Registration No. 333-
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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. [ ]
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<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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<S> <C> <C> <C> <C>
Title of Proposed Proposed
each class maximum maximum Amount of
of securities to Amount to offering price aggregate registration
be registered be registered per unit offering price fee
- --------------------------------------------------------------------------------
Common Stock 3,000,000 Shares $31 1/4* $93,750,000 $28,410
(without par value)
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</TABLE>
* Inserted solely for the purpose of calculating the registration fee; computed
soley on the basis of the average of the reported high and low sales prices on
the New York Stock Exchange-Composite Transactions on July 17, 1998, as reported
in The Wall Street Journal pursuant to Rule 457(c).
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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<PAGE>
The information in his prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an
offer to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED ___________, 1998
PROSPECTUS [GRAPHIC OMITTED]
3,000,000 Shares
Common Stock Baltimore Gas and Electric Company
39 W. Lexington Street
Baltimore, Maryland 21201
(410) 234-5000
----------------
BGE may sell shares of common stock from time to time through the agent
under our continuous offering program. We will receive all the proceeds from the
sale of the stock, less expenses, after paying the agent a commission of not
more than 5 cents per share. The proceeds we receive will depend on the number
of shares we sell and the market price of our stock at the time of sale. We also
may sell shares of common stock in fixed price offerings, special offerings or
block transactions. For these types of sales, we will prepare and distribute a
prospectus supplement which will describe the sale. Our common stock is listed
on the New York, Chicago and Pacific stock exchanges under the symbol "BGE."
-----------------
We urge you to carefully read this prospectus 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.
- --------------------------------------------------------------------------------
SALOMON SMITH BARNEY
- Agent -
____________________, 1998
<PAGE>
TABLE OF CONTENTS
Page
------
Where You Can Find More Information................................... 3
BGE................................................................... 4
Use of Proceeds....................................................... 4
Common Stock Dividends and Price Range................................ 5
Description of Common Stock........................................... 6
Plan of Distribution.................................................. 6
Legal Opinions........................................................ 7
Experts............................................................... 7
2
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WHERE YOU CAN FIND
MORE INFORMATION
General
We file annual, quarterly and current 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 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 common stock.
This prospectus is part of a registration statement that we filed with the SEC.
- - Annual Report on Form 10-K for the year ended December 31, 1997;
- - Quarterly Report on Form 10-Q for the quarter ended March 31, 1998; and
- - Current Report on Form 8-K dated June 15, 1998.
You may request a copy of these filings, at no cost, by writing us at:
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 prospectus supplement. We have not authorized anyone else
to provide you with different information. We are not making an offer of the
common stock in any state where the offer is not permitted. You should not
assume that the information in this prospectus or any prospectus 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;
- - 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
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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, including:
- - energy marketing activities;
- - power generation projects;
- - home products and commercial building systems;
- - investment activities; and
- - real estate.
USE OF PROCEEDS
We will use the net proceeds from the sale of common stock 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 will 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.
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COMMON STOCK DIVIDENDS AND PRICE RANGE
When our Board of Directors declares dividends they also set the record dates
and payment dates. The record dates are typically the 10th of March, June,
September and December, and we normally mail dividends to each shareholder on or
about the 1st of January, April, July and October. We have paid dividends on our
common stock continuously since 1910.
The range of the high and low sale prices of our common stock, reported by The
Wall Street Journal, as New York Stock Exchange-Composite Transactions and
dividends paid per share were as follows:
<TABLE>
<CAPTION>
Price Range Dividends
------------------------ Paid Per
High Low Share
--------- --------- -----------
<S> <C> <C> <C>
1996
First Quarter ................. 29 1/2 26 1/8 .39
Second Quarter ................ 28 5/8 25 1/2 .39
Third Quarter ................. 28 5/8 25 .40
Fourth Quarter ................ 28 3/4 25 3/4 .40
1997
First Quarter ................ 28 26 1/2 .40
Second Quarter ............... 27 24 3/4 .40
Third Quarter ................ 28 1/16 26 .41
Fourth Quarter ............... 34 5/16 25 13/16 .41
1998
First Quarter ................ 34 1/8 29 3/4 .41
Second Quarter ............... 32 15/16 29 1/4 .41
Third Quarter ................ 31 5/8 30 5/8 .42
(through July 17, 1998)
</TABLE>
The book value per share of our common stock at March 31, 1998 was $ 19.57. The
last reported sale price of the common stock on the New York Stock Exchange on
July 17, 1998 was $31 3/8.
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DESCRIPTION OF COMMON STOCK
Below is a brief summary of your rights as holders of our common stock. You can
find a complete description of these rights in our Charter. See Where You Can
Find More Information.
Dividend Rights
We pay dividends on our common stock when declared by our Board of Directors.
However, we must first pay all dividends (and any redemption payments) due on
our preference stock before paying common stock dividends.
Voting Rights
General
Holders of our common stock are entitled to one vote per share on all matters on
which shareholders vote. They have unlimited and exclusive voting rights except
as noted below. Cumulative voting for the election of Directors is not
permitted.
Preference Stockholder Rights Affecting Common Stockholder Rights
IF WE FAIL TO PAY DIVIDENDS
If we do not pay full dividends on our preference stock for four consecutive
quarters, holders of the preference stock will vote on all matters on which
shareholders vote, until we pay all the dividends owed.
ON EXTRAORDINARY MATTERS
Owners of two-thirds of the preference stock must consent to amend our Charter
to:
- - create any shares of stock ranking prior or equal to the existing preference
stock as to dividends or distribution of assets, or
- - substantially adversely affect the contract rights of the outstanding
preference stock.
Liquidation
Our common stock has no par value. If we liquidate, dissolve or wind up our
affairs, you will share equally in any assets remaining after full payment of
liabilities to our creditors and $100 per share plus accrued dividends due to
holders of our preference stock.
General
You do not have any preemptive or special rights to purchase any shares of
common stock we may issue at a later date. We have not issued any securities
convertible into shares of our common stock. In addition, as holders of common
stock, you have no redemption, conversion or sinking fund rights. When issued to
you, the common stock will be legally issued, fully paid and nonassessable.
PLAN OF DISTRIBUTION
The common stock will be sold on a continuing basis through the agent, Salomon
Smith Barney. The agent agrees to use its reasonable efforts to solicit
purchases for the period of its appointment. We will receive all the proceeds
from the sale of the stock, after paying the agent a commission of no more than
5 cents per share and before deducting expenses of approximately $150,000. In
addition, we have agreed to reimburse the agent for certain of its expenses in
connection with the sale of the common stock.
The agent will sell the shares on the New York Stock Exchange, or on any other
exchange on which the shares are listed, at prevailing market prices through (a)
ordinary brokers' transactions or (b) in block transactions. In block
transactions, the agent may purchase all or a portion of the shares as principal
for its own account and resell them.
The agent may also sell the shares in a fixed price offering. If this happens,
we will sell shares to the agent for its own account at a negotiated price
(which is related to the prevailing market price), and the agent may form a
group of dealers to participate with it
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in reselling the shares to you. For this type of sale, we will prepare and
distribute a prospectus supplement which will describe the offering price and
the number of shares sold and customary distributors' or sellers' commissions
payable, if any.
The agent may also sell the shares by conducting a special offering or exchange
distribution in accordance with the rules of the stock exchange on which the
shares are listed. We would also prepare and distribute a prospectus supplement
for these types of offerings.
General Information
Dealers and agents that participate in the distribution of the common stock may
be underwriters as defined in the Securities Act of 1933 (1933 Act), and any
discounts or commissions received by them from us and any profit on the resale
of the common stock by them may be treated as underwriting discounts and
commissions under the 1933 Act.
We have an agreement with the agent to indemnify it from certain civil
liabilities, including liabilities under the 1933 Act or to contribute with
respect to payments which the agent may be required to make. We may have similar
agreements with dealers and other agents.
Dealers and agents may engage in transactions with, or perform services for, us
or our subsidiaries in the ordinary course of their business.
In connection with any fixed price offering, exchange distribution, or special
offering, the selling group, which would include dealers who enter into an
underwriting agreement with us, may engage in transactions which stabilize,
maintain or otherwise affect the market price of the common stock. Specifically,
the selling group may overallot in connection with the offering, creating a
short position. In addition, they may bid for, and purchase, the securities in
the open market to cover shorts or to stabilize the price of the common stock.
Finally, the selling group may reclaim selling concessions allowed for
distributing common stock in the offering, if the selling group repurchases
previously distributed common stock in the market to cover overallotments or to
stabilize the price of the common stock. Any of these activities may stabilize
or maintain the market price of the common stock above independent market
levels. The selling group is not required to engage in any of these activities,
and may stop any of the activities at any time.
LEGAL OPINION
One of our lawyers will issue an opinion regarding certain legal matters in
connection with the common stock 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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You should rely only on the information incorporated by reference or provided in
this prospectus. BGE has not authorized anyone else to provide you with
different information. Neither BGE nor the agent is making an offer of these
securities in any state where the offer is not permitted. You should not assume
that the information in this prospectus is accurate as of any date other than
the date on the front of this prospectus.
3,000,000 Shares
[GRAPHIC OMITTED]
BALTIMORE GAS AND
ELECTRIC COMPANY
COMMON STOCK
-----------------------
PROSPECTUS
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SALOMON SMITH BARNEY
__________________ , 1998
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Securities and Exchange Commission Registration Fee.............. $28,410
Services of Independent Accountants.............................. 25,000*
Listing Fees..................................................... 45,000*
Legal Fees and Expenses.......................................... 25,000*
Transfer Agent and Registrar Fees................................ 5,000*
Printing and Delivery Expenses................................... 10,000*
Miscellaneous Expenses........................................... 11,590*
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Total............................................................ $150,000
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* 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 Sales Agency Agreement
which is 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
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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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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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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 22nd day of July, 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 July 22, 1998
Board and Director
Principal financial and accounting officer:
/s/ David A. Brune Vice President July 22, 1998
- --------------------
David A. Brune
Directors:
* H. Furlong Baldwin
* Beverly B. Byron
* J. Owen Cole
* Dan A. Colussy
* Edward A. Crooke
* James R. Curtiss
* Jerome W. Geckle Directors July 22, 1998
* Freeman A. Hrabowski III
* Nancy Lampton
* 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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EXHIBIT INDEX
Exhibit
Number
1 - Form of Sales Agency Agreement, including Form of
Volume and Pricing Parameters and Form of Terms Agreement.
4(a)* - Charter of Baltimore Gas and Electric Company,
restated as of August 16, 1996. (Designated as Exhibit
3 in the Form 10-Q for the quarter ended September
30, 1996, dated November 14, 1996, File No. 1-1910.)
4(b)* - By-Laws of Baltimore Gas and Electric Company, as
amended to January 23, 1998. (Designated as Exhibit
3(b) in the Form 10-K for the year ended December 31,
1997, File No. 1-1910.)
4(c)* - Form of Common Stock Certificate. (Designated as
Exhibit 4 to Form S-3 Registration Statement,
Registration No. 33-57658.)
5 - Opinion of Company Counsel as to legality.
23(a) - Consent of PricewaterhouseCoopers LLP, Independent
Certified Public Accountants.
23(b) - Consent of Company Counsel (included in Exhibit 5).
24 - Power of Attorney.
- ------------------
* Incorporated by reference.
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Exhibit 1
3,000,000 Shares
Baltimore Gas and Electric Company
Common Stock
Form of Sales Agency Agreement
__________, 1998
Smith Barney Inc.
390 Greenwich Street
New York, NY 10013
Ladies and Gentlemen:
The undersigned, Baltimore Gas and Electric Company, a Maryland
corporation (the "Company"), hereby confirms its agreement with Smith Barney
Inc. (the "Agent") as follows:
1. Issuance and Sale of Common Stock. The Company has authorized by
appropriate corporate action and proposes to issue and sell in the manner
contemplated by this Agreement up to 3,000,000 shares (the "Shares") of its
Common Stock (the "Common Stock"), having the terms and provisions set forth in
the Charter of the Company restated as of August 16, 1996, (a copy of which has
heretofore been delivered to the Agent) and summarized in the Prospectus
hereinafter mentioned. Subject to the terms and conditions stated in this
Agreement, the Company hereby (a) appoints the Agent as its exclusive sales
agent for the purpose of soliciting purchases of the Shares from the Company by
others and (b) agrees that whenever it determines to sell Shares directly to the
Agent as principal for resale to others, it will enter into a Terms Agreement
(as defined in Section 2(b) hereof) with the Agent relating to such sale in
accordance with Section 2(b) hereof.
2. Solicitations as Agent; Purchases as Principal. (a) Solicitations as
Agent. On the basis of the representations and warranties herein contained, but
subject to the terms and conditions herein set forth, the Agent agrees, as an
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agent of the Company, to use its reasonable best efforts to solicit offers to
purchase the Shares. The Agent and the Company agree that such solicitations,
and offers for the sale of the Shares, shall commence upon receipt of, and shall
be made in accordance with, written instructions from the Company to the Agent
(which shall be substantially in the form of Exhibit A hereto and which may take
the form of an exchange of any standard form of written telecommunication
between the Agent and the Company) and shall continue until such time as the
Company has instructed the Agent that such solicitations and offers shall be
suspended in accordance with Section 8 hereof. The Company reserves the right,
in its sole discretion, to instruct the Agent, at any time and from time to time
after the Commencement Date (as defined in Section 7 hereof), to so commence or
suspend such solicitations and offers for any period of time or permanently in
accordance with the provisions of this Agreement.
In soliciting purchases of the Shares from the Company by others
(including customers of the Agent), the Agent will be acting for the Company and
not as principal. The Agent, as the exclusive agent for the offer and sale of
the Shares, will use its reasonable best efforts to sell the Shares on behalf of
the Company as contemplated hereby; provided, however, that it is understood by
the Company that the Agent has no obligations to find purchasers of the Shares
and that the Agent in its sole discretion, upon notice thereof to the Company,
can suspend from time to time its efforts in offering for sale, and soliciting
purchases of, the Shares. In any transaction where the Agent has acted as agent
for the Company and has not purchased as principal, the Agent will use its
reasonable best efforts to obtain performance by each purchaser of Shares from
the Company, but the Agent will not have liability to the Company in the event
any such purchase is not consummated for any reason except as may be otherwise
provided by any applicable regulations and rules of the Exchanges (as defined in
Section 3(a) (i) hereof) on which the transaction was executed and except that
the Agent will complete the purchase in accordance with the customs of the
Exchanges in the case of transactions in which the Agent has also acted as
broker for the purchaser. The Company also understands that under no
circumstances shall the Agent be obligated to purchase any Shares for its own
account, except (i) pursuant to a Terms Agreement, (ii) as provided in the
preceding sentence and (iii) except to the extent that the Agent has acted as a
principal in purchasing a portion of a block as contemplated by Section 3
(a)(ii) hereof, or has made a firm commitment with the Company in connection
with an offering or distribution of the type contemplated by Section 3(a) (iii)
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hereof that has been expressly authorized by the Company and agreed to by the
Agent.
(b) Purchases as Principal. Each sale of Shares to the Agent as
principal for resale to others shall be made in accordance with the terms of
this Agreement and, except for purchases made in accordance with the customs of
the Exchanges in the case of transactions in which the Agent has also acted as
broker for a purchaser and in the case of transactions permitted by Section 3(a)
(ii) hereof, a separate agreement that will provide for the sale of such Shares
to, and the purchase and reoffering thereof by, the Agent. Each such separate
agreement (which shall be substantially in the form of Exhibit B hereto and
which may take the form of an exchange of any standard form of written
telecommunication between the Agent and the Company) is herein referred to as a
"Terms Agreement". The Agent's commitment to purchase Shares pursuant to any
Terms Agreement shall be deemed to have been made on the basis of the
representations and warranties of the Company herein contained and shall be
subject to the terms and conditions herein set forth. Unless expressly
authorized by the Company in the Terms Agreement, or as otherwise provided
herein, the Agent will not be authorized to utilize a selling or dealer group in
connection with the resale of the Shares purchased. Such Terms Agreement shall
also specify the requirements for the opinions of counsel, comfort letter and
officer's certificate pursuant to Sections 7(b), 7(c), 7(d) and 7(e),
respectively, hereof.
3. Manner of Offer and Sale. (a) Method of Offer and Sale. The Shares
may be offered and sold by any of the following methods:
(i) Ordinary Brokers' Transactions. The Shares may be offered
and sold by the Agent in ordinary regular-way transactions in the
auction market on the floor of the New York Stock Exchange, Inc. (the
"NYSE") or any other stock exchange on which the Common Stock may be
listed or admitted to trading (the NYSE, together with such other stock
exchanges, the "Exchanges").
(ii) Block Transactions. The Agent may solicit offers to
purchase Shares, and offer Shares for sale, in transactions on the
Exchanges in "crosses" of blocks where the Agent acts as broker for the
buyers in addition to acting as agent for the Company. It is understood
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that on occasion the Agent may also act as a principal and purchase for
its own account, with the consent of the Company, a portion of the
Shares being sold in the cross of a block. The Agent may also offer and
sell Shares in block transactions on the Exchanges in which other
broker-dealers are acting as broker for all or some of the buyers of
the Shares being sold in such transactions. In the discretion of the
Agent, the Agent may also sell Shares in block transactions to one or
more broker-dealers purchasing such Shares, or a portion of such
Shares, as principal for their own account, with the consent of the
Company. Any of the transactions contemplated by this Section 3(a) (ii)
may be executed in the over-the-counter market, with broker-dealers who
are not members of the Exchanges or otherwise, provided that the Agent
has obtained any necessary permission from officials of the Exchanges
or such transactions are otherwise in compliance with the rules of the
Exchanges.
(iii) Fixed Price Offerings. With the prior authorization of
the Company, and any necessary permission from officials of the
Exchanges, the Agent may conduct fixed price offerings off the floor of
the Exchanges, in which the Agent has committed to purchase as
principal the Shares involved in such offerings and dealers selected by
the Agent participate in the resale of such Shares. With the prior
authorization of the Company, the Agent may also conduct "special
offerings" or "exchange distributions" of Shares on the NYSE in
accordance with Rule 391 and Rule 392, respectively, of the NYSE or on
any one or more of the other Exchanges in accordance with the
appropriate rules of such other Exchanges. It is understood that the
terms of "fixed price offerings," "special offerings" and "exchange
distributions" contemplated by this Section 3(a) (iii) will in each
case be subject to the prior approval of the Company.
(b) Market Prices. The Company understands that sales of Shares will be
made at market prices prevailing at the time of sale in the case of transactions
on the Exchanges and at prices negotiated by the Agent and related to prevailing
market prices in the case of over-the-counter transactions; provided, however,
that the price per share to be paid to the Company for the Shares shall be in
compliance with the terms of this Agreement and the Procedures.
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(c) Discounts, Commissions, Concessions, Etc. The Company will (i) pay
to the Agent, on each Settlement Date (as defined in Section 4) in respect of
the sale of any Shares solicited by the Agent, in same day funds, commissions
for its services in acting as agent for the Company in the sale of such Shares
in an amount per share to be negotiated as provided in the Procedures (as
defined in Section 3(e) hereof) for the types of transactions involved (but not,
in any event, to exceed $0.05 per share) (it being understood that the Company
and the Agent may agree upon payment for such commissions in such other manner
as they may determine in accordance with the Procedures) and (ii) pay the
reasonable fees and expenses of Cahill Gordon & Reindel ("Counsel for the
Agent") in connection with the offer and sale of the Shares. Discounts,
commissions, concessions, the offering price and other terms of offerings or
distributions referred to in Sections 2(b) and 3(a) hereof will be agreed upon
by the Company and the Agent prior to any such offering or distribution. The
Company understands and agrees that, in any sale of Shares where the Agent is
also acting as broker for a buyer of Shares, the Agent may also receive a
brokerage commission from the buyer in any amount negotiated by the Agent and
such buyer.
(d) Authorized Actions. The Company agrees that, concurrently with the
offer and sale of Shares on behalf of the Company as contemplated by this
Agreement, the Agent may (i) act as broker for the sale of shares of Common
Stock by customers other than the Company, (ii) to the extent permitted by the
rules and regulations of the Securities and Exchange Commission (the
"Commission") under the Securities Exchange Act of 1934, (the "Exchange Act"),
solicit the sale of shares of Common Stock by customers other than the Company
through the Agent as broker for the seller, solicit the sale of shares of Common
Stock by customers other than the Company to the Agent as principal and solicit
offers to purchase shares of Common Stock and (iii) offer and sell as principal
for its own account Shares that the Agent has purchased from the Company as
contemplated by Sections 2(b) and 3(a) (ii) or shares of Common Stock that the
Agent has otherwise acquired in transactions permitted by this Agreement.
(e) Procedures. Procedural details relating to the offer and sale of
the Shares, and the issue and delivery of the Shares and payment for the Shares,
are set forth in the Common Stock Procedures attached hereto as Exhibit C (the
"Procedures"). The Agent and the Company each agree to perform the respective
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duties and obligations to be performed by them as provided in the Procedures as
amended from time to time. The Procedures may be amended only by a written
agreement of the Company and the Agent. The Agent agrees that the number of
Shares to be offered and sold from time to time, and the prices at which Shares
are to be offered and sold, will be in compliance with limitations established
by the Company with the Agent in accordance with the Procedures.
(f) Compliance with Laws and Regulations. The Agent agrees that in
carrying out the transactions contemplated by this Agreement, it will observe
and comply with (i) all applicable securities laws, regulations, rules and
ordinances of any jurisdiction in which the Shares may be offered, sold or
delivered and (ii) all applicable regulations and rules of the Exchanges on
which such transactions are executed.
4. Delivery of Shares. Delivery of Shares sold in transactions of the
types referred to in Section 3(a) hereof will take place through the book-entry
processing of the Depository Trust Company ("DTC") deposit withdrawal at
custodian ("DWAC") system on the date that is three Business Days (as defined
below) after the "trade date" for the sale of such Shares, against delivery to
the Company in same day funds of the purchase price for such Shares; provided,
however, that the Company and the Agent may agree upon delivery of and payment
for Shares sold in particular transactions at such other time and place and in
such other manner as they may determine in accordance with the Procedures. The
date of delivery to the Agent of Shares sold against delivery to the Company of
funds in payment therefor is herein called the "Settlement Date." Delivery of
Shares, and payment, for Shares sold pursuant to a Terms Agreement shall be made
in accordance with such Terms Agreement. Except as may be otherwise determined
by the NYSE, "Business Day" as used in this Agreement means any day on which the
NYSE is open for business other than any such day on which banking institutions
in New York City are authorized or obligated by law to close.
5. Representations and Warranties of the Company. The Company
represents and warrants to the Agent that:
(a) Filing of Registration Statement with Commission. A registration
statement on Form S-3 (File No. 333-____) relating to the Shares, including a
prospectus, has been filed with the Commission under the Securities Act of 1933,
(the "Securities Act"), in accordance with Rule 415 of the published rules and
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regulations of the Commission (the "Regulations") under the Securities Act. Such
registration statement has been declared effective by the Commission. References
in this Agreement to the "Registration Statement" at a particular time are to
such registration statement, as it may have been amended or supplemented at such
time, including all exhibits thereto and all documents that at such time are
incorporated by reference therein. References in this Agreement to the
"Prospectus" at a particular time are to the form of preliminary prospectus
filed as a part of the Registration Statement at such time and, thereafter, to
the prospectus first filed with the Commission pursuant to Rule 424(b) of the
Regulations under the Securities Act, as it may have been amended or
supplemented at such time, including all documents that at such time are
incorporated by reference therein.
(b) Registration Statement; Prospectus and Incorporated Documents. (i)
The Registration Statement, at the date of this Agreement and any applicable
Terms Agreement and at the Commencement Date, as it may be amended or
supplemented at each such time, complies and will comply, as the case may be, in
all material respects with the Securities Act and the Regulations thereunder;
the Prospectus, at the date of this Agreement and any applicable Terms
Agreement, at the date it is first filed pursuant to Rule 424(b) of the
Regulations under the Securities Act and at the Commencement Date, as it may be
amended or supplemented at each such time, complies and will comply, as the case
may be, in all material respects with the Securities Act and the Regulations
thereunder; (ii) the Registration Statement at the date of this Agreement and
any applicable Terms Agreement and at the Commencement Date, as it may be
amended or supplemented at each such time, does not and will not, as the case
may be, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; the Prospectus, at the date of this Agreement and any
applicable Terms Agreement, at the date it is first filed pursuant to Rule
424(b) of the Regulations under the Securities Act and at the Commencement Date,
as it may be amended or supplemented at each such time, does not and will not,
as the case may be, contain an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided,
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however, that these representations and warranties do not apply to statements or
omissions in such documents, based upon information furnished to the Company in
writing by the Agent expressly for use therein; and (iii) the documents
incorporated by reference in the Registration Statement or the Prospectus
pursuant to Item 12 of Form S-3 of the Securities Act, at the time they were
filed with the Commission, complied in all material respects with the
requirements of the Exchange Act, and the Regulations thereunder.
6. Covenants of the Company. The Company covenants and agrees that:
(a) Filing of Prospectus with Commission; No Stop Order. The Company
will cause the Prospectus, and any amendments or supplements thereto, to be
filed with, or transmitted for filing to, the Commission in accordance with Rule
424(b) of the Regulations under the Securities Act and will notify the Agent
immediately, and confirm such notice in writing, of the issuance by the
Commission of any stop order under the Securities Act suspending the
effectiveness of the Registration Statement or of the initiation of any
proceedings for that purpose. The Company will make every reasonable effort to
prevent the issuance by the Commission of any stop order and, if any such stop
order shall at any time be issued, to obtain the lifting thereof at the earliest
possible moment.
(b) Amendments and Supplements. From the time solicitation regarding
sale of the Shares is begun until all of the Shares have been sold (i) the
Company will advise the 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 (including a prospectus filed pursuant to Rule
424(b) of the Regulations under the Securities Act that differs from the
Prospectus first filed pursuant to such Rule 424(b) but excepting post-effective
amendments, supplements, and stickers relating solely to pricing, if any and
incorporation of document(s) by reference into the Registration Statement or the
Prospectus); (ii) the Company will afford the Agent a reasonable opportunity to
comment on any such proposed post-effective amendment, sticker or supplement;
and (iii) the Company will advise the Agent of the filing of any such
post-effective amendment, sticker or supplement.
(c) Copies of Registration Statement and Prospectus. The Company will
promptly deliver to the Agent a fully executed copy of the Registration
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Statement as originally filed including documents incorporated by reference and
of all amendments thereto, heretofore or hereafter made, including any
post-effective amendment thereto (in each case including all exhibits filed
therewith not previously furnished), including signed copies of each consent and
certificate included therein or filed as an exhibit thereto, and will deliver to
the Agent as many conformed copies of the foregoing (excluding the exhibits) as
the Agent may reasonably request. The Company will deliver to the Agent from
time to time during the period when the Prospectus is required to be delivered
under the Securities Act, such number of copies of the Prospectus (including any
amendments or supplements thereto), as the Agent may reasonably request for the
purposes contemplated by the Securities Act and the Regulations thereunder.
(d) Compliance with the Securities Act. During the period when the
Prospectus is required to be delivered under the Securities Act, the Company
will comply so far as it is able, and at its own expense, with all requirements
imposed upon it by the Securities Act and by the Regulations thereunder, so far
as necessary to permit the continuance of sales of or dealing in the Shares
during such period in accordance with the provisions hereof and the Prospectus.
(e) Changes of Material Fact. If the Company determines that any event
relating to or affecting the Company shall occur as a result of which it is
necessary to amend or supplement the Prospectus (as it may be amended or
supplemented at such time) in order to make the Prospectus (as it may be amended
or supplemented at such time) not misleading in the light of the circumstances
existing at the time it is delivered to a purchaser, the Company will forthwith
(i) notify the Agent to suspend solicitations of offers to purchase, and offers
for the sale of, the Shares (and, if so notified by the Company, the Agent shall
forthwith suspend such solicitations and offers and cease using the Prospectus
as supplemented or amended) and (ii) prepare and furnish to the Agent, without
expense to the Agent, a reasonable number of copies of an amendment or
amendments or a supplement or supplements to the Prospectus (as it may be
amended or supplemented at such time) that will amend or supplement the
Prospectus (as it may be amended or supplemented at such time) so that as
amended or supplemented it will not include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
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therein, in the light of the circumstances existing at the time the Prospectus
(as so amended or supplemented) is delivered to a purchaser, not misleading. For
the purpose of this Section 6(e) the Company will furnish such information as
the Agent may from time to time reasonably request.
(f) Earnings Statement. 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 Commencement 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.
(g) Blue Sky Qualification. During the period when the Prospectus is
required to be delivered under the Act, the Company will use its best efforts to
qualify the Shares for offer and sale under the blue sky laws of such
jurisdictions as the Agent may reasonably designate, and will file and make in
each year such statements or reports as are or may be reasonably required by the
laws of such jurisdictions; provided, however, that the Company shall not be
required to qualify as a foreign corporation or dealer in securities or to file
any consents to service of process under the laws of any jurisdiction.
(h) Payment of Expenses. Whether or not the transactions contemplated
hereunder are consummated or this Agreement or any applicable Terms Agreement is
terminated, the Company will pay all expenses incident to the performance of its
obligations under this Agreement or such Terms Agreement, including (i) the
preparation, printing and filing of this Agreement, such Terms Agreement, the
Registration Statement as originally filed and any amendments or supplements
thereto, the preliminary prospectuses filed as a part thereof, the Prospectus
and any amendments and supplements thereto and any documents incorporated by
reference therein and, in each case, the exhibits thereto, in each case in
quantities as required by the Agent under this Agreement, (ii) the issue and
delivery of the Shares as provided in Section 4 hereof, (iii) the fees and
expenses of the accountants, (iv) the expenses in connection with the
qualification of the Shares under securities laws in accordance with the
provisions of Section 6(g) hereof, including filing fees and the fees and
disbursements of Counsel for the Agent in connection therewith and in connection
with the preparation of any Blue Sky Survey, (v) the reasonable fees and
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expenses of Counsel for the Agent, (vi) the commissions and amounts payable in
accordance with Section 3(c) hereof and (vii) any advertising and other
out-of-pocket expenses of the Agent incurred with the approval of the Company.
If this Agreement is terminated in accordance with the provisions of Section 7
or 12 hereof, the Company shall pay for reasonable fees and disbursements of
Counsel for the Agent. The Company shall not in any event be liable to the Agent
for damages on account of the loss of anticipated profits.
7. Conditions of Agent's Obligations. The obligation of the Agent to
solicit offers to purchase the Shares as agent of the Company, the obligation of
any purchaser of Shares sold through the Agent as agent and the obligation of
the Agent to purchase Shares pursuant to any Terms Agreement shall be subject at
10:00 A.M., New York City time, on __________1998, or at such later time and
date as the Agent and the Company may agree upon (the "Commencement Date"), and
at all times thereafter, to the accuracy in all material respects of the
representations and warranties on the part of the Company herein contained and
to the accuracy of the statements of the Company's officers made in any
certificate furnished pursuant to the provisions hereof, to the performance and
observance by the Company of all covenants and agreements herein contained and
to the following additional conditions precedent:
(a) Filing of Prospectus with Commission; No Stop Order; Regulatory
Approvals. The Prospectus and any amendments or supplements thereto, shall have
been filed with, or transmitted for filing to, the Commission in accordance with
Rule 424(b) of the Regulations under the Securities Act; no stop order with
respect to the effectiveness of the Registration Statement shall have been
issued under the Securities Act by the Commission and no proceedings therefor
shall have been instituted or, to the knowledge of the Company or the Agent
shall be contemplated by the Commission.
(b) Opinion of Counsel of the Company. On the Commencement Date and, if
specified in any Terms Agreement, on the Settlement Date therefor, the Agent
shall have received the favorable opinion dated as of the Commencement Date or
such Settlement Date, as the case may be, of legal counsel for the Company, in
form and substance satisfactory to Counsel for the Agent, to the effect that:
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(i) The Company and Constellation Holdings, Inc. have been
duly incorporated and are validly existing as corporations in good
standing under the law 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 the District
of Columbia, which are the only 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 Shares have been duly authorized and will, upon
issuance and delivery thereof in compliance with this Agreement and
against payment therefor pursuant to this Agreement, be duly authorized
and issued, fully paid and non-assessable shares and the issuance of
the Shares is not subject to preemptive rights;
(iii) the Shares conform as to legal matters with the
statements concerning them in the Registration Statement and the
Prospectus under the caption "DESCRIPTION OF COMMON STOCK";
(iv) this Agreement or such Terms Agreement, as the case may
be, has been duly authorized, executed and delivered by the Company;
(v) the approval of the Public Service Commission of Maryland
necessary for the valid issuance of the Shares by the Company pursuant
to this Agreement has been obtained and continues in full force and
effect 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 Shares by the Company under this
Agreement (except that such opinion need not pass upon the requirements
of state securities acts);
(vi) the Registration Statement has become effective under the
Securities Act, and, 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
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are pending or contemplated under the Securities Act. 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 effective or issue dates, appeared to comply as to
form in all material respects with the requirements of Form S-3 under
the Securities Act and the Regulations of the Commission thereunder.
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 statements therein not misleading. 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.
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 is understood that such counsel need express no
opinion as to the financial statements or other financial and
statistical information contained in the Registration Statement or the
Prospectus; and
(vii) the issuance, sale and delivery of the Shares 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"), or if the Company is a
registered holding company under the 1935 Act, the requisite approval
of the Commission has been received and continues in full force and
effect.
In rendering the above opinions, counsel for the Company may rely, as to matters
of fact, to the extent deemed proper, on certificates of responsible officers of
the Company, public officials, and Ballard, Spahr, Andrews & Ingersoll, a
Pennsylvania counsel for the Company. References to the Prospectus in this
Section 7(b) include any amendments or supplements thereto at the date such
opinion is rendered.
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(c) Opinion of Counsel for the Agent. On the Commencement Date and, if
specified in any Terms Agreement, the Settlement Date therefor, the Agent shall
have received the favorable opinion dated as of the Commencement Date or such
Settlement Date, as the case may be, of Counsel for the Agent with respect to
the matters set forth in subheadings (ii), (iii), (iv), (v) and, the second
sentence of (vi) of paragraph (b) of this Section 7, and with respect to such
other matters as the Agent may reasonably require. 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 Shares, all other matters governed by the laws of the
State of Maryland and the applicability of the 1935 Act upon the opinion of
counsel for the Company referred to above, and, as to matters governed by the
laws of the Commonwealth of Pennsylvania, upon an opinion of Ballard, Spahr,
Andrews & Ingersoll.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of the
Company, counsel for the Company, representatives of the independent public
accountants of the Company and representatives of the Agent at which conferences
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 any 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 clause (iii) of
paragraph (b) of this Section 7), 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 amendments or supplements thereto, as of their respective
effective or issue 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 or other
financial and statistical data included or incorporated by reference in the
Registration Statement or Prospectus).
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(d) Comfort Letter. On the Commencement Date and, if specified in any
Terms Agreement, the Settlement Date therefor, a letter dated as of the
Commencement Date or such Settlement Date, as the case may be, from Coopers &
Lybrand, confirming that they are independent public accountants within the
meaning of the Securities Act and the Regulations thereunder with respect to the
Company 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, which is incorporated by reference in the
Registration Statement comply in form in all material respects with the
applicable accounting requirements of the Securities Act and the
Regulations thereunder and the Exchange Act and the Regulations
thereunder;
(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
Commencement 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 Securities
Act and the Regulations thereunder and the Exchange Act and the
Exchange Act Regulations thereunder or any material modifications
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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 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 Commencement 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 Commencement 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;
(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
16
<PAGE>
incorporated and the underlying general accounting records of the
Company, except as described in such letter; and
(iv) shall cover such other matters as the Agent shall
reasonably request.
(e) Certificate as to No Material Adverse Change, Etc. On the
Commencement Date and on each Settlement Date in respect of a Terms Agreement,
there shall not have been, since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as may otherwise
be stated therein or contemplated thereby, any material adverse change in the
financial position or in the financial results of operations of the Company, and
the Agent shall have received a certificate of the Company signed by the
Chairman of the Board, the Chief Executive Officer, the Vice Chairman, the
President, or any Vice President of the Company reasonably satisfactory to the
Agent, dated as of the Commencement Date or, if specified in such Terms
Agreement, the Settlement Date therefor, as the case may be, to the effect that
to the best of their knowledge after reasonable investigation, and relying on
opinions of counsel to the extent that legal matters are involved, (i) there has
been no such material adverse change, (ii) the representations and warranties
contained in this Agreement are true and correct in all material respects as of
the Commencement Date or such Settlement Date, as the case may be, (iii) the
Company has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied under this Agreement or such Terms Agreement,
as the case may be, on or prior to the Commencement Date or such Settlement
Date, as the case may be, and (iv) no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings for that purpose
have been initiated or threatened by the Commission.
(f) Other Documents. On the Commencement Date, and on each Settlement
Date in respect of a Terms Agreement, Counsel for the Agent shall have been
furnished with such documents and opinions as they may reasonably require for
the purpose of enabling them to pass upon the issuance and sale of the Shares as
herein contemplated and related proceedings, or in order to evidence the
accuracy or completeness of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained, and all proceedings
taken by the Company in connection with the sale of the Shares as herein
17
<PAGE>
contemplated shall be satisfactory in form and substance to the Agent and
Counsel for the Agent.
(g) The Exchanges shall have approved for listing upon official notice
of issuance, the Shares.
In case any of the conditions specified above in this Section 7 shall
not have been fulfilled, this Agreement or any applicable Terms Agreement may be
terminated by the Agent upon mailing or delivering written notice thereof to the
Company. Any such termination shall be without liability of either party to the
other party except as otherwise provided in Section 6(h) hereof and except for
any liability under Section 10 hereof.
8. Suspension of Offers and Solicitations. At any time and from time to
time after the Commencement Date (except any such time that the Agent owns any
Shares purchased as principal that are held for resale to others in accordance
with the terms of this Agreement), the Company may in its sole discretion orally
instruct the Agent to suspend solicitations of offers to purchase, and offers
for the sale of, the Shares as provided herein and in the Procedures. If at any
such time, or at any time that the Company has otherwise notified the Agent to
suspend such solicitations and offers under this Agreement, there shall be any
sales of Shares by the Company not yet settled outstanding, the Company will
promptly advise the Agent whether such sales may be settled and whether the
Prospectus as then in effect may be delivered in connection with the settlement
of such sales. If the Company determines that such sales may not be settled or
that such Prospectus may not be so delivered, the Agent will use its best
efforts to arrange for the cancellation of such sales, but the Company shall
have the sole responsibility for, and shall hold the Agent harmless from, any
losses, claims, damages or liabilities (and expenses in connection therewith)
that may result from the inability to make settlement of such sales.
9. Additional Representations and Warranties and Agreements of the
Company. The Company represents and warrants and agrees that:
(a) Affirmation of Representations and Warranties. Each authorization
by the Company to the Agent to solicit offers to purchase the Shares as provided
in the Procedures shall be deemed to be an affirmation that the representations
18
<PAGE>
and warranties of the Company contained in this Agreement are true and correct
at the time of such authorization, and an undertaking that such representations
and warranties will be true and correct at the time of delivery of and payment
for Shares sold pursuant to such authorization as provided in Section 4 hereof,
in each case as though made at and as of each such time (except that such
representations and warranties shall be deemed to relate to the Registration
Statement and the Prospectus as amended or supplemented to each such time).
(b) From the time solicitation regarding the sale of the Shares is begun
until all of the Shares have been sold, each time the Company (i) amends or
supplements the Registration Statement or the Prospectus (other than in
reference solely to prices of Shares) 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 Agent
(but in the case of (iv) above only if requested by the Agent) with a
certificate of the Chairman of the Board, the Chief Executive Officer, the Vice
Chairman, President or any Vice President and a principal financial or
accounting officer of the Company, in form satisfactory to the Agent, 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.
19
<PAGE>
(c) From the time solicitation regarding the sale of the Shares is begun
until all of the Shares have been sold, at each Representation Date referred to
in Section 9(b) (i) or (ii) and, only if requested by the Agent, at each
Representation Date referred to in Section 9(b) (iii) or (iv), the Company shall
concurrently furnish the Agent 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 Agent, to the effect set forth in Section 7(b) hereof, but
modified, as necessary, to relate to the Registration Statement and the
Prospectus as then amended or supplemented; provided, however, that in lieu of
such opinion, counsel may furnish the Agent with a letter to the effect that the
Agent may rely on a prior opinion delivered under Section 7(b) or this Section
9(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 Shares is begun
until all of the Shares have been sold, at each Representation Date referred to
in Section 9(b) (i) or (ii) and, only if requested by the Agent, at each
Representation Date referred to in Section 9(b) (iii) or (iv), but in each case
only if such documents referred to in Section 9(b) include additional financial
information, the Company shall cause Coopers & Lybrand concurrently to furnish
the Agent with a letter, addressed jointly to the Company and the Agent and
dated the Representation Date or the date of such filing, in form and substance
satisfactory to the Agent, to the effect set forth in Section 7(d) 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 Agent, should be covered by such letter, in which event such
letter shall also cover such other information and procedures as shall be
requested by the Agent.
20
<PAGE>
10. Indemnification. (a) Indemnification of the Agent. The Company will
indemnify and hold harmless the Agent and each person, if any, who controls the
Agent within the meaning of Section 15 of the Securities Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement or documents incorporated by reference therein
(or any amendment thereto), of the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary
to make the statements therein not misleading or arising out of any
untrue statement or alleged untrue statement of a material fact
contained in any related preliminary prospectus, the Prospectus (or any
amendment or supplement thereto) or the documents incorporated by
reference therein, or the omission or alleged omission therefrom of a
material fact necessary in order to make the statement therein, in the
light of the circumstances under which they were made, not misleading,
unless such untrue statement or omission or such alleged untrue
statement or omission was made in reliance upon and in conformity with
written information furnished to the Company by the Agent expressly for
use in the Registration Statement (or any amendment thereto) or such
preliminary prospectus or the Prospectus (or any amendment or
supplement thereto); provided, however, that any such indemnity with
respect to a Prospectus shall not inure to the benefit of the Agent (or
of any person controlling the Agent) on account of any losses,
liabilities, claims or damages arising from the sale of Shares to any
person if any amendments or supplements to such Prospectus shall have
been furnished to the Agent on a timely basis to permit the Agent to
send or give to such person, with or prior to the written confirmation
of such sale, a copy of such amended or supplemented Prospectus, except
the documents incorporated by reference therein, and the untrue
statement or omission of a material fact contained in such Prospectus
and giving rise to such losses, liabilities, claims or damages was
corrected in such amended or supplemented Prospectus (including the
documents incorporated by reference therein);
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
21
<PAGE>
paid in settlement of any litigation, commenced or threatened or of any
claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, if such settlement is
effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred, in
investigating, preparing or defending against any litigation, commenced
or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under clause
(i) or (ii) above.
(b) Indemnification of Company. The Agent agrees to indemnify and hold
harmless the Company, its directors, each of its officers who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the Act against any and all loss, liability, claim,
damage and expense described in the indemnity contained in Section 10(a) hereof,
as incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto) or any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with written
information furnished to the Company by the Agent expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary prospectus
or the Prospectus (or any amendment or supplement thereto).
(c) General. Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure so to notify an indemnifying
party shall not relieve it from any liability except to the extent that it has
been prejudiced in any material respect by such failure or from any liability
that it may have to such indemnified party otherwise than on account of this
indemnity agreement. 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 after notice from the indemnifying party to such
22
<PAGE>
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 10 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 Shares (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 Agent 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 Agent 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 Shares
distributed to the public through it pursuant to this Agreement or upon resale
of Shares purchased by it from the Company, less the aggregate amount of any
damages which the 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 Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
(e) Confirmation of Certain Statements. The Agent confirms that the
statements with respect to the public offering of the Shares set forth on the
cover page of, and the statements under the caption "Plan of Distribution" in,
23
<PAGE>
the Prospectus are correct and were furnished in writing to the Company by the
Agent for inclusion in the Prospectus.
11. Survival of Representations and Warranties and Agreements. The
indemnity and other agreements of the Company and the Agent contained in
Sections 6(h) and 10 hereof and the representations, warranties and other
statements of the Company set forth in this Agreement or made by the Company
pursuant to this Agreement shall remain in full force and effect, regardless of
(a) any termination of this Agreement or any Terms Agreement, (b) any
investigation made by or on behalf of the Agent or any of its controlling
persons or by or on behalf of the Company or any of its officers, directors or
controlling persons and (c) acceptance of delivery of and payment for Shares
sold hereunder.
12. Termination. (a) Termination of this Agreement.This Agreement may be
terminated at any time by either party hereto upon the giving of written notice
of such termination to the other party hereto effective at the close of business
on the date such notice is received.
(b) Termination of a Terms Agreement. The Agent may, by notice to the
Company, terminate a Terms Agreement if, at any time after the date of this
Agreement and at or prior to the Settlement Date in respect thereof, (i) there
shall have occurred 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 the reasonable judgment of the Agent,
materially impairs the investment quality of the Shares, or (ii) trading in
securities generally on the New York Stock Exchange shall have been suspended or
limited, other than a temporary suspension in trading to provide for an orderly
market, or minimum prices have been established on such Exchange, a banking
moratorium shall have been declared either by New York State or Federal
authorities or there shall have occurred an outbreak or material escalation of
hostilities or other calamity or crisis, the effect of which on the financial
markets of the United States is such as to make it, in the Agent's judgment,
impracticable to market the Shares.
(c) General. In the event of any termination under Section 12(a) or
12(b) hereof, neither party will have any liability to the other party hereto,
except that (i) the Agent shall be entitled to any commission earned in
accordance with Section 3(c) hereof, (ii) if at the time of termination (A) the
24
<PAGE>
Agent shall own any Shares purchased pursuant to a Terms Agreement with the
intention of reselling them or (B) an offer to purchase any of the Shares has
been accepted by the Company but the time of delivery to the purchaser or his
agent of the Shares relating thereto has not occurred, the covenants set forth
in Sections 6 and 9 hereof shall remain in effect until such Shares have been
resold or delivered, as the case may be and (iii) the covenants set forth in
Sections 6(f) and 6(h) hereof, the indemnity and contribution agreement set
forth in Section 10 hereof and the provisions of Sections 11 and 16 hereof shall
remain in effect.
13. Notices. Except as otherwise specifically provided herein or in the
Procedures, all statements, instructions, requests, notices and advances
hereunder and under any applicable Terms Agreement shall be in writing (or by
telephone or telefax if subsequently confirmed in writing), and shall be deemed
to have been duly given if mailed, delivered or transmitted by any standard form
of telecommunication to (a) in the case of the Agent, Smith Barney Inc., 390
Greenwich Street, New York, New York 10013, Attention: Robert G. Leonard,
Telefax No.: 212-816-7949, with, in the case of instructions given by the
Company pursuant to Section 2(a) or 8 hereof, and (b) in the case of the
Company, Baltimore Gas and Electric Company, 39 W. Lexington Street, Baltimore,
Maryland, 21201, Attention: T. E. Ruszin, Jr., Treasurer, Telefax No.:
410-234-5367.
14. Parties. This Agreement and any applicable Terms Agreement shall
inure solely to the benefit of the Company and the Agent and, to the extent
provided in Sections 10 and 11 hereof, to any officer or director of the Company
or to any person who controls the Company or the Agent, and their respective
successors. No other person, partnership, association or corporation shall
acquire or have any right under or by virtue of this Agreement or any Terms
Agreement. The term "successors" shall not include any purchaser of any Shares
merely because of such purchase. The respective rights and obligations of the
Company and the Agent hereunder may not be assigned, transferred or contracted
to another.
15. Arm's Length Dealing. This Agreement and any applicable Terms
Agreement have been negotiated at arm's length between the Agent and the
Company, which regularly issues and sells securities in the public markets
through investment bankers, and the relationship created hereby or thereby is
25
<PAGE>
not intended to be one of customer and member as the term "customer" is used in
the provisions pertaining to the protection of customers of the articles,
bylaws, rules, regulations and policies of the NYSE or the National Association
of Securities Dealers, Inc.
16. Governing Law. This Agreement and any Terms Agreement shall be
governed by and construed in accordance with the laws of the State of New York
without regard to principles of conflict of law.
17. Captions. Captions to Sections of this Agreement are included for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or in any way affect the meaning of any provisions of this
Agreement.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument along with all counterparts will become a binding agreement
between the Agent and the Company in accordance with its terms.
Very truly yours,
BALTIMORE GAS AND ELECTRIC COMPANY
By
Title: Vice President
Confirmed, accepted and agreed, as of the date first above written:
SMITH BARNEY INC.
By
Title:
26
<PAGE>
EXHIBIT A
BALTIMORE GAS AND ELECTRIC COMPANY
3,000,000 Shares Common Stock
Continuous Offering Program
Volume and Pricing Parameters for Offers and Solicitations
[Date]
Smith Barney Inc.
390 Greenwich Street, 5th Floor
New York, New York 10013
Ladies and Gentlemen:
The Company hereby instructs you to commence solicitations of offers to
purchase, and offers for the sale of, up to an additional ___________ shares of
the Company's Common Stock, in accordance with the terms of the Sales Agency
Agreement, at prices not less than $_____ per share, or such higher prices as we
verbally communicate to you.
In addition, the sales price must be (1)equal to or greater than the
prior day's closing price on the New York Stock Exchange less $0.50 and (2)
equal to or greater than the sale or bid price, whichever is lower, as reported
on the New York Stock Exchange immediately prior to pricing less $0.50.
Including the above mentioned ________ shares, __________ shares remain
to be issued under the Continuous Offering Program.
The Company reserves the right, in its sole discretion, to instruct
you, at any time after the date hereof to suspend such solicitations and sales
for any period of time or permanently in accordance with the provisions of the
Sales Agency Agreement.
BALTIMORE GAS AND ELECTRIC COMPANY
By:
Vice President
<PAGE>
EXHIBIT B
BALTIMORE GAS AND ELECTRIC COMPANY
[ ] Shares of Common Stock
Terms Agreement
[Date]
Smith Barney Inc.
390 Greenwich Street
New York, NY 10013
Ladies and Gentlemen:
Pursuant to the terms and conditions set forth in the Sales Agency
Agreement, dated __________, 1998, between Baltimore Gas and Electric Company
(the "Company") and you (the "Agent") and the additional terms set forth below,
you are to purchase _______ shares of the Company's Common Stock (the "Shares").
Purchase Price per Share:
Public Offering Price per Share:
Settlement Date and Time:
Form of Settlement:
Additional Terms:
[If agreed to by you and the Company prior to the execution hereof: the Company
will not, between the date hereof and the Settlement Date and Time set forth
above, without your prior consent, offer or sell, or enter into any agreement to
sell, any of its Common Stock, except pursuant to the Company's Dividend
<PAGE>
Reinvestment and Stock Purchase Plan and Employee Savings Plan.]
[Indicate whether the Company authorizes you to utilize a selling or dealer
group in connection with the resale of the Shares as required by Section 2(b) of
the Sales Agency Agreement.]
[Indicate whether the legal opinion, accountant's letter and/or the officer's
certificate described in Sections 7(b), 7(c), 7(d) and 7(e), respectively, of
the Sales Agency Agreement will or will not be required.]
BALTIMORE GAS AND ELECTRIC COMPANY
By______________________________
Title:
Confirmed, accepted, and agreed, as of the date first above written:
Smith Barney Inc.
By_____________________________________
Title:
<PAGE>
EXHIBIT C
BALTIMORE GAS AND ELECTRIC COMPANY
Common Stock Procedures
Pursuant to the Sales Agency Agreement dated as of ____________, 1998
(the "Sales Agency Agreement") between Baltimore Gas and Electric Company (the
"Company") and Smith Barney Inc., as exclusive sales agent (the "Agent"), up to
3,000,000 shares of the Company's Common Stock are being offered and sold.
Capitalized terms used herein and not otherwise defined herein shall have the
meanings ascribed to them in the Sales Agency Agreement.
The Shares have been registered with the Commission under the
Securities Act. Harris Trust and Savings Bank acts as transfer agent and
registrar for the Common Stock (together with any successor transfer agent or
registrar, the "Transfer Agent").
Administrative procedures and specific terms of the offering are
explained below. Administrative responsibilities, accountable document control
and record-keeping responsibilities will be performed by the Company's Finance
Department. The Company will advise the Agent in writing of those persons
handling administrative responsibilities with whom the Agent is to communicate
regarding offers to purchase Shares and the details of their delivery.
I. Acceptance of The Company will have the sole right
Orders; to give orders to sell, and accept
Authorized offers to purchase, Shares. Instructions
Persons: regarding offers and sales of Shares will
be given for the Company by D. A. Brune,
T. E. Ruszin or by another specifically
named authorized representative of the
Company.
Such instructions will be accepted at the
Agent by Robert G. Leonard, or by another
specifically named authorized
representative of the Agent. Offers and
sales of the Shares will be made under
volume and price parameters and with such
commissions as agreed upon between the
Company and the Agent. Offers not
complying with such terms will be
communicated telephonically by the Agent
to the authorized representative of the
Company, including specific prices on
"block" transactions. The Company may
reject any offer to purchase Shares in
<PAGE>
whole or in part. The Agent may reject
any offer to purchase Shares in whole or
in part in the reasonable exercise of its
discretion.
II. Settlement: Settlement will occur on the third
Business Day after the Trade Date.
Delivery of Shares will take place
through the book-entry processing of the
Depository Trust Company ("DTC") DWAC
system (deposit withdrawal at custodian).
Another time , place or method of
settlement (e.g., same day for cash"
sales) may be specified if mutually
agreed upon in writing by authorized
representatives of the Company and the
Agent.
III.Denominations: Since delivery of Shares will take place
through DWAC, a single certificate
evidencing the Shares for each day's
transactions will be registered in the
name of DTC or a nominee of DTC. The
Transfer Agent will hold all
certificates.
IV. Details for With regard to Shares sold by the Company
Settlement: through the Agent, on any day, the Agent
will advise the Company by telephone of
the following key details of any
transactions that take place by the end
of such day:
1. The number of Shares sold.
2. The prices at which Shares were sold.
3. The commissions payable to the Agent
by the Company.
4. Other applicable charges, such as
transfer taxes and fees of the
Commission.
5. The net proceeds payable to the
Company.
6. The Settlement Date or Dates.
The Agent will confirm the foregoing key
details by facsimile transmission within one
Business Day after the Trade Date (See Part
V below).
After receiving the key details by facsimile
transmission from the Agent, the Company
2
<PAGE>
will promptly notify the Transfer Agent in
writing of the number of Shares sold and
instruct the Transfer Agent, on the
Settlement Date, to accept the DWAC
transaction for the settlement of the Shares
sold.
On the Settlement Date, the following events
will take place:
1. Within the Company's brokerage
account at the Agent, a trade will
settle representing the Shares sold
and the net proceeds payable to the
Company.
2. The Agent will initiate a DWAC
transaction to credit the Shares
sold to its DTC participant account.
3. The Transfer Agent will subsequently
accept the DWAC transaction for the
appropriate number of such Shares,
per written instructions from the
Company as noted above.
4. Simultaneously with the Shares being
credited to the Agent's DTC
participant account, the Agent will
release from the Company's brokerage
account at the Agent the net
proceeds from the sale of the
Shares.
5. The Agent will wire transfer the net
proceeds as the Company may direct.
The Company will notify the NYSE quarterly
of the number of outstanding shares and give
the NYSE any other notice of the issue of
Shares as may be required by the NYSE.
V. Confirmation: For each order to purchase Shares solicited
by the Agent and accepted by or on behalf
of the Company, the Agent will issue a
written confirmation by facsimile
transmission within one Business Day after
the Trade Date to Baltimore Gas and Electric
Company, 39 W. Lexington Street, Room
800, Baltimore, Maryland 21201, Attention:
T. E. Ruszin, Jr. Treasurer containing the
key details listed above.
VI. Delivery of The Company will deliver (through DWAC) the
of the Shares: Shares sold to Agent only against payment
therefor as specified in Section 4 of the
Sales Agency Agreement and as set forth in
3
<PAGE>
"Details for Settlement" under Part IV
of these Procedures. See "Delivery of
Prospectus" under Part IX of these Procedures
as to the requirement to deliver a current
Prospectus with sale transactions.
VII. Fails: Failure to make payment when due will be
subject to the regulations and rules of
the NYSE, as applicable, and the provisions
of Section 2(a) of the Sales Agency
Agreement.
VIII.Suspension of The Company may instruct the Agent to
Solicitation, commence or suspend solicitations of offers
Amendment or to purchase, and offers for the sale of,
Supplement: Shares at any time in accordance with the
Sales Agency Agreement. Upon receipt of
such instructions to suspend, the Agent
will immediately suspend such activities
until such time as the Company has advised
the Agent that such activities may be
resumed. If the Company decides to amend or
supplement the Registration Statement or the
Prospectus, it will promptly advise the
Agent and will furnish the Agent with the
proposed amendment or supplement as
provided in the Sales Agency Agreement.
In the event that at the time the Agent
suspends such activities there shall be
any sales not yet settled outstanding, the
Company will, consistent with its obligations
under the Sales Agency Agreement, promptly
advise the Agent whether such sales may be
settled and whether copies of the Prospectus
as in effect at the time of the suspension
may be delivered in connection with the
settlement of such sales.
Subject to the preceding paragraph, the
Agent shall have the right in its sole
discretion, upon notice thereof to the
Company, to commence or suspend at any time
offers to sell and solicitations of offers
to buy the Shares.
IX. Delivery of Prospectus: Prior to any auction market sales of
Shares on the NYSE, copies of the
Prospectus as most recently amended or
supplemented must be filed with such
Exchange pursuant to Rule 153 of the
Regulations under the Act. A copy of the
4
<PAGE>
Prospectus as most recently amended
or supplemented must also accompany each
written confirmation of a sale of Shares
by the Agent to a customer of the Agent,
or of a sale of Shares by the Agent as
principal, in each case otherwise than
in the auction market. As used above,
the term Prospectus does not include any
documents incorporated by reference
therein.
X. Payment of Selling The Agent will send a written confirmation
Selling by facsimile transmission within one
Commissions, Business Day after the Trade Date to the
Transfer Company with respect to each transaction
Taxes and setting forth the selling commissions,
Fees of the transfer taxes and fees of the Commission
Commission: payable in connection therewith. Such
amounts are obligations of the Company
and will be "netted" against proceeds
paid to the Company on the applicable
Settlement Date.
XI. Advertising The Company will determine with the Agent
Costs: the amount of advertising that may be
appropriate in offering the Common Stock.
Advertising expenses will be paid by the
Company.
5
Baltimore Gas and Electric Company
P.O. Box 1475
Baltimore, Maryland 21203
410-234-5314 FAX 410 234-5690
Constance F. Smith
Associate General Counsel
Legal
Exhibit 5
July 21, 1998
Baltimore Gas and Electric Company
39 W. Lexington Street
Baltimore, Maryland 21201
Ladies and Gentlemen:
This opinion is provided in connection with the Registration Statement
(the "Registration Statement") filed by Baltimore Gas and Electric Company
("BGE") with the Securities and Exchange Commission ("Commission") under the
Securities Act of 1933 (the "Securities Act") regarding, among other things the
proposed issuance of up to 3,000,000 shares of the common stock (without par
value) of BGE (the "Common Stock").
I am an Associate General Counsel of BGE and head of the Corporate Unit
in its Legal Department. In connection with this opinion, the General Counsel of
BGE and I, together with attorneys we supervise, have examined such records and
documents and made such examinations of law as we have deemed relevant in
connection with this opinion. It is my opinion that when there has been
compliance with the Securities Act and the applicable state securities laws, the
Common Stock to be sold by BGE, when issued, delivered, and paid for in the
manner described in the form of the Sales Agency Agreement filed as Exhibit 1 to
the Registration Statement, will be legally issued, and the Common Stock when so
issued, delivered and paid for, will also be fully paid and nonassessable.
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 to you solely in connection with the filing of
the Registration Statement 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.
<PAGE>
Baltimore Gas and Electric Company
July 21, 1998
Page 3
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). In so doing,
I do not admit that I am in the category of persons whose consent is required
under Section 7 of the Securities Act or the rules and regulations of the
Commission promulgated thereunder.
Very truly yours,
/s/ Constance F. Smith
Exhibit 23 (a)
CONSENT OF INDEPENDENT ACCOUNTANTS
-------
We consent to the incorporation by reference in this Registration Statement on
Form S-3 covering 3,000,000 shares of Baltimore Gas and Electric Company Common
Stock (without par value) offered pursuant to the Continuous Offering Program
(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 as of December 31, 1997 and 1996 and for each of the three
years ended December 31, 1997.
We also consent to the reference to our firm under the caption "Experts" in this
Registration Statement.
/s/ Pricewaterhouse Coopers LLP
PRICEWATERHOUSE COOPERS LLP
Baltimore, Maryland
July 21, 1998
Exhibit 24
Page 1 of 2
BALTIMORE GAS AND ELECTRIC COMPANY
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directors and
officers of Baltimore Gas and Electric Company hereby constitutes and
appoints C. H. Poindexter, E. A. Crooke and D. A. Brune and each of them
his true and lawful attorneys and agents, with full power of substitution
and resubstitution, for him and in his name, place and stead, to do any and
all acts and things and to execute, in his name any and all instruments
which said attorneys and agents, or any of them, may deem necessary or
advisable to enable said Company to comply with the Securities Act of 1933,
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 3,000,000 shares of Common Stock (without par
value) of said Company, all as authorized by Resolutions adopted by the
Board of Directors of Baltimore Gas and Electric Company at a meeting held
July 17, 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 statement to be filed with the Securities and Exchange
Commission in respect of said Common Stock, to any and all amendments to
any registration statement in respect to said Common Stock, 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 17th day of July, 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/ D. A. Brune
--------------------
D. A. Brune
Vice President
<PAGE>
Exhibit 24
Page 2 of 2
Power of Attorney
in connection with
the registering of
not exceeding
3,000,000 shares
of Common Stock
(without par value)
of the Company
Directors
/s/ H. Furlong Baldwin /s/ Jerome W. Geckle
--------------------- ---------------------
H. Furlong Baldwin Jerome W. Geckle
/s/ Beverly B. Byron /s/ Freeman A. Hrabowski, III
---------------------- -----------------------------
Beverly B. Byron Freeman A. Hrabowski, III
/s/ J. Owen Cole /s/ Nancy Lampton
---------------------- ----------------------------
J. Owen Cole Nancy Lampton
/s/ Dan A. Coluss /s/ George V. McGowan
---------------------- ------------------------------
Dan A. Colussy George V. McGowan
/s/ Edward A. Crooke /s/ George L. Russell, Jr.
---------------------- ------------------------------
Edward A. Crooke George L. Russell, Jr
/s/ James R. Curtiss /s/ Michael D. Sullivan
---------------------- ----------------------------
James R. Curtiss Michael D. Sullivan
Dated: July 17,1998
