchase Notes from the Company has been solicited by such Agent and accepted by
the Company, but such Agent shall have no liability to the Company in the event
any such purchase is not consummated for any reason. If the Company shall
default on its obligations to deliver Notes to a purchaser whose offer it has
accepted, the Company (i) shall
<PAGE>
-18-
hold the Agents harmless against any loss, claim or damage arising from or as a
result of such default by the Company, and (ii), in particular, shall pay to the
Agents any commission to which they would be entitled in connection with such
sale.
9. SURVIVAL OF CERTAIN REPRESENTATIONS AND OBLIGATIONS. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers and of the Agents set forth in or made pursuant to this
Agreement will remain in full force and effect, regardless of any investigation,
or statement as to the results thereof, made by or on behalf of any Agent, the
Company or any of their respective representatives, officers or directors or any
controlling person and will survive delivery of and payment for the Notes. If
this Agreement is terminated pursuant to Section 10 or for any other reason, the
Company shall remain responsible for the expenses to be paid or reimbursed by it
pursuant to Section 4(g) and the obligations of the Company under Sections 4(f)
and (h) and the respective obligations of the Company and the Agents pursuant to
Section 7 shall remain in effect. In addition, if any such termination shall
occur either (i) at a time when any Agent shall own any of the Notes with the
intention of reselling them or (ii) after the Company has accepted an offer to
purchase Notes and prior to the related settlement, the obligations of the
Company under the last sentence of Section 4(b), under Sections 4(a), 4(c),
4(d), 4(e), 6(a), 6(e) and 6(f) and, in the case of a termination occurring as
described in (ii) above, under Section 3(c) and under the last sentence of
Section 8, shall also remain in effect.
10. TERMINATION. This Agreement may be terminated for any reason at any
time by the Company as to any Agent or, in the case of either Agent, by such
Agent insofar as this Agreement relates to such Agent, upon the giving of one
day's written notice of such termination to the other parties hereto. Any
settlement with respect to Notes placed by an Agent occurring after termination
of this Agreement shall be made in accordance with the Procedures and each Agent
agrees, if requested by the Company, to take the steps therein provided to be
taken by such Agent in connection with such settlement.
11. OTHER SALES AND PURCHASES OF NOTES. From time to time, any Agent may
agree with the Company to purchase all or a portion of Notes from the Company as
an underwriter (acting either alone or in conjunction with one or more
investment banking firms) for resale to the public. In this event, such purchase
shall be made in accordance with the terms of a separate agreement to be entered
into between such Agent and the Company in substantially the form attached
hereto as Exhibit C.
Without the oral consent (confirmed in writing) of the Company,
neither Agent shall have the right to purchase all or a portion of the Notes for
its own account. In the event the Company consents to such purchase, the
purchase shall be made in accordance with the terms of a separate agreement to
be entered
<PAGE>
-19-
into between such Agent and the Company in substantially the form attached
hereto as Exhibit D.
Nothing in this Agreement shall prohibit the sale of all or a
portion of Notes directly by the Company to any person or entity without the
involvement of either of the Agents or from entering into similar agreements
with other firms as agents.
The Company will not appoint another agent without providing each
Agent with at least one business day's notice.
12. NOTICES. Except as otherwise provided herein, all notices and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if delivered by overnight mail or transmitted by any standard form of
telecommunication. Notices to Lehman Brothers Inc. shall be delivered or
telecopied to it at 3 World Financial Center, 12th Floor, New York, New York
10285-1200, telecopier, (212) 528-1718, Attention: Medium-Term Note Department;
notices to Goldman, Sachs & Co. shall be delivered or telecopied to it at 85
Broad Street, New York, New York 10004, telecopier, (212) 902-3000, Attention:
Registration Department; and notices to the Company shall be delivered or
telecopied to it at 39 W. Lexington Street, Baltimore, Maryland 21201,
telecopier, (410) 234-5367, Attention: Treasurer, 8th Floor, Gas and Electric
Building, or in the case of any party hereto, to such other address or person as
such party shall specify to each other party by a notice given in accordance
with the provisions of this Section 12. Any such notice shall take effect at the
time of receipt.
13. SUCCESSORS. This Agreement will inure to the benefit of and be binding
upon the parties hereto, their respective successors, the officers and directors
and controlling persons referred to in Section 7 and, to the extent provided in
Section 6(f), any person who has agreed to purchase Notes from the Company, and
no other person will have any right or obligation hereunder.
14. GOVERNING LAW; COUNTERPARTS. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York. This Agreement
may be executed in counterparts and the executed counterparts shall together
constitute a single instrument.
If the foregoing correctly sets forth our agreement, please indicate your
acceptance hereof in the space provided for that purpose below.
Very truly yours,
BALTIMORE GAS AND ELECTRIC COMPANY
By: ____________________________
<PAGE>
-20-
CONFIRMED AND ACCEPTED, as of the
date first above written:
LEHMAN BROTHERS INC.
By: ____________________
GOLDMAN, SACHS & CO.
________________________
Goldman, Sachs & Co.
<PAGE>
Exhibit A
to Agency Agreement
The Company agrees to pay either Agent a commission equal to the following
percentage of the principal amount of Notes sold to purchasers solicited by such
Agent:
Commission Rate
(as a percentage of
TERM PRINCIPAL AMOUNT)
----------------------------------- -----------------
9 months to less than 12 months .125
12 months to less than 18 months .15
18 months to less than 24 months .20
2 years to less than 3 years .25
3 years to less than 4 years .35
4 years to less than 5 years .45
5 years to less than 7 years .50
7 years to less than 10 years .55
10 years to less than 15 years .60
15 years to less than 20 years .65
20 years through 30 years .75
<PAGE>
Exhibit B
to Agency Agreement
ADMINISTRATIVE PROCEDURES
The Medium-Term Notes, Series H due from nine months to thirty years from
their issue dates (the "Notes") are to be offered on a continuing basis by
Baltimore Gas and Electric Company (the "Company"). Lehman Brothers Inc. and
Goldman, Sachs & Co. as agents (individually, an "Agent" and collectively, the
"Agents") have each agreed to use all reasonable efforts to solicit purchases of
the Notes. Neither Agent will be obligated to purchase Notes for its own account
and neither may do so without the written consent of the Company. The Notes are
being sold pursuant to an Agency Agreement, dated as of ____________ (the
"Agency Agreement"), among the Company and the Agents, and will be issued
pursuant to an Indenture, between the Company and The Bank of New York
(successor to Mercantile-Safe Deposit and Trust Company), dated as of July 1,
1985 as supplemented by the Supplemental Indentures dated as of October 1, 1987
and January 26, 1993, respectively (the "Indenture"). The Notes will rank
equally with all other unsecured and unsubordinated indebtedness of the Company
and will have been registered with the Securities and Exchange Commission (the
"Commission").
The Company has designated The Bank of New York (the "Bank") as
the agency for payment, registration and notice concerning the Notes in
accordance with Section 5.02 of the Indenture and as the Authentication Agent
for the Notes in accordance with Section 2.02 of the Indenture. The Company has
also designated the Bank as the Calculation Agent with respect to the issuance
of floating rate notes pursuant to the Interest Calculation Agency Agreement
between the Company and the Bank dated __________.
Administrative procedures and specific terms of the offering are
explained below. Internal administrative and record-keeping responsibilities
will be handled for the Company by its Financial Services Unit of the Finance
Department. The Company will advise the Agents in writing of those persons
handling administrative responsibilities with whom the Agents are to communicate
regarding offers to purchase Notes and the details of their delivery. Unless
otherwise designated, the Notes will be issued as Global Securities registered
in the name of The Depository Trust Company or a nominee thereof (referred to as
"Book Entry Notes"). Procedures pertaining specifically to Book-Entry Notes and,
as the case may be, Notes issued in definitive form ("Certificated Notes") will
be explained separately below.
I. GENERAL PROCEDURES
AGGREGATE
PRINCIPAL AMOUNT: $200,000,000
ISSUE DATE:
Each Note will be dated the date of its authentication. Each
Note will also bear an original issue date (the "Issue
Date") which, with respect to any Note (or portion thereof),
shall mean the date of its original issuance and shall be
specified therein. The Issue Date shall remain the same for
all Notes
<PAGE>
-B2-
subsequently issued upon transfer, exchange or substitution
of a Note, regardless of their dates of authentication.
MATURITIES:
Each Note will mature on a Business Day (as defined below),
selected by the purchaser and agreed to by the Company,
which will range from nine months to thirty years after the
Issue Date. Each Note bearing interest at a rate determined
by reference to an interest rate formula (a "Floating Rate
Note") will mature on an Interest Payment Date (as defined
below).
"Business Day" means any day other than a Saturday or Sunday
that (a) is not a day on which banking institutions in
Baltimore, Maryland, or in New York, New York, are
authorized or obligated by law or executive order to be
closed, and (b) with respect to LIBOR Notes only, is a day
on which dealings in deposits in U.S. dollars are transacted
in the London interbank market.
PRICE TO PUBLIC:
Each Note will be issued at 100% of principal amount (unless
otherwise indicated in a pricing supplement).
DENOMINATIONS:
The minimum denominations of the Notes will be $1,000 and
integral multiples of $1,000 in excess thereof (see "Special
Procedures for Book-Entry Notes Denominations" for
information relating to Book-Entry Notes).
REGISTRATION:
Notes will be issued only in fully registered form as either
a Book-Entry Note or a Certificated Note. Certificated Notes
may be presented for registration of transfer or exchange at
the Bank's New York office.
INTEREST PAYMENTS:
Each Note bearing interest at a fixed rate (a "Fixed Rate
Note") will bear interest from its Issue Date if interest
has not been paid on the Note or from the most recent
Interest Payment Date to which interest has been paid at the
fixed rate per annum stated on the face thereof, payable
semi-annually on May 1 and November 1 of each year (each an
"Interest Payment Date" with respect to such Fixed Rate
Note), and at Stated Maturity, and, if applicable, upon
redemption or repurchase.
Special provisions are set forth in the Prospectus relating
to Floating Rate Notes. Interest rates are determined by
reference to the interest rate formula stated therein and
payable in arrears on such dates as specified therein (each
an "Interest Payment Date" with respect to such Floating
Rate Note).
Interest on Fixed Rate Notes (including payments for partial
periods) will be computed and paid on the basis of a 360-day
year of twelve 30-day months and will not accrue on the 31st
day of any month. Interest will be payable to the person in
whose name the Note is registered at the close of business
on April 15 or October 15, (whether or not such date is a
Business Day) with respect to
<PAGE>
-B3-
Fixed Rate Notes or the fifteenth day (whether or not a
Business Day) with respect to Floating Rate Notes (the
"Record Dates"), next preceding the respective Interest
Payment Date; provided, however, that interest payable at
Stated Maturity and, if applicable, upon redemption or
repurchase will be payable to the person to whom principal
shall be payable. The first payment of interest on any Note
originally issued between a Record Date and an Interest
Payment Date will be made on the Interest Payment Date
following the next succeeding Record Date. All interest
payments (excluding interest payments made at Stated
Maturity and, if applicable, upon redemption and repurchase)
will be made by check mailed to the person entitled thereto
as provided above; except that holders of over $5 million in
principal amount of the Notes may receive interest payments
by wire upon at least one Business Day's written notice to
the Bank.
On the fifth Business Day immediately preceding each
Interest Payment Date, the Bank will furnish the Company
with the total amount of the interest payments to be made on
such Interest Payment Date. The Bank will provide monthly to
the Company's Financial Services Unit a list of the
principal and interest to be paid on Notes maturing in the
next succeeding month. On the Interest Payment Date (unless
the Interest Payment Date is not a Business Day, then the
immediately succeeding Business Day), the Company will
transfer to the Bank, via the Federal Reserve wire system,
immediately available funds sufficient to make such interest
payments. The Bank will assume responsibility for
withholding taxes on interest paid as required by law.
ACCEPTANCE OF
OFFERS:
Each Agent will promptly advise the Company of each
reasonable offer to purchase Notes received by it, other
than those rejected by such Agent. Each Agent may, in its
discretion reasonably exercised, without notice to the
Company, reject any offer received by it, in whole or in
part. The Company will have the sole right to accept offers
to purchase Notes and may reject any such offer, in whole or
in part. If the Company rejects an offer, the Company will
promptly notify the Agent involved.
SETTLEMENT:
All offers accepted by the Company will be settled on the
third Business Day next succeeding the date of acceptance
unless otherwise agreed by any purchaser and the Company.
The settlement date shall be specified upon receipt of an
offer.
CONFIRMATION:
For each accepted offer, the Presenting Agent will issue a
confirmation to the purchaser, with a copy to the Company's
Financial Services Unit and the Bank, setting forth the
Purchase Information and delivery and payment instructions.
REDEMPTION AT
COMPANY'S OPTION:
Except as otherwise specified in the applicable Pricing
Supplement and on the Notes, the Notes will not be
redeemable prior to their Stated Maturity. If so specified,
such Note will be redeemable at the option of the Company on
or after a specified date at a specified price or prices
(which may include a
<PAGE>
-B4-
premium) together with accrued interest thereon payable to,
but excluding, the date fixed for redemption. The Notes will
be redeemable in whole or in part (whether or not any other
Notes of the same series are redeemed), in increments of
$1,000 on notice by mail given not more than 60 nor less
than 30 days prior to the date fixed for redemption. If
there is a partial redemption, the Bank will issue a new
Note on the same terms.
Upon presentation of each Note at the date fixed for
redemption, the Bank (or any other duly appointed paying
agent) will pay the principal amount (at a price, expressed
as a percent of the principal amount, specified on the Note
and in the applicable Pricing Supplement) redeemed thereof,
together with accrued interest due on the amount redeemed at
the date fixed for redemption. Such payment shall be made in
immediately available funds, provided that the Note is
presented to the Bank (or any such paying agent) in time for
the Bank (or any such paying agent) to make payments in such
funds in accordance with its normal procedures. On the date
fixed for redemption (unless the date fixed for redemption
is not a Business Day, then the immediately succeeding
Business Day), the Company will provide the Bank (and any
such paying agent), via the Federal Reserve wire transfer
system, with immediately available funds sufficient for the
Bank to make such payment. Notes presented at the date fixed
for redemption will be canceled by the Bank as provided in
the Indenture.
REPURCHASE AT
HOLDER'S OPTION:
Except as otherwise specified in the applicable Pricing
Supplement and on the Notes, the Company is not required to
repurchase the Notes from the holders prior to the Stated
Maturity. If so specified, Notes will be redeemable at the
option of the holder, in whole or in part, in increments of
$1,000, on the dates and at the prices specified therein,
together with accrued interest to, but excluding, the
repurchase date. For Book-Entry Notes, holders must deliver
a written notice to the Bank at least 30, but no more than
60 days prior to the date of repurchase, but no later than
5:00 p.m. New York City time on the last day for giving
notice. The written notice must specify the principal amount
to be repurchased and must be signed by a duly authorized
officer of the Depositary participant (signature
guaranteed). For Certificated Notes, holders must complete
the "Option to Elect Repayment" on the reverse of the Note
and then deliver the Note to the Bank at least 30, but no
more than 45 days prior to the date of the repurchase, but
no later than 5:00 p.m. New York City time on the last day
for giving notice. All notices are irrevocable. If there is
a partial redemption, the Bank will issue a new Note on the
same terms.
On the repurchase date, the Bank (or any other duly
appointed paying agent) will repurchase the Note from the
holder at the specified price, together with any accrued
interest, payment to be made in immediately available funds.
The Company will provide the Bank (and any such paying
agent), via the Federal Reserve wire transfer system, with
immediately available funds sufficient for the Bank to make
such repurchases. Repurchased Notes will be canceled by the
Bank as provided in the Indenture.
<PAGE>
-B5-
REMARKETED NOTES:
Procedures related to Remarketed Notes will be added at the
time any notes are issued.
MATURITY:
Upon presentation of each Note at maturity the Bank (or any
other duly appointed paying agent) will pay the principal
amount thereof, together with accrued interest due at
maturity. Such payment shall be made in immediately
available funds, provided that the Note is presented to the
Bank (or any such paying agent) in time for the Bank (or any
such paying agent) to make payments in such funds in
accordance with its normal procedures. On the maturity date,
the Company will provide the Bank (and any such paying
agent), via the Federal Reserve wire transfer system, with
immediately available funds sufficient for the Bank to make
such payment. Notes presented at maturity will be canceled
by the Bank as provided in the Indenture.
PROCEDURE FOR
RATE OR REDEMPTION
CHANGES:
The Company and the Agents will discuss from time to time
the rates to be borne by, and the redemption and repurchase
provisions, if any, of, the Notes that may be sold as a
result of the solicitation of offers by the Agents. Once any
Agent has recorded any indication of interest in Notes upon
certain terms, and communicated with the Company, if the
Company plans to accept an offer to purchase Notes upon such
terms, it will prepare a sticker reflecting the terms of
such Notes and, after confirming such terms with such Agent,
will arrange to have the Prospectus, as then amended or
supplemented, and bearing such sticker, filed with the
Commission and will supply at least 10 copies of the
Prospectus, as then amended or supplemented, and bearing
such sticker, to the Presenting Agent. No settlements with
respect to Notes upon such terms may occur prior to such
filing and the Agents will not, prior to such filing, mail
confirmations to customers who have offered to purchase
Notes upon such terms. After such filing, sales, mailing of
confirmations and settlements may occur with respect to
Notes upon such terms, subject to the provisions of
"Delivery of Prospectus" below.
If the Company decides to post rates (which may include the
presence or absence of redemption and repurchase provisions)
and a decision has been reached to change interest rates or
redemption or repurchase provisions, if any, the Company
will promptly notify each Agent. Each Agent will forthwith
suspend solicitation of purchases. At that time, the Agents
will recommend and the Company will establish rates to be so
"posted." Following establishment of posted rates and prior
to the filing described in the following sentence, the
Agents may only record indications of interest in purchasing
Notes at the posted rates. Once any Agent has recorded any
indication of interest in Notes at the posted rates and
communicated with the Company, if the Company plans to
accept an offer at the posted rate, it will prepare a
sticker reflecting such posted rates and, after confirming
such terms with such Agent, will arrange to have the
Prospectus, and bearing such sticker, filed with the
Commission and will supply at least 10 copies of the
Prospectus, as then amended or supplemented, to the
Presenting Agent. No settlements at the posted rates may
occur prior to such filing and the Agents will not, prior to
<PAGE>
-B6-
such filing, mail confirmations to customers who have
offered to purchase Notes at the posted rates. After such
filing, sales, mailing of confirmations and settlements may
resume, subject to the provisions of "Delivery of
Prospectus" below.
Outdated stickers, and copies of the Prospectus to which
they are attached (other than those retained for files),
will be destroyed.
SUSPENSION OF
SOLICITATION;
AMENDMENT OR
SUPPLEMENT:
As provided in the Agency Agreement, the Company may suspend
solicitation of purchases at any time and, upon receipt of
at least one Business Day's prior notice from the Company,
the Agents will each forthwith suspend solicitation until
such time as the Company has advised them that solicitation
of purchases may be resumed.
If the Agents receive the notice from the Company
contemplated by Section 4(b) of the Agency Agreement, they
will promptly suspend solicitation and will only resume
solicitation as provided in the Agency Agreement. If the
Company decides to amend or supplement the Registration
Statement or the Prospectus relating to the Notes, it will
promptly advise each Agent and will furnish each Agent with
the proposed amendment or supplement in accordance with the
terms of the Agency Agreement. The Company will promptly
file such amendment or supplement; provide the Agents with
copies of any such amendment or supplement; confirm to the
Agents that such amendment or supplement has been filed with
the Commission; and advise the Agents that solicitation may
be resumed.
Any such suspension shall not affect the Company's
obligations under the Agency Agreement; and in the event
that at the time the Company suspends solicitation of
purchases there shall be any offers already accepted by the
Company outstanding for settlement, the Company will have
the sole responsibility for fulfilling such obligations. The
Company will in addition promptly advise the Agents and the
Bank if such offers are not to be settled and if copies of
the Prospectus as in effect at the time of the suspension
may not be delivered in connection with the settlement of
such offers.
DELIVERY OF
PROSPECTUS:
A copy of the Prospectus, as most recently amended or
supplemented on the date of delivery thereof (except as
provided below), must be delivered to a purchaser prior to
or together with the earlier of delivery of (i) the written
confirmation provided for above, and (ii) any Note purchased
by such purchaser. The Company shall ensure that the
Presenting Agent receives copies of the Prospectus and each
amendment or supplement thereto (including appropriate
pricing stickers) in such quantities and within such time
limits as will enable the Presenting Agent to deliver such
confirmation or Note to a purchaser as contemplated by these
procedures and in compliance with the preceding sentence.
If, since the date of acceptance of a purchaser's offer, the
<PAGE>
-B7-
Prospectus shall have been supplemented solely to reflect
any sale of Notes on terms different from those agreed to
between the Company and such purchaser or a change in posted
rates not applicable to such purchaser, such purchaser shall
not receive the Prospectus as supplemented by such new
supplement, but shall receive the Prospectus as supplemented
to reflect the terms of the Notes being purchased by such
purchaser and otherwise as most recently amended or
supplemented on the date of delivery of the Prospectus.
AUTHENTICITY OF
SIGNATURES:
The Company will cause the Bank to furnish the Agents from
time to time with the specimen signatures of each of the
Bank's officers, employees or agents who have been
authorized by the Bank to authenticate Notes, but the Agents
will have no obligation or liability to the Company or the
Bank in respect of the authenticity of the signature of any
officer, employee or agent of the Company or the Bank on any
Note.
ADVERTISING COST:
The Company will determine with the Agents the amount of
advertising that may be appropriate in offering the Notes.
Advertising expenses will be paid by the Company.
II. SPECIAL PROCEDURES FOR BOOK-ENTRY NOTES
Each Note may be represented by either a Global Security
delivered to the Bank, as agent for the Depository Trust
Company ("DTC"), and recorded in the book-entry system
maintained by DTC or a certificate delivered to the Holder
thereof or a Person designated by such Holder. An owner of a
Book-Entry Note will not be entitled to receive a
certificate representing such Note. In connection with the
qualification of the Book-Entry Notes for eligibility in the
book-entry system maintained by DTC, the Bank will perform
the custodial, document control and administrative functions
described below, in accordance with its respective
obligations under a Letter of Representations from the
Company and the Bank to DTC and a Medium-Term Note
Certificate Agreement previously entered into between the
Bank and DTC, and its obligations as a participant in DTC,
including DTC's Same-Day Funds Settlement System ("SDFS").
Except as otherwise set forth in this Exhibit B, Book-Entry
Notes will be issued in accordance with the administrative
procedures set forth in this section.
ISSUANCE:
On any date of settlement (as defined under "Settlement"
below), for one or more Fixed Rate Book-Entry Notes, the
Company will issue a single Global Security in fully
registered form without coupons representing up to
$200,000,000 principal amount of all of such Notes that have
the same original issuance date, interest rate and Stated
Maturity. Similarly, on any settlement date for one or more
Floating Rate Book-Entry Notes, the Company will issue a
single Global Security representing up to $200,000,000
principal amount of all of such Notes that have the same
interest rate formula, original issuance date, Initial
Interest Rate, Interest Payment Dates, Index Maturity,
Spread or Spread Multiplier, minimum interest rate (if any),
maximum interest rate (if
<PAGE>
-B8-
any) and Stated Maturity. Each Global Security will be dated
and issued as of the date of its authentication by the Bank,
as authenticating agent. Each Global Security will have an
interest accrual date (the "Interest Accrual Date"), which
will be (i) with respect to an original Global Security (or
any portion thereof), its original issuance date and (ii)
with respect to any Global Security (or portion thereof)
issued subsequently upon exchange of a Global Security or in
lieu of a destroyed, lost or stolen Global Security, the
most recent Interest Payment Date to which interest has been
paid or duly provided for on the predecessor Global Security
or Securities (or if no such payment or provision has been
made, the original issuance date of the predecessor Global
Security), regardless of the date of authentication of such
subsequently issued Global Security. No Global Security will
represent (i) both Fixed Rate and Floating Rate Book-Entry
Notes or (ii) any Certificated Note.
IDENTIFICATION
NUMBERS:
The Company will arrange, on or prior to commencement of a
program for the offering of Book-Entry Notes, with the CUSIP
Service Bureau of Standard & Poor's Corporation (the "CUSIP
Service Bureau") for the reservation of a series of CUSIP
numbers (including tranche numbers), consisting of
approximately 900 CUSIP numbers and relating to Global
Securities representing the Book-Entry Notes. The Company
will obtain from the CUSIP Service Bureau a written list of
such series of reserved CUSIP numbers and will deliver to
the Bank and DTC such written list of 900 CUSIP numbers of
such series. The Company will assign CUSIP numbers to Global
Securities as described below under Settlement Procedure
"B." DTC will notify the CUSIP Service Bureau periodically
of the CUSIP numbers that the Company has assigned to Global
Securities. At any time when fewer than 100 of the reserved
CUSIP numbers remain unassigned to Global Securities, and if
it deems necessary, the Company will reserve additional
CUSIP numbers for assignment to Global Securities
representing Book-Entry Notes. Upon obtaining such
additional CUSIP numbers the Company shall deliver such
additional CUSIP numbers to the Bank and DTC.
REGISTRATION:
Each Global Security will be registered in the name of Cede
& Co., as nominee for DTC, on the Securities Register
maintained under the Indenture governing such Global
Security. The beneficial owner of a Book-Entry Note (or one
or more indirect participants in DTC designated by such
owner) will designate one or more participants in DTC (with
respect to such Note, the "Participants") to act as agent or
agents for such owner in connection with the book-entry
system maintained by DTC, and DTC will record in book-entry
form, in accordance with instructions provided by such
Participants, a credit balance with respect to such Note in
the account of such Participants. The ownership interest of
such beneficial owner in such Note will be recorded through
the records of such Participants or through the separate
records of such Participants and one or more indirect
participants in DTC.
TRANSFERS:
Transfers of a Book-Entry Note will be accomplished by book
entries made by DTC and, in turn, by Participants (and in
certain cases, one or more indirect participants in DTC)
acting on behalf of beneficial transferors and transferees
of such Note.
<PAGE>
-B9-
CONSOLIDATION
AND EXCHANGE:
The Bank may deliver to DTC and the CUSIP Service Bureau at
any time a written notice of consolidation specifying (i)
the CUSIP numbers of two or more Outstanding Global
Securities that represent (A) Fixed Rate Book-Entry Notes
having the same original issuance date, interest rate and
Stated Maturity and with respect to which interest has been
paid to the same date or (B) Floating Rate Book-Entry Notes
having the same interest rate formula, original issuance
date, Initial Interest Rate, Interest Payment Dates, Index
Maturity, Spread or Spread Multiplier, minimum interest rate
(if any), maximum interest rate (if any) and Stated Maturity
and with respect to which interest has been paid to the same
date, (ii) a date, occurring at least thirty days after such
written notice is delivered and at least thirty days before
the next Interest Payment Date for such Book-Entry Notes, on
which such Global Securities shall be exchanged for a single
replacement Global Security and (iii) a new CUSIP number,
obtained from the Company, to be assigned to such
replacement Global Security. Upon receipt of such a notice,
DTC will send to its participants (including the Bank) a
written reorganization notice to the effect that such
exchange will occur on such date. Prior to the specified
exchange date, the Bank will deliver to the CUSIP Service
Bureau a written notice setting forth such exchange date and
the new CUSIP number and stating that, as of such exchange
date, the CUSIP numbers of the Global Securities to be
exchanged will no longer be valid. On the specified exchange
date, the Bank will exchange such Global Securities for a
single Global Security bearing the new CUSIP number and a
new Interest Accrual Date, and the CUSIP numbers of the
exchanged Global Securities will, in accordance with CUSIP
Service Bureau procedures, be canceled and not immediately
reassigned. Notwithstanding the foregoing, if the Global
Securities to be exchanged exceed $200,000,000 in aggregate
principal amount, one Global Security will be authenticated
and issued to represent each $200,000,000 of principal
amount of the exchanged Global Securities and an additional
Global Security will be authenticated and issued to
represent any remaining principal amount of such Global
Securities (see "Denominations" below).
DENOMINATIONS:
Book-Entry Notes will be issued in principal amount of
$1,000, or any amount in excess thereof that is an integral
multiple of $1,000. Global Securities representing one or
more Book-Entry Notes will be denominated in principal
amounts not in excess of $200,000,000.
INTEREST:
GENERAL. Interest on each Book-Entry Note will accrue from
the Interest Accrual Date of the Global Security
representing such Note. Each payment of interest on a
Book-Entry Note will include interest accrued through the
date preceding, as the case may be, the Interest Payment
Date, Stated Maturity or redemption; provided, however, that
if the Interest Reset Dates with respect to any such Note
are daily or weekly, interest payable on any Interest
Payment Date, other than interest payable on any date on
which principal for such Note is payable, will include
interest accrued from but excluding the second preceding
Record Date to and including the next preceding Record Date.
Interest payable at the Stated Maturity or upon redemption
of a Book-Entry
<PAGE>
-B10-
Note will be payable to the Person to whom the principal of
such Note is payable. Standard & Poor's Corporation will use
the information received in the pending deposit message
described under Settlement Procedure "C" below in order to
include the amount of any interest payable and certain other
information regarding the related Global Security in the
appropriate weekly bond report published by Standard &
Poor's Corporation.
On the first Business Day of January, April, July and
October of each year the Bank will deliver to the Company
and DTC a written list of Regular Record Dates and Interest
Payment Dates that will occur with respect to Floating Rate
Book-Entry Notes during the six-month period beginning on
such first Business Date. Promptly after each Interest
Determination Date (as defined in the Prospectus) for
Floating Rate Notes, the Bank, acting as the calculation
agent for Floating Rate Notes, will notify Standard & Poor's
Corporation of the interest rates determined on such
Interest Determination Date.
PAYMENTS OF
PRINCIPAL
AND INTEREST:
PAYMENTS OF INTEREST ONLY. Promptly after each Record Date,
the Bank will deliver to the Company and DTC a written
notice specifying by CUSIP number the amount of interest to
be paid on each Global Security on the following Interest
Payment Date (other than an Interest Payment Date coinciding
with Maturity) and the total of such amounts. DTC will
confirm the amount payable on each Global Security on such
Interest Payment Date by reference to the daily bond reports
published by Standard & Poor's Corporation. The Company will
pay to the Bank, as paying agent, the total amount of
interest due on such Interest Payment Date (other than at
Maturity), and the Bank will pay such amount to DTC at the
times and in the manner set forth below under "Manner of
Payment."
PAYMENTS AT MATURITY. On or about the first Business Day of
each month, the Bank will deliver to the Company and DTC a
written list of principal and interest to be paid on each
Global Security maturing in the following month. The
Company, the Bank and DTC will confirm the amounts of such
principal and interest payments with respect to each such
Global Security on or about the fifth Business Day preceding
the Maturity of such Global Security. The Company will pay
to the Bank, as the paying agent, the principal amount of
such Global Security, together with interest due at such
Maturity. The Bank will pay such amount to DTC at the times
and in the manner set forth below under "Manner of Payment."
Promptly after payment to DTC of the principal and interest
due at the Maturity of such Global Security, the Bank will
cancel such Global Security and deliver it to the Company
with an appropriate debit advice. On the first Business Date
of each month, the Bank will prepare a written statement
indicating the total principal amount of Outstanding Global
Securities for which it serves as paying agent and
authenticating agent as of the immediately preceding
Business Day.
PAYMENTS UPON REDEMPTION. The Company, the Bank and DTC will
confirm the purchase price and accrued interest payable for
each Global Security to be
<PAGE>
-B11-
redeemed by the Company on or about the fifth Business Day
preceding the redemption of such Global Security.
PAYMENTS UPON REPURCHASE. The Bank will notify the Company
in a timely manner, but no later that the fifth Business Day
following the end of the applicable notice period for the
holders, of the receipt of notice for holders requesting
repurchase of Notes. The Company, the Bank and DTC will
confirm the purchase price and accrued interest payable for
each Global Security to be repurchased by the Company on or
about the fifth Business Day preceding the redemption of
such Global Security.
MANNER OF PAYMENT. The total amount of any principal and
interest due on Global Securities on any Interest Payment
Date or at Maturity, including Redemption and Repurchase,
shall be paid by the Company to the Bank in funds available
for use by the Bank as of 9:30 A.M. (New York City time) on
such date. The Company will make such payment on such Global
Securities by instructing the Bank to withdraw funds from an
account maintained by the Company at the Bank. The Company
will confirm such instructions in writing to the Bank. For
maturity, redemption or any other principal payments: prior
to 10:00 A.M. (New York City time) on such date or as soon
as possible thereafter, the Bank will make such payments to
DTC in same day funds in accordance with DTC's Same Day
Funds Settlement Paying Agent Operating Procedures. For
interest payments: the Bank will make such payments to DTC
in accordance with existing arrangements between DTC and the
Bank. DTC will allocate such payments to its participants in
accordance with its existing operating procedures. Neither
the Company (either as issuer or as Paying Agent) nor the
Bank shall have any direct responsibility or liability for
the payment by DTC to such Participants of the principal of
and interest on the Book-Entry Notes.
The amount of any taxes required under applicable law to be
withheld from any interest payment on a Book-Entry Note will
be determined and withheld by the Participant, indirect
participant in DTC or other Person responsible for
forwarding payments and materials directly to the beneficial
owner of such Note.
SETTLEMENT
PROCEDURES:
Settlement Procedures with regard to each Book-Entry Note
sold by the Company through an Agent, as agent, shall be as
follows:
A. The Presenting Agent will advise the Company by
telephone, and confirm in writing by facsimile transmission
the following settlement information:
1. Exact name in which Note is to be registered
("Registered Owner").
2. Exact address of the Registered Owner and address
for payments of principal and interest, if any.
3. Taxpayer identification number of the Registered
Owner.
<PAGE>
-B12-
4. Principal amount of the Note (and, if multiple Notes
are to be issued, denominations thereof).
5. Settlement date.
6. Stated Maturity.
7. Issue Price.
8. Issue date.
9. Trade date.
10. The DTC Participant account number of such Agent.
11. Interest rate:
(a) Fixed Rate Notes:
i) interest rate
(b) Floating Rate Notes:
i) interest rate basis
ii) initial interest rate
iii) spread and/or spread multiplier, if any
iv) interest rate reset periods and dates
v) interest payment dates
vi) index maturity
vii) maximum and minimum interest rates,
if any
viii) record dates
ix) interest determination dates
12. The dates and related prices on or after which the
Notes are redeemable at the option of the Company, and
additional redemption or repurchase provisions, if any.
13. Wire transfer information.
14. Presenting Agent's commission (to be paid in the
form of a discount from the proceeds remitted to the Company
upon settlement.)
B. The Company will assign a CUSIP number to the Global
Security representing such Note and then advise the Bank in
writing by facsimile transmission of the information set
forth in Settlement Procedure "A" above, such CUSIP number
and the name of such Agent. The Original Issuance
Instructions will be accompanied by a letter signed by any
Officer of the Company giving the Bank authority to
authenticate the Notes in the manner set forth in the
Original Issuance Instructions.
<PAGE>
-B13-
C. The Bank will enter a pending deposit message through
DTC's Participant Terminal System, providing the following
settlement information to DTC, the Presenting Agent,
Standard & Poor's Corporation and, upon request, the Trustee
under the Indenture pursuant to which such Note is to be
issued:
1. The information set forth in Settlement Procedure
"A."
2. Identification as a Fixed Rate Book-Entry Note or a
Floating Rate Book-Entry Note.
3. Initial Interest Payment Date for such Note, number
of days by which such date succeeds the related "DTC Record
Date" (which term means the Regular Record Date except in
the case of floating rate notes which reset daily or weekly
in which case it means the date 5 calendar days immediately
preceding the Interest Payment Date) and amount of interest
payable on such Interest Payment Date.
4. Frequency of interest payments (monthly,
semiannually, quarterly, etc.).
5. CUSIP number of the Global Security representing
such Note.
6. Whether such Global Security will represent any
other Book-Entry Note (to the extent known at such time).
D. The Bank, as authentication agent, will complete and
authenticate the note certificate evidencing the Global
Security representing such Book-Entry Note.
E. DTC will credit such Note to the Bank's participant
account at DTC.
F. The Bank will enter an SDFS deliver order through DTC's
Participant Terminal System instructing DTC to (i) debit
such Note to the Bank's participant account and credit such
Note to the Presenting Agent's participant account and (ii)
debit the Presenting Agent's settlement account and credit
the Bank's settlement account for an amount equal to the
price of such Note less the Presenting Agent's commission.
G. The Presenting Agent will enter an SDFS deliver order
through DTC's Participant Terminal System instructing DTC
(i) to debit such Note to the Presenting Agent's participant
account and credit such Note to the participant accounts of
the Participants with respect to such Note and (ii) debit
the settlement accounts of such Participants and credit the
settlement account of the Presenting Agent for an amount
equal to the price of such Note.
H. Transfers of funds in accordance with SDFS deliver orders
described in Settlement Procedures "F" and "G" will be
settled in accordance with SDFS operating procedures in
effect on the settlement date.
<PAGE>
-B14-
I. The Bank will credit to an account of the Company
maintained at the Bank funds available for immediate use in
the amount transferred to the Bank in accordance with
Settlement Procedure "F."
J. The Presenting Agent will deliver to the purchaser a copy
of the most recent Prospectus applicable to the Note with or
prior to any written offer of Notes and the confirmation and
payment by the purchaser of the Note. The Presenting Agent
will confirm the purchase of such Note to the purchaser
either by transmitting to the Participants with respect to
such Note a confirmation order or orders through DTC's
institutional delivery system or by mailing a written
confirmation to such purchaser.
SETTLEMENT
PROCEDURES
TIMETABLE:
For orders of Book-Entry Notes solicited by an Agent, as
agent, and accepted by the Company for settlement,
Settlement Procedures "A" through "J" set forth above shall
be completed as soon as possible but not later than the
respective times (New York City time) set forth below:
SETTLEMENT
PROCEDURES TIME (New York)
----------- ------------------------------
A - B 11:00 A.M. on the Sale Date
C 2:00 P.M. on the Sale Date
D 9:00 A.M. on the Settlement Date
E 10:00 A.M. on the Settlement Date
F - G 2:00 P.M. on the Settlement Date
H 4:45 P.M. on the Settlement Date
I - J 5:00 P.M. on the Settlement Date
If a sale is to be settled more than one Business Day
after the sale date, Settlement Procedures "A," "B" and "C"
shall be completed as soon as practicable but no later than
11:00 A.M. and 2:00 P.M., as the case may be, on the first
Business Day after the sale date. If the initial interest
rate for a Floating Rate Book-Entry Note has not been
determined at the time that Settlement Procedure "A" is
completed, Settlement Procedures "B" and "C" shall be
completed as soon as such rate has been determined but no
later than 11:00 A.M. and 12:00 Noon, respectively, on the
second Business Day before the settlement date. Settlement
Procedure "I" is subject to extension in accordance with any
extension of Fedwire closing deadlines and in the other
events specified in the SDFS operating procedures in effect
on the settlement date.
If settlement of a Book-Entry Note is rescheduled or
canceled, the Bank will deliver to DTC, through DTC's
Participant Terminal System, a cancellation message to such
effect by no later than 2:00 P.M. on the Business Day
immediately preceding the scheduled settlement date.
<PAGE>
-B15-
FAILURE TO SETTLE:
If the Bank fails to enter an SDFS deliver order with
respect to a Book-Entry Note pursuant to Settlement
Procedure "F," the Bank may deliver to DTC, through DTC's
Participant Terminal System, as soon as practicable a
withdrawal message instructing DTC to debit such Note to the
Bank's participant account. DTC will process the withdrawal
message, provided that the Bank's participant account
contains a principal amount of the Global Security
representing such Note that is at least equal to the
principal amount to be debited. If a withdrawal message is
processed with respect to all the Book-Entry Notes
represented by a Global Security, the Bank will mark such
Global Security "canceled," make appropriate entries in the
Bank's records and send such canceled Global Security to the
Company. The CUSIP number assigned to such Global Security
shall, in accordance with CUSIP Service Bureau procedures,
be canceled and not immediately reassigned. If a withdrawal
message is processed with respect to one or more, but not
all, of the Book-Entry Notes represented by a Global
Security, the Bank will exchange such Global Security for
two Global Securities, one of which shall represent such
Book-Entry Note or Notes and shall be canceled immediately
after issuance and the other of which shall represent the
other Book-Entry Notes previously represented by the
surrendered Global Security and shall bear the CUSIP number
of the surrendered Global Security.
If the purchase price for any Book-Entry Note is not timely
paid to the Participants with respect to such Note by the
beneficial purchasers thereof (or a Person, including an
indirect participant in DTC, acting on behalf of such
purchaser), such Participants and, in turn, the Agent for
such Note may enter SDFS deliver orders through DTC's
Participant Terminal System reversing the orders entered
pursuant to Settlement Procedures "F" and "G," respectively.
Thereafter, the Bank will deliver the withdrawal message and
take the related actions described in the preceding
paragraph.
Notwithstanding the foregoing, upon any failure to settle
with respect to a Book-Entry Note, DTC may take any actions
in accordance with its SDFS operating procedures then in
effect. In the event of a failure to settle with respect to
one or more, but not all, of the Book-Entry Notes to have
been represented by a Global Security, the Bank will
provide, in accordance with Settlement Procedure "D," for
the authentication and issuance of a Global Security
representing the other Book-Entry Notes to have been
represented by such Global Security and will make
appropriate entries in its records.
III. SPECIAL PROCEDURES FOR CERTIFICATED NOTES
The Notes may be issued in physical form as
Certificated Notes. The following Settlement Procedures
relate specifically to the issuance of Certificated Notes.
DETAILS FOR
SETTLEMENT:
A. For each offer accepted by the Company, the Agent who
presented such offer (the "Presenting Agent") shall
communicate to (i) the Company's Financial
<PAGE>
-B16-
Services Unit and (ii) the Bank by telephone, facsimile
transmission or other acceptable means the following
information (the "Purchase Information"):
1. Exact name in which the Note or Notes are to be
registered ("registered owner").
2. Exact address of registered owner and address for
payment of principal and interest, if any.
3. Taxpayer identification number of registered owner.
4. Principal amount of the Note (and if multiple Notes
are to issued, denominations thereof).
5. Settlement date.
6. Stated Maturity.
7. Issue Price.
8. Issue date.
9. Trade date.
10.Interest rate:
(a) Fixed Rate Notes:
i) interest rate
(b) Floating Rate Notes:
i) interest rate basis
ii) initial interest rate
iii) spread and/or spread multiplier, if any
iv) interest rate reset periods and dates
v) interest payment dates
vi) index maturity
vii) maximum and minimum interest rates, if any
viii) record dates
ix) interest determination dates
11. The dates and related prices on or after which the
Notes are redeemable at the option of the Company, and
additional redemption or repurchase provisions, if any.
12. Wire transfer information.
<PAGE>
-B17-
13. Presenting Agent's commission (to be paid in the
form of a discount from the proceeds remitted to the Company
upon settlement).
14. Instructions for delivery of Note(s).
The Issue Date of, and the settlement date for, Notes will
be the same. Before accepting any offer to purchase Notes to
be settled in less than three days, the Company shall verify
that the Bank will have adequate time to prepare and
authenticate the Notes.
B. After receiving the details for each accepted offer from
the Presenting Agent, the Company will, after recording the
details and any necessary calculations, confirm the Purchase
Information by telephone, facsimile transmission or other
acceptable means, to the Bank.
C. The Bank will complete the Note assigning to and entering
on, each Note a transaction number and authenticating the
Note.
D. The Bank will deliver the Notes to the Presenting Agent,
pursuant to the delivery instructions from the Company. The
Bank will retain a copy of the Note. The Presenting Agent
will cause to be wire transferred to a bank account
designated by the Company immediately available funds in the
amount of the principal of the Notes, less the applicable
commission.
E. The Presenting Agent, as the Company's agent, will
deliver the Notes against payment by such purchasers in
immediately available funds in the principal amount of the
Notes. Delivery of any confirmation or a Note will be made
in compliance with "Delivery of Prospectus."
F. The Bank will automatically forward a copy of the Notes
to the Company unless notified of a fail (See "Fails").
SETTLEMENT
PROCEDURES
TIMETABLE:
For offers accepted by the Company, Settlement Procedures
"A" through "F" set forth above shall be completed on or
before the respective times set forth below:
<PAGE>
-B18-
SETTLEMENT
PROCEDURES TIME (New York)
---------- ---------------------------------------
A - B 11:00 A.M. on the Next Business Day
after the Trade Date
C 3:00 P.M. on the Business Date prior to
Settlement Date
D 2:15 P.M. on the Settlement Date
E 3:00 P.M. on the Settlement Date
F 5:00 P.M. on the Business Day after the
Settlement Date
FAILS:
In the event that a purchaser shall fail to accept delivery
of and make payment for a Note on the settlement date, the
Presenting Agent will notify the Bank and the Company, by
telephone, confirmed in writing. If the Note has been
delivered to the Presenting Agent, as the Company's agent,
the Presenting Agent shall return such Note to the Bank. If
funds have been advanced for the purchase of such Note, the
Agent will, immediately upon receipt of such Note, debit the
account of the Company for the amount so advanced and the
Company shall refund the payment previously made by the
Presenting Agent in immediately available funds. Such
payments will be made on the settlement date, if possible,
and in any event not later than the Business Day following
the settlement date. If such fail shall have occurred for
any reason other than the failure of the Presenting Agent to
provide a confirmation to the purchaser, the Company will
reimburse the Presenting Agent on an equitable basis for its
loss of the use of funds during the period when they were
credited to the account of the Company. Immediately upon
receipt of the Note in respect of which the fail occurred,
the Bank will make appropriate entries to reflect the fact
that the Note was never issued and will mark the Note
"Canceled." The Presenting Agent will not be entitled to any
commission with respect to any Note which the purchaser does
not accept or make payment for.
<PAGE>
Exhibit C
to Agency Agreement
BALTIMORE GAS AND ELECTRIC COMPANY
MEDIUM-TERM NOTES, SERIES H
FORM OF PURCHASE AGREEMENT
INCLUDING
STANDARD PURCHASE PROVISIONS
<PAGE>
BALTIMORE GAS AND ELECTRIC COMPANY
MEDIUM-TERM NOTES, SERIES H
PURCHASE AGREEMENT
[Date]
Baltimore Gas and Electric Company
39 W. Lexington Street
Baltimore, Maryland 21201
Dear Sirs:
Referring to the Medium-Term Notes, Series H of Baltimore Gas and
Electric Company (the "Company") covered by the registration statement on Form
S-3 (No. 333-________), (such registration statement, including (i) the
prospectus included therein, dated _________________, as supplemented by a
prospectus supplement dated ____________ in the form first filed under Rule
424(b) (such prospectus as so supplemented, including each document incorporated
by reference therein is hereinafter called the "Prospectus") and (ii) all
documents filed as part thereof or incorporated by reference therein, is
hereinafter called the "Registration Statement") on the basis of the
representations, warranties and agreements contained in this Agreement, but
subject to the terms and conditions herein set forth, the purchaser or
purchasers named in Schedule A hereto (the "Purchasers") agree to purchase,
severally, and the Company agrees to sell to the Purchasers, severally, the
respective principal amounts of the Company's Medium-Term Notes, Series H having
the terms described below (the "Purchased Notes") set forth opposite the name of
each Purchaser on Schedule A hereto.
The price at which the Purchased Notes shall be purchased from the
Company by the Purchasers shall be ______% of the principal amount plus accrued
interest, if any, from
<PAGE>
_____________. The initial public offering price shall be _____% of the
principal amount plus accrued interest, if any, from ____________________. The
Purchased Notes will be offered by the Purchasers as set forth in the Prospectus
Supplement relating to such Purchased Notes.
The Purchased Notes will have the following terms:
Fixed Interest rate (if applicable): _____% per annum
(accruing from )
Floating Interest Rate (if applicable):
Interest Rate Basis: ___________________
Spread: ___________________
Spread Multiplier: ___________________
Index Maturity: ___________________
Initial Interest Rate: ___________________
Maximum Interest Rate: ___________________
Minimum Interest Rate: ___________________
Interest Reset Dates: ___________________
Interest Determination Dates: ___________________
Calculation Agent: ___________________
Interest Payment Dates: ___________________
Stated Maturity: ___________________
Redeemable by the Redemption Prices
Company on or after: (% of Principal Amount):
_____________________ _______________________
_____________________ _______________________
_____________________ _______________________
<PAGE>
Subject to Repurchase by
the Company at the option of Repurchase Prices
the holder on: (% of Principal Amount):
_____________________ _______________________
_____________________ _______________________
_____________________ _______________________
The "Closing Date" shall be:
The place to which the
Purchased Notes may be
checked, packaged and
delivered shall be: ________________________
Notices to the Purchasers shall be sent to the following address(es) or
telecopier number(s):
If we are acting as Representative(s) for the several Purchasers named
in Schedule A hereto, we represent that we are authorized to act for such
several Purchasers in connection with the transactions contemplated in this
Agreement, and that, if there are more than one of us, any action under this
Agreement taken by any of us will be binding upon all the Purchasers.
All of the provisions contained in the document entitled "Baltimore Gas
and Electric Company Standard Purchase Provisions", a copy of which has been
previously furnished to us, are hereby incorporated by reference in their
entirety and shall be deemed to be a part of this Agreement to the same extent
as if such provisions had been set forth in full herein.
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed duplicate hereof, whereupon
it will become a binding agreement between the Company and the several
Purchasers in accordance with its terms.
Very truly yours,
[Firm Name]
By ___________________________
Title: _______________________
Acting on behalf of and as
Representative(s) of the
several Purchasers named in
Schedule A hereto.*
The foregoing Purchase
Agreement is hereby confirmed
as of the date first above
written
BALTIMORE GAS AND ELECTRIC COMPANY
By ______________________________
Title: _____________________
_____________
* To be deleted if the Purchase Agreement is not executed by one or more
Purchasers acting as Representative(s) of the Purchasers for purposes of this
Agreement.
<PAGE>
SCHEDULE A
NAME OF PURCHASER AMOUNT
- ------------------ -------
----------
Total $
==========
<PAGE>
BALTIMORE GAS AND ELECTRIC COMPANY
STANDARD PURCHASE PROVISIONS
From time to time, Baltimore Gas and Electric Company, a Maryland
corporation ("Company") may enter into purchase agreements that provide for the
sale of designated securities to the purchaser or purchasers named therein. The
standard provisions set forth herein may be incorporated by reference in any
such purchase agreement ("Purchase Agreement"). The Purchase Agreement,
including the provisions incorporated therein by reference, is herein sometimes
referred to as "this Agreement." Unless otherwise defined herein, terms defined
in the Purchase Agreement are used herein as therein defined.
1. INTRODUCTORY. The Company proposes to issue and sell from time to time
its Medium-Term Notes, Series H ("Notes") registered under the registration
statement referred to in Section 2(a). The Notes will be issued under an
Indenture, dated as of July 1, 1985, between the Company and The Bank of New
York (successor to Mercantile-Safe Deposit and Trust Company), as Trustee as
supplemented by the Supplemental Indentures dated as of October 1, 1987 and
January 26, 1993, respectively (the "Indenture"). The Notes will be sold to the
Purchasers for resale in accordance with the terms of the offering determined at
the time of the sale. The Notes involved in any such offering are hereinafter
referred to as the "Purchased Notes," and the firm or firms, as the case may be,
which agree to purchase the same are hereinafter referred to as the "Purchasers"
of such Purchased Notes. The terms "you" and "your" refer to those Purchasers
who sign the Purchase Agreement either on behalf of themselves only or on behalf
of themselves and as representatives of the several Purchasers named in Schedule
A thereto, as the case may be.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to and agrees with each Purchaser that:
(a) A registration statement on Form S-3 (No. 333-________), covering
$200 million principal amount of the Notes, including a prospectus has been
filed with the Securities and Exchange Commission ("Commission") and has
become effective. The terms Registration Statement and Prospectus shall
have the meanings ascribed to them in the Purchase Agreement.
(b) The Registration Statement conforms in all respects to the
requirements of the Securities Act of 1933, as amended ("Act"), and the
pertinent published rules and regulations of the Commission thereunder ("33
Act Rules and Regulations") and the Trust Indenture Act of 1939, as amended
("Trust Indenture Act"), and does not include any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, except
that the foregoing does not
<PAGE>
- 2 -
apply to statements or omissions in such document based upon written
information furnished to the Company by any Purchaser specifically for use
therein. The documents incorporated by reference in the Registration
Statement or the Prospectus pursuant to Item 12 of Form S-3 of the Act, at
the time they were filed with the Commission, complied in all material
respects with the requirements of the Securities Exchange Act of 1934, as
amended ("Exchange Act"), and the pertinent published rules and regulations
thereunder ("Exchange Act Rules and Regulations"). Any additional documents
deemed to be incorporated by reference in the Prospectus will, when they
are filed with the Commission, comply in all material respects with the
requirements of the Exchange Act and the Exchange Act Rules and Regulations
and will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
3. DELIVERY AND PAYMENT. The Company will deliver the Purchased Notes to
you for the accounts of the Purchasers, at the offices of the Trustee (at the
place specified in the Purchase Agreement) against payment of the purchase price
by certified or official bank check or checks in same day or New York or
Baltimore Clearing House funds drawn to the order of the Company, at the office
of the Company, 39 W. Lexington Street, Baltimore, Maryland, at the time set
forth in this Agreement or at such other time not later than seven full business
days thereafter as you and the Company determine, such time being herein
referred to as the "Closing Date." The Purchased Notes so to be delivered will
be in definitive fully registered form registered in such denominations, of
$1,000 or multiples thereof, and in such names as you request in writing not
later than 3:00 p.m., New York Time, on the third full business day prior to the
Closing Date, or, if no such request is received, in the names of the respective
Purchasers in the amounts agreed to be purchased by them pursuant to this
Agreement. The Company shall make the Purchased Notes available for checking and
packaging at the offices of the Trustee (at the place specified in the Purchase
Agreement) prior to the Closing Date and, unless prevented from doing so by
circumstances beyond its control, not later than 2:00 p.m., New York Time, on
the business day next preceding the Closing Date. If you request that any
Purchased Notes be issued in a name or names other than that of the Purchaser
agreeing to purchase such Purchased Notes hereunder, the Company shall not be
obligated to pay any transfer taxes resulting therefrom. The Notes may also be
represented by a permanent global Note or Notes, registered in the name of The
Depository Trust Company, as depositary (the "Depositary"), or a nominee of the
Depositary (each such Note represented by a permanent global Note being referred
to herein as a "Book-Entry Note"). Beneficial interests in Book-Entry Notes will
only be evidenced by, and transfers thereof will only be effected through,
records maintained by the Depositary's participants.
<PAGE>
- 3 -
4. OFFERING BY THE PURCHASERS. The several Purchasers propose to offer the
Purchased Notes for sale to the public as set forth in the Prospectus.
5. COVENANTS OF THE COMPANY. The Company covenants and agrees with the
several Purchasers that:
(a) It will promptly cause the Prospectus to be filed with the
Commission as required by Rule 424.
(b) For as long as a prospectus relating to the Purchased Notes is
required to be delivered under the Act, if any event relating to or
affecting the Company or of which the Company shall be advised in writing
by the Purchasers shall occur which, in the Company's opinion, should be
set forth in a supplement or amendment to the Prospectus in order either to
make the Prospectus comply with the requirements of the Act or which would
require the making of any change in the Prospectus so that as thereafter
delivered to purchasers such Prospectus will not contain any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading, the Company will promptly amend or
supplement the Prospectus by either (i) preparing and filing with the
Commission supplement(s) or amendment(s) to the Prospectus, or (ii) making
an appropriate filing pursuant to the Exchange Act, which will supplement
or amend the Prospectus so that, as supplemented or amended, the Prospectus
when the Prospectus is delivered to a purchaser will comply with the Act
and will not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading.
Prior to any such filing, the Company shall give oral notice to the
Purchasers.
(c) Not later than 45 days after the end of the 12-month period
beginning at the end of the fiscal quarter of the Company in which the
Closing Date occurs, the Company will make generally available to its
security holders an earnings statement (which need not be audited) covering
such 12-month period which will satisfy the provisions of Section 11(a) of
the Act.
(d) The Company will furnish to you copies of the following documents,
in each case as soon as available after filing and in such quantities as
you reasonably request (i) the Registration Statement relating to the Notes
as originally filed and all pre-effective amendments thereto (at least one
of which will be signed and will include all exhibits except those
incorporated by reference to previous filings with the Commission); (ii)
each prospectus relating to the Purchased Notes; and (iii) during the time
when a
<PAGE>
- 4 -
prospectus relating to the Purchased Notes is required to be delivered
under the Act, all post-effective amendments and supplements to the
Registration Statement or Prospectus, respectively (except supplements
relating to securities that are not Purchased Notes).
(e) The Company will use its best efforts to obtain the qualification
of the Purchased Notes for sale and the determination of their eligibility
for investment under the laws of such jurisdictions as you designate and
will continue such qualifications in effect so long as required for the
distribution, provided, however, that the Company shall not be required to
qualify as a foreign corporation or to file any consent to service of
process under the laws of any jurisdiction or to comply with any other
requirements deemed by the Company to be unduly burdensome.
(f) During the period of five years after the Closing Date, the
Company will furnish to you, and upon request, to each of the other
Purchasers: (i) as soon as practicable after the end of each fiscal year, a
copy of its annual report to shareholders for such year, (ii) as soon as
available, a copy of each report or definitive proxy statement of the
Company filed with the Commission under the Exchange Act or mailed to
shareholders, and (iii) from time to time, such other information
concerning the Company as you may reasonably request.
(g) The Company will pay all expenses incident to the performance of
its obligations under this Agreement, and will reimburse the Purchasers for
any expenses (including Blue Sky fees not exceeding $6,000 and
disbursements of counsel) incurred by them in connection with qualification
of the Purchased Notes for sale and determination of their eligibility for
investment under the laws of such jurisdictions as you designate and the
printing of memoranda relating thereto, for any filing fees charged by
investment rating agencies for the rating of the Purchased Notes, for any
expenses incurred in connection with listing the Purchased Notes on a
national securities exchange and for expenses incurred in distributing
prospectuses to the Purchasers, except that if this Agreement is terminated
by the Purchasers under Section 6(c) hereof, the Company shall not be
obligated to reimburse the Purchasers for any of the foregoing expenses.
(h) The Company will not offer or sell any of its other debt
securities which are substantially similar to the Purchased Notes prior to
ten business days after the Closing Date without the consent of the
Purchasers.
6. CONDITIONS OF THE OBLIGATIONS OF THE PURCHASERS. The obligations of the
several Purchasers to purchase and pay for the Purchased Notes will be subject
to the accuracy of the
<PAGE>
- 5 -
representations and warranties on the part of the Company herein, to the
accuracy of the statements of Company officers made pursuant to the provisions
hereof, to the performance by the Company of its obligations hereunder and to
the following additional conditions precedent:
(a) Subsequent to the signing of this Agreement, you shall have
received a letter of PricewaterhouseCoopers LLP, dated the Closing Date,
confirming that they are independent public accountants within the meaning
of the Act and the 33 Act Rules and Regulations, and stating in effect
that:
(i) In their opinion, the consolidated financial statements and
supporting schedules audited by them which are included in the
Company's Form 10-K ("Form 10-K"), which is incorporated by reference
in the Registration Statement comply in form in all material respects
with the applicable accounting requirements of the Act and the 33 Act
Rules and Regulations and the Exchange Act and the Exchange Act Rules
and Regulations;
(ii) On the basis of procedures specified in such letter (but not
an audit in accordance with generally accepted auditing standards),
including reading the minutes of meetings of the shareholders, the
Board of Directors and the Executive Committee of the Company since
the end of the year covered by the Form 10-K as set forth in the
minute books through a specified date not more than five days prior to
the Closing Date, performing procedures specified in Statement on
Auditing Standards No. 71, Interim Financial Information, on the
unaudited interim consolidated financial statements of the Company
incorporated by reference in the Registration Statement, if any, and
reading the latest available unaudited interim consolidated financial
statements of the Company, and making inquiries of certain officials
of the Company who have responsibility for financial and accounting
matters as to whether the latest available financial statements not
incorporated by reference in the Registration Statement are prepared
on a basis substantially consistent with that of the audited
consolidated financial statements incorporated in the Registration
Statement, nothing has come to their attention that has caused them to
believe that (1) any unaudited consolidated financial statements
incorporated by reference in the Registration Statement do not comply
in form in all material respects with the applicable requirements of
the Act and the 33 Act Rules and Regulations and the Exchange Act and
the Exchange Act Rules and Regulations or any material modifications
should be made to those unaudited consolidated financial statements
for them to be in conformity with generally accepted accounting
principles; (2) at the date of the latest available balance sheet not
incorporated by
<PAGE>
- 6 -
reference in the Registration Statement there was any change in the
capital stock, change in long-term debt or decrease in consolidated
net assets or common shareholders' equity as compared with the amounts
shown in the latest balance sheet incorporated by reference in the
Registration Statement or for the period from the closing date of the
latest income statement incorporated by reference in the Registration
Statement to the closing date of the latest available income statement
read by them there were any decreases, as compared with the
corresponding period of the previous year, in operating revenues,
operating income, net income, the ratio of earnings to fixed charges
(measured on the most recent twelve month period), or in earnings per
share of common stock except in all instances of changes or decreases
that the Registration Statement discloses have occurred or may occur,
or which are described in such letter; or (3) at a specified date not
more than five days prior to the Closing Date, there was any change in
the capital stock or long-term debt of the Company or, at such date,
there was any decrease in net assets of the Company as compared with
amounts shown in the latest balance sheet incorporated by reference in
the Registration Statement, [or for the period from the closing date
of the latest income statement incorporated by reference in the
Registration Statement to a specified date not more than five days
prior to the Closing Date, there were any decreases as compared with
the corresponding period of the previous year, in operating revenues,
operating income, net income or in earnings applicable to common
stock,] except in all cases for changes or decreases which the
Registration Statement discloses have occurred or may occur, or which
are described in such letter; and
(iii) Certain specified procedures have been applied to certain
financial or other statistical information (to the extent such
information was obtained from the general accounting records of the
Company) set forth or incorporated by reference in the Registration
Statement and that such procedures have not revealed any disagreement
between the financial and statistical information so set forth or
incorporated and the underlying general accounting records of the
Company, except as described in such letter.
(b) Prior to the Closing Date, no stop order suspending the effectiveness
of the Registration Statement shall have been issued and no proceedings for that
purpose shall have been instituted, or to the knowledge of the Company or you,
shall be contemplated by the Commission.
(c) Subsequent to the date of this Agreement, (i) there shall not have
occurred any change or any development involving a prospective change not
contemplated by the
<PAGE>
- 7 -
Prospectus in or affecting particularly the business or properties of the
Company which, in the judgment of a majority in interest of the Purchasers
including you, materially impairs the investment quality of the Purchased Notes,
(ii) no rating of any of the Company's debt securities shall have been lowered
by any recognized rating agency and (iii) trading in securities generally on the
New York Stock Exchange shall not have been suspended nor limited, other than a
temporary suspension in trading to provide for an orderly market, nor shall
minimum prices have been established on such Exchange, a banking moratorium
shall not have been declared either by New York State or Federal authorities and
there shall not have occurred an outbreak or escalation of major hostilities in
which the United States is involved or other substantial national or
international calamity or crisis, the effect of which on the financial markets
of the United States is such as to make it, in your judgment, impracticable to
market the Purchased Notes.
(d) There shall not be in effect on the Closing Date any order of the
Public Service Commission of Maryland which would prevent the issuance, sale and
delivery of the Purchased Notes in accordance with the terms contemplated by
this Agreement.
(e) You shall have received an opinion, dated the Closing Date, of a
counsel for the Company to the effect that:
(i) The Company and Constellation Enterprises, Inc. have been duly
incorporated and are validly existing as corporations in good standing
under the laws of the State of Maryland, with power and authority
(corporate and other) to own their respective properties and conduct their
respective businesses as described in the Prospectus; and the Company is
duly qualified to do business as a foreign corporation in good standing in
the Commonwealth of Pennsylvania and all other jurisdictions in which the
conduct of its business or the ownership of its properties requires such
qualification and the failure to do so would have a material and adverse
impact on its financial condition;
(ii) The Indenture has been duly authorized, executed and delivered by
the Company and is a valid instrument, legally binding on the Company and
enforceable in accordance with its terms, except as limited by bankruptcy,
insolvency, or other laws affecting the enforcement of creditors' rights
and by general principles of equity;
(iii) The issuance and sale of the Purchased Notes have been duly
authorized by all necessary corporate action of the Company. The Purchased
Notes being
<PAGE>
- 8 -
delivered to the Purchasers at the Closing (assuming that they have been
duly authenticated by the Trustee or a duly designated Authentication Agent
under the Indenture, which fact counsel need not verify by an inspection of
the Purchased Notes), have been duly issued and constitute legal, valid,
and binding obligations of the Company enforceable in accordance with their
terms, and are entitled to the benefits provided by the Indenture except as
such enforceability or entitlement may be limited by bankruptcy,
insolvency, or other laws affecting the enforcement of creditors' rights
and by general principles of equity;
(iv) The Registration Statement has become effective under the Act
and, (a) to the best of such counsel's knowledge, no stop order suspending
the effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or are pending or
contemplated under the Act; (b) the Registration Statement (as of its
effective date) and the Prospectus (as of the date of this Agreement) and
any amendments or supplements thereto, as of their respective dates,
appeared to comply as to form in all material respects with the
requirements of Form S-3 under the Act and the 33 Act Rules and Regulations
and the Trust Indenture Act; (c) such counsel has no reason to believe that
either the Registration Statement or the Prospectus, or any such amendment
or supplement, as of such respective dates, contained any untrue statement
of a material fact or omitted to state any material fact required to be
stated therein or necessary to make the statement therein not misleading;
(d) the descriptions in the Registration Statement and Prospectus of
statutes, legal and governmental proceedings and contracts and other
documents are accurate and fairly present the information required to be
shown; (e) and such counsel does not know of any legal or governmental
proceedings required to be described in the Prospectus which are not
described as required, or of any contracts or documents of a character
required to be described in the Registration Statement or Prospectus or to
be filed as exhibits to the Registration Statement which are not described
or filed as required; it being understood that such counsel, in addressing
the matters covered in this paragraph (iv) need express no opinion as to
the financial statements or other financial and statistical information
contained in the Registration Statement or the Prospectus or incorporated
therein or attached as an exhibit thereto or as to the Statement of
Eligibility and Qualification on Form T-l of the Trustee under the
Indenture.
(v) The approval of the Public Service Commission of Maryland
necessary for the valid issuance by the Company
<PAGE>
- 9 -
of the Purchased Notes pursuant to this Agreement has been obtained and
continues in full force and effect. The Company has received the approval
of FERC for the issuance of Purchased Notes on or before December 31,
[1998] with maturities of not more than 12 months after the date of
issuance and the approval of FERC will be required for the issuance of any
Purchased Notes having such maturities after December 31, [1998] and such
counsel knows of no other approval of any other regulatory authority which
is legally required for the valid offering, issuance, sale and delivery of
the Purchased Notes by the Company under this Agreement (except that such
opinion need not pass upon the requirements of state securities acts);
(vi) To the best of such counsel's knowledge and belief, the
consummation of the transactions contemplated in this Agreement and the
compliance by the Company with all the terms of the Indenture did not and
will not result in a breach of any of the terms and provisions of, or
constitute a default under, the Company's Charter or By-Laws or any
indenture, mortgage or deed of trust or other agreement or instrument to
which the Company is a party;
(vii) Each of this Agreement, the Interest Calculation Agency
Agreement and the Letter of Representations has been duly authorized,
executed and delivered by the Company;
(viii) The Indenture is duly qualified under the Trust Indenture Act;
(ix) The issuance, sale and delivery of the Purchased Notes as
contemplated by this Agreement are not subject to the approval of the
Securities and Exchange Commission under the provisions of the Public
Utility Holding Company Act of 1935 (the "1935 Act"); and
(x) The Notes and Indenture conform as to legal matters with the
statements concerning them in the Registration Statement and Prospectus
under the caption "DESCRIPTION OF NOTES" and on the cover page of the
Prospectus.
(f) The Agents shall have received from Cahill Gordon & Reindel, counsel
for the Agents, an opinion dated the Closing Date, with respect to the matters
referred to in paragraph 6(e) subheadings (ii), (iii), (iv)b, (v), (vii), (viii)
and (x) and such other matters as the Agents shall reasonably request and the
Company shall have furnished to such counsel such documents as they request for
the purpose of enabling them to pass on such matters.
<PAGE>
- 10 -
In rendering such opinion, Cahill Gordon & Reindel may rely, as to the
incorporation of the Company, the approval of the Public Service Commission of
Maryland required for the issuance, sale and delivery of the Purchased Notes and
all other matters governed by the laws of the State of Maryland, the
applicability of the 1935 Act, and FERC approval for the issuance, sale and
delivery of the Purchased Notes, upon the opinion of Counsel for the Company
referred to above.
In addition, such counsel shall state that such counsel has participated in
conferences with officers, counsel and other representatives of the Company,
representatives of the independent public accountants for the Company and
representatives of the Purchasers at which the contents of the Registration
Statement and the Prospectus and related matters were discussed; and, although
such counsel is not passing upon and does not assume responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement and Prospectus (except as to the matters referred to in
their opinion rendered pursuant to subheading (x) above), on the basis of the
foregoing (relying as to materiality to a large extent upon the opinions of
officers, counsel and other representatives of the Company), no facts have come
to the attention of such counsel which lead such counsel to believe that either
the Registration Statement (as of its effective date) or the Prospectus (as of
the date of this Agreement), and any subsequent amendments or supplements
thereto, as of their respective dates, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make such statements therein not misleading (it being understood
that such counsel need make no comment with respect to the financial statements
and other financial and statistical data included in the Registration Statement
or Prospectus or incorporated therein or as to the Statement of Eligibility and
Qualification on Form T-l of the Trustee under the Indenture).
(g) You shall have received a certificate of the Chairman of the
Board,Vice Chairman, President or any Vice President and a principal
financial or accounting officer of the Company, dated the Closing Date, in
which such officers shall state, to the best of their knowledge after
reasonable investigation, and relying on opinions of counsel to the extent
that legal matters are involved, that the representations and warranties of
the Company in this Agreement are true and correct in all material
respects, that the Company has complied with all agreements and satisfied
all conditions on its part to be performed or satisfied at or prior to the
Closing Date, that no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose
have been instituted or are contemplated by the Commission, and that,
subsequent to the date of the most recent financial statements set forth or
incorporated by reference in the Prospectus, there has been
<PAGE>
- 11 -
no material adverse change in the financial position or in the financial
results of operation of the Company except as set forth or contemplated in
the Prospectus or as described in such certificate.
(h) The Company will furnish you with such conformed copies of such
opinions, certificates, letters and documents as you reasonably request.
In case any such condition shall not have been satisfied, this Agreement
may be terminated by you upon notice in writing or by telecopy to the Company
without liability or obligation on the part of the Company or any Purchaser,
except as set forth in Section 10 hereof.
7. CONDITIONS OF THE OBLIGATIONS OF THE COMPANY. The obligations of the
Company to sell and deliver the Purchased Notes are subject to the following
conditions precedent:
(a) Prior to the Closing Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or, to the
knowledge of the Company or you, shall be contemplated by the Commission.
(b) There shall not be in effect on the Closing Date any order of the
Maryland Commission or Federal Energy Regulatory Commission which would
prevent the issuance, sale and delivery of the Purchased Notes or which
contains conditions or provisions with respect thereto which are not
acceptable to the Company, it being understood that no order in effect at
the date of this Agreement contains any such unacceptable conditions or
provisions.
If any such condition shall not have been satisfied, then the Company
shall be entitled, by notice in writing or by telecopy to you, to terminate
this Agreement without any liability on the part of the Company or any
Purchaser, except as set forth in Section 10 hereof.
8. INDEMNIFICATION.
(a) The Company will indemnify and hold harmless each Purchaser and
each person, if any, who controls any Purchaser within the meaning of the
Act or Exchange Act against any losses, claims, damages or liabilities,
joint or several, to which such Purchaser or such controlling person may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement or the Prospectus, or any
related preliminary prospectus or arise out of or are based upon the
omission or alleged omission to state therein a material fact
<PAGE>
- 12 -
required to be stated therein or necessary to make the statements therein
not misleading; and will reimburse each Purchaser and each such controlling
person for any legal or other expenses reasonably incurred by such
Purchaser or such controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action; provided,
however, that the Company will not be liable to such Purchaser or
controlling person in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made
in any such documents in reliance upon and in conformity with written
information furnished to the Company by such Purchaser or such controlling
person specifically for use therein unless such loss, claim, damage or
liability arises out of the offer or sale of the Purchased Notes occurring
after such Purchaser or controlling person has notified the Company in
writing that such information should no longer be used therein. This
indemnity agreement will be in addition to any liability which the Company
may otherwise have.
(b) Each Purchaser will indemnify and hold harmless the Company, each
of its directors, each of its officers who have signed the Registration
Statement and each person, if any, who controls the Company within the
meaning of the Act or the Exchange Act, against any losses, claims, damages
or liabilities to which the Company or any such director, officer or
controlling person may become subject, under the Act, or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Registration
Statement or the Prospectus, or any related preliminary prospectus or arise
out of or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only
to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity
with written information furnished to the Company by such Purchaser
specifically for use therein; and will reimburse any legal or other
expenses reasonably incurred by the Company or any such director, officer
or controlling person in connection with investigating or defending any
such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that such Purchaser will not be liable to the
Company, or any such director, officer or controlling person in any such
case to the extent that any such loss, claim, damage or liability arises
out of the offer or sale of Purchased Notes occurring after such Purchaser
has notified the Company in writing that such information should no longer
be used therein. This indemnity agreement will be in
<PAGE>
- 13 -
addition to any liability which such Purchaser may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party
under (a) and (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not
relieve it from any liability which it may have to any indemnified party
otherwise than under this Section. In case any such action is brought
against any indemnified party, and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel satisfactory to such indemnified party (who may, with the
consent of the indemnified party, be counsel to the indemnifying party) and
who shall not be counsel to any other indemnified party who may have
interests conflicting with those of such indemnified party, and after
notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will not
be liable to such indemnified party under this Section for any legal or
other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation.
(d) If recovery is not available under the foregoing indemnification
provisions of this Section, for any reason other than as specified therein,
the parties entitled to indemnification by the terms thereof shall be
entitled to contribution to liabilities and expenses, except to the extent
that contribution is not permitted under Section 11(f) of the Act. In
determining the amount of contribution to which the respective parties are
entitled, there shall be considered the relative benefits received by each
party from the offering of the Purchased Notes (taking into account the
portion of the proceeds of the offering realized by each), the parties'
relative knowledge and access to information concerning the matter with
respect to which the claim was asserted, the opportunity to correct and
prevent any statement or omission, and any other equitable considerations
appropriate under the circumstances. The Company and the Purchasers and
such controlling persons agree that it would not be equitable if the amount
of such contribution were determined by pro rata or per capita allocation
(even if the Purchasers and such controlling persons were treated as one
entity for such purpose). Notwithstanding the provisions of this subsection
(d), no Purchaser or controlling person shall be required to make
contribution hereunder which in the aggregate exceeds the total public
offering price of the Purchased Notes, purchased by the Purchaser under
this
<PAGE>
- 14 -
Agreement, less the aggregate amount of any damages which such Purchaser or
such controlling person has otherwise been required to pay in respect of
the same claim or any substantially similar claim. The Purchasers'
obligations to contribute are several in proportion to their respective
underwriting obligations and are not joint.
9. DEFAULT OF PURCHASERS. If any Purchaser or Purchasers default in their
obligations to purchase Purchased Notes hereunder and the aggregate principal
amount of Purchased Notes which such defaulting Purchaser or Purchasers agreed
but failed to purchase is 10% of the principal amount of Purchased Notes or
less, you may make arrangements satisfactory to the Company for the purchase of
such Purchased Notes by other persons, including any of the Purchasers, but if
no such arrangements are made by the Closing Date the non-defaulting Purchasers
shall be obligated severally, in proportion to their respective commitments
hereunder, to purchase the Purchased Notes which such defaulting Purchasers
agreed but failed to purchase. If any Purchaser or Purchasers so default and the
aggregate principal amount of Purchased Notes with respect to which such default
or defaults occur is more than the above percentage and arrangements
satisfactory to you and the Company for the purchase of such Purchased Notes by
other persons are not made within thirty-six hours after such default, this
Agreement will terminate without liability on the part of any non-defaulting
Purchaser or the Company, except as provided in Section 10. In the event that
any Purchaser or Purchasers default in their obligation to purchase Purchased
Notes hereunder, the Company may, by prompt written notice to the non-defaulting
Purchasers, postpone the Closing Date for a period of not more than seven full
business days in order to effect whatever changes may thereby be made necessary
in the Registration Statement or the Prospectus or in any other documents, and
the Company will promptly file any amendments to the Registration Statement or
supplements to the Prospectus which may thereby be made necessary. As used in
this Agreement, the term "Purchaser" includes any person substituted for a
Purchaser under this Section. Nothing herein will relieve a defaulting Purchaser
from liability for its default.
10. SURVIVAL OF CERTAIN REPRESENTATIONS AND OBLIGATIONS. The respective
indemnities, agreements, representations, warranties, and other statements of
the Company or its officers and of the several Purchasers set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation, or statement as to the results thereof, made by or on behalf
of any Purchaser or the Company or any of its officers or directors or any
controlling person, and will survive delivery of and payment for the Purchased
Notes. If this Agreement is terminated pursuant to Section 6, 7 or 9 or if for
any reason the purchase of the Purchased Notes by the Purchasers is not
consummated, the Company shall remain responsible for the expenses to be paid or
reimbursed by it pursuant to Section 5(g).
<PAGE>
- 15 -
In addition, in such event the respective obligations of the Company and the
Purchasers pursuant to Section 8 shall remain in effect; provided, however, that
you will use your best efforts to promptly notify each other Purchaser and each
dealer and prospective customer to whom you have delivered a Prospectus for the
Purchased Notes by telephone or telegraph, confirmed by letter in either case,
of such termination or failure to consummate, including in such notice
instructions regarding the continued use of the Registration Statement, the
Prospectus, or any amendment or supplement thereto, or any related preliminary
prospectus.
11. NOTICES. All communications hereunder will be in writing, and, if sent
to the Purchasers will be delivered or telecopied and confirmed to the address
furnished in writing for the purpose of such communications hereunder, or, if
sent to the Company, will be delivered or telecopied and confirmed to it,
attention of Treasurer at 39 W. Lexington Street, Baltimore, Maryland 21201,
telecopier (410) 234-5367; provided, however, that any notice to a Purchaser
pursuant to Section 8 will be mailed, delivered or telecopied to such Purchaser
at its address appearing in its Purchasers' Questionnaire.
12. SUCCESSORS. This Purchase Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 8, and no other
person will have any right or obligation hereunder.
13. CONSTRUCTION. This Purchase Agreement shall be governed by and
construed in accordance with the laws of the State of Maryland.
14. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and it is not necessary that the signatures of all parties appear
on the same counterpart, but such counterparts together shall constitute but one
and the same agreement.
<PAGE>
Exhibit D
to Agency Agreement
PURCHASE AGREEMENT
(for purchaser's account)
[Date]
Baltimore Gas and Electric Company
39 W. Lexington Street
Baltimore, Maryland 21201
Attention: Treasurer
The undersigned agrees to purchase the following principal amount of the
Notes described in the Agency Agreement among Baltimore Gas and Electric
Company, Lehman Brothers, Lehman Brothers Inc., and Goldman, Sachs & Co. dated
_____________, 1998 (the "Agency Agreement"):
Principal Amount: $ ________________
Fixed Interest Rate (if applicable): ________________%
Floating Interest Rate (if applicable):
Interest Rate Basis: ________________
Spread: ________________
Spread Multiplier: ________________
Index Maturity: ________________
Initial Interest Rate: ________________
Maximum Interest Rate: ________________
Minimum Interest Rate: ________________
Interest Reset Dates: ________________
<PAGE>
Interest Determination Dates: ________________
Calculation Agent: ________________
Interest Payment Dates: ________________
Stated Maturity: ________________
Redeemable at the option Redemption Prices
of the Company on or after: (% of Principal Amount):
-------------------------- ----------------------
________________ ________________
________________ ________________
________________ ________________
Subject to repurchase by
the Company at the option Repurchase Prices
of the holder on: (% of Principal Amount):
________________ ________________
________________ ________________
________________ ________________
Discount: ________ % of Principal Amount
Price to be paid
to Company
(in immediately
available funds): $ _______________
Settlement Date: ____________ , 19 ___
Except as otherwise expressly provided therein, all terms used herein which
are defined in the Agency Agreement shall have the same meanings as in the
Agency Agreement. The term Agent, as used in the Agency Agreement, shall be
deemed to refer only to the undersigned for purposes of this Agreement.
This Agreement incorporates by reference Sections 4, 6, 7, 12 and 13 of the
Agency Agreement, the first and last sentences of Section 9 thereof and, to the
extent applicable, the Procedures. You and we agree to perform, to the extent
applicable, our respective duties and obligations specifically provided to be
performed by each of us in the Procedures.
<PAGE>
Our obligation to purchase Notes hereunder is subject to the accuracy on
the above Settlement Date of your representations and warranties contained in
Section 2 of the Agency Agreement (it being understood that such representations
and warranties shall relate to the Registration Statement and the Prospectus as
amended at such Settlement Date) and to your performance and observance of all
covenants and agreements contained in Sections 4 and 6 thereof. Our obligation
hereunder is also subject to the following conditions:
(a) the satisfaction, at such Settlement Date, of each of the conditions
set forth in subsections (a), (b) and (d) through (h) of Section 5 of the Agency
Agreement (it being understood that each document so required to be delivered
shall be dated such Settlement Date and that each such condition and the
statements contained in each such document that relate to the Registration
Statement or the Prospectus shall be deemed to relate to the Registration
Statement or the Prospectus, as the case may be, as amended or supplemented at
the time of settlement on such Settlement Date and except that the opinion
described in Section 5(d) of the Agency Agreement shall be modified so as to
state that the Notes being sold on such Settlement Date, when delivered against
payment therefor as provided in the Indenture and this Agreement, will have been
duly executed, authenticated, issued and delivered and will constitute valid and
legally binding obligations of the Company enforceable in accordance with their
terms, subject only to the exceptions as to enforcement set forth in clause (ii)
of Section 5(d) of the Agency Agreement, and will conform to the description
thereof contained in the Prospectus as amended or supplemented at such
Settlement Date); and
(b) there shall not have occurred (i) any change, or any development
involving a prospective change not contemplated by the Prospectus, in or
affecting particularly the business or properties of the Company which, in our
judgment, materially impairs the investment quality of the Notes, (ii) any
downgrading in the rating of the Company's debt securities by any "nationally
recognized statistical rating organization" (as defined for purposes of Rule
436(g) under the Act); (iii) any suspension or limitation of trading, other than
a temporary suspension in trading to provide for an orderly market, in
securities generally on the New York Stock Exchange, or any setting of minimum
prices for trading on such exchange, or any suspension of trading of any
<PAGE>
securities of the Company on any exchange or in the over-the-counter market;
(iv) any banking moratorium declared by Federal or New York authorities; or (v)
any outbreak or escalation of major hostilities in which the United States is
involved, any declaration of war by Congress or any other substantial national
or international calamity or emergency if, in our judgment, the effect of any
such outbreak, escalation, declaration, calamity or emergency makes it
impractical or inadvisable to proceed with completion of the sale of and payment
for the Notes.
In further consideration of our agreement hereunder, you agree that between
the date hereof and the above Settlement Date, you will not offer or sell, or
enter into any agreement to sell, any debt securities of the Company in the
United States, other than sales of Notes, borrowings under your revolving credit
agreements and lines of credit, the private placement of securities and
issuances of your commercial paper.
If for any reason our purchase of the above Notes is not consummated, you
shall remain responsible for the expenses to be paid or reimbursed by you
pursuant to Section 4 of the Agency Agreement and the respective obligations of
you and the undersigned pursuant to Section 7 shall remain in effect. If for any
reason our purchase of the above Notes is not consummated other than because of
our default or a failure to satisfy a condition set forth in clause (iii), (iv)
or (v) of paragraph (b) above, you shall reimburse us, severally, for all
out-of-pocket expenses reasonably incurred by us in connection with the offering
of the above Notes and not otherwise required to be reimbursed pursuant to
Section 4 of the Agency Agreement.
<PAGE>
This Agreement shall be governed by and construed in accordance with the
laws of the State of Maryland. This Agreement may be executed in counterparts
and the executed counterparts shall together constitute a single instrument.
[Insert Name of Purchaser]
By: __________________________
CONFIRMED AND ACCEPTED, as of
the date first above written:
BALTIMORE GAS AND ELECTRIC COMPANY
By: _______________________________
Exhibit 1(b)
$200,000,000
MEDIUM-TERM NOTES, SERIES H
DUE FROM NINE MONTHS TO THIRTY YEARS
FROM DATE OF ISSUE
FORM OF INTEREST CALCULATION AGENCY AGREEMENT
THIS AGREEMENT dated as of __________, 1998 between Baltimore
Gas and Electric Company (hereinafter called the "Issuer"),
having its principal office at 39 W. Lexington Street,
Baltimore, Maryland 21201, and The Bank of New York, a New
York banking corporation (hereinafter sometimes called the
"Calculation Agent or Paying Agent" which terms shall, unless
the context shall otherwise require, include its successors
and assigns), having its principal corporate trust office at
101 Barclay Street, New York, New York 10286.
RECITALS OF THE ISSUER
The Issuer proposes to issue from time to time up to
$200,000,000 aggregate principal amount of Medium-Term Notes, Series H (the
"Notes") under the Indenture dated as of July 1, 1985 as supplemented by the
Supplemental Indentures dated as of October 1, 1987, and January 26, 1993,
respectively (the "Indenture"), between the Issuer and The Bank of New York
(successor to Mercantile-Safe Deposit and Trust Company) (the "Trustee"), as
Trustee. Capitalized terms used in this Agreement
<PAGE>
and not otherwise defined herein are used as defined in the Indenture. Certain
of the Notes may bear interest at a floating rate determined by reference to an
interest rate formula (the "Floating Rate Notes") and the Issuer desires to
engage the Calculation Agent to perform certain services in connection
therewith.
NOW IT IS HEREBY AGREED THAT:
1. The Issuer hereby appoints The Bank of New York as
Calculation Agent for the Floating Rate Notes, upon the terms and subject to the
conditions herein mentioned, and The Bank of New York hereby accepts such
appointment. The Calculation Agent shall act as an agent of the Issuer for the
purpose of determining the interest rate or rates of the Floating Rate Notes.
2. The Issuer agrees to deliver to the Calculation Agent,
prior to the issuance of any Floating Rate Notes, copies of the proposed forms
of such Notes, including copies of all terms and conditions relating to the
determination of the interest rate thereunder. The Issuer shall not issue any
Floating Rate Note prior to the receipt of confirmation from the Calculation
Agent of its acceptance of the proposed form of such Note. The Calculation Agent
hereby acknowledges its acceptance of the proposed form of Floating Rate Note
previously delivered to it.
2
<PAGE>
3. The Issuer shall notify the Calculation Agent of the
issuance of any Floating Rate Notes prior to the issuance thereof and, at the
time of such issuance, shall deliver to the Calculation Agent the information
required to be provided by the Company for the calculation of the applicable
interest rates thereunder. The Calculation Agent shall calculate the applicable
interest rates for Floating Rate Notes in accordance with the terms of such
Notes, the Indenture and the provisions of this Agreement.
4. Promptly following the determination of each change to the
interest rate applicable to any Floating Rate Note, the Calculation Agent will
cause to be forwarded to the Issuer, the Trustee and the principal Paying Agent
information regarding the interest rate then in effect for such Floating Rate
Note.
5. The Issuer will pay such compensation as shall be agreed
upon with the Calculation Agent and the expenses, including reasonable counsel
fees, incurred by the Calculation Agent in connection with its duties hereunder,
upon receipt of such invoices as the Issuer shall reasonably require.
6. Notwithstanding any satisfaction or discharge of the Notes
or the Indenture, the Issuer will indemnify the Calculation Agent against any
losses, liabilities, costs, claims, actions or demands which it may incur or
sustain or which may be
3
<PAGE>
made against it in connection with its appointment or the exercise of its powers
and duties hereunder as well as the reasonable costs, including the expenses and
fees of counsel in defending any claim, action or demand, except such as may
result from the negligence, willful misconduct or bad faith of the Calculation
Agent or any of its employees. The Calculation Agent shall incur no liability
and shall be indemnified and held harmless by the Issuer for, or in respect of,
any actions taken or suffered to be taken in good faith by the Calculation Agent
in reliance upon written instructions from the Issuer. In case any action is
brought against the Calculation Agent with respect to which the Calculation
Agent intends to seek indemnification from the Issuer pursuant to this paragraph
6, the Calculation Agent will notify the Issuer in writing of the commencement
thereof, and the Issuer will be entitled to participate therein and to assume
the defense thereof, with counsel satisfactory to the Calculation Agent;
PROVIDED, HOWEVER, that if the defendants in any such action include both the
Issuer and the Calculation Agent and the Calculation Agent shall have reasonably
concluded, after consultation with legal counsel of its choosing, that there may
be legal defenses available to it which are different from or additional to
those available to the Issuer, the Calculation Agent shall have the right to
select separate counsel to assert such legal defenses and otherwise to
participate in the defense of such action on behalf of the Calculation Agent,
and in such event the Issuer will indemnify the Calculation Agent against the
4
<PAGE>
reasonable compensation and expenses and disbursements of such separate counsel.
7. The Calculation Agent may consult with counsel (and notify
the Issuer of such consultation) and the written advice of such counsel or any
opinion of counsel shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good faith
and in reliance thereon.
8. The Calculation Agent accepts its obligations herein set
forth upon the terms and conditions hereof, including the following, to all of
which the Issuer agrees:
(i) in acting under this Agreement and in connection
with the Notes, the Calculation Agent, acting as agent for the
Issuer, does not assume any obligation towards, or any
relationship of agency or trust for or with, any of the
Holders of the Notes;
(ii) unless herein otherwise specifically provided,
any order, certificate, notice, request or communication from
the Issuer made or given under any provision of this Agreement
shall be sufficient if signed by any person whom the
Calculation Agent reasonably believes to be a duly authorized
officer or attorney-in-fact of the Issuer;
5
<PAGE>
(iii) the Calculation Agent shall be obligated to
perform only such duties as are set forth specifically herein
and any duties necessarily incidental thereto;
(iv) the Calculation Agent shall be protected and
shall incur no liability for or in respect of any action taken
or omitted to be taken or anything suffered in good faith by
it in reliance upon anything contained in a Floating Rate
Note, the Indenture or any information supplied to it by the
Issuer pursuant to this Agreement, including the information
to be supplied pursuant to paragraph 3 above;
(v) the Calculation Agent, whether acting for itself
or in any other capacity, may become the owner or pledgee of
Notes with the same rights as it would have had if it were not
acting hereunder as Calculation Agent; and
(vi) the Calculation Agent shall incur no liability
hereunder except for loss sustained by reason of its
negligence, willful misconduct or bad faith.
9. (a) The Issuer agrees to notify the Calculation Agent at
least 3 business days prior to the issuance of any Floating Rate Note with an
interest rate to be determined by reference to London interbank offered rates
(LIBOR) or any other formula that would require the Calculation Agent to select
banks or other financial institutions (the "Reference Banks") for purposes of
quoting rates. Promptly thereafter, the Calculation
6
<PAGE>
Agent will notify the Issuer and the Trustee of the names and addresses of such
Reference Banks. Forthwith upon any change in the identity of the Reference
Banks, the Calculation Agent shall notify the Issuer and the Trustee of such
change. The Calculation Agent shall not be responsible to the Issuer or any
third party for any failure of the Reference Banks to fulfill their duties or
meet their obligations as Reference Banks or as a result of the Calculation
Agent having acted (except in the event of negligence or willful misconduct) on
any quotation or other information given by any Reference Bank which
subsequently may be found to be incorrect.
(b) Except as provided below, the Calculation Agent may at
any time resign as Calculation Agent by giving written notice to the Issuer and
the Trustee of such intention on its part, specifying the date on which its
desired resignation shall become effective, provided that such notice shall
be given not less than 60 days prior to the said effective date unless the
Issuer and the Trustee otherwise agree in writing. Except as provided below, the
Calculation Agent may be removed by the filing with it and the Trustee of an
instrument in writing signed by the Issuer specifying such removal and the date
when it shall become effective (such effective date being at least 15 days after
said filing). Any such resignation or removal shall take effect upon:
(i) the appointment by the Issuer as hereinafter provided of
a successor Calculation Agent; and
7
<PAGE>
(ii) the acceptance of such appointment by such successor
Calculation Agent;
PROVIDED, HOWEVER, that in the event the Calculation Agent has given not less
than 60 days' prior notice of its desired resignation, and during such 60 days
there has not been acceptance by a successor Calculation Agent of its
appointment as successor Calculation Agent, the Calculation Agent so resigning
may petition any court of competent jurisdiction for the appointment of a
successor Calculation Agent. The Issuer covenants that it shall appoint a
successor Calculation Agent as soon as practicable after receipt of any notice
of resignation hereunder. Upon its resignation or removal becoming effective,
the retiring Calculation Agent shall be entitled to the payment of its
compensation and the reimbursement of all reasonable expenses (including
reasonable counsel fees) incurred by such retiring Calculation Agent pursuant to
paragraph 5 hereof.
(c) If at any time the Calculation Agent shall resign or be
removed, or shall become incapable of acting or shall be adjudged bankrupt or
insolvent, or liquidated or dissolved, or an order is made or an effective
resolution is passed to wind up the Calculation Agent, or if the Calculation
Agent shall file a voluntary petition in bankruptcy or make an assignment for
the benefit of its creditors, or shall consent to the appointment of a receiver,
administrator or other similar official of all or any substantial part of its
property, or shall admit in writing its inability to pay or meet its debts as
they mature, or if a receiver, administrator or other similar official
8
<PAGE>
of the Calculation Agent or of all or any substantial part of its property shall
be appointed, or if any order of any court shall be entered approving any
petition filed by or against the Calculation Agent under the provisions of any
applicable bankruptcy or insolvency law, or if any public officer shall take
charge or control of the Calculation Agent or its property or affairs for the
purpose of rehabilitation, conservation or liquidation, then a successor
Calculation Agent shall be appointed by the Issuer by an instrument in writing
filed with the successor Calculation Agent and the Trustee. Upon the appointment
as aforesaid of a successor Calculation Agent and acceptance by the latter of
such appointment the former Calculation Agent shall cease to be Calculation
Agent hereunder.
(d) Any successor Calculation Agent appointed hereunder shall
execute and deliver to its predecessor, the Issuer and the Trustee and
instrument accepting such appointment hereunder, and thereupon such successor
Calculation Agent, without any further act, deed or conveyance, shall become
vested with all the authority, rights, powers, immunities, duties and
obligations of such predecessor with like effect as if originally named as the
Calculation Agent hereunder, and such predecessor, upon payment of its
reasonable compensation, charges and disbursements then unpaid, shall thereupon
become obliged to transfer and deliver, and such successor Calculation Agent
shall be entitled to receive, copies of any relevant records maintained by such
predecessor Calculation Agent.
9
<PAGE>
(e) Any corporation into which the Calculation Agent
may be merged or converted or any corporation with which the Calculation
Agent may be consolidated or any corporation resulting from any merger,
conversion or consolidation to which the Calculation Agent shall be a party
shall, to the extent permitted by applicable law, be the successor Calculation
Agent under this Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto. Notice of any such merger,
conversion or consolidation shall forthwith be given to the Issuer and the
Trustee.
(f) The provisions of paragraph 6 hereof shall survive any
resignation or removal hereunder.
10. Any notice required to be given hereunder shall be
delivered in person, by overnight mail or sent by facsimile or communicated by
telephone (subject, in the case of communication by telephone, to confirmation
dispatched within two business days by letter or facsimile), in the case of the
Issuer, to it at the address set forth in the heading of this Agreement,
Attention: Treasurer; in the case of the Trustee or the Calculation Agent, to it
at the address set forth in the heading of this Agreement; or, in any case, to
any other address of which the party receiving notice shall have notified the
party giving such notice in writing.
11. This Agreement may be amended only by a writing duly
executed and delivered by each of the parties signing below.
10
<PAGE>
12. The provisions of this Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
13. This Agreement may be executed in counterparts and the
executed counterparts shall together constitute a single instrument.
IN WITNESS WHEREOF, this Agreement has been executed and delivered as
of the day and year first above written.
BALTIMORE GAS AND ELECTRIC COMPANY
By: _____________________________
Title: __________________________
THE BANK OF NEW YORK
By: _____________________________
Title: __________________________
11
Exhibit 4(d)
FIXED-RATE MEDIUM TERM NOTE
FRONT
REGISTERED REGISTERED
No. FXR ___
CUSIP
BALTIMORE GAS AND ELECTRIC COMPANY
INCORPORATED UNDER THE LAWS OF THE STATE OF MARYLAND
MEDIUM-TERM NOTE, SERIES H
(FIXED-RATE)
[If this Note is registered in the name of The Depository Trust Company (the
"Depositary") (55 Water Street, New York, New York) or its nominee, this Note
may not be transferred except as a whole by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary unless and until
this Note is exchanged in whole or in part for Notes in definitive form. Unless
this certificate is presented by an authorized representative of the Depositary
to the Company or its agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co. or such other
name as requested by an authorized representative of the Depositary and any
payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner
hereof, Cede & Co. has an interest herein.]
- -----------------------------------------------------------------
PRINCIPAL AMOUNT: _____________________
INTEREST RATE: ______________________
STATED MATURITY: ______________________
ORIGINAL ISSUE DATE: ______________________
ISSUE PRICE: ______________________
REDEEMABLE
AT THE OPTION OF THE REDEMPTION PRICES
COMPANY ON OR AFTER (% OF PRINCIPAL AMOUNT)
______________________ ______________________
______________________ ______________________
______________________ ______________________
______________________ ______________________
-1-
<PAGE>
SUBJECT TO REPURCHASE
AT THE OPTION REPURCHASE PRICES
OF THE HOLDER ON (% OF PRINCIPAL AMOUNT)
______________________ ______________________
______________________ ______________________
______________________ ______________________
______________________ ______________________
[Remarketing provisions, if any, to be included here]
- -----------------------------------------------------------------
Baltimore Gas and Electric Company, a Maryland corporation
(herein called the "Company", which term includes any successor corporation
under the Indenture, as hereinafter defined), for value received, promises to
pay to Cede & Co. or its registered assigns, the principal sum of
_________________________________________________________ DOLLARS on the Stated
Maturity shown above and to pay interest on said principal sum from the Original
Issue Date shown above if interest has not been paid on this Note or from the
most recent Interest Payment Date for which interest has been paid or duly
provided for, at the fixed rate per annum shown above, semi-annually on May 1
and November 1 (the "Interest Payment Date(s)") of each year until the Stated
Maturity or upon redemption or repurchase of this Note. Each payment of interest
payable on each Interest Payment Date and at Stated Maturity or, if applicable,
upon redemption or repurchase shall include interest to, but excluding the
relevant Interest Payment Date and the date of Stated Maturity or redemption,
respectively. Said interest shall be computed on the basis of a 360-day year of
twelve 30-day months. In the event this Note is issued between a Record Date
(the April 15 and October 15 next preceding the May 1 and November 1 Interest
Payment Dates) and an Interest Payment Date or on an Interest Payment Date, the
first day that interest shall be payable will be on the Interest Payment Date
following the next succeeding Record Date. In the event of a default in the
payment of interest, interest will be payable as provided in that certain
Indenture dated as of July 1, 1985, as supplemented by the Supplemental
Indentures dated as of October 1, 1987, and January 26, 1993, respectively (the
"Indenture"), by and between the Company and The Bank of New York (successor to
Mercantile-Safe Deposit and Trust Company), a corporation duly organized and
existing under the laws of the State of New York , as Trustee (herein called the
"Trustee," which term includes any successor Trustee under the Indenture).
Pursuant to the provisions of the Indenture, the Company will
maintain an agency at The Bank of New York in The City of New York, New York
(the "Bank"), or at such other agencies as may from time to time be designated,
where the Notes may be presented for payment, for registration of transfer and
exchange, and where notices or demands to, or upon, the Company may be served.
The interest so payable on any May 1 or November 1 will, subject
to certain exceptions provided in the Indenture, be paid to the person in whose
name this Note is registered at the close of business on the Record Date for
such Interest Payment Date, which shall be the April 15 and October 15 next
preceding the May 1 and November 1 Interest Payment Dates; provided, however,
that
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<PAGE>
interest payable at Stated Maturity or, if applicable, upon redemption or
repurchase, shall be payable to the person to whom principal shall be payable.
Payment of the principal of and interest on this Note will be made at the Bank
in U.S. dollars; provided, however, that payments of interest (other than any
interest payable at Stated Maturity or upon redemption or repurchase) may be
made at the option of the Company (i) by checks mailed to the addresses of the
persons entitled thereto as such addresses shall appear in the register of the
Notes or (ii) by wire transfer to persons who are holders of record at such
other addresses that have been filed with the Bank on or prior to the Record
Date.
Payment of the principal, premium, if any, and interest payable
at Stated Maturity, or, if applicable, upon redemption or repurchase, on this
Note will be made in immediately available funds at the request of the holder
provided that this Note is presented to the Bank in time for the Bank to make
such payments in such funds in accordance with its normal procedures.
Reference is made to the further provisions of this Note set
forth on the reverse hereof, which shall have the same effect as though fully
set forth at this place.
Unless the certificate of authentication hereon has been executed
by or on behalf of the Trustee or a duly designated authentication agent by
manual signature, this Note shall not be entitled to any benefit under said
Indenture, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, Baltimore Gas and Electric Company has caused
this instrument to be executed in its corporate name with the manual or
facsimile signature of its President or a Vice President and a facsimile of its
corporate seal to be imprinted hereon, attested by the manual or facsimile
signature of its Secretary or an Assistant Secretary.
Dated:
BALTIMORE GAS AND ELECTRIC COMPANY
By: ____________________
President
ATTEST:
____________________ [SEAL]
Secretary
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the
series designated herein issued under
the Indenture described herein.
____________________
By: ____________________
Authorized Signatory
-3-
<PAGE>
FORM OF FIXED-RATE MEDIUM-TERM NOTE
(REVERSE)
BALTIMORE GAS AND ELECTRIC COMPANY
MEDIUM-TERM NOTE, SERIES H
(FIXED RATE)
This Note is one of a duly authorized issue of debt securities
(the "Securities") of the Company, of a series designated as its Medium-Term
Notes, Series H (herein called the "Notes"), limited (except as otherwise
provided in the Indenture) in aggregate principal amount to $200,000,000, issued
and to be issued under the Indenture, to which Indenture and all relevant
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, obligations, duties and immunities thereunder of the Company,
the Trustee, the Bank and the Securityholders and the terms upon which the Notes
are, and are to be, authenticated and delivered. The Securities, of which the
Notes constitute a series, may be issued in one or more series, which different
series may be issued in various aggregate principal amounts, may mature at
different times, may bear interest at different rates, may be subject to
different covenants and Events of Default and may otherwise vary as in the
Indenture provided. All capitalized terms not otherwise defined herein shall
have the definitions assigned to them in the Indenture.
This Note may not be redeemed by the Company prior to Stated
Maturity unless otherwise set forth on the face hereof. Notwithstanding Section
4.03 of the Indenture, pursuant to Section 4.01 thereof, and if so indicated on
the face of this Note, this Note may be redeemed at the option of the Company on
any date on or after the date set forth on the face hereof in whole or in part
in increments of $1,000, at a redemption price or prices designated on the face
hereof to be redeemed together with interest thereon payable to the date fixed
for redemption. This Note may be so redeemed in whole or in part whether or not
other Notes of the same series are redeemed.
Notice of redemption by the Company will be given by the Company
by mail to holders of the Notes to be redeemed, not less than 30 nor more than
60 days prior to the date fixed for redemption, all as provided in the
Indenture. The Bank may carry out the responsibilities to be performed by the
Trustee required by Article Four of the Indenture.
The Company is not required to repurchase Notes from holders prior to
Stated Maturity unless otherwise set forth on the face hereof. If so indicated
on the face hereof, this Note may be repurchased by the Company at the option of
the holder on the dates and at the prices designated thereon, in whole or in
part in increments of $1,000, together with interest payable to the repurchase
date. For book-entry notes, unless otherwise specified on the face of this Note,
holders must deliver written notice to the Bank at least 30, but no more than
60, days prior to the date
-4-
<PAGE>
of repurchase, but no later than 5:00 p.m. New York City time on the last day
for giving notice. The written notice must specify the principal amount to be
repurchased and must be signed by a duly authorized officer of the Depositary
participant (signature guaranteed). For definitive notes, unless otherwise
specified on the face of this Note, holders must complete the "Option to Elect
Repayment" on the reverse of this Note and then deliver this Note to the Bank at
least 30, but no more than 45, days prior to the date of repurchase, but no
later than 5:00 p.m. New York City time on the last day for giving notice. All
notices are irrevocable.
In the event of redemption or repurchase of this Note in part
only, a new Note or Notes of this series, having the same Stated Maturity,
optional redemption or repurchase provisions, Interest Rate and other terms and
provisions of this Note, in authorized denominations in an aggregate principal
amount equal to the unredeemed portion hereof will be issued in the name of the
holder hereof upon the surrender hereof.
[Remarketing provisions, if any, to be included here]
The Notes will not be subject to conversion, amortization or any
sinking fund.
As provided in the Indenture and subject to certain limitations
herein and therein set forth, the transfer of this Note may be registered on the
register of the Notes, upon surrender of this Note for registration of transfer
at the Bank, or at such other agencies as may be designated pursuant to the
Indenture, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Trustee or the Bank duly executed by, the holder
hereof or his attorney duly authorized in writing, and thereupon one or more new
Notes, of authorized denominations and for the same aggregate principal amount,
will be issued to the designated transferee or transferees.
The Notes are issuable only as registered Notes without coupons
in denominations of $1,000 or any amount in excess thereof that is an integral
multiple of $1,000. As provided in the Indenture, and subject to certain
limitations herein and therein set forth, the Notes are exchangeable for a like
aggregate principal amount of Notes of other authorized denominations having the
same interest rate, Stated Maturity, optional redemption or repurchase
provisions, if any, and Original Issue Date, as requested by the Securityholder
surrendering the same.
No service charge will be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Company, the Trustee, the Bank, the Security registrar and
any agent of the Company, the Trustee, the Bank, or the Security registrar may
treat the Securityholder in whose name this Note is registered as the absolute
owner hereof for the
-5-
<PAGE>
purpose of receiving payment as herein provided and for all other purposes,
whether or not this Note is overdue, and neither the Company, the Trustee, the
Bank, the Security registrar nor any such agent shall be affected by notice to
the contrary.
If an Event of Default (as defined in the Indenture) with respect
to the Notes shall occur and be continuing, the principal of all the Notes may
be declared due and payable in the manner and with the effect provided in the
Indenture.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the holders of the Securities of
any series under the Indenture at any time by the Company with the consent of
the holders of not less than 66 2/3% in aggregate principal amount of the
Securities at the time Outstanding to be affected (voting as one class). The
Indenture also permits the Company and the Trustee to enter into supplemental
indentures without the consent of the holders of Securities of any series for
certain purposes specified in the Indenture, including the making of such other
provisions in regard to matters arising under the Indenture which shall not
adversely affect the interest of the holders of such Securities. The Indenture
also contains provisions permitting the holders of specified percentages in
aggregate principal amount of the Securities of any series at the time
Outstanding, on behalf of the holders of all the Securities of such series, to
waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the holder of this Note shall be conclusive and binding
upon such holder and upon all future holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent or waiver is made upon this Note.
The Indenture provides that no holder of any Security of any
series may enforce any remedy with respect to such series under the Indenture
except in the case of refusal or neglect of the Trustee to act after notice of a
continuing Event of Default and after written request by the holders of not less
than 25% in aggregate principal amount of the Outstanding Securities of such
series and the offer to the Trustee of reasonable indemnity; PROVIDED, HOWEVER,
that such provision shall not prevent the holder hereof from enforcing payment
of the principal of or interest on this Note.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place and rate, and in the coin or currency, herein
prescribed.
No recourse shall be had for the payment of the principal of or
the interest on this Note, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture or any indenture
supplemental thereto, against any incorporator, stockholder, officer or
director, as such,
-6-
<PAGE>
past, present or future, of the Company or any predecessor or successor
corporation, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise, all such liability
being, by the acceptance hereof and as part of the consideration for the issue
hereof, expressly waived and released.
This Note shall be governed by and construed in accordance with
the laws of the State of Maryland.
ASSIGNMENT FORM
To assign this Note, fill in the form below:
Assignee's Social Security or Tax I. D. Number: ________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
_______________________________________________________________________________
_______________________________________________________________________________
(Print or Type Assignee's Name, Address and Zip Code)
the within Note of the Company and hereby does irrevocably constitute and
appoint _______________________________________________________________________
Attorney to transfer the said Note on the books of the Company, with full power
of substitution in the premises.
_______________________________
Signature of Assignor
(Sign exactly as name appears on the face of the Note)
Dated: _______________
-7-
<PAGE>
[HOLDER'S OPTION TO ELECT REPURCHASE]
[IN THE CASE OF CERTIFICATED NOTES ONLY]
The undersigned hereby irrevocably requests and instructs the Company to
repurchase the within or attached Note (or portion thereof specified below)
pursuant to its terms at a price equal to ____ % of the principal amount
thereof, together with accrued interest, if any, to the repurchase date, to the
undersigned, at _______________________________________________________________
(Print or type name, address and phone number of the undersigned)
For the within or attached Note to be repurchased on the repurchase date, the
Bank must receive at least 30, but not more than 45, days prior to the date of
repurchase, but no later than 5:00 p.m. New York City time on the last day for
giving notice, (i) this Note with the "Option to Elect Repayment" form duly
completed or (ii) a telegram, telex, facsimile transmission or letter from a
member of a national securities exchange or the National Association of
Securities Dealers, Inc. or a commercial bank or a trust company in the United
States of America setting forth the name, address and telephone number of the
holder of such Note, the principal amount of such Note, the amount of the Note
to be repurchased, a statement that the option to elect repayment is being made
thereby and a guarantee that the Note to be repaid with the form entitled
"Option to Elect Repurchase" on the reverse of such Note duly completed will be
received by the Bank not later than five Business Days after the date of such
telegram, telex, facsimile transmission or letter, and such Note and form are
received by the Bank by such fifth Business Day.
If less than the entire principal amount of the within or attached Note is to be
repurchased, specify the portion to be repurchased: $ ______________ and specify
the denomination or denominations of the Note or Notes to be issued to the
holder for the portion of the Note not being repurchased (in the absence of
specific instruction, one such Note will be issued): $ _____________.
NOTICE: The signature to this Option to Elect Repayment must correspond with the
names as written upon the face of the within instrument in every particular,
without alteration or enlargement or any change whatever.
_________________________
Signature of Holder
(Sign exactly as name appears on the face of the Note)
Dated: _______________
- 8 -
Exhibit 4(e)
[FRONT]
REGISTERED REGISTERED
No.FLR ___
[CUSIP]
BALTIMORE GAS AND ELECTRIC COMPANY
INCORPORATED UNDER THE LAWS OF THE STATE OF MARYLAND
MEDIUM-TERM NOTE, SERIES H
(FLOATING RATE)
[If this Note is registered in the name of The Depository Trust Company (the
"Depositary") (55 Water Street, New York, New York) or its nominee, this Note
may not be transferred except as a whole by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary unless and until
this Note is exchanged in whole or in part for Notes in definitive form. Unless
this certificate is presented by an authorized representative of the Depositary
to the Company or its agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co. or such other
name as requested by an authorized representative of the Depositary and any
payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner
hereof, Cede & Co. has an interest herein.]
- -----------------------------------------------------------------
PRINCIPAL AMOUNT: _____________________
INITIAL INTEREST RATE: ______________________
STATED MATURITY: ______________________
INDEX MATURITY: ______________________
SPREAD: ______________________
ORIGINAL ISSUE DATE: ______________________
SPREAD MULTIPLIER: ______________________ %
ISSUE PRICE: ______________________
MAXIMUM INTEREST RATE: ______________________ %
MINIMUM INTEREST RATE: ______________________ %
<PAGE>
CALCULATION AGENT: ______________________
INTEREST PAYMENT DATES:
(Monthly, Quarterly,
Semi-Annually
or Annually) ______________________
INTEREST RESET DATES:
(Daily, Weekly, Monthly,
Quarterly, Semi-Annually
or Annually) ______________________
INTEREST DETERMINATION
DATES: ______________________
CALCULATION DATES: ______________________
INTEREST RATE BASIS (Check One):
_____ CD Rate
_____ Commercial Paper Rate
_____ LIBOR ( ____ Reuters ____ Telerate)
_____ Treasury Rate
_____ Federal
_____ Funds Effective Rate
_____ Prime Rate
_____ CMT Rate ( _____ Telerate 7055)
( _____ Telerate 7052)
REDEEMABLE
AT THE OPTION OF THE REDEMPTION PRICES
COMPANY ON OR AFTER (% OF PRINCIPAL AMOUNT)
--------------------- -----------------------
_____________________ _______________________
_____________________ _______________________
_____________________ _______________________
_____________________ _______________________
SUBJECT TO REPURCHASE
AT THE OPTION REPURCHASE PRICES
OF THE HOLDER ON (% OF PRINCIPAL AMOUNT)
--------------------- -----------------------
_____________________ _______________________
_____________________ _______________________
_____________________ _______________________
_____________________ _______________________
[Remarketing provisions, if any, to be included here]
- -----------------------------------------------------------------
- 2 -
<PAGE>
Baltimore Gas and Electric Company, a Maryland corporation
(herein called the "Company" which term includes any successor corporation under
the Indenture, as hereinafter defined), for value received, promises to pay to
Cede & Co. or its registered assigns, the principal sum of
_________________________________________________________ DOLLARS on the Stated
Maturity shown above and to pay interest on said principal sum from the Original
Issue Date shown above if interest has not been paid on this Note or from the
most recent Interest Payment Date for which interest has been paid or duly
provided for until Stated Maturity or, if applicable, upon redemption or
repurchase at the rate per annum determined in accordance with the provisions on
the reverse hereof, depending on the Interest Rate Basis and the Spread and/or
Spread Multiplier, as the case may be, specified above. Interest will be payable
on each Interest Payment Date and at Stated Maturity or upon redemption or
repurchase. Each payment of interest payable at Stated Maturity or, if
applicable, upon redemption or repurchase shall include interest to, but
excluding the date of Stated Maturity or redemption or repurchase. In the event
this Note is issued between a Record Date (the date 15 calendar days prior to
each Interest Payment Date whether or not such day shall be a Business Day) and
an Interest Payment Date or on an Interest Payment Date, the first day that
interest shall be payable will be on the Interest Payment Date following the
next succeeding Record Date. In the event of a default in the payment of
interest, interest will be payable as provided in that certain Indenture dated
as of July 1, 1985, as supplemented by the Supplemental Indentures dated as of
October 1, 1987, and January 26, 1993, respectively (the "Indenture"), by and
between the Company and The Bank of New York (successor to Mercantile-Safe
Deposit and Trust Company), a corporation duly organized and existing under the
laws of the State of New York, as Trustee (herein called the "Trustee," which
term includes any successor Trustee under the Indenture).
Pursuant to the provisions of the Indenture, the Company will
maintain an agency at The Bank of New York in The City of New York, New York
(the "Bank"), or at such other agencies as may from time to time be designated,
where the Notes may be presented for payment, for registration of transfer and
exchange, and where notices or demands to, or upon, the Company may be served.
The interest so payable on the dates specified above will,
subject to certain exceptions provided in the Indenture, be paid to the person
in whose name this Note is registered at the close of business on the Record
Date for such Interest Payment Date, which shall be the date 15 calendar days
prior to each Interest Payment Date whether or not such day shall be a Business
Day; provided, however, that interest payable at Stated Maturity or, if
applicable, upon redemption or repurchase, shall be payable to the person to
whom principal shall be payable. Payment of the principal of and interest on
this Note will be made at the Bank in U.S. dollars; PROVIDED, HOWEVER, that
payments of interest (other than any interest payable at Stated Maturity or upon
redemption or repurchase) may be made at the option of the Company (i) by checks
mailed to the addresses of the persons entitled thereto as such addresses shall
appear in
- 3 -
<PAGE>
the register of the Notes or (ii) by wire transfer to persons who are holders of
record at such other addresses that have been filed with the Bank on or prior to
the Record Date.
Payment of the principal, premium, if any, and interest payable
at Stated Maturity, or, if applicable, upon redemption or repurchase, on this
Note will be made in immediately available funds at the request of the holder
provided that this Note is presented to the Bank in time for the Bank to make
such payments in such funds in accordance with its normal procedures.
Reference is made to the further provisions of this Note set
forth on the reverse hereof, which shall have the same effect as though fully
set forth at this place.
Unless the certificate of authentication hereon has been executed
by or on behalf of the Trustee or a duly designated authentication agent by
manual signature, this Note shall not be entitled to any benefit under said
Indenture, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, Baltimore Gas and Electric Company has caused
this instrument to be executed in its corporate name with the manual or
facsimile signature of its President or a Vice President and a facsimile of its
corporate seal to be imprinted hereon, attested by the manual or facsimile
signature of its Secretary or an Assistant Secretary.
Dated: __________________
BALTIMORE GAS AND ELECTRIC COMPANY
By: ____________________
President
ATTEST:
____________________ [SEAL]
Secretary
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the
series designated herein issued under
the Indenture described herein.
____________________
By: ____________________
Authorized Signatory
- 4 -
<PAGE>
(REVERSE)
BALTIMORE GAS AND ELECTRIC COMPANY
MEDIUM-TERM NOTE, SERIES H
(FLOATING RATE NOTE)
This Note is one of a duly authorized issue of debt securities
(the "Securities") of the Company, of a series designated as its Medium-Term
Notes, Series H (herein called the "Notes"), limited (except as otherwise
provided in the Indenture) in aggregate principal amount to $200,000,000, issued
and to be issued under the Indenture, to which Indenture and all relevant
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, obligations, duties and immunities thereunder of the Company,
the Trustee, the Bank and the Securityholder and the terms upon which the Notes
are, and are to be, authenticated and delivered. The Securities, of which the
Notes constitute a series, may be issued in one or more series, which different
series may be issued in various aggregate principal amounts, may mature at
different times, may bear interest at different rates, may be subject to
different covenants and Events of Default and may otherwise vary as in the
Indenture provided. All capitalized terms not otherwise defined herein shall
have the definitions assigned to them in the Indenture.
Commencing with the applicable Interest Reset Date first following the
Original Issue Date specified on the face hereof, the rate at which interest on
this Note is payable shall be reset daily, weekly, monthly, quarterly,
semi-annually or annually as shown on the face hereof. The interest rate per
annum for each interest reset period shall be calculated on the applicable
Interest Determination Date specified on the face hereof and shall be the
Interest Rate Basis specified on the face hereof, determined in accordance with
the provisions of the applicable heading below, adjusted by adding or
subtracting a Spread and/or multiplying by a Spread Multiplier, as the case may
be, specified on the face hereof; PROVIDED, HOWEVER, that (i) the interest rate
in effect from the Original Issue Date to the first Interest Reset Date with
respect to this Note will be the Initial Interest Rate specified on the face
hereof and (ii) the interest rate in effect for the ten days immediately prior
to the Stated Maturity or redemption or repurchase will be that in effect on the
tenth day preceding such Stated Maturity or redemption or repurchase. Each such
adjusted rate shall be applicable on and after the Interest Reset Date to which
it relates, to, but not including, the next succeeding Interest Reset Date or
until the Stated Maturity, or the date of redemption or repurchase, as the case
may be. If any Interest Reset Date would otherwise be a day that is not a
Business Day, such Interest Reset Date shall be postponed to the next succeeding
day that is a Business Day (as defined below), except that if the Interest Rate
Basis specified on the face hereof is LIBOR, and if such Business Day is in the
next succeeding calendar month, such Interest Reset Date shall be the
immediately preceding Business Day. Subject to provisions of
- 5 -
<PAGE>
applicable law and except as specified herein, on each Interest Reset Date the
rate of interest on this Note shall be the rate determined in accordance with
the provisions of the applicable heading below.
All percentages resulting from any calculation on this Note will be
rounded, if necessary, to the nearest one hundred-thousandth of a percentage
point, with five one-millionths of a percentage point rounded upward (E.G.,
9.876545% (or .09876545) would be rounded to 9.87655% (or .0987655)), and all
dollar amounts used in or resulting from such calculation will be rounded to the
nearest cent with one-half cent being rounded upward.
DETERMINATION OF CD RATE.
If the Interest Rate Basis on this Note is the CD Rate, the CD Rate
with respect to this Note shall equal the rate on each Interest Determination
Date designated on the face hereof for negotiable certificates of deposit having
the Index Maturity designated on the face hereof as published in H.15(519) under
the heading "CDs (Secondary Market)." In the event that such rate is not
published prior to 9:00 A.M., New York City time, on the Calculation Date
designated on the face hereof pertaining to such Interest Determination Date,
then the CD Rate will be the rate on such Interest Determination Date for
negotiable certificates of deposit having the Index Maturity as published in
Composite Quotations under the heading "Certificates of Deposit." If such rate
was neither published in H.15(519) by 9:00 A.M., New York City time, on such
Calculation Date nor in Composite Quotations by 3:00 P.M., New York City time,
on such date, the CD Rate for that CD Interest Determination Date shall be
calculated by the Calculation Agent and shall be the arithmetic mean of the
secondary market offered rates, as of 10:00 A.M., New York City time, on that
Interest Determination Date, of three leading nonbank dealers of negotiable U.S.
dollar certificates of deposit in The City of New York selected by the
Calculation Agent for negotiable certificates of deposit of major United States
money market banks with a remaining maturity closest to the Index Maturity in a
denomination of $5,000,000; PROVIDED, HOWEVER, that if fewer than three dealers
selected as aforesaid by the Calculation Agent are quoting as mentioned in this
sentence, the rate of interest in effect for the applicable period will be the
same as the CD Rate as adjusted for the Spread and/or Spread Multiplier, as the
case may be, for the immediately preceding interest reset period.
The CD Rate determined with respect to any Interest Determination Date
will become effective on and as of the applicable Interest Reset Date specified
on the face hereof; PROVIDED, HOWEVER, that (i) the interest rate in effect for
the period from the Original Issue Date to first Interest Reset Date will be the
Initial Interest Rate specified on the face hereof, and (ii) the interest rate
in effect for the ten days immediately preceding the Stated Maturity or
redemption will be that in effect on the tenth day preceding such Stated
Maturity or redemption.
DETERMINATION OF COMMERCIAL PAPER RATE.
- 6 -
<PAGE>
If the Interest Rate Basis on this Note is the Commercial Paper Rate,
the Commercial Paper Rate with respect to this Note shall equal the Money Market
Yield (calculated as described below) of the rate on each Interest Determination
Date designated on the face hereof for commercial paper having the Index
Maturity designated on the face hereof as published in H.15(519) under the
heading "Commercial Paper." In the event that such rate is not published prior
to 9:00 A.M., New York City time, on the Calculation Date designated on the face
hereof pertaining to such Interest Determination Date, then the Commercial Paper
Rate will be the Money Market Yield of the rate on such Interest Determination
Date for commercial paper having the Index Maturity as published in Composite
Quotations under the heading "Commercial Paper." If such rate was neither
published in H.15(519) by 9:00 A.M., New York City time, on such Calculation
Date nor in Composite Quotations by 3:00 P.M., New York City time, on such date,
the Commercial Paper Rate for that Interest Determination Date will be
calculated by the Calculation Agent and will be the Money Market Yield of the
arithmetic mean of the offered rates, as of 11:00 A.M., New York City time, on
that Interest Determination Date, of three leading dealers of commercial paper
in The City of New York selected by the Calculation Agent for commercial paper
having the Index Maturity designated on the face hereof placed for an industrial
issuer whose bond rating is "AA," or the equivalent, from a nationally
recognized rating agency; PROVIDED, HOWEVER, that if fewer than three dealers
selected as aforesaid by the Calculation Agent are quoting as mentioned in this
sentence, the rate of interest in effect for the applicable period will be the
same as the Commercial Paper Rate as adjusted for the Spread and/or Spread
Multiplier, as the case may be, for the immediately preceding interest reset
period.
"Money Market Yield" shall be a yield (expressed as a percentage
rounded upwards, if necessary, to the next higher one-hundred thousandth of a
percentage point) calculated in accordance with the following formula:
Money Market Yield = D x 360
------------- x 100
360 - (D x M)
where "D" refers to the per annum rate for commercial paper quoted on a bank
discount basis and expressed as a decimal; and "M" refers to the actual number
of days in the period for which interest is being calculated.
The Commercial Paper Rate determined with respect to any Interest
Determination Date will become effective on and as of the applicable Interest
Reset Date specified on the face hereof; PROVIDED, HOWEVER, that (i) the
interest rate in effect for the period from the Original Issue Date to the first
Interest Reset Date will be the Initial Interest Rate specified on the face
hereof; and (ii) the interest rate in effect for the ten days immediately
preceding the Stated Maturity or redemption will be that in effect on the tenth
day preceding such Stated Maturity or redemption.
DETERMINATION OF LIBOR.
- 7 -
<PAGE>
If the Interest Rate Basis on this Note is LIBOR, LIBOR with respect to
this Note will be determined by the Calculation Agent in accordance with the
following provisions:
(a) With respect to any Interest Determination Date, LIBOR will be
determined by either (i) the arithmetic mean of the offered rates for deposits
in U.S. dollars having the Index Maturity designated on the face hereof,
commencing on the second Business Day immediately following such Interest
Determination Date, which appear on the Reuters Screen LIBO Page as of 11:00
A.M., London time, on that Interest Determination Date, if at least two such
offered rates appear on the Reuters Screen LIBO Page, or (ii) the rate for
deposits in U.S. dollars having the Index Maturity designated on the face
hereof, commencing on the second Business Day immediately following such
Interest Determination Date, that appears on the Telerate Page 3750 as of 11:00
a.m., London time, on such Interest Determination Date. If neither Reuters
Screen LIBO Page nor Telerate Page 3750 is specified on the face hereof, LIBOR
will be determined as if Telerate Page 3750 had been specified.
(b) With respect to an Interest Determination Date on which fewer than
two offered rates appear on the Reuters Screen LIBO Page or no rate appears on
Telerate Page 3750 for the applicable Index Maturity as described in (a) above,
LIBOR will be determined on the basis of the rates at approximately 11:00 A.M.,
London time, on such Interest Determination Date at which deposits in U.S.
dollars having the Index Maturity designated on the face hereof are offered to
prime banks in the London interbank market by four major banks in the London
interbank market selected by the Calculation Agent commencing on the second
Business Day immediately following such Interest Determination Date and in a
principal amount not less than $1,000,000 that in the Calculation Agent's
judgment is representative for a single transaction in such market at such time
(a "Representative Amount"). The Calculation Agent will request the principal
London office of each of such banks to provide a quotation of its rate. If at
least two such quotations are provided, LIBOR for such Interest Determination
Date will be the arithmetic mean of such quotations. If fewer than two
quotations are provided, LIBOR for such Interest Determination Date will be the
arithmetic mean of the rates quoted at approximately 11:00 A.M., New York City
time, on such Interest Determination Date by three major banks in The City of
New York, selected by the Calculation Agent, for loans in U.S. dollars to
leading European banks having the specified Index Maturity commencing on the
second Business Day immediately following such Interest Determination Date and
in a Representative Amount; PROVIDED, HOWEVER, that if fewer than three banks
selected as aforesaid by the Calculation Agent are quoting as mentioned in this
sentence, the rate of interest in effect for the applicable period will be the
same as LIBOR as adjusted for the Spread and/or Spread Multiplier, as the case
may be, for the immediately preceding interest reset period.
LIBOR determined with respect to any Interest Determination Date will
become effective on and as of the applicable Interest Reset Date specified on
the face hereof; pROVIDED, HOWEVER, that (i) the interest rate in effect for the
period from the Original Issue Date to the first Interest Reset Date will be the
Initial Interest Rate specified on the face hereof and (ii) the interest rate in
effect for the ten days immediately preceding the Stated
- 8 -
<PAGE>
Maturity or redemption will be that in effect on the tenth day preceding such
Stated Maturity or redemption.
DETERMINATION OF FEDERAL FUNDS EFFECTIVE RATE.
If the Interest Rate Basis on this Note is the Federal Funds Effective
Rate, the Federal Funds Effective Rate with respect to this Note shall equal
with respect to each Interest Determination Date designated on the face hereof
the rate on such date for Federal Funds as published in H.15(519) under the
heading "Federal Funds (Effective)" or, if not so published prior to 11:00 A.M.,
New York City time, on the Calculation Date designated on the face hereof
pertaining to such Interest Determination Date, then the Federal Funds Effective
Rate will be the rate on such Interest Determination Date as published in
Composite Quotations under the heading "Federal Funds/Effective Rate." If such
rate was neither published in H.15(519) by 11:00 A.M., New York City time, on
such Calculation Date nor in Composite Quotations by 3:00 P.M., New York City
time, on such date, the Federal Funds Effective Rate for such Interest
Determination Date will be calculated by the Calculation Agent and will be the
arithmetic mean of the rates, as of 11:00 A.M., New York City time, on that
Interest Determination Date, for the last transaction in overnight Federal Funds
arranged by three leading brokers of Federal Funds transactions in The City of
New York selected by the Calculation Agent; PROVIDED, HOWEVER, that if fewer
than three brokers selected as aforesaid by the Calculation Agent are quoting as
mentioned in this sentence, the rate of interest in effect for the applicable
period will be the same as the Federal Funds Effective Rate as adjusted for the
Spread and/or Spread Multiplier, as the case may be, for the immediately
preceding interest reset period.
The Federal Funds Effective Rate determined with respect to any
Interest Determination Date will become effective on and as of the applicable
Interest Reset Date specified on the face hereof; PROVIDED, HOWEVER, that (i)
the interest rate in effect for the period from the Original Issue Date to the
first Interest Reset Date will be the Initial Interest Rate specified on the
face hereof; and (ii) the interest rate in effect for the ten days immediately
preceding the Stated Maturity or redemption will be that in effect on the tenth
day preceding such Stated Maturity or redemption.
DETERMINATION OF PRIME RATE.
If the Interest Rate Basis on this Note is the Prime Rate, the Prime
Rate with respect to the Note shall equal with respect to each Interest
Determination Date designated on the face hereof the rate set forth on such date
in H.15(519) under the heading "Bank Prime Loan." In the event that such rate is
not published prior to 9:00 A.M., New York City time, on the Calculation Date
designated on the face hereof pertaining to such Interest Determination Date,
then the Prime Rate will be the arithmetic mean (rounded upwards, if necessary,
to the next higher one-hundred thousandth of a percentage point) of the rates of
interest publicly announced by each bank that appear on the Reuters Screen
USPRIMEONE Page as such bank's prime rate or base lending rate as in effect for
that Interest Determination Date. If fewer than four such rates but more than
one such rate appear on the Reuters Screen USPRIMEONE Page for the Interest
Determination Date, the Prime Rate will be the arithmetic mean of
- 9 -
<PAGE>
the prime rates (quoted on the basis of the actual number of days in the year
divided by a 360-day year) as of the close of business on such Interest
Determination Date by four major money center banks in The City of New York
selected by the Calculation Agent. If fewer than two quotations are provided,
the Prime Rate shall be determined on the basis of the rates furnished in The
City of New York by the appropriate number of substitute banks or trust
companies organized and doing business under the laws of the United States, or
any State thereof, having total equity capital of at least $500 million and
being subject to supervision or examination by a Federal or State authority,
selected by the Calculation Agent to provide such rate or rates; PROVIDED,
HOWEVER, that if the banks selected as aforesaid by the Calculation Agent are
not quoting as mentioned in this sentence, the rate of interest in effect for
the applicable period will be the same as the Prime Rate as adjusted for the
Spread and/or Spread Multiplier, as the case may be, for the immediately
preceding interest reset period.
The Prime Rate determined with respect to any Interest Determination
Date will become effective on and as of the applicable Interest Reset Date
specified on the face hereof; pROVIDED, HOWEVER, that (i) the interest rate in
effect for the period from the Original Issue Date to the first Interest Reset
Date will be the Initial Interest Rate specified on the face hereof; and (ii)
the interest rate in effect for the ten days immediately preceding the Stated
Maturity or redemption will be that in effect on the tenth day preceding such
Stated Maturity or redemption.
DETERMINATION OF TREASURY RATE.
If the Interest Rate Basis on this Note is the Treasury Rate, the
Treasury Rate with respect to this Note shall equal with respect to each
Interest Determination Date designated on the face hereof the rate for the most
recent auction of direct obligations of the United States ("Treasury bills")
having the Index Maturity designated on the face hereof as published in
H.15(519) under the heading, "U.S. Government Securities/Treasury Bills/Auction
Average (Investment)" or, if not so published by 9:00 A.M., New York City time,
on the Calculation Date designated on the face hereof pertaining to such
Interest Determination Date, the auction average rate (expressed as a bond
equivalent, on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) for such auction as otherwise announced by the United
States Department of the Treasury. In the event that the results of the auction
of Treasury bills having the Index Maturity designated on the face hereof are
neither published in H.15(519) by 9:00 A.M., New York City time, on such
Calculation Date, nor otherwise published or reported as provided above by 3:00
P.M., New York City time on such date, or if no such auction is held in a
particular week, then the Treasury Rate shall be calculated by the Calculation
Agent and shall be a yield to maturity (expressed as a bond equivalent, on the
basis of a year of 365 or 366 days, as applicable, and applied on a daily basis)
of the arithmetic mean of the secondary market bid rates as of approximately
3:30 P.M., New York City time, on such Interest Determination Date, of three
leading primary United States government securities dealers in The City of New
York selected by the Calculation Agent, for the issue of Treasury bills with a
remaining maturity closest to the specified Index Maturity; PROVIDED, HOWEVER,
that if fewer than three dealers
- 10 -
<PAGE>
selected as aforesaid by the Calculation Agent are quoting as mentioned in this
sentence, the rate of interest in effect for the applicable period will be the
same as the Treasury Rate as adjusted for the Spread and/or Spread Multiplier,
as the case may be, for the immediately preceding interest reset period.
The Treasury Rate determined with respect to any Interest Determination
Date will become effective on and as of the applicable Interest Reset Date
specified on the face hereof; PROVIDED, HOWEVER, that (i) the interest rate in
effect for the period from the Original Issue Date to the first Interest Reset
Date will be the Initial Interest Rate specified on the face hereof; and (ii)
the interest rate in effect for the ten days immediately preceding the Stated
Maturity or redemption will be that in effect on the tenth day preceding such
Stated Maturity or redemption.
DETERMINATION OF CMT RATE
If the Interest Rate Basis on this Note is the CMT Rate, the CMT Rate
with respect to this Note shall equal with respect to each Interest
Determination Date designated on the face hereof the rate displayed on the
Designated CMT Telerate Page under the caption "...Treasury Constant
Maturities.. Federal Reserve Board Release H.15... Mondays Approximately 3:45
P.M.," under the column for the Index Maturity designated on the face hereof (i)
if the Designated CMT Telerate Page is 7055, the rate for the applicable
Interest Determination Date and (ii) if the Designated CMT Telerate Page is
7052, the week, or the month, as applicable, ended immediately preceding the
week in which the Interest Determination Date occurs. If no page is specified on
the face hereof, the Designated CMT Telerate Page shall be 7052, for the most
recent week. If such rate is no longer displayed on the relevant page, or if not
displayed by 3:00 P.M., New York City time, on the related Calculation Date,
then the CMT Rate for such Interest Determination Date will be such Treasury
Constant Maturity rate for the Index Maturity designated on the face hereof as
published in the relevant H.15 (519). If such rate is no longer published, or if
not published by 3:00 P.M., New York City time, on the related Calculation Date,
then the CMT Rate for such Interest Determination Date will be such Treasury
Constant Maturity rate for the Index Maturity on the face hereof (or other
United States Treasury rate for such Index Maturity for that Interest
Determination Date with respect to such Interest Reset Date) as may then be
published by either the Federal Reserve Board or the United States Department of
the Treasury that the Calculation Agent determines to be comparable to the rate
formerly displayed on the Designated CMT Telerate Page and published in the
relevant H.15(519). If such information is not provided by 3:00 P.M., New York
City time, on the related Calculation Date, then the CMT Rate for that Interest
Determination Date will be calculated by the Calculation Agent and will be a
yield to maturity, based on the arithmetic mean of the secondary market closing
offer side prices as of approximately 3:30 P.M. (New York City time) on that
Interest Determination Date reported, according to their written records, by
three leading primary United States government securities dealers (each, a
"Reference Dealer") in The City of New York selected by the Calculation Agent
(from five such Reference Dealers selected by the Calculation Agent and
eliminating the highest quotation (or, in the event of equality, one of the
highest) and the lowest quotation (or, in the event of equality,
- 11 -
<PAGE>
one of the lowest)), for the most recently issued direct noncallable fixed rate
obligations of the United States ("Treasury Note") with an original maturity of
approximately the Index Maturity designated on the face hereof and a remaining
term to maturity of not less than such Index Maturity minus one year. If two
Treasury Notes with an original maturity as described in the preceding sentence
have remaining terms to maturity equally close to the Index Maturity designated
on the face hereof, the quotes for the Treasury Note with the shorter remaining
term to maturity will be used. If the Calculation Agent cannot obtain three such
Treasury Note quotations, the CMT Rate for that Interest Determination Date will
be calculated by the Calculation Agent and will be a yield to maturity based on
the arithmetic mean of the secondary market offer side prices as of
approximately 3:30 P.M. (New York City time) on that Interest Determination Date
of three Reference Dealers in The City of New York (from five such Reference
Dealers selected by the Calculation Agent and eliminating the highest quotation
(or, in the event of equality, one of the highest) and the lowest quotation (or,
in the event of equality, one of the lowest)), for Treasury Notes with an
original maturity of the number of years that is the next highest to the Index
Maturity designated on the face hereof and a remaining term to maturity closest
to such Index Maturity and in an amount of at least $100 million. If three or
four (and not five) of such Reference Dealers are quoting as described above,
then the CMT Rate will be based on the arithmetic mean of the offer prices
obtained and neither the highest nor the lowest of such quotes will be
eliminated; PROVIDED, HOWEVER, that if fewer than three Reference Dealers
selected by the Calculation Agent are quoting as described herein, the rate of
interest in effect for the applicable period will be the same as the CMT Rate as
adjusted for the Spread and/or Spread Multiplier, as the case may be, for the
immediately preceding Interest Reset Period.
The CMT Rate determined with respect to any Interest Determination Date
will become effective on and as of the applicable Interest Reset Date specified
on the face hereof; PROVIDED, HOWEVER, that (i) the interest rate in effect for
the period from the Original Issue Date to the first Interest Reset Date will be
the Initial Interest Rate specified on the face hereof; and (ii) the interest
rate, in effect for the ten days immediately preceding the Stated Maturity or
redemption will be that in effect on the tenth day preceding such Stated
Maturity or redemption.
Notwithstanding the foregoing, the interest rate hereon shall not be
greater than the Maximum Interest Rate, if any, or less than the Minimum
Interest Rate, if any, shown on the face hereof. The Calculation Agent shall
calculate the interest rate on this Note in accordance with the foregoing on
each Interest Determination Date.
The Interest Rate on this Note will in no event be higher than the
maximum rate permitted by Maryland law as the same may be modified by the United
States law of general applicability.
The Calculation Agent will, upon the request of the Holder of this Note
provide to such Holder the interest rate hereon then in effect and, if
different, the interest rate which will become effective as of the next
applicable Interest Reset Date.
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<PAGE>
If any Interest Payment Date specified on the face hereof would
otherwise be a day that is not a Business Day, the Interest Payment Date shall
be postponed to the next day that is a Business Day, except that if (i) the rate
of interest on this Note shall be determined in accordance with the provisions
of the heading "Determination of LIBOR" above, and (ii) such Business Day is in
the next succeeding calendar month, such Interest Payment Date shall be the
immediately preceding Business Day. "Business Day" means any day other than a
Saturday or Sunday that (a) is not a day on which banking institutions in
Baltimore, Maryland, or in New York, New York, are authorized or obligated by
law or executive order to be closed, and (b) with respect to LIBOR Notes only,
is a day on which dealings in deposits in U.S. dollars are transacted in the
London interbank market.
Interest payments for this Note will include interest accrued to but
excluding the Interest Payment Dates; PROVIDED, HOWEVER, that if the Interest
Reset Dates with respect to this Note are daily or weekly, interest payable on
any Interest Payment Date, other than interest payable on any date on which
principal hereof is payable, will include interest accrued to and including the
Record Date next preceding such Interest Payment Date. Accrued interest hereon
from the Original Issue Date or from the last date to which interest hereon has
been paid, as the case may be, shall be an amount calculated by multiplying the
face amount hereof by an accrued interest factor. Such accrued interest factor
shall be computed by adding the interest factor calculated for each day from the
Original Issue Date or from the last date to which interest shall have been
paid, as the case may be, to the date for which accrued interest is being
calculated. The interest factor (expressed as a decimal rounded upwards, if
necessary, to the next higher one hundred-thousandth of a percentage point) for
each such day shall be computed by dividing the interest rate (expressed as a
decimal, rounded upwards, if necessary, to the next higher one
hundred-thousandth of a percentage point) applicable to each such day by 360, in
the case of the Commercial Paper Rate, CD Rate, LIBOR, Federal Funds Effective
Rate or Prime Rate, or by the actual number of days in the year in the case of
the Treasury Rate or the CMT Rate.
This Note may not be redeemed by the Company prior to Stated
Maturity unless otherwise set forth on the face hereof. Notwithstanding Section
4.03 of the Indenture, pursuant to Section 4.01 thereof, and if so indicated on
the face of this Note, this Note may be redeemed at the option of the Company,
on any date on or after the date set forth on the face hereof in whole or in
part in increments of $1,000, at a redemption price or prices designated on the
face hereof to be redeemed together with interest thereon payable to the date
fixed for redemption. This Note may be so redeemed in whole or in part whether
or not other Notes of the same series are redeemed.
Notice of redemption or repurchase will be given by the Company
by mail to holders of the Notes to be redeemed, not less than 30 nor more than
60 days prior to the date fixed for redemption, all as provided in the
Indenture. The Bank may carry out the responsibilities to be performed by the
Trustee required by Article Four of the Indenture.
- 13 -
<PAGE>
The Company is not required to repurchase Notes from holders prior to
Stated Maturity unless otherwise set forth on the face hereof. If so indicated
on the face hereof, this Note may be repurchased by the Company at the option of
the holder on the dates and at the prices designated thereon, in whole or in
part in increments of $1,000, together with interest payable to the repurchase
date. For book-entry notes, unless otherwise specified on the face of this Note,
holders must deliver written notice to the Bank at least 30, but no more than
60, days prior to the date of repurchase, but no later than 5:00 p.m. New York
City time on the last day for giving notice. The written notice must specify the
principal amount to be repurchased and must be signed by a duly authorized
officer of the Depositary participant (signature guaranteed). For definitive
notes, unless otherwise specified on the face of this Note, holders must
complete the "Option to Elect Repayment" on the reverse of this Note and then
deliver this Note to the Bank at least 30, but no more than 45, days prior to
the date of repurchase, but no later than 5:00 p.m. New York City time on the
last day for giving notice. All notices are irrevocable.
In the event of redemption or repurchase of this Note in part
only, a new Note or Notes of this series, having the same Stated Maturity,
optional redemption or repurchase provisions, Interest Rate and other terms and
provisions of this Note, in authorized denominations in an aggregate principal
amount equal to the unredeemed portion hereof will be issued in the name of the
holder hereof upon the surrender hereof.
[Remarketing provisions, if any, to be included here]
The Notes will not be subject to conversion, amortization or any
sinking fund.
As provided in the Indenture and subject to certain limitations
herein and therein set forth, the transfer of this Note may be registered on the
register of the Notes, upon surrender of this Note for registration of transfer
at the Bank, or at such other agencies as may be designated pursuant to the
Indenture, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Trustee or the Bank duly executed by, the holder
hereof or his attorney duly authorized in writing, and thereupon one or more new
Notes, of authorized denominations and for the same aggregate principal amount,
will be issued to the designated transferee or transferees.
The Notes are issuable only as registered Notes without coupons
in denominations of $1,000 or any amount in excess thereof that is an integral
multiple of $1,000. As provided in the Indenture, and subject to certain
limitations herein and therein set forth, the Notes are exchangeable for a like
aggregate principal amount of Notes of other authorized denominations having the
same Interest Rate, Stated Maturity, optional redemption or repurchase
provisions, if any, and Original Issue Date, as requested by the Securityholder
surrendering the same.
- 14 -
<PAGE>
No service charge will be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Company, the Trustee, the Bank, the Security registrar and
any agent of the Company, the Trustee, the Bank, or the Security registrar may
treat the Securityholder in whose name this Note is registered as the absolute
owner hereof for the purpose of receiving payment as herein provided and for all
other purposes, whether or not this Note is overdue, and neither the Company,
the Trustee, the Bank, the Security registrar nor any such agent shall be
affected by notice to the contrary.
If an Event of Default (as defined in the Indenture) with respect
to the Notes shall occur and be continuing, the principal of all the Notes may
be declared due and payable in the manner and with the effect provided in the
Indenture.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the holders of the Securities of
any series under the Indenture at any time by the Company with the consent of
the holders of not less than 66 2/3% in aggregate principal amount of the
Securities at the time outstanding to be affected (voting as one class). The
Indenture also permits the Company and the Trustee to enter into supplemental
indentures without the consent of the holders of Securities of any series for
certain purposes specified in the Indenture, including the making of such other
provisions in regard to matters arising under the Indenture which shall not
adversely affect the interest of the holders of such Securities. The Indenture
also contains provisions permitting the holders of specified percentages in
aggregate principal amount of the Securities of any series at the time
outstanding, on behalf of the holders of all the Securities of such series, to
waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the holder of this Note shall be conclusive and binding
upon such holder and upon all future holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent or waiver is made upon this Note.
The Indenture provides that no holder of any Security of any
series may enforce any remedy with respect to such series under the Indenture
except in the case of refusal or neglect of the Trustee to act after notice of a
continuing Event of Default and after written request by the holders of not less
than 25% in aggregate principal amount of the outstanding Securities of such
series and the offer to the Trustee of reasonable indemnity; provided, however,
that such provision shall not prevent the holder hereof from enforcing payment
of the principal of or interest on this Note.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the
- 15 -
<PAGE>
obligation of the Company, which is absolute and unconditional, to pay the
principal of and interest on this Note at the times, place and rate, and in the
coin or currency, herein prescribed.
No recourse shall be had for the payment of the principal of or
the interest on this Note, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture or any indenture
supplemental thereto, against any incorporator, stockholder, officer or
director, as such, past, present or future, of the Company or any predecessor or
successor corporation, whether by virtue of any constitution, statute or rule of
law, or by the enforcement of any assessment or penalty or otherwise, all such
liability being, by the acceptance hereof and as part of the consideration for
the issue hereof, expressly waived and released.
This Note shall be governed by and construed in accordance with
the laws of the State of Maryland.
- 16 -
<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below:
Assignee's Social Security or Tax I. D. Number: ________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
_____________________________________________________________________________
_____________________________________________________________________________
(Print or Type Assignee's Name, Address and Zip Code)
the within Note of the Company and hereby does irrevocably constitute and
appoint _______________________________________________________________________
Attorney to transfer the said Note on the books of the Company, with full power
of substitution in the premises.
_________________________
Signature of Assignor
(Sign exactly as name appears on the face of the Note)
Dated: _______________
- 17 -
<PAGE>
[HOLDER'S OPTION TO ELECT REPURCHASE]
[IN THE CASE OF CERTIFICATED NOTES ONLY]
The undersigned hereby irrevocably requests and instructs the Company to
repurchase the within or attached Note (or portion thereof specified below)
pursuant to its terms at a price equal to ___ % of the principal amount thereof,
together with accrued interest, if any, to the repurchase date, to the
undersigned, at _______________________________________________________________
(Print or type name, address and phone number of the undersigned)
For the within or attached Note to be repurchased on the repurchase date, the
Bank must receive at least 30, but not more than 45, days prior to the date of
repurchase, but no later than 5:00 p.m. New York City time on the last day for
giving notice, (i) this Note with the "Option to Elect Repayment" form duly
completed or (ii) a telegram, telex, facsimile transmission or letter from a
member of a national securities exchange or the National Association of
Securities Dealers, Inc. or a commercial bank or a trust company in the United
States of America setting forth the name, address and telephone number of the
holder of such Note, the principal amount of such Note, the amount of the Note
to be repurchased, a statement that the option to elect repayment is being made
thereby and a guarantee that the Note to be repaid with the form entitled
"Option to Elect Repurchase" on the reverse of such Note duly completed will be
received by the Bank not later than five Business Days after the date of such
telegram, telex, facsimile transmission or letter, and such Note and form are
received by the Bank by such fifth Business Day.
If less than the entire principal amount of the within or attached Note is to be
repurchased, specify the portion to be repurchased: $ ______________ and specify
the denomination or denominations of the Note or Notes to be issued to the
holder for the portion of the Note not being repurchased (in the absence of
specific instruction, one such Note will be issued): $ _____________.
NOTICE: The signature to this Option to Elect Repayment must correspond with the
names as written upon the face of the within instrument in every particular,
without alteration or enlargement or any change whatever.
_________________________
Signature of Holder
(Sign exactly as name appears on the face of the Note)
Dated: _______________
- 18 -
Exhibit 5
DONNA M. LEVY BALTIMORE GAS AND ELECTRIC COMPANY
COUNSEL P.O. BOX 1475
BALTIMORE, MARYLAND 21203-1475
410 234-5598 FAX 410 234-7168
[BGE LOGO OMITTED]
October 21, 1998
Baltimore Gas and Electric Company
39 W. Lexington Street
Baltimore, Maryland 21201
Gentlemen:
This opinion is provided in connection with the Registration Statement
(the "Registration Statement") being filed by Baltimore Gas and Electric Company
("BGE") with the Securities and Exchange Commission ("Commission") under the
Securities Act of 1933 regarding the proposed issuance of up to $200,000,000
principal amount Medium Term Notes, Series H (the "Notes").
I am a Counsel of BGE and a member of the Corporate Unit in its Legal
Department. I am generally familiar with BGE's corporate history, properties,
operations, Charter (including amendments, supplements, and restatements
thereto), the issuance of its securities outstanding, and the indentures under
which its debt is issued. In connection with this opinion, I, together with
other attorneys in the Corporate Unit, have considered, among other things (1)
the Charter of BGE; (2) the By-Laws of BGE; (3) the Indenture dated as of July
1, 1985, from the Company to The Bank of New York, as successor Trustee as
amended by Supplemental Indentures dated as of October 1, 1987 and January 26,
1993 (the "Indenture") under which the Notes will be issued; (4) the corporate
proceedings for the approval of the issuance and sale of the Notes; (5) the
Registration Statement; (6) the agency agreement (including the standard
purchase provisions) filed as exhibits to the Registration Statement (the
"purchase agreement"); (7) the provisions of the Public Utility Holding Company
Act of 1935 (the "1935 Act"), together with an order dated January 16, 1956,
issued by the Commission (File No. 31-631) exempting BGE from the provisions of
the 1935 Act applicable to it as a holding company; and (8) such other
documents, transactions, and matters of law as we deemed necessary in order to
render this opinion.
<PAGE>
Baltimore Gas and Electric Company
October 21, 1998
Page 2
This opinion is subject to (1) the proper execution, authentication,
and delivery of the Notes upon receipt of the purchase price pursuant to the
purchase agreement; (2) the qualification of the Indenture under the Trust
Indenture Act of 1939; and (3) the Registration Statement becoming effective
under the Securities Act of 1933.
Based on the foregoing, I am of the opinion that the Notes, when issued
and delivered pursuant to the purchase agreement, will constitute legally issued
and binding obligations of BGE.
I express no opinion as to the law of any jurisdiction other than the
law of the State of Maryland and the law of the United States of America. The
opinion expressed herein concerns only the effect of the law (excluding the
principles of conflicts of law) of the State of Maryland and the United States
of America as currently in effect.
This opinion is provided solely for your benefit and may not be relied
upon by, or quoted to, any other person or entity, in whole or in part, without
my prior written consent.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the references to me in the Registration Statement
(and any amendments thereto) or the prospectus constituting a part of the
Registration Statement (and any amendments or supplements thereto).
Very truly yours,
/s/ Donna Levy
Exhibit 23(b)
CONSENT OF INDEPENDENT ACCOUNTANTS
-------
We consent to the incorporation by reference in this Registration Statement on
Form S-3 covering $200,000,000 of Baltimore Gas and Electric Company Medium-Term
Notes, Series H (the "Registration Statement") of our report dated January 21,
1998, on our audits of the consolidated financial statements and financial
statement schedule included on Form 10-K, of Baltimore Gas and Electric Company
and Subsidiaries, as of December 31, 1997 and 1996 and for each of the three
years in the period ended December 31, 1997.
We also consent to the reference to our firm under the caption "Experts" in this
Registration Statement.
/s/ PricewaterhouseCoopers LLP
------------------------------
PricewaterhouseCoopers LLP
Baltimore, Maryland
October 21, 1998
Exhibit 24
Page 1 of 2
BALTIMORE GAS AND ELECTRIC COMPANY
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned directors and
officers of Baltimore Gas and Electric Company hereby constitute and appoint C.
H. Poindexter, E. A. Crooke and David A. Brune and each of them their true and
lawful attorneys and agents to do any and all acts and things and to execute, in
their name any and all instruments which said attorneys and agents, or any of
them, may deem necessary or advisable to enable said corporation to comply with
the Securities Act of 1933, as amended, and any rules, regulations and
requirements of the Securities and Exchange Commission in respect thereof in
connection with the registration under said Act of not exceeding $200,000,000
principal amount of Medium-Term Notes, Series H of said Company, maturing not
more than thirty years after the date as of which they are issued, all as
authorized by Resolutions adopted by the Board of Directors of Baltimore Gas and
Electric Company at a meeting held October 16, 1998, including specifically, but
without limiting the generality of the foregoing, power and authority to sign
the names of the undersigned directors and officers in the capacities indicated
below, to any registration statements to be filed with the Securities and
Exchange Commission in respect of said Medium-Term Notes, Series H, to any and
all amendments to any registration statement in respect to said Medium-Term
Notes, Series H, or to any instruments or documents filed as part of or in
connection with said registration statement or amendments to such documents; and
each of the undersigned hereby ratifies and confirms all that said attorneys and
agents, or any of them, shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, each of the undersigned has subscribed, or caused
to be subscribed, these presents this 16th day of October, 1998.
Signature
----------
Principal Executive Officer
and Director /s/ C. H. POINDEXTER
------------------------
C. H. Poindexter
Chairman of the Board
and Director
Principal Financial and
Accounting Officer /s/ DAVID A. BRUNE
-------------------------
David A. Brune
Vice President
<PAGE>
Exhibit 24
Page 2 of 2
Power of Attorney
in connection with the
registering of
not exceeding $200 million
of Medium-Term Notes,
Series H
Directors
/s/ H. Furlong Baldwin /s/ Douglas L. Becker
/s/ Beverly B. Byron /s/ J. Owen Cole
/s/ Dan A. Colussy /s/ Edward A. Crooke
/s/ James R. Curtiss /s/ Jerome W. Geckle
/s/ Freeman A. Hrabowski, III /s/ Nancy Lampton
/s/ Charles R. Larson /s/ George V. McGowan
/s/ George L. Russel, Jr. /s/ Michael D. Sullivan
Dated: October 16, 1998
Exhibit 25
====================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
______________________________________
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 3-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
__________________________________
Baltimore Gas and Electric Company
(Exact name of obligor as specified in its charter)
Maryland 52-0280210
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
David A. Brune, Vice President
39 W. Lexington Street
Baltimore, Maryland 21201
(Address of principal executive offices) (Zip code)
______________________________
Medium-Term Notes, Series H
(Title of the indenture securities)
====================================================================
<PAGE>
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
- ------------------------------------------------------------------------------
Name Address
- ------------------------------------------------------------------------------
Superintendent of Banks of the State 2 Rector Street, New York,
of New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to Rule
7a-29 under the Trust Indenture Act of 1939 (the "Act") and Rule 24 of the
Commission's Rules of Practice.
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
- 2 -
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
- 3 -
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 19th day of October, 1998.
THE BANK OF NEWYORK
By: /s/ Marie E. Trimboli
--------------------------
Name: Marie E. Trimboli
Title: Assistant Treasurer
- 4 -
<PAGE>
Exhibit 7
---------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286 And Foreign and Domestic
Subsidiaries, a member of the Federal Reserve System, at the
close of business March 31, 1998, published in accordance with a
call made by the Federal Reserve Bank of this District pursuant
to the provisions of the Federal Reserve Act.
Dollar Amounts
in Thousands
ASSETS ----------------
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ................. $ 6,397,993
Interest-bearing balances .......... 1,138,362
Securities:
Held-to-maturity securities ........ 1,062,074
Available-for-sale securities ...... 4,167,240
Federal funds sold and Securities purchased
under agreements to resell.......... 391,650
Loans and lease financing
receivables:
Loans and leases, net of unearned
income ........................... 36,538,242
LESS: Allowance for loan and
lease losses ..................... 631,725
LESS: Allocated transfer risk
reserve........................... 0
Loans and leases, net of unearned
income, allowance, and reserve 35,906,517
Assets held in trading accounts ...... 2,145,149
Premises and fixed assets (including
capitalized leases) ................ 663,928
Other real estate owned .............. 10,895
Investments in unconsolidated
subsidiaries and associated
companies .......................... 237,991
Customers' liability to this bank on
acceptances outstanding ............ 992,747
Intangible assets .................... 1,072,517
Other assets ......................... 1,643,173
-----------
Total assets ......................... $55,830,236
===========
LIABILITIES
Deposits:
In domestic offices ................ $24,849,054
Noninterest-bearing ................ 10,011,422
Interest-bearing ................... 14,837,632
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 15,319,002
Noninterest-bearing ................ 707,820
Interest-bearing ................... 14,611,182
Federal funds purchased and Securities
sold under agreements to repurchase. 1,906,066
Demand notes issued to the U.S.
Treasury ........................... 215,985
Trading liabilities .................. 1,591,288
Other borrowed money:
With remaining maturity of one year
or less .......................... 1,991,119
With remaining maturity of more than
one year through three years...... 0
With remaining maturity of more than
three years ...................... 25,574
Bank's liability on acceptances
executed and outstanding .............. 998,145
Subordinated notes and debentures .... 1,314,000
Other liabilities .................... 2,421,281
----------
Total liabilities .................... 50,631,514
----------
EQUITY CAPITAL
Common stock ......................... 1,135,284
Surplus .............................. 731,319
Undivided profits and capital
reserves ........................... 3,328,050
Net unrealized holding gains
(losses) on available-for-sale
securities ......................... 40,198
Cumulative foreign currency
translation adjustments ............ ( 36,129)
Total equity capital ................. 5,198,722
Total liabilities and equity -----------
capital ............................ $55,830,236
===========
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
Thomas A. Renyi
Alan R. Griffith Directors
J. Carter Bacot
