Exhibit 1(a)
$173,000,000
BALTIMORE GAS AND ELECTRIC COMPANY
MEDIUM-TERM NOTES
SERIES I
FORM OF AGENCY AGREEMENT
__________, 2000
Lehman Brothers Inc.
3 World Financial Center
12th Floor
New York, New York 10285-1200
Banc of America Securities LLC
100 N. Tryon Street
Charlotte, NC 28255
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Dear Sirs:
1. Introduction. Baltimore Gas and Electric Company, a Maryland corporation
(the "Company"), confirms its agreement with, Lehman Brothers, Inc., Banc of
America Securities LLC, and Goldman, Sachs & Co. (individually, an "Agent" and
collectively, the "Agents") with respect to the issue and sale from time to time
by the Company of up to $173,000,000 aggregate principal amount of its
Medium-Term Notes, Series I registered under the registration statement referred
to in Section 2(a) (the "Notes"). The Notes will be issued under an indenture,
dated as of July 1, 1985, as supplemented by the Supplemental Indentures dated
as of October 1, 1987, and January 26, 1993, respectively (the "Indenture"),
between the Company and The Bank of New York (successor to Mercantile-Safe
Deposit and Trust Company) (the "Trustee").
The Notes shall have the maturity ranges (which shall be from nine
months to thirty years), annual interest rates, redemption provisions and other
terms set forth in the Prospectus referred to in Section 2(a) as it may be
supplemented from time to time. The Notes will be issued, and the terms thereof
established, from time to time by the Company in accordance with the Indenture,
the Notes and the Procedures (as defined in Section 3(d) hereof).
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2. Representations and Warranties of the Company. The Company represents
and warrants to, and agrees with, each Agent as follows:
(a) A registration statement on Form S-3 (No. 333-____) ,which
also serves as a post-effective amendment to the registration statement on Form
S-3 (No. 333-66015), covering $173 million principal amount of the Notes,
including a prospectus, has been filed with the Securities and Exchange
Commission ("Commission") and has become effective. Such registration statement,
including (i) the prospectus included therein dated ________, 2000 (such
prospectus including each document incorporated by reference therein, as may be
amended or supplemented from time to time, is hereinafter called the
"Prospectus") and (ii) all documents filed as part thereof or incorporated by
reference therein, as may be amended or supplemented from time to time, are
hereinafter called the "Registration Statement." Any reference in this Agreement
to amending or supplementing the Prospectus shall be deemed to include the
filing of materials incorporated by reference in the Prospectus after the
Closing Date and any reference in this Agreement to any amendment or supplement
to the Prospectus shall be deemed to include any such materials incorporated by
reference in the Prospectus after the Closing Date.
(b) The Registration Statement conforms in all respects to the
requirements of the Securities Act of 1933, as amended ("Act"), and the
pertinent published rules and regulations of the Commission thereunder ("33 Act
Rules and Regulations") and the Trust Indenture Act of 1939, as amended ("Trust
Indenture Act"), and does not include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, and on the Closing Date, and at each
of the times of (i) acceptance referred to in Section 6(a) hereof, (ii) delivery
referred to in Section 6(e) hereof and (iii) amendment or supplement referred to
in Section 6(b) hereof (the Closing Date and each such time being herein
sometimes referred to as "Representation Date"), the Registration Statement and
the Prospectus will conform in all respects to the requirements of the Act, the
Trust Indenture Act and the 33 Act Rules and Regulations and none of such
documents will contain an untrue statement of a material fact or will omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading, except that the foregoing does not apply to
statements or omissions in such document based upon written information
furnished to the Company by any Agent specifically for use therein. The
documents incorporated by reference in the Registration Statement or the
Prospectus pursuant to Item 12 of Form S-3 of the Act, at the time they were
filed with the Commission, complied in all material respects with the
requirements of the Securities Exchange Act of 1934, as amended ("Exchange
Act"), and the pertinent published rules and regulations thereunder ("Exchange
Act Rules and Regulations"). Any additional documents deemed to be incorporated
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by reference in the Prospectus will, when they are filed with the Commission,
comply in all material respects with the requirements of the Exchange Act and
the Exchange Act Rules and Regulations and will not contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
3. Appointment as Agent; Solicitations as Agent.
(a) Subject to the terms and conditions stated herein, the Company
hereby appoints each of the Agents as an agent of the Company for the purpose of
soliciting or receiving offers to purchase the Notes from the Company by others.
(b) On the basis of the representations and warranties contained
herein, but subject to the terms and conditions herein set forth, each Agent
agrees, as agent of the Company, to use all reasonable efforts when requested by
the Company to solicit offers to purchase the Notes upon the terms and
conditions set forth in the Prospectus, as from time to time amended or
supplemented.
Upon receipt of notice from the Company as contemplated by Section
4(b) hereof, each Agent shall suspend its solicitation of purchases of Notes
until such time as the Company shall have furnished it with an amendment or
supplement to the Registration Statement or the Prospectus, as the case may be,
contemplated by Section 4(b) and shall have advised each Agent that such
solicitation may be resumed.
The Company reserves the right, in its sole discretion, to suspend
solicitation of offers to purchase the Notes commencing at any time for any
period of time or permanently. Upon receipt of notice from the Company, the
Agents will use their best efforts promptly to suspend solicitation of offers to
purchase Notes from the Company, but in no event later than one business day
after notice, until such time as the Company has advised the Agents that such
solicitation may be resumed. For the purpose of the foregoing sentence,
"business day" shall mean any day which is not a Saturday or a Sunday or a day
on which banking institutions in The City of New York and the State of Maryland
are authorized or required by law or executive order to be closed.
The Agents are authorized to solicit offers to purchase Notes only
in fully registered form, in minimum denominations of $1,000 and integral
multiples of $1,000 in excess thereof, and at a purchase price which, unless
otherwise specified in a supplement to the Prospectus, shall be equal to 100% of
the principal amount thereof. Each Agent shall communicate to the Company,
orally or in writing, each reasonable offer to purchase Notes received by it as
Agent. The Company shall have the sole right to accept offers to purchase the
Notes and may reject any such offer, in whole or in part. Each Agent shall have
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the right, in its discretion reasonably exercised, without notice to the
Company, to reject any offer to purchase Notes received by it, in whole or in
part, and any such rejection shall not be deemed a breach of its agreement
contained herein.
No Note which the Company has agreed to sell pursuant to this
Agreement shall be deemed to have been purchased and paid for, or sold, by the
Company until such Note shall have been delivered to the purchaser thereof
against payment by such purchaser.
(c) At the time of delivery of, and payment for, any Notes sold by
the Company as a result of a solicitation made by, or offer to purchase received
by, an Agent, the Company agrees to pay such Agent a commission in accordance
with the schedule set forth in Exhibit A hereto.
(d) Administrative procedures respecting the sale of Notes (the
"Procedures") shall be agreed upon from time to time by the Agents and the
Company. The initial Procedures, which are set forth in Exhibit B hereto, shall
remain in effect until changed by agreement among the Company and the Agents.
Each Agent and the Company agree to perform the respective duties and
obligations specifically provided to be performed by each of them herein and in
the Procedures. The Company will furnish a copy of the Procedures as from time
to time in effect to the Trustee which will act as the authenticating agent and
the agent for payment, registration and notice with respect to the Notes
pursuant to the Indenture and the agent for calculating interest rates with
respect to floating rate notes pursuant to the Interest Calculation Agency
Agreement dated as of _(the "Interest Calculation Agency Agreement").
(e) The documents required to be delivered by Section 5 hereof
shall be delivered at the offices of the Company, 250 W. Pratt Street, 20th
Floor, Baltimore, Maryland, 21201, not later than 5:00 P.M., Baltimore time, on
the date of this Agreement or at such later time as may be mutually agreed by
the Company and the Agents, which in no event shall be later than the time at
which the Agents commence solicitation of purchases of Notes hereunder, such
time and date being herein called the "Closing Date."
4. Certain Agreements of the Company. The Company agrees with the Agents
that it will furnish to Cahill Gordon & Reindel, counsel for the Agents, one
signed copy of the Registration Statement, including all exhibits and all
documents incorporated by reference, in the form it became effective and of all
amendments thereto and that, in connection with each offering of Notes, it will
take the following actions:
(a) From the time solicitation regarding sale of the Notes is begun until all of
the Notes have been sold (i) the Company will advise each Agent promptly of any
proposal to amend or supplement the Registration Statement or the Prospectus by
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means of a post-effective amendment, sticker, or supplement (except
post-effective amendment, supplements, and stickers relating solely to interest
rates or maturities of Notes) but not by means of incorporation of document(s)
by reference into the Registration Statement or the Prospectus; (ii) the Company
will afford the Agents a reasonable opportunity to comment on any such proposed
post-effective amendment, sticker, or supplement; (iii) the Company will advise
each Agent of the filing of any such post-effective amendment, sticker, or
supplement; and (iv) the Company will (x) advise each Agent of the institution
by the Commission of any stop order proceedings in respect of the Registration
Statement or of any part thereof, (y) use its best efforts to prevent the
issuance of any such stop order, and (z) if a stop order is issued, to obtain
its lifting as soon as possible.
(b) If from the time solicitation regarding sale of the Notes is
begun until all of the Notes have been sold, the Company shall determine that it
is necessary to suspend solicitation of the Notes because of the occurrence of
an event that results in the Prospectus either (x) including an untrue statement
of a material fact or omitting to state any material fact necessary to make the
statements in such Prospectus, in light of the circumstances under which they
were made when such Prospectus was delivered, not misleading, or (y) failing to
comply with the Act, then the Company will promptly notify each Agent to suspend
solicitation of purchases of the Notes. Notwithstanding Section 4(a) if the
Company shall determine to amend or supplement the Registration Statement or
Prospectus to correct such result, it will advise each Agent promptly and afford
the Agents a reasonable opportunity to discuss and comment upon the nature of
the disclosure in such amendment or supplement. Notwithstanding the foregoing,
if at the time of any notification to suspend solicitations (i) this Agreement
shall be in effect and any Agent shall own any of the Notes with the intention
of reselling them, or (ii) the Company has accepted an offer to purchase Notes
but the related settlement has not occurred, then the Company, subject to the
provisions of Section 4(a) of this Agreement, will promptly prepare and file
with the Commission an amendment or supplement which will correct such statement
or omission or effect such compliance.
(c) The Company, during the period when a prospectus relating to
the Notes is required to be delivered under the Act, will furnish to each Agent
promptly after timely filing with the Commission all documents required to be
filed pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act (except
those filings associated with employee benefit plans). The Company will
immediately notify each Agent of any downgrading in the rating of the Notes or
any other debt securities of the Company, or any proposal to downgrade the
rating of the Notes or any other debt securities of the Company, by any
"nationally recognized statistical rating organization" (as defined for purposes
of Rule 436(g) under the Act), as soon as the Company learns of such downgrading
or proposal to downgrade.
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(d) The Company will furnish to each Agent copies of the
Registration Statement, including all exhibits except those incorporated by
reference, any related preliminary prospectus, any related preliminary
prospectus supplement, the Prospectus and all amendments and supplements to such
documents, in each case as soon as available and in such quantities as are
reasonably requested.
(e) The Company will use its best efforts to obtain the
qualification of the Notes for sale and the determination of their eligibility
for investment under the laws of such jurisdictions as the Agents designate and
will continue such qualifications in effect so long as required for the
distribution; provided, however, that the Company shall not be required to
qualify as a foreign corporation or to file any consent to service of process
under the laws of any jurisdiction or to comply with any other requirements
deemed by the Company to be unduly burdensome.
(f) So long as any Notes are outstanding, the Company will furnish
to the Agents: (i) as soon as practicable after the end of each fiscal year, a
copy of its annual report to shareholders for such year, (ii) as soon as
available, a copy of each report or definitive proxy statement of the Company
filed with the Commission under the Exchange Act or mailed to shareholders, and
(iii) from time to time, such other information concerning the Company as you
may reasonably request.
(g) The Company will pay all expenses incident to the performance
of its obligations under this Agreement, and will reimburse each Agent for any
expenses (including Blue Sky fees and disbursements of counsel which will not in
the aggregate exceed $_____) incurred by it in connection with qualification of
the Notes for sale and determination of their eligibility for investment under
the laws of such jurisdictions as such Agent may designate and the printing of
memoranda relating thereto, for any filing fees charged by investment rating
agencies for the rating of the Notes, for any filing fee of the National
Association of Securities Dealers, Inc. relating to the Notes, and for the
reasonable fees and disbursements of counsel to the Agents.
(h) Not later than 45 days after the end of the 12-month period
beginning at the end of any fiscal quarter of the Company in which the Closing
Date or any other Representation Date occurs, the Company will make generally
available to its security holders an earnings statement (which need not be
audited) covering such 12-month period which will satisfy the provisions of
Section 11(a) of the Act.
5. Conditions of Obligations of Agents. The obligation of each Agent under
this Agreement at any time to solicit offers to purchase the Notes is subject to
the accuracy of the representations and warranties of the Company herein on the
date hereof, on each Representation Date and on the date of each such
solicitation, to the accuracy of the statements of the Company's officers made
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pursuant to the provisions hereof on each such date, to the performance by the
Company of its obligations hereunder on or prior to each such date, and to each
of the following additional conditions precedent:
(a) No stop order suspending the effectiveness of the Registration
Statement or of any part thereof shall have been issued and no proceedings for
that purpose shall have been instituted or, to the knowledge of the Company or
any Agent, shall be contemplated by the Commission.
(b) Neither the Registration Statement nor the Prospectus, as
amended or supplemented as of any Representation Date or date of such
solicitation, as the case may be, shall contain any untrue statement of fact
which, in the opinion of any Agent, is material or omits to state a fact which,
in the opinion of such Agent, is material and is required to be stated therein
or is necessary to make the statements therein not misleading.
(c) There shall not have occurred (i) any suspension or limitation
of trading in securities generally on the New York Stock Exchange other than a
temporary suspension in trading to provide for an orderly market, or any setting
of minimum prices for trading on such exchange, or any suspension of trading of
any securities of the Company on any exchange or in the over-the-counter market;
(ii) any banking moratorium declared by Federal or New York authorities; or
(iii) any outbreak or escalation of major hostilities in which the United States
is involved, any declaration of war by Congress or any other substantial
national or international calamity or emergency if, in the reasonable judgment
of such Agents, the effect of any such outbreak, escalation, declaration,
calamity or emergency makes it impractical or inadvisable to proceed with
solicitations of purchases of, or sales of, Notes.
(d) At the Closing Date, the Agents shall have received an
opinion, dated the Closing Date, of a counsel for the Company, to the effect
that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Maryland, with power and authority (corporate and other)
to own its properties and conduct its business as described in
the Prospectus; and the Company is duly qualified to do business
as a foreign corporation in good standing in all other
jurisdictions in which the conduct of its business or the
ownership of its properties requires such qualification and the
failure to do so would have a material and adverse impact on its
financial condition;
(ii) The Indenture has been duly authorized, executed and
delivered by the Company, and is a valid instrument, legally
binding on the Company, enforceable in accordance with its terms,
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except as limited by bankruptcy, insolvency, or other laws
affecting the enforcement of creditors' rights and by general
principles of equity;
(iii) The issuance and sale of Notes have been duly
authorized by all necessary corporate action of the Company. The
Notes (assuming that they have been duly authenticated by the
Trustee or a duly designated Authentication Agent under the
Indenture, which fact counsel need not verify by an inspection of
the Notes), when issued in accordance with the provisions of this
Agreement and the Indenture, will be duly issued and constitute
legal, valid and binding obligations of the Company enforceable in
accordance with their terms and are entitled to the benefits
provided by the Indenture, except as limited by bankruptcy,
insolvency or other laws affecting the enforcement of creditors'
rights and by general principles of equity;
(iv) The Registration Statement has become effective under
the Act and (a) to the best of such counsel's knowledge, no stop
order suspending the effectiveness of the Registration Statement
has been issued and no proceedings for that purpose have been
instituted or are pending or contemplated under the Act; (b) the
Registration Statement (as of its effective date) and the
Prospectus (as of its date and as of the the Closing Date )
appeared to comply as to form in all material respects with the
requirements of Form S-3 under the Act and the 33 Act Rules and
Regulations and the Trust Indenture Act; (c) such counsel has no
reason to believe that either the Registration Statement as of
its effective date or the Prospectus as of the date of this
Agreement contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein
or necessary to make the statements therein not misleading; (d)
the descriptions in the Registration Statement and Prospectus of
statutes, legal and governmental proceedings and contracts and
other documents are accurate and fairly present the information
required to be shown; and (e) such counsel does not know of any
legal or governmental proceedings required to be described in the
Prospectus which are not described as required, nor of any
contracts or documents of a character required to be described in
the Registration Statement or Prospectus or to be filed as
exhibits to the Registration Statement which are not described or
filed as required; it being understood that such counsel, in
addressing the matters covered in this paragraph (iv), need
express no opinion as to the financial statements or other
financial and statistical information contained in the
Registration Statement or the Prospectus or incorporated therein
or attached as an exhibit thereto or as to the Statement of
Eligibility and Qualification on Form T-1 of the Trustee under
the Indenture;
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(v) The approval of the Public Service Commission of
Maryland necessary for the valid issuance by the Company of Notes
pursuant to this Agreement has been obtained and continues in full
force and effect. The Company has received the approval of the
Federal Energy Regulatory Commission ("FERC") for the issuance of
Notes on or before December 31, 2000 with maturities of not more
than 12 months after the date of issuance and the approval of FERC
will be required for the issuance of any Notes having such
maturities after December 31, 2000. Such counsel knows of no other
approval of any other regulatory authority which is legally
required for the valid offering, issuance, sale and delivery of
the Notes by the Company under this Agreement (except that such
opinion need not pass upon the requirements of state securities
acts);
(vi) To the best of such counsel's knowledge and belief,
the consummation of the transactions contemplated in this
Agreement and the compliance by the Company with all the terms of
the Indenture did not and will not result in a breach of any of
the terms or provisions of, or constitute a default under, the
Company's Charter or By-Laws or any indenture, mortgage or deed of
trust or other agreement or instrument to which the Company is a
party;
(vii) Each of this Agreement and the Interest Calculation
Agency Agreement has been duly authorized, executed and delivered
by the Company;
(viii) The Indenture is duly qualified under the Trust
Indenture Act;
(ix) The issuance, sale and delivery of the Notes as
contemplated by this Agreement are not subject to the approval of
the Commission under the provisions of the Public Utility Holding
Company Act of 1935, as amended (the "1935 Act"); and
(x) The Notes and Indenture conform as to legal matters
with the statements concerning them in the Registration Statement
and Prospectus under the caption "DESCRIPTION OF NOTES" and on the
cover page of the Prospectus.
(e) At the Closing Date, the Agents shall have received a
certificate, dated the Closing Date, of the Chairman of the Board, President or
any Vice President and a principal financial or accounting officer of the
Company in which such officers, to the best of their knowledge after reasonable
investigation and relying upon opinions of counsel to the extent legal matters
are involved, shall state that (i) the representations and warranties of the
Company in this Agreement are true and correct in all material respects, (ii)
the Company has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied hereunder at or prior to the Closing Date,
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(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 or contemplated in the Prospectus.
(f) At the Closing Date, the Agents shall have received a letter,
dated the Closing Date, of PricewaterhouseCoopers LLP, confirming that they are
independent pubic accountants within the meaning of the Act and the 33 Act Rules
and Regulations, and stating in effect that:
(i) In their opinion, the consolidated financial statements
and supporting schedules audited by them which are included in the
Company's Form 10-K ("Form 10-K"), which is incorporated by
reference in the Registration Statement comply in form in all
material respects with the applicable accounting requirements of
the Act and the 33 Act Rules and Regulations and the Exchange Act
and the Exchange Act Rules and Regulations;
(ii) On the basis of procedures specified in such letter
(but not an audit in accordance with generally accepted auditing
standards), including reading the minutes of meetings of the
shareholders, the Board of Directors and the Executive Committee
of the Company since the end of the year covered by the Form 10-K
as set forth in the minute books through a specified date not more
than five days prior to the Closing Date, performing the
procedures specified in Statement on Auditing Standards No. 71,
Interim Financial Information, on the unaudited interim
consolidated financial statements of the Company incorporated by
reference in the Registration Statement, if any, and reading the
latest available unaudited interim consolidated financial
statements of the Company, and making inquiries of certain
officials of the Company who have responsibility for financial and
accounting matters as to whether the latest available financial
statements not incorporated by reference in the Registration
Statement are prepared on a basis substantially consistent with
that of the audited consolidated financial statements incorporated
in the Registration Statement, nothing has come to their attention
that has caused them to believe that (1) any unaudited
consolidated financial statements incorporated by reference in the
Registration Statement do not comply in form in all material
respects with the applicable requirements of the Act and the 33
Act Rules and Regulations and the Exchange Act and the Exchange
Act Rules and Regulations or any material modifications should be
made to those unaudited consolidated financial statements for them
to be in conformity with generally accepted accounting principles;
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(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 Closing Date,
there was any change in the capital stock or long-term debt of the
Company [or, at such date, there was any decrease in net assets of
the Company] as compared with amounts shown in the latest balance
sheet incorporated by reference in the Registration Statement, [or
for the period from the closing date of the latest income
statement incorporated by reference in the Registration Statement
to a specified date not more than five days prior to the Closing
Date, there were any decreases as compared with the corresponding
period of the previous year, in operating revenues, operating
income, net income or in earnings applicable to common stock,]
except in all cases for instances of changes or decreases that the
Registration Statement discloses have occurred or may occur, or
which are described in such letter; and
(iii) Certain specified procedures have been applied to
certain financial or other statistical information (to the extent
such information was obtained from the general accounting records
of the Company) set forth or incorporated by reference in the
Registration Statement and that such procedures have not revealed
any disagreement between the financial and statistical information
so set forth or incorporated and the underlying general accounting
records of the Company, except as described in such letter.
(g) The Agents shall have received from Cahill Gordon & Reindel,
counsel for the Agents, an opinion dated the Closing Date, with respect to the
matters referred to in paragraph 5(d) subheadings (ii), (iii), (iv)b, (v),
(vii), (viii) and (x) and such other related matters as you may require and the
Company shall have furnished to such counsel such documents as they request for
the purpose of enabling them to pass on such matters.
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In rendering such opinion, Cahill Gordon & Reindel may rely, as to
the incorporation of the Company, the approval of the Public Service Commission
of Maryland required for the issuance, sale and delivery of the Notes, and all
other matters governed by the laws of the State of Maryland, the applicability
of the 1935 Act and the approval of FERC for the issuance, sale and delivery of
the Notes upon the opinion of Counsel for the Company referred to above.
In addition, such counsel shall state that such counsel has
participated in conferences with officers, counsel and other representatives of
the Company, representatives of the independent certified public accountants for
the Company and representatives of the Agents at which the contents of the
Registration Statement and the Prospectus and related matters were discussed;
and, although such counsel is not passing upon and does not assume
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement and Prospectus (except as to the matters
referred to in their opinion rendered pursuant to subheading (x) above), on the
basis of the foregoing (relying as to materiality to a large extent upon the
opinions of officers, counsel and other representatives of the Company), no
facts have come to the attention of such counsel which lead such counsel to
believe that either the Registration Statement (as of its effective date) or the
Prospectus (as of the date of this Agreement), contained an untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary to make such statements therein not misleading (it being
understood that such counsel need make no comment with respect to the financial
statements and other financial and statistical information included in the
Registration Statement or Prospectus or incorporated therein or as to the
Statement of Eligibility and Qualification on Form T-l of the Trustee under the
Indenture).
(h) The approval of the Public Service Commission of Maryland
necessary for the valid issuance of Notes by the Company pursuant to this
Agreement has been obtained and continues in full force and effect. The Company
has received the approval of FERC for the issuance of Notes on or before
December 31, 2000 with maturities of not more than 12 months after the date of
issuance and the approval of FERC will be obtained before the issuance of any
Notes after December 31, 2000.
The Company will furnish the Agents with such conformed copies of
such opinions, certificates, letters and documents as the Agents reasonably
request.
6. Additional Covenants of the Company. The Company agrees that:
(a) Each acceptance by the Company of an offer for the purchase of
Notes shall be deemed to be an affirmation that its representations and
warranties contained in this Agreement are true and correct at the time of such
acceptance, it being understood that such representations and warranties shall
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relate to the Registration Statement and the Prospectus as amended or
supplemented at each such time. Each such acceptance by the Company of an offer
for the purchase of Notes shall be deemed to constitute an additional
representation, warranty and agreement by the Company that, as of the settlement
date for the sale of such Notes, after giving effect to the issuance of such
Notes and of any other Notes to be issued on or prior to such settlement date,
the aggregate amount of Notes which have been issued and sold by the Company
will not exceed the amount of Notes registered pursuant to the Registration
Statement.
(b) From the time solicitation regarding the sale of the Notes is
begun until all of the Notes have been sold, each time the Company (i) amends or
supplements the Registration Statement or the Prospectus (other than in
reference solely to interest rates or maturities of Notes) by means of a
post-effective amendment, sticker, or supplement but not by means of
incorporation of document(s) by reference into the Registration Statement or the
Prospectus; (ii) files an annual report on Form 10-K under the Exchange Act;
(iii) files its quarterly reports on Form 10-Q under the Exchange Act; and (iv)
files a report on Form 8-K under the Exchange Act (the date of filing each of
the aforementioned documents is referred to as a "Representation Date"); the
Company shall furnish the Agents (but in the case of (iv) above only if
requested by the Agents) with a certificate of the Chairman, President or any
Vice President and a principal financial or accounting officer of the Company,
in form satisfactory to the Agents, to the effect that on the Representation
Date, to the best of their knowledge after reasonable investigation and relying
upon opinions of counsel to the extent legal matters are involved, (i) the
representations and warranties of the Company in this Agreement are true and
correct in all material respects; (ii) the Company has complied with all
agreements and satisfied all conditions on its part to be performed or satisfied
hereunder at or prior to the Representation Date; (iii) no stop order suspending
the effectiveness of the Registration Statement or of any part thereof has been
issued and no proceedings for that purpose have been instituted or are
contemplated by the Commission; and (iv) subsequent to the date of the most
recent financial statements set forth or incorporated by reference in the
Prospectus, there has been no material adverse change in the financial position
or in the financial results of operations of the Company, except as set forth in
or contemplated by the Prospectus.
(c) From the time solicitation regarding the sale of the Notes is
begun until all of the Notes have been sold, at each Representation Date
referred to in Section 6(b) (i) or (ii) and, only if requested by the Agents, at
each Representation Date referred to in Section 6(b) (iii) or (iv), the Company
shall concurrently furnish the Agents with a written opinion or opinions of
counsel for the Company, dated the Representation Date or the date of such
filing, in form satisfactory to the Agents, to the effect set forth in Section
5(d) hereof, but modified, as necessary, to relate to the Registration Statement
<PAGE>
-14-
and the Prospectus as then amended or supplemented; provided, however, that in
lieu of such opinion, counsel may furnish the Agents with a letter to the effect
that the Agents may rely on a prior opinion delivered under Section 5(d) or this
Section 6(c) to the same extent as if it were dated the date of such letter
(except that statements in such prior opinion shall be deemed to relate to the
Registration Statement and the Prospectus as amended or supplemented at such
Representation Date).
(d) From the time solicitation regarding the sale of the Notes is
begun until all of the Notes have been sold, at each Representation Date
referred to in Section 6(b) (i) or (ii) and, only if requested by the Agents, at
each Representation Date referred to in Section 6(b) (iii) or (iv), but in each
case only if such documents referred to in Section 6(b) include additional
financial information, the Company shall cause PricewaterhouseCoopers LLP or
successor thereto concurrently to furnish the Agents with a letter, addressed
jointly to the Company and the Agents and dated the Representation Date or the
date of such filing, in form and substance satisfactory to the Agents, to the
effect set forth in Section 5(f) hereof but modified to relate to the
Registration Statement and the Prospectus as amended or supplemented at such
Representation Date, with such changes as may be necessary to reflect changes in
the financial statements and other information derived from the accounting
records of the Company; provided, however, that if the Registration Statement or
the Prospectus is amended or supplemented solely to include financial
information as of and for a fiscal quarter, PricewaterhouseCoopers LLP may limit
the scope of such letter to the unaudited financial statements included in such
amendment or supplement unless there is contained therein any other accounting,
financial or statistical information that, in the reasonable judgment of the
Agents, should be covered by such letter, in which event such letter shall also
cover such other information and procedures as shall be agreed upon by the
Agents.
(e) On each settlement date for the sale of Notes, the Company
shall, if requested by an Agent that solicited or received the offer to purchase
any Notes being delivered on such settlement date, furnish such Agent with a
written opinion of a counsel for the Company, dated the date of delivery
thereof, in form satisfactory to such Agent, to the effect set forth in clauses
(i), (ii), (iii) and (v) of Section 5(d) hereof, but modified, as necessary, to
relate to the Prospectus as amended or supplemented at such settlement date and
except that such opinion shall state that the Notes being sold by the Company on
such settlement date, when delivered against payment therefor as provided in the
Indenture and this Agreement, will have been duly executed, authenticated,
issued and delivered and will constitute valid and legally binding obligations
of the Company enforceable in accordance with their terms, subject only to the
exceptions as to enforcement set forth in clauses (ii) and (iii) of Section 5(d)
<PAGE>
-15-
hereof, and conform to the description thereof contained in the Prospectus as
amended or supplemented at such settlement date.
(f) The Company agrees that any obligation of a person who has
agreed to purchase Notes to make payment for and take delivery of such Notes
shall be subject to (i) the accuracy, on the related settlement date fixed
pursuant to the Procedures, of the Company's representations and warranties
deemed to be made to the Agents pursuant to Section 2 and the last sentence of
subsection (a) of this Section 6; (ii) the satisfaction, on such settlement
date, of each of the conditions set forth in Sections 5(a), (b), (c) and (h), it
being understood that under no circumstance shall any Agent have any duty or
obligation to exercise the judgment permitted under Section 5(b) or (c) on
behalf of any such person; (iii) the absence of any change or development
involving a prospective change, not contemplated by the Prospectus as amended or
supplemented to the trade date as specified pursuant to the administrative
procedures, in or affecting particularly the business or properties of the
Company which materially impairs the investment quality of the Notes; and (iv)
no downgrading in the rating of the Company's debt securities by any "nationally
recognized statistical rating organization" (as defined for purposes of Rule
436(g) under the Act).
7. Indemnification and Contribution.
(a) The Company will indemnify and hold harmless each Agent and
each person if any, who controls either Agent within the meaning of the Act or
the Exchange Act against any losses, claims, damages or liabilities, joint or
several, to which such Agent or such controlling person may become subject,
under the Act, or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Registration Statement or the Prospectus, or any related preliminary
prospectus or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading; and will reimburse each Agent and each
such controlling person for any legal or other expenses reasonably incurred by
such Agent or such controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company will not be liable to such Agent or controlling person in any
such case to the extent that any such loss, claim, damage or liability arises
out of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in any such documents in reliance upon and in
conformity with written information furnished to the Company by such Agent or
such controlling person specifically for use therein unless such loss, claim,
damage or liability arises out of the offer or sale of Notes occurring after
such Agent or controlling person has notified the Company in writing that such
<PAGE>
-16-
information should no longer be used therein. This indemnity agreement will be
in addition to any liability which the Company may otherwise have.
(b) Each Agent will indemnify and hold harmless the Company, each
of its directors, each of its officers who have signed the Registration
Statement and each person, if any, who controls the Company within the meaning
of the Act or the Exchange Act, against any losses, claims, damages or
liabilities to which the Company or any such director, officer or controlling
person may become subject, under the Act, or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement or the Prospectus, or any related
preliminary prospectus or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such Agent
specifically for use therein; and will reimburse any legal or other expenses
reasonably incurred by the Company or any such director, officer or controlling
person in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that such Agent will not be liable to the Company or any such director, officer
or controlling person in any such case to the extent that any such loss, claim,
damage or liability arises out of the offer or sale of Notes occurring after
such Agent has notified the Company in writing that such information should no
longer be used therein. This indemnity agreement will be in addition to any
liability which such Agent may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under (a) and (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under this Section. In case any such action is brought against any indemnified
party, and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it may wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel satisfactory to such indemnified
party (who may, with the consent of the indemnified party, be counsel to the
indemnifying party) and who shall not be counsel to any other indemnified party
who may have interests conflicting with those of such indemnified party, and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will not be
<PAGE>
-17-
liable to such indemnified party under this Section for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation.
(d) If recovery is not available under the foregoing
indemnification provisions of this Section for any reason other than as
specified therein, the parties entitled to indemnification by the terms thereof
shall be entitled to contribution to liabilities and expenses, except to the
extent that contribution is not permitted under Section ll(f) of the Act. In
determining the amount of contribution to which the respective parties are
entitled, there shall be considered the relative benefits received by each party
from the offering of the Notes (taking into account the portion of the proceeds
of the offering realized by each), the parties' relative knowledge and access to
information concerning the matter with respect to which the claim was asserted,
the opportunity to correct and prevent any statement or omission, and any other
equitable considerations appropriate under the circumstances. The Company and
the Agents and such controlling persons agree that it would not be equitable if
the amount of such contribution were determined by pro rata or per capita
allocation (even if the Agents and such controlling persons were treated as one
entity for such purpose). Notwithstanding the provisions of this subsection (d),
no Agent or controlling person shall be required to make contribution hereunder
which in the aggregate exceeds the total public offering price of the Notes,
distributed to the public through it pursuant to this Agreement or upon resale
of Notes purchased by it from the Company, less the aggregate amount of any
damages which such Agent or such controlling person has otherwise been required
to pay in respect to the same claim or substantially similar claim. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The obligations of each Agent and each
controlling person in this subsection (d) to contribute are several, in the same
proportion which the amount of the Notes which are the subject of the action and
which were distributed to the public through such Agent or such controlling
person pursuant to this Agreement bears to the total amount of such Notes
distributed to the public through any other Agent or controlling person pursuant
to this Agreement, and not joint.
8. Status of Each Agent. In soliciting offers to purchase the Notes from
the Company pursuant to this Agreement and in assuming its other obligations
hereunder (other than offers to purchase pursuant to Section 11), each Agent is
acting individually and not jointly and is acting solely as agent for the
Company and not as principal. Each Agent will use all reasonable efforts to
assist the Company in obtaining performance by each purchaser whose offer to
purchase Notes from the Company has been solicited by such Agent and accepted by
the Company, but such Agent shall have no liability to the Company in the event
<PAGE>
-18-
any such purchase is not consummated for any reason. If the Company shall
default on its obligations to deliver Notes to a purchaser whose offer it has
accepted, the Company (i) shall hold the Agents harmless against any loss, claim
or damage arising from or as a result of such default by the Company, and (ii),
in particular, shall pay to the Agents any commission to which they would be
entitled in connection with such sale.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers and of the Agents set forth in or made pursuant to this
Agreement will remain in full force and effect, regardless of any investigation,
or statement as to the results thereof, made by or on behalf of any Agent, the
Company or any of their respective representatives, officers or directors or any
controlling person and will survive delivery of and payment for the Notes. If
this Agreement is terminated pursuant to Section 10 or for any other reason, the
Company shall remain responsible for the expenses to be paid or reimbursed by it
pursuant to Section 4(g) and the obligations of the Company under Sections 4(f)
and (h) and the respective obligations of the Company and the Agents pursuant to
Section 7 shall remain in effect. In addition, if any such termination shall
occur either (i) at a time when any Agent shall own any of the Notes with the
intention of reselling them or (ii) after the Company has accepted an offer to
purchase Notes and prior to the related settlement, the obligations of the
Company under the last sentence of Section 4(b), under Sections 4(a), 4(c),
4(d), 4(e), 6(a), 6(e) and 6(f) and, in the case of a termination occurring as
described in (ii) above, under Section 3(c) and under the last sentence of
Section 8, shall also remain in effect.
10. Termination. This Agreement may be terminated for any reason at any
time by the Company as to any Agent or, in the case of either Agent, by such
Agent insofar as this Agreement relates to such Agent, upon the giving of one
day's written notice of such termination to the other parties hereto. Any
settlement with respect to Notes placed by an Agent occurring after termination
of this Agreement shall be made in accordance with the Procedures and each Agent
agrees, if requested by the Company, to take the steps therein provided to be
taken by such Agent in connection with such settlement.
11. Other Sales and Purchases of Notes. From time to time, any Agent may
agree with the Company to purchase all or a portion of Notes from the Company as
an underwriter (acting either alone or in conjunction with one or more
investment banking firms) for resale to the public. In this event, such purchase
shall be made in accordance with the terms of a separate agreement to be entered
into between such Agent and the Company in substantially the form attached
hereto as Exhibit C.
Without the oral consent (confirmed in writing) of the Company,
neither Agent shall have the right to purchase all or a portion of the Notes for
<PAGE>
-19-
its own account. In the event the Company consents to such purchase, the
purchase shall be made in accordance with the terms of a separate agreement to
be entered into between such Agent and the Company in substantially the form
attached hereto as Exhibit D.
Nothing in this Agreement shall prohibit the sale of all or a
portion of Notes directly by the Company to any person or entity without the
involvement of either of the Agents or from entering into similar agreements
with other firms as agents.
The Company will not appoint another agent without providing each
Agent with at least one business day's notice.
12. Notices. Except as otherwise provided herein, all notices and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if delivered by overnight mail or transmitted by any standard form of
telecommunication. Notices to Lehman Brothers Inc. shall be delivered or
telecopied to it at 3 World Financial Center, 9th Floor, New York, New York
10285-1200, telecopier, (212) 526-1532, Attention: Medium-Term Note Department
desk notices to Goldman, Sachs & Co. shall be delivered or telecopied to it at
85 Broad Street, New York, New York 10004, telecopier, (212) 902-3000,
Attention: Registration Department; notices to Banc of America Securities LLC
shall be delivered or telecopied to it at 100 N. Tryon Street, Charlotte, NC
28255, telecopier (704) 388-9982, and notices to the Company shall be delivered
or telecopied to it at 250 W. Pratt Street, 20TH Floor, Baltimore, Maryland
21201-2437, telecopier, (410) 783-3619, Attention: Treasurer, 20th Floor, or in
the case of any party hereto, to such other address or person as such party
shall specify to each other party by a notice given in accordance with the
provisions of this Section 12. Any such notice shall take effect at the time of
receipt.
13. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto, their respective successors, the officers and directors
and controlling persons referred to in Section 7 and, to the extent provided in
Section 6(f), any person who has agreed to purchase Notes from the Company, and
no other person will have any right or obligation hereunder.
14. Governing Law; Counterparts. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York. This Agreement
may be executed in counterparts and the executed counterparts shall together
constitute a single instrument.
<PAGE>
-20-
If the foregoing correctly sets forth our agreement, please indicate your
acceptance hereof in the space provided for that purpose below.
Very truly yours,
Baltimore Gas and Electric Company
By:
CONFIRMED AND ACCEPTED, as of the
date first above written:
LEHMAN BROTHERS INC.
By:__________________________
GOLDMAN, SACHS & CO.
____________________________
Goldman, Sachs & Co.
Banc of America Securities LLC
By:_________________________
<PAGE>
-21-
Exhibit A
to Agency Agreement
The Company agrees to pay either Agent a commission equal to the following
percentage of the principal amount of Notes sold to purchasers solicited by such
Agent:
Commission Rate
(as a percentage of
Term principal amount)
9 months to less than 12 months .125
12 months to less than 18 months .15
18 months to less than 24 months .20
2 years to less than 3 years .25
3 years to less than 4 years .35
4 years to less than 5 years .45
5 years to less than 7 years .50
7 years to less than 10 years .55
10 years to less than 15 years .60
15 years to less than 20 years .65
20 years through 30 years .75
<PAGE>
Exhibit B
to Agency Agreement
ADMINISTRATIVE PROCEDURES
The Medium-Term Notes, Series I due from nine months to thirty years from
their issue dates (the "Notes") are to be offered on a continuing basis by
Baltimore Gas and Electric Company (the "Company"). Lehman Brothers Inc., Banc
of America Securities LLC, and Goldman, Sachs & Co. as agents (individually, an
"Agent" and collectively, the "Agents") have each agreed to use all reasonable
efforts to solicit purchases of the Notes. Neither Agent will be obligated to
purchase Notes for its own account and neither may do so without the written
consent of the Company. The Notes are being sold pursuant to an Agency
Agreement, dated as of ____________ (the "Agency Agreement"), among the Company
and the Agents, and will be issued pursuant to an Indenture, between the Company
and The Bank of New York (successor to Mercantile-Safe Deposit and Trust
Company), dated as of July 1, 1985 as supplemented by the Supplemental
Indentures dated as of October 1, 1987 and January 26, 1993, respectively (the
"Indenture"). The Notes will rank equally with all other unsecured and
unsubordinated indebtedness of the Company and will have been registered with
the Securities and Exchange Commission (the "Commission").
The Company has designated The Bank of New York (the "Bank") as the agency
for payment, registration and notice concerning the Notes in accordance with
Section 5.02 of the Indenture and as the Authentication Agent for the Notes in
accordance with Section 2.02 of the Indenture. The Company has also designated
the Bank as the Calculation Agent with respect to the issuance of floating rate
notes pursuant to the Interest Calculation Agency Agreement between the Company
and the Bank dated __________.
Administrative procedures and specific terms of the offering are explained
below. Internal administrative and record-keeping responsibilities will be
handled for the Company by Constellation Energy Group's Financial Management
Unit of the Finance Department. The Company will advise the Agents in writing of
those persons handling administrative responsibilities with whom the Agents are
to communicate regarding offers to purchase Notes and the details of their
delivery. Unless otherwise designated, the Notes will be issued as Global
Securities registered in the name of The Depository Trust Company or a nominee
thereof (referred to as "Book Entry Notes"). Procedures pertaining specifically
to Book-Entry Notes and, as the case may be, Notes issued in definitive form
("Certificated Notes") will be explained separately below.
I. GENERAL PROCEDURES
Aggregate
Principal Amount: $__________
Issue Date: Each Note will be dated the date of its
authentication. Each Note will also bear an original
issue date (the "Issue Date") which, with respect to
any Note (or portion thereof), shall mean the date
of its original issuance and shall be specified
therein. The Issue Date shall remain the same for
<PAGE>
-B2-
all Notes subsequently issued upon transfer,
exchange or substitution of a Note, regardless of
their dates of authentication.
Maturities: Each Note will mature on a Business Day (as defined
below), selected by the purchaser and agreed to by
the Company, which will range from nine months to
thirty years after the Issue Date. Each Note bearing
interest at a rate determined by reference to an
interest rate formula (a "Floating Rate Note") will
mature on an Interest Payment Date (as defined
below).
"Business Day" means any day other than a Saturday
or Sunday that (a) is not a day on which banking
institutions in, Maryland, or in New York, New York,
are authorized or obligated by law or executive
order to be closed, and (b) with respect to LIBOR
Notes only, is a day on which dealings in deposits
in U.S. dollars are transacted in the London
interbank market.
Price to Public: Each Note will be issued at 100% of principal
amount (unless otherwise indicated in a pricing
supplement).
Denominations: The minimum denominations of the Notes will be
$1,000 and integral multiples of $1,000 in excess
thereof (see "Special Procedures for Book-Entry
Notes - Denominations" for information relating to
Book-Entry Notes).
Registration: Notes will be issued only in fully registered form
as either a Book-Entry Note or a Certificated
Note. Certificated Notes may be presented for
registration of transfer or exchange at the Bank's
New York office.
Interest Payments: Each Note bearing interest at a fixed rate
(a "Fixed Rate Note") will bear interest from its
Issue Date if interest has not been paid on the Note
or from the most recent Interest Payment Date to
which interest has been paid at the fixed rate per
annum stated on the face thereof, payable
semi-annually on May 1 and November 1 of each year
(each an "Interest Payment Date" with respect to
such Fixed Rate Note), and at Stated Maturity, and,
if applicable, upon redemption or repurchase.
Special provisions are set forth in the Prospectus
relating to Floating Rate Notes. Interest rates are
determined by reference to the interest rate formula
stated therein and payable in arrears on such dates
as specified therein (each an "Interest Payment
Date" with respect to such Floating Rate Note).
Interest on Fixed Rate Notes (including payments for
partial periods) will be computed and paid on the
basis of a 360-day year of twelve 30-day months and
will not accrue on the 31st day of any month.
Interest will be payable to the person in whose name
the Note is registered at the close of business on
April 15 or October 15, (whether or not such date is
<PAGE>
-B3-
a Business Day) with respect to Fixed Rate Notes or
the fifteenth day (whether or not a Business Day)
with respect to Floating Rate Notes (the "Record
Dates"), next preceding the respective Interest
Payment Date; provided, however, that interest
payable at Stated Maturity and, if applicable, upon
redemption or repurchase will be payable to the
person to whom principal shall be payable. The first
payment of interest on any Note originally issued
between a Record Date and an Interest Payment Date
will be made on the Interest Payment Date following
the next succeeding Record Date. All interest
payments (excluding interest payments made at Stated
Maturity and, if applicable, upon redemption and
repurchase) will be made by check mailed to the
person entitled thereto as provided above; except
that holders of over $5 million in principal amount
of the Notes may receive interest payments by wire
upon at least one Business Day's written notice to
the Bank.
On the fifth Business Day immediately preceding each
Interest Payment Date, the Bank will furnish the
Company with the total amount of the interest
payments to be made on such Interest Payment Date.
The Bank will provide monthly to the Company's
Financial Services Unit a list of the principal and
interest to be paid on Notes maturing in the next
succeeding month. On the Interest Payment Date
(unless the Interest Payment Date is not a Business
Day, then the immediately succeeding Business Day),
the Company will transfer to the Bank, via the
Federal Reserve wire system, immediately available
funds sufficient to make such interest payments. The
Bank will assume responsibility for withholding
taxes on interest paid as required by law.
Acceptance of Offers: Each Agent will promptly advise the Company
of each reasonable offer to purchase Notes
received by it, other than those rejected by such
Agent. Each Agent may, in its discretion reasonably
exercised, without notice to the Company, reject any
offer received by it, in whole or in part. The
Company will have the sole right to accept offers to
purchase Notes and may reject any such offer, in
whole or in part. If the Company rejects an offer,
the Company will promptly notify the Agent involved.
Settlement: All offers accepted by the Company will be settled
on the third Business Day next succeeding the date
of acceptance unless otherwise agreed by any
purchaser and the Company. The settlement date shall
be specified upon receipt of an offer.
Confirmation: For each accepted offer, the Presenting Agent will
issue a confirmation to the purchaser, with a copy
to the Company's Financial Services Unit and the
Bank, setting forth the Purchase Information and
delivery and payment instructions.
Redemption at
Company's Option: Except as otherwise specified in the applicable
Pricing Supplement and on the Notes, the Notes will
not be redeemable prior to their Stated Maturity.
If so specified, such Note will be redeemable at
the option of the Company on or after a specified
date at a specified price or prices (which may
<PAGE>
-B4-
include a premium) together with accrued interest
thereon payable to, but excluding, the date fixed
for redemption. The Notes will be redeemable in
whole or in part (whether or not any other Notes
of the same series are redeemed), in increments of
$1,000 on notice by mail given not more than 60
nor less than 30 days prior to the date fixed for
redemption. If there is a partial redemption,
the Bank will issue a new Note on the same terms.
Upon presentation of each Note at the date fixed for
redemption, the Bank (or any other duly appointed
paying agent) will pay the principal amount (at a
price, expressed as a percent of the principal
amount, specified on the Note and in the applicable
Pricing Supplement) redeemed thereof, together with
accrued interest due on the amount redeemed at the
date fixed for redemption. Such payment shall be
made in immediately available funds, provided that
the Note is presented to the Bank (or any such
paying agent) in time for the Bank (or any such
paying agent) to make payments in such funds in
accordance with its normal procedures. On the date
fixed for redemption (unless the date fixed for
redemption is not a Business Day, then the
immediately succeeding Business Day), the Company
will provide the Bank (and any such paying agent),
via the Federal Reserve wire transfer system, with
immediately available funds sufficient for the Bank
to make such payment. Notes presented at the date
fixed for redemption will be canceled by the Bank as
provided in the Indenture.
Repurchase at
Holder's Option: Except as otherwise specified in the applicable
Pricing Supplement and on the Notes, the Company is
not required to repurchase the Notes from the
holders prior to the Stated Maturity. If so
specified, Notes will be redeemable at the option of
the holder, in whole or in part, in increments of
of $1,000, on the dates and at the prices specified
therein, together with accrued interest to, but
excluding, the repurchase date. For Book-Entry
Notes, holders must deliver a written notice to the
Bank at least 30, but no more than 60 days prior to
the date of repurchase, but no later than 5:00
p.m. New York City time on the last day for giving
notice. The written notice must specify the
principal amount to be repurchased and must b
signed by a duly authorized officer of the
Depositary participant (signature guaranteed).
For Certificated Notes, holders must complete the
"Option to Elect Repayment" on the reverse of the
Note and then deliver the Note to the Bank at
least 30, but no more than 45 days prior to the date
of the repurchase, but no later than 5:00 p.m.
New York City time on the last day for giving
notice. All notices are irrevocable. If there is a
partial redemption, the Bank will issue a new Note
on the same terms.
On the repurchase date, the Bank (or any other duly
appointed paying agent) will repurchase the Note
from the holder at the specified price, together
with any accrued interest, payment to be made in
immediately available funds. The Company will
provide the Bank (and any such paying agent), via
the Federal Reserve wire transfer system, with
immediately available funds sufficient for the Bank
to make such repurchases. Repurchased Notes will be
canceled by the Bank as provided in the Indenture.
<PAGE>
-B5-
Remarketed Notes Procedures related to Remarketed Notes will be added
at the time any notes are issued.
Maturity: Upon presentation of each Note at maturity the Ban
(or any other duly appointed paying agent) will
pay the principal amount thereof, together with
accrued interest due at maturity. Such payment
shall be made in immediately available funds,
provided that the Note is presented to the Bank (or
any such paying agent) in time for the Bank (or any
such paying agent) to make payments in such
funds in accordance with its normal procedures.
On the maturity date, the Company will provide the
Bank (and any such paying agent), via the Federal
Reserve wire transfer system, with immediately
available funds sufficient for the Bank to make
such payment. Notes presented at maturity will be
canceled by the Bank as provided in the Indenture.
Procedure for
Rate or Redemption
Changes: The Company and the Agents will discuss from
time to time the rates to be borne by, and the
redemption and repurchase provisions, if any, of,
the Notes that may be sold as a result of the
solicitation of offers by the Agents. Once any Agent
has recorded any indication of interest in
Notes upon certain terms, and communicated with
the Company, if the Company plans to accept an
offer to purchase Notes upon such terms, it will
prepare a sticker reflecting the terms of such
Notes and, after confirming such terms with such
Agent, will arrange to have the Prospectus, as
then amended or supplemented, and bearing such
sticker, filed with the Commission and will supply
at least 10 copies of the Prospectus, as then
amended or supplemented, and bearing such sticker,
to the Presenting Agent. No settlements with
respect to Notes upon such terms may occur prior to
such filing and the Agents will not, prior to such
filing, mail confirmations to customers who have
offered to purchase Notes upon such terms. After
such filing, sales, mailing of confirmations and
settlements may occur with respect to Notes upon
such terms, subject to the provisions of "Delivery
of Prospectus" below.
If the Company decides to post rates (which may
include the presence or absence of redemption and
repurchase provisions) and a decision has been
reached to change interest rates or redemption or
repurchase provisions, if any, the Company will
promptly notify each Agent. Each Agent will
forthwith suspend solicitation of purchases. At that
time, the Agents will recommend and the Company will
establish rates to be so "posted." Following
establishment of posted rates and prior to the
filing described in the following sentence, the
Agents may only record indications of interest in
purchasing Notes at the posted rates. Once any Agent
has recorded any indication of interest in Notes at
the posted rates and communicated with the Company,
if the Company plans to accept an offer at the
posted rate, it will prepare a sticker reflecting
such posted rates and, after confirming such terms
with such Agent, will arrange to have the
Prospectus, and bearing such sticker, filed with the
Commission and will supply at least 10 copies of the
Prospectus, as then amended or supplemented, to the
Presenting Agent. No settlements at the posted rates
may occur prior to such filing and the Agents will
not, prior to such filing, mail confirmations to
<PAGE>
-B6-
customers who have offered to purchase Notes at the
posted rates. After such filing, sales, mailing of
confirmations and settlements may resume, subject to
the provisions of "Delivery of Prospectus" below.
Outdated stickers, and copies of the Prospectus to
which they are attached (other than those retained
for files), will be destroyed.
Suspension of
Solicitation;
Amendment or
Supplement: As provided in the Agency Agreement, the Company may
suspend solicitation of purchases at any time and,
upon receipt of at least one Business Day's prior
notice from the Company, the Agents will each
forthwith suspend solicitation until such time as
the Company has advised them that solicitation of
purchases may be resumed.
If the Agents receive the notice from the Company
contemplated by Section 4(b) of the Agency
Agreement, they will promptly suspend solicitation
and will only resume solicitation as provided in the
Agency Agreement. If the Company decides to amend or
supplement the Registration Statement or the
Prospectus relating to the Notes, it will promptly
advise each Agent and will furnish each Agent with
the proposed amendment or supplement in accordance
with the terms of the Agency Agreement. The Company
will promptly file such amendment or supplement;
provide the Agents with copies of any such amendment
or supplement; confirm to the Agents that such
amendment or supplement has been filed with the
Commission; and advise the Agents that solicitation
may be resumed.
Any such suspension shall not affect the Company's
obligations under the Agency Agreement; and in the
event that at the time the Company suspends
solicitation of purchases there shall be any offers
already accepted by the Company outstanding for
settlement, the Company will have the sole
responsibility for fulfilling such obligations. The
Company will in addition promptly advise the Agents
and the Bank if such offers are not to be settled
and if copies of the Prospectus as in effect at the
time of the suspension may not be delivered in
connection with the settlement of such offers.
Delivery of
Prospectus: A copy of the Prospectus, as most recently amended
or supplemented on the date of delivery thereof
(except as provided below), must be delivered to a
purchaser prior to or together with the earlier
of delivery of (i) the written confirmation
provided for above, and (ii) any Note purchased by
such purchaser. The Company shall ensure that the
Presenting Agent receives copies of the
Prospectus and each amendment or supplement
thereto (including appropriate pricing stickers)
in such quantities and within such time limits
as will enable the Presenting Agent to deliver
such confirmation or Note to a purchaser as
contemplated by these procedures and in compliance
with the preceding sentence. If, since the date of
acceptance of a purchaser's offer, the Prospectus
shall have been supplemented solely to reflect any
<PAGE>
-B7-
sale of Notes on terms different from those agreed
to between the Company and such purchaser or a
change in posted rates not applicable to such
purchaser, such purchaser shall not receive the
Prospectus as supplemented by such new supplement,
but shall receive the Prospectus as supplemented to
reflect the terms of the Notes being purchased by
such purchaser and otherwise as most recently
amended or supplemented on the date of delivery of
the Prospectus.
Authenticity of
Signatures: The Company will cause the Bank to furnish the
Agents from time to time with the specimen
signatures of each of the Bank's officers, employees
or agents who have been authorized by the Bank to
authenticate Notes, but the Agents will have no
obligation or liability to the Company or the Bank
in respect of the authenticity of the signature of
any officer, employee or agent of the Company or the
Bank on any Note.
Advertising Cost: The Company will determine with the Agents the
amount of advertising that may be appropriate in
offering the Notes. Advertising expenses will be
paid by the Company.
II. Special Procedures for Book-Entry Notes
Each Note may be represented by either a Global
Security delivered to the Bank, as agent for the
Depository Trust Company ("DTC"), and recorded in
the book-entry system maintained by DTC or a
certificate delivered to the Holder thereof or a
Person designated by such Holder. An owner of a
Book-Entry Note will not be entitled to receive a
certificate representing such Note. In connection
with the qualification of the Book-Entry Notes for
eligibility in the book-entry system maintained by
DTC, the Bank will perform the custodial, document
control and administrative functions described
below, in accordance with its respective obligations
under a Letter of Representations from the Company
and the Bank to DTC and a Medium-Term Note
Certificate Agreement previously entered into
between the Bank and DTC, and its obligations as a
participant in DTC, including DTC's Same-Day Funds
Settlement System ("SDFS"). Except as otherwise set
forth in this Exhibit B, Book-Entry Notes will be
issued in accordance with the administrative
procedures set forth in this section.
Issuance: On any date of settlement (as defined under
"Settlement" below), for one or more Fixed Rate
Book-Entry Notes, the Company will issue a single
Global Security in fully registered form without
coupons representing up to $_____________ principal
amount of all of such Notes that have the same
original issuance date, interest rate and Stated
Maturity. Similarly, on any settlement date for
one or more Floating Rate Book-Entry Notes, the
Company will issue a single Global Security
representing up to $___________ principal amount
of all of such Notes that have the same interest
rate formula, original issuance date, Initial
Interest Rate, Interest Payment Dates, Index
Maturity, Spread or Spread Multiplier, minimum
interest rate (if any), maximum interest rate (if
any) and Stated Maturity. Each Global Security
<PAGE>
-B8-
will be dated and issued as of the date of its
authentication by the Bank, as authenticating
agent. Each Global Security will have an interest
accrual date (the "Interest Accrual Date"), which
will be (i) with respect to an original Global
Security (or any portion thereof), its original
issuance date and (ii) with respect to any Global
Security (or portion thereof) issued subsequently
upon exchange of a Global Security or in lieu of
a destroyed, lost or stolen Global Security, the
most recent Interest Payment Date to which
interest has been paid or duly provided for on the
predecessor Global Security or Securities (or if
no such payment or provision has been made, the
original issuance date of the predecessor Global
Security), regardless of the date of authentication
of such subsequently issued Global Security.
No Global Security will represent (i) both Fixed
Rate and Floating Rate Book-Entry Notes or (ii)
any Certificated Note.
Identification Numbers: The Company will arrange, on or prior to
commencement of a program for the offering of Book-
Entry Notes, with the CUSIP Service Bureau of
Standard & Poor's Corporation (the "CUSIP Service
Bureau")for the reservation of a series of CUSIP
numbers (including tranche numbers), consisting of
approximately 900 CUSIP numbers and relating to
Global Securities representing the Book-Entry
Notes. The Company will obtain from the CUSIP
Service Bureau a written list of such series of
reserved CUSIP numbers and will deliver to the Bank
and DTC such written list of 900 CUSIP numbers of
such series. The Company will assign CUSIP numbers
to Global Securities as described below
under Settlement Procedure "B." DTC will notify the
CUSIP Service Bureau periodically of the CUSIP
numbers that the Company has assigned to Global
Securities. At any time when fewer than 100 of the
reserved CUSIP numbers remain unassigned to Global
Securities, and if it deems necessary, the
Company will reserve additional CUSIP numbers for
assignment to Global Securities representing
Book-Entry Notes. Upon obtaining such additional
CUSIP numbers the Company shall deliver such
additional CUSIP numbers to the Bank and DTC.
Registration: Each Global Security will be registered in the
name of Cede & Co., as nominee for DTC, on the
Securities Register maintained under the Indenture
governing such Global Security. The beneficial
owner of a Book-Entry Note (or one or more indirect
participants in DTC designated by such owner)
will designate one or more participants in DTC (with
respect to such Note, the "Participants") to
act as agent or agents for such owner in connection
with the book-entry system maintained by DTC,
and DTC will record in book-entry form, in
accordance with instructions provided by such
Participants, a credit balance with respect to such
Note in the account of such Participants. The
ownership interest of such beneficial owner in such
Note will be recorded through the records of
such Participants or through the separate records
of such Participants and one or more indirect
participants in DTC.
Transfers: Transfers of a Book-Entry Note will be accomplished
by book entries made by DTC and, in turn, by
Participants (and in certain cases, one or more
indirect participants in DTC) acting on behalf of
beneficial transferors and transferees of such Note.
<PAGE>
-B9-
Consolidation
and Exchange: The Bank may deliver to DTC and the CUSIP
Service Bureau at any time a written notice of
consolidation specifying (i) the CUSIP numbers of
two or more Outstanding Global Securities that
represent (A) Fixed Rate Book-Entry Notes having the
same original issuance date, interest rate and
Stated Maturity and with respect to which interest
has been paid to the same date or (B) Floating
Rate Book-Entry Notes having the same interest
rate formula, original issuance date, Initial
Interest Rate, Interest Payment Dates, Index
Maturity, Spread or Spread Multiplier, minimum
interest rate (if any), maximum interest rate
(if any) and Stated Maturity and with respect to
which interest has been paid to the same date, (ii)
a date, occurring at least thirty days after
such written notice is delivered and at least thirty
days before the next Interest Payment Date for
such Book-Entry Notes, on which such Global
Securities shall be exchanged for a single
replacement Global Security and (iii) a new CUSIP
number, obtained from the Company, to be assigned
to such replacement Global Security. Upon receipt
of such a notice, DTC will send to its participants
(including the Bank) a written reorganization notice
to the effect that such exchange will occur on
such date. Prior to the specified exchange date,
the Bank will deliver to the CUSIP Service Bureau
a written notice setting forth such exchange date
and the new CUSIP number and stating that, as of
such exchange date, the CUSIP numbers of the Global
Securities to be exchanged will no longer be
valid. On the specified exchange date, the Bank
will exchange such Global Securities for a single
Global Security bearing the new CUSIP number and a
new Interest Accrual Date, and the CUSIP numbers
of the exchanged Global Securities will, in
accordance with CUSIP Service Bureau procedures, be
canceled and not immediately reassigned.
Notwithstanding the foregoing, if the Global
Securities to be exchanged exceed $__________ in
aggregate principal amount, one Global Security
will be authenticated and issued to represent each
$__________ of principal amount of the exchanged
Global Securities and an additional Global
Security will be authenticated and issued to
represent any remaining principal amount of such
Global Securities (see "Denominations" below).
Denominations: Book-Entry Notes will be issued in principal amount
of $1,000, or any amount in excess thereof that is
an integral multiple of $1,000. Global Securities
representing one or more Book-Entry Notes will be
denominated in principal amounts not in excess of
$400,000,000.
Interest: General. Interest on each Book-Entry Note will
accrue from the Interest Accrual Date of the Global
Security representing such Note. Each payment of
interest on a Book-Entry Note will include
interest accrued through the date preceding, as the
case may be, the Interest Payment Date, Stated
Maturity or redemption; provided, however, that
if the Interest Reset Dates with respect to any
such Note are daily or weekly, interest payable on
any Interest Payment Date, other than interest
payable on any date on which principal for such Note
is payable, will include interest accrued from
but excluding the second preceding Record Date to
and including the next preceding Record Date.
Interest payable at the Stated Maturity or upon
<PAGE>
-B10-
redemption of a Book-Entry Note will be payable to
the Person to whom the principal of such Note is
payable. Standard & Poor's Corporation will use
the information received in the pending deposit
message described under Settlement Procedure "C"
below in order to include the amount of any
interest payable and certain other information
regarding the related Global Security in the
appropriate weekly bond report published by Standard
& Poor's Corporation.
On the first Business Day of January, April, July
and October of each year the Bank will deliver to
the Company and DTC a written list of Regular Record
Dates and Interest Payment Dates that will occur
with respect to Floating Rate Book-Entry Notes
during the six-month period beginning on such first
Business Date. Promptly after each Interest
Determination Date (as defined in the Prospectus)
for Floating Rate Notes, the Bank, acting as the
calculation agent for Floating Rate Notes, will
notify Standard & Poor's Corporation of the interest
rates determined on such Interest Determination
Date.
Payments of Principal
and Interest: Payments of Interest Only. Promptly after each
Record Date, the Bank will deliver to the Company
and DTC a written notice specifying by CUSIP
number the amount of interest to be paid on each
Global Security on the following Interest
Payment Date (other than an Interest Payment Date
coinciding with Maturity) and the total of such
amounts. DTC will confirm the amount payable on
each Global Security on such Interest Payment Date
by reference to the daily bond reports published
by Standard & Poor's Corporation. The Company
will pay to the Bank, as paying agent, the total
amount of interest due on such Interest Payment
Date (other than at Maturity), and the Bank will
pay such amount to DTC at the times and in the
manner set forth below under "Manner of Payment."
Payments at Maturity. On or about the first Business
Day of each month, the Bank will deliver to the
Company and DTC a written list of principal and
interest to be paid on each Global Security maturing
in the following month. The Company, the Bank and
DTC will confirm the amounts of such principal and
interest payments with respect to each such Global
Security on or about the fifth Business Day
preceding the Maturity of such Global Security. The
Company will pay to the Bank, as the paying agent,
the principal amount of such Global Security,
together with interest due at such Maturity. The
Bank will pay such amount to DTC at the times and in
the manner set forth below under "Manner of
Payment."
Promptly after payment to DTC of the principal and
interest due at the Maturity of such Global
Security, the Bank will cancel such Global Security
and deliver it to the Company with an appropriate
debit advice. On the first Business Date of each
month, the Bank will prepare a written statement
indicating the total principal amount of Outstanding
Global Securities for which it serves as paying
agent and authenticating agent as of the immediately
preceding Business Day.
Payments Upon Redemption. The Company, the Bank and
DTC will confirm the purchase price and accrued
interest payable for each Global Security to be
<PAGE>
-B11-
redeemed by the Company on or about the fifth
Business Day preceding the redemption of such Global
Security.
Payments Upon Repurchase. The Bank will notify the
Company in a timely manner, but no later that the
fifth Business Day following the end of the
applicable notice period for the holders, of the
receipt of notice for holders requesting repurchase
of Notes. The Company, the Bank and DTC will confirm
the purchase price and accrued interest payable for
each Global Security to be repurchased by the
Company on or about the fifth Business Day preceding
the redemption of such Global Security.
Manner of Payment. The total amount of any principal
and interest due on Global Securities on any
Interest Payment Date or at Maturity, including
Redemption and Repurchase, shall be paid by the
Company to the Bank in funds available for use by
the Bank as of 9:30 A.M. (New York City time) on
such date. The Company will make such payment on
such Global Securities by instructing the Bank to
withdraw funds from an account maintained by the
Company at the Bank. The Company will confirm such
instructions in writing to the Bank. For maturity,
redemption or any other principal payments: prior to
10:00 A.M. (New York City time) on such date or as
soon as possible thereafter, the Bank will make such
payments to DTC in same day funds in accordance with
DTC's Same Day Funds Settlement Paying Agent
Operating Procedures. For interest payments: the
Bank will make such payments to DTC in accordance
with existing arrangements between DTC and the Bank.
DTC will allocate such payments to its participants
in accordance with its existing operating
procedures. Neither the Company (either as issuer or
as Paying Agent) nor the Bank shall have any direct
responsibility or liability for the payment by DTC
to such Participants of the principal of and
interest on the Book-Entry Notes.
The amount of any taxes required under applicable
law to be withheld from any interest payment on a
Book-Entry Note will be determined and withheld by
the Participant, indirect participant in DTC or
other Person responsible for forwarding payments and
materials directly to the beneficial owner of such
Note.
Settlement Procedures: Settlement Procedures with regard to each Book-Entry
Note sold by the Company through an Agent, as
agent, shall be as follows:
A. The Presenting Agent will advise the Company by
telephone, and confirm in writing by facsimile
transmission the following settlement information:
1. Exact name in which Note is to be registered
("Registered Owner").
2. Exact address of the Registered Owner and
address for payments of principal and
interest, if any.
3. Taxpayer identification number of the
Registered Owner.
<PAGE>
-B12-
4. Principal amount of the Note (and, if
multiple Notes are to be issued,
denominations thereof).
5. Settlement date.
6. Stated Maturity.
7. Issue Price.
8. Issue date.
9. Trade date.
10. The DTC Participant account number of
such Agent.
11. Interest rate:
(a) Fixed Rate Notes:
i) interest rate
(b) Floating Rate Notes:
i) interest rate basis
ii) initial interest rate
iii) spread and/or spread
multiplier, if any
iv) interest rate reset periods
and dates
v) interest payment dates
vi) index maturity
vii) maximum and minimum interest
rates, if any
viii) record dates
ix) interest determination dates
12. The dates and related prices on or after which
the Notes are redeemable at the option of the
Company, and additional redemption or repurchase
provisions, if any.
13. Wire transfer information.
14. Presenting Agent's commission (to be paid in the
form of a discount from the proceeds remitted to the
Company upon settlement.)
B. The Company will assign a CUSIP number to the Global
Security representing such Note and then advise the
Bank in writing by facsimile transmission of the
information set forth in Settlement Procedure "A"
above, such CUSIP number and the name of such Agent.
The Original Issuance Instructions will be
accompanied by a letter signed by any Officer of the
Company giving the Bank authority to authenticate
the Notes in the manner set forth in the Original
Issuance Instructions.
<PAGE>
-B13-
C. The Bank will enter a pending deposit message
through DTC's Participant Terminal System, providing
the following settlement information to DTC, the
Presenting Agent, Standard & Poor's Corporation and,
upon request, the Trustee under the Indenture
pursuant to which such Note is to be issued:
1. The information set forth in Settlement
Procedure "A."
2. Identification as a Fixed Rate Book-Entry Note
or a Floating Rate Book-Entry Note.
3. Initial Interest Payment Date for such Note,
number of days by which such date succeeds the
related "DTC Record Date" (which term means the
Regular Record Date except in the case of floating
rate notes which reset daily or weekly in which case
it means the date 5 calendar days immediately
preceding the Interest Payment Date) and amount of
interest payable on such Interest Payment Date.
4. Frequency of interest payments (monthly,
semiannually, quarterly, etc.).
5. CUSIP number of the Global Security representing
such Note.
6. Whether such Global Security will represent any
other Book-Entry Note (to the extent known at such
time).
D. The Bank, as authentication agent, will complete and
authenticate the note certificate evidencing the
Global Security representing such Book-Entry Note.
E. DTC will credit such Note to the Bank's participant
account at DTC.
F. The Bank will enter an SDFS deliver order through
DTC's Participant Terminal System instructing DTC to
(i) debit such Note to the Bank's participant
account and credit such Note to the Presenting
Agent's participant account and (ii) debit the
Presenting Agent's settlement account and credit the
Bank's settlement account for an amount equal to the
price of such Note less the Presenting Agent's
commission.
G. The Presenting Agent will enter an SDFS deliver
order through DTC's Participant Terminal System
instructing DTC (i) to debit such Note to the
Presenting Agent's participant account and credit
such Note to the participant accounts of the
Participants with respect to such Note and (ii)
debit the settlement accounts of such Participants
and credit the settlement account of the Presenting
Agent for an amount equal to the price of such Note.
H. Transfers of funds in accordance with SDFS deliver
orders described in Settlement Procedures "F" and
"G" will be settled in accordance with SDFS
operating procedures in effect on the settlement
date.
<PAGE>
-B14-
I. The Bank will credit to an account of the Company
maintained at the Bank funds available for
immediate use in the amount transferred to the Bank
in accordance with Settlement Procedure "F."
J. The Presenting Agent will deliver to the purchaser a
copy of the most recent Prospectus applicable to the
Note with or prior to any written offer of Notes and
the confirmation and payment by the purchaser of the
Note. The Presenting Agent will confirm the purchase
of such Note to the purchaser either by transmitting
to the Participants with respect to such Note a
confirmation order or orders through DTC's
institutional delivery system or by mailing a
written confirmation to such purchaser.
Settlement Procedures
Timetable: For orders of Book-Entry Notes solicited by an
Agent, as agent, and accepted by the Company for
settlement, Settlement Procedures "A" through "J"
set forth above shall be completed as soon as
possible but not later than the respective times
(New York City time) set forth below:
================================================================================
SETTLEMENT
PROCEDURES TIME (New York)
================================================================================
A - B 11:00 A.M. on the Sale Date
===============================================================================
C 2:00 P.M. on the Sale Date
===============================================================================
D 9:00 A.M. on the Settlement Date
===============================================================================
E 10:00 A.M. on the Settlement Date
===============================================================================
F - G 2:00 P.M. on the Settlement Date
===============================================================================
H 4:45 P.M. on the Settlement Date
===============================================================================
I - J 5:00 P.M. on the Settlement Date
===============================================================================
If a sale is to be settled more than one
Business Day after the sale date, Settlement
Procedures "A," "B" and "C" shall be completed as
soon as practicable but no later than 11:00 A.M. and
2:00 P.M., as the case may be, on the first Business
Day after the sale date. If the initial interest
rate for a Floating Rate Book-Entry Note has not
been determined at the time that Settlement
Procedure "A" is completed, Settlement Procedures
"B" and "C" shall be completed as soon as such rate
has been determined but no later than 11:00 A.M. and
12:00 Noon, respectively, on the second Business Day
before the settlement date. Settlement Procedure "I"
is subject to extension in accordance with any
extension of Fedwire closing deadlines and in the
other events specified in the SDFS operating
procedures in effect on the settlement date.
If settlement of a Book-Entry Note is
rescheduled or canceled, the Bank will deliver to
DTC, through DTC's Participant Terminal System, a
cancellation message to such effect by no later than
2:00 P.M. on the Business Day immediately preceding
the scheduled settlement date.
<PAGE>
-B15-
Failure to Settle: If the Bank fails to enter an SDFS deliver order
with respect to a Book-Entry Note pursuant to
Settlement Procedure "F," the Bank may deliver to
DTC, through DTC's Participant Terminal System,
as soon as practicable a withdrawal message
instructing DTC to debit such Note to the Bank's
participant account. DTC will process the withdrawal
message, provided that the Bank's participant
account contains a principal amount of the Global
Security representing such Note that is at least
equal to the principal amount to be debited. If a
withdrawal message is processed with respect to
all the Book-Entry Notes represented by a Global
Security, the Bank will mark such Global Security
"canceled," make appropriate entries in the Bank's
records and send such canceled Global Security
to the Company. The CUSIP number assigned to such
Global Security shall, in accordance with CUSIP
Service Bureau procedures, be canceled and not
immediately reassigned. If a withdrawal message is
processed with respect to one or more, but not all,
of the Book-Entry Notes represented by a Global
Security, the Bank will exchange such Global
Security for two Global Securities, one of which
shall represent such Book-Entry Note or Notes and
shall be canceled immediately after issuance and
the
other of which shall represent the other Book-Entry
Notes previously represented by the surrendered
Global Security and shall bear the CUSIP number of
the surrendered Global Security.
If the purchase price for any Book-Entry Note is not
timely paid to the Participants with respect to such
Note by the beneficial purchasers thereof (or a
Person, including an indirect participant in DTC,
acting on behalf of such purchaser), such
Participants and, in turn, the Agent for such Note
may enter SDFS deliver orders through DTC's
Participant Terminal System reversing the orders
entered pursuant to Settlement Procedures "F" and
"G," respectively. Thereafter, the Bank will deliver
the withdrawal message and take the related actions
described in the preceding paragraph.
Notwithstanding the foregoing, upon any failure to
settle with respect to a Book-Entry Note, DTC may
take any actions in accordance with its SDFS
operating procedures then in effect. In the event of
a failure to settle with respect to one or more, but
not all, of the Book-Entry Notes to have been
represented by a Global Security, the Bank will
provide, in accordance with Settlement Procedure
"D," for the authentication and issuance of a Global
Security representing the other Book-Entry Notes to
have been represented by such Global Security and
will make appropriate entries in its records.
III. Special Procedures for Certificated Notes
The Notes may be issued in physical form as
Certificated Notes. The following Settlement
Procedures relate specifically to the issuance of
Certificated Notes.
Details for
Settlement: A. For each offer accepted by the Company, the Agent
who presented such offer (the "Presenting Agent")
shall communicate to (i) the Company's Financial
<PAGE>
-B16-
Services Unit and (ii) the Bank by telephone,
facsimile transmission or other acceptable means
the following information (the "Purchase
Information"):
1. Exact name in which the Note or Notes are to be
registered ("registered owner").
2. Exact address of registered owner and address for
payment of principal and interest, if any.
3. Taxpayer identification number of registered
owner.
4. Principal amount of the Note (and if multiple
Notes are to issued, denominations thereof).
5. Settlement date.
6. Stated Maturity.
7. Issue Price.
8. Issue date.
9. Trade date.
10. Interest rate:
(a) Fixed Rate Notes:
i) interest rate
(b) Floating Rate Notes:
i) interest rate basis
ii) initial interest rate
iii) spread and/or spread
multiplier, if any
iv) interest rate reset periods
and dates
v) interest payment dates
vi) index maturity
vii) maximum and minimum interest
rates, if any
viii) record dates
ix) interest determination dates
11. The dates and related prices on or after
which the Notes are redeemable at the option
of the Company, and additional redemption or
repurchase provisions, if any.
12. Wire transfer information.
<PAGE>
-B17-
13. Presenting Agent's commission (to be paid in
the form of a discount from the proceeds
remitted to the Company upon settlement).
14. Instructions for delivery of Note(s).
The Issue Date of, and the settlement date for,
Notes will be the same. Before accepting any offer
to purchase Notes to be settled in less than three
days, the Company shall verify that the Bank will
have adequate time to prepare and authenticate the
Notes.
B. After receiving the details for each accepted offer
from the Presenting Agent, the Company will, after
recording the details and any necessary
calculations, confirm the Purchase Information by
telephone, facsimile transmission or other
acceptable means, to the Bank.
C. The Bank will complete the Note assigning to and
entering on, each Note a transaction number and
authenticating the Note.
D. The Bank will deliver the Notes to the Presenting
Agent, pursuant to the delivery instructions from
the Company. The Bank will retain a copy of the
Note. The Presenting Agent will cause to be wire
transferred to a bank account designated by the
Company immediately available funds in the amount of
the principal of the Notes, less the applicable
commission.
E. The Presenting Agent, as the Company's agent, will
deliver the Notes against payment by such purchasers
in immediately available funds in the principal
amount of the Notes. Delivery of any confirmation or
a Note will be made in compliance with "Delivery of
Prospectus."
F. The Bank will automatically forward a copy of the
Notes to the Company unless notified of a fail (See
"Fails").
Settlement Procedures
Timetable: For offers accepted by the Company, Settlement
Procedures "A" through "F" set forth above
shall be completed on or before the respective
times set forth below:
<PAGE>
-B18-
================================================================================
SETTLEMENT
PROCEDURES TIME (New York)
================================================================================
================================================================================
A - B 11:00 A.M. on the Next Business Day
after the Trade Date
================================================================================
================================================================================
C 3:00 P.M. on the Business Date prior to
Settlement Date
================================================================================
D 2:15 P.M. on the Settlement Date
================================================================================
E 3:00 P.M. on the Settlement Date
================================================================================
F 5:00 P.M. on the Business Day after the
Settlement Date
================================================================================
Fails: In the event that a purchaser shall fail to accept
delivery of and make payment for a Note on the settlement
date, the Presenting Agent will notify the Bank and the
Company, by telephone, confirmed in writing. If the Note has
been delivered to the Presenting Agent, as the Company's
agent, the Presenting Agent shall return such Note to the
Bank. If funds have been advanced for the purchase of such
Note, the Agent will, immediately upon receipt of such Note,
debit the account of the Company for the amount so advanced
and the Company shall refund the payment previously made by
the Presenting Agent in immediately available funds. Such
payments will be made on the settlement date, if possible,
and in any event not later than the Business Day following
the settlement date. If such fail shall have occurred for
any reason other than the failure of the Presenting Agent to
provide a confirmation to the purchaser, the Company will
reimburse the Presenting Agent on an equitable basis for its
loss of the use of funds during the period when they were
credited to the account of the Company. Immediately upon
receipt of the Note in respect of which the fail occurred,
the Bank will make appropriate entries to reflect the fact
that the Note was never issued and will mark the Note
"Canceled." The Presenting Agent will not be entitled to any
commission with respect to any Note which the purchaser does
not accept or make payment for.
<PAGE>
-B19-
Exhibit C
to Agency Agreement
BALTIMORE GAS AND ELECTRIC COMPANY
MEDIUM-TERM NOTES, SERIES I
FORM OF PURCHASE AGREEMENT
INCLUDING
STANDARD PURCHASE PROVISIONS
<PAGE>
BALTIMORE GAS AND ELECTRIC COMPANY
MEDIUM-TERM NOTES, SERIES I
PURCHASE AGREEMENT
[Date]
Baltimore Gas and Electric Company
250 W. Pratt Street, 20th Floor
Baltimore, Maryland 21201
Dear Sirs:
Referring to the Medium-Term Notes, Series I of Baltimore Gas and
Electric Company (the "Company") covered by the registration statement on Form
S-3 (No. 333-________), (such registration statement, including (i) the
prospectus included therein, dated _________________, as supplemented by a
prospectus supplement dated ____________ in the form first filed under Rule
424(b) (such prospectus as so supplemented, including each document incorporated
by reference therein is hereinafter called the "Prospectus") and (ii) all
documents filed as part thereof or incorporated by reference therein, is
hereinafter called the "Registration Statement") on the basis of the
representations, warranties and agreements contained in this Agreement, but
subject to the terms and conditions herein set forth, the purchaser or
purchasers named in Schedule A hereto (the "Purchasers") agree to purchase,
severally, and the Company agrees to sell to the Purchasers, severally, the
respective principal amounts of the Company's Medium-Term Notes, Series I having
the terms described below (the "Purchased Notes") set forth opposite the name of
each Purchaser on Schedule A hereto.
The price at which the Purchased Notes shall be purchased from the
Company by the Purchasers shall be ______% of the principal amount plus accrued
interest, if any, from _____________. The initial public offering price shall be
_____% of the principal amount plus accrued interest, if any, from
____________________. The Purchased Notes will be offered by the Purchasers as
set forth in the Prospectus Supplement relating to such Purchased Notes.
The Purchased Notes will have the following terms:
Fixed Interest rate (if applicable): % per annum
accruing from )
Floating Interest Rate (if applicable):
Interest Rate Basis: ___________________
Spread: ___________________
Spread Multiplier: ___________________
Index Maturity: ___________________
Initial Interest Rate: ___________________
Maximum Interest Rate: ___________________
Minimum Interest Rate: ___________________
Interest Reset Dates: ___________________
Interest Determination Dates: ___________________
Calculation Agent: ___________________
Interest Payment Dates: ___________________
Stated Maturity: ___________________
Redeemable by the Redemption Prices
Company on or after: (% of Principal Amount):
________________ ___________________
________________ ___________________
________________ ___________________
<PAGE>
Subject to Repurchase by
the Company at the option of Repurchase Prices
the holder on: (% of Principal Amount):
_________________ ___________________
_________________ ___________________
_________________ ___________________
The "Closing Date" shall be:
The place to which the
Purchased Notes may be
checked, packaged and
delivered shall be: ___________________
Notices to the Purchasers shall be sent to the following
address(es) or telecopier number(s):
If we are acting as Representative(s) for the several Purchasers named
in Schedule A hereto, we represent that we are authorized to act for such
several Purchasers in connection with the transactions contemplated in this
Agreement, and that, if there are more than one of us, any action under this
Agreement taken by any of us will be binding upon all the Purchasers.
All of the provisions contained in the document entitled "Baltimore Gas
and Electric Company Standard Purchase Provisions", a copy of which has been
previously furnished to us, are hereby incorporated by reference in their
entirety and shall be deemed to be a part of this Agreement to the same extent
as if such provisions had been set forth in full herein.
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed duplicate hereof, whereupon
it will become a binding agreement between the Company and the several
Purchasers in accordance with its terms.
Very truly yours,
[Firm Name]
By
Title: _______________________
Acting on behalf of and as
Representative(s) of the
several Purchasers named in
Schedule A hereto.*
The foregoing Purchase
Agreement is hereby confirmed
as of the date first above
written
BALTIMORE GAS AND ELECTRIC COMPANY
By _______________________
Title: _____________________
____________________________
* To be deleted if the Purchase Agreement is not executed by one or more
Purchasers acting as Representative(s) of the Purchasers for purposes of this
Agreement.
<PAGE>
SCHEDULE A
Name of Purchaser Amount
Total ____________________
$
<PAGE>
BALTIMORE GAS AND ELECTRIC COMPANY
STANDARD PURCHASE PROVISIONS
From time to time, Baltimore Gas and Electric Company, a Maryland
corporation ("Company") may enter into purchase agreements that provide for the
sale of designated securities to the purchaser or purchasers named therein. The
standard provisions set forth herein may be incorporated by reference in any
such purchase agreement ("Purchase Agreement"). The Purchase Agreement,
including the provisions incorporated therein by reference, is herein sometimes
referred to as "this Agreement." Unless otherwise defined herein, terms defined
in the Purchase Agreement are used herein as therein defined.
1. Introductory. The Company proposes to issue and sell from time
to time its Medium-Term Notes, Series I ("Notes") registered under the
registration statement referred to in Section 2(a). The Notes will be issued
under an Indenture, dated as of July 1, 1985, between the Company and The Bank
of New York (successor to Mercantile-Safe Deposit and Trust Company), as Trustee
as supplemented by the Supplemental Indentures dated as of October 1, 1987 and
January 26, 1993, respectively (the "Indenture"). The Notes will be sold to the
Purchasers for resale in accordance with the terms of the offering determined at
the time of the sale. The Notes involved in any such offering are hereinafter
referred to as the "Purchased Notes," and the firm or firms, as the case may be,
which agree to purchase the same are hereinafter referred to as the "Purchasers"
of such Purchased Notes. The terms "you" and "your" refer to those Purchasers
who sign the Purchase Agreement either on behalf of themselves only or on behalf
of themselves and as representatives of the several Purchasers named in Schedule
A thereto, as the case may be.
2. Representations and Warranties of the Company. The Company
represents and warrants to and agrees with each Purchaser that:
(a) A registration statement on Form S-3 (No. 333-________),which
also serves as a post-effective amendment to the registration statement
on Form S-3 (No. 333-66015), covering $_____ million principal amount of
the Notes, including a prospectus has been filed with the Securities and
Exchange Commission ("Commission") and has become effective. The terms
Registration Statement and Prospectus shall have the meanings ascribed
to them in the Purchase Agreement.
(b) The Registration Statement conforms in all respects to the
requirements of the Securities Act of 1933, as amended ("Act"), and the
pertinent published rules and regulations of the Commission thereunder
("33 Act Rules and Regulations") and the Trust Indenture Act of 1939, as
amended ("Trust Indenture Act"), and does not include any untrue
statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not
<PAGE>
- 2-
misleading, except that the foregoing does not apply to statements or
omissions in such document based upon written information furnished to
the Company by any Purchaser specifically for use therein. The documents
incorporated by reference in the Registration Statement or the
Prospectus pursuant to Item 12 of Form S-3 of the Act, at the time they
were filed with the Commission, complied in all material respects with
the requirements of the Securities Exchange Act of 1934, as amended
("Exchange Act"), and the pertinent published rules and regulations
thereunder ("Exchange Act Rules and Regulations"). Any additional
documents deemed to be incorporated by reference in the Prospectus will,
when they are filed with the Commission, comply in all material respects
with the requirements of the Exchange Act and the Exchange Act Rules and
Regulations and will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.
3. Delivery and Payment. The Company will deliver the Purchased
Notes to you for the accounts of the Purchasers, at the offices of the Trustee
(at the place specified in the Purchase Agreement) against payment of the
purchase price by certified or official bank check or checks in same day or New
York or Baltimore Clearing House funds drawn to the order of the Company, at the
office of the Company, 250 W. Pratt Street, 20th Floor, Baltimore, Maryland, at
the time set forth in this Agreement or at such other time not later than seven
full business days thereafter as you and the Company determine, such time being
herein referred to as the "Closing Date." The Purchased Notes so to be delivered
will be in definitive fully registered form registered in such denominations, of
$1,000 or multiples thereof, and in such names as you request in writing not
later than 3:00 p.m., New York Time, on the third full business day prior to the
Closing Date, or, if no such request is received, in the names of the respective
Purchasers in the amounts agreed to be purchased by them pursuant to this
Agreement. The Company shall make the Purchased Notes available for checking and
packaging at the offices of the Trustee (at the place specified in the Purchase
Agreement) prior to the Closing Date and, unless prevented from doing so by
circumstances beyond its control, not later than 2:00 p.m., New York Time, on
the business day next preceding the Closing Date. If you request that any
Purchased Notes be issued in a name or names other than that of the Purchaser
agreeing to purchase such Purchased Notes hereunder, the Company shall not be
obligated to pay any transfer taxes resulting therefrom. The Notes may also be
represented by a permanent global Note or Notes, registered in the name of The
Depository Trust Company, as depositary (the "Depositary"), or a nominee of the
Depositary (each such Note represented by a permanent global Note being referred
to herein as a "Book-Entry Note"). Beneficial interests in Book-Entry Notes will
only be evidenced by, and transfers thereof will only be effected through,
records maintained by the Depositary's participants.
<PAGE>
-3-
4. Offering by the Purchasers. The several Purchasers propose to
offer the Purchased Notes for sale to the public as set forth in the Prospectus.
5. Covenants of the Company. The Company covenants and agrees
with the several Purchasers that:
(a) It will promptly cause the Prospectus to be filed with the
Commission as required by Rule 424.
(b) For as long as a prospectus relating to the Purchased Notes
is required to be delivered under the Act, if any event relating to or
affecting the Company or of which the Company shall be advised in
writing by the Purchasers shall occur which, in the Company's opinion,
should be set forth in a supplement or amendment to the Prospectus in
order either to make the Prospectus comply with the requirements of the
Act or which would require the making of any change in the Prospectus so
that as thereafter delivered to purchasers such Prospectus will not
contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading,
the Company will promptly amend or supplement the Prospectus by either
(i) preparing and filing with the Commission supplement(s) or
amendment(s) to the Prospectus, or (ii) making an appropriate filing
pursuant to the Exchange Act, which will supplement or amend the
Prospectus so that, as supplemented or amended, the Prospectus when the
Prospectus is delivered to a purchaser will comply with the Act and will
not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
Prior to any such filing, the Company shall give oral notice to the
Purchasers.
(c) Not later than 45 days after the end of the 12-month period
beginning at the end of the fiscal quarter of the Company in which the
Closing Date occurs, the Company will make generally available to its
security holders an earnings statement (which need not be audited)
covering such 12-month period which will satisfy the provisions of
Section 11(a) of the Act.
(d) The Company will furnish to you copies of the following
documents, in each case as soon as available after filing and in such
quantities as you reasonably request (i) the Registration Statement
relating to the Notes as originally filed and all pre-effective
amendments thereto (at least one of which will be signed and will
include all exhibits except those incorporated by reference to previous
<PAGE>
-4-
filings with the Commission); (ii) each prospectus relating to the
Purchased Notes; and (iii) during the time when a prospectus relating to
the Purchased Notes is required to be delivered under the Act, all
post-effective amendments and supplements to the Registration Statement
or Prospectus, respectively (except supplements relating to securities
that are not Purchased Notes).
(e) The Company will use its best efforts to obtain the
qualification of the Purchased Notes for sale and the determination of
their eligibility for investment under the laws of such jurisdictions as
you designate and will continue such qualifications in effect so long as
required for the distribution, provided, however, that the Company shall
not be required to qualify as a foreign corporation or to file any
consent to service of process under the laws of any jurisdiction or to
comply with any other requirements deemed by the Company to be unduly
burdensome.
(f) During the period of five years after the Closing Date, the
Company will furnish to you, and upon request, to each of the other
Purchasers: (i) as soon as practicable after the end of each fiscal
year, a copy of its annual report to shareholders for such year, (ii) as
soon as available, a copy of each report or definitive proxy statement
of the Company filed with the Commission under the Exchange Act or
mailed to shareholders, and (iii) from time to time, such other
information concerning the Company as you may reasonably request.
(g) The Company will pay all expenses incident to the performance
of its obligations under this Agreement, and will reimburse the
Purchasers for any expenses (including Blue Sky fees not exceeding $ and
disbursements of counsel) incurred by them in connection with
qualification of the Purchased Notes for sale and determination of their
eligibility for investment under the laws of such jurisdictions as you
designate and the printing of memoranda relating thereto, for any filing
fees charged by investment rating agencies for the rating of the
Purchased Notes, for any expenses incurred in connection with listing
the Purchased Notes on a national securities exchange and for expenses
incurred in distributing prospectuses to the Purchasers, except that if
this Agreement is terminated by the Purchasers under Section 6(c)
hereof, the Company shall not be obligated to reimburse the Purchasers
for any of the foregoing expenses.
(h) The Company will not offer or sell any of its other debt
securities which are substantially similar to the Purchased Notes prior
to ten business days after the Closing Date without the consent of the
Purchasers.
<PAGE>
-5-
6. Conditions of the Obligations of the Purchasers. The
obligations of the several Purchasers to purchase and pay for the Purchased
Notes will be subject to the accuracy of the representations and warranties on
the part of the Company herein, to the accuracy of the statements of Company
officers made pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional conditions
precedent:
(a) Subsequent to the signing of this Agreement, you shall have
received a letter of PricewaterhouseCoopers LLP, dated the Closing Date,
confirming that they are independent public accountants within the
meaning of the Act and the 33 Act Rules and Regulations, and stating in
effect that:
(i) In their opinion, the consolidated financial
statements and supporting schedules audited by them which are
included in the Company's Form 10-K ("Form 10-K"), which is
incorporated by reference in the Registration Statement comply in
form in all material respects with the applicable accounting
requirements of the Act and the 33 Act Rules and Regulations and
the Exchange Act and the Exchange Act Rules and Regulations;
(ii) On the basis of procedures specified in such letter
(but not an audit in accordance with generally accepted auditing
standards), including reading the minutes of meetings of the
shareholders, the Board of Directors and the Executive Committee
of the Company since the end of the year covered by the Form 10-K
as set forth in the minute books through a specified date not
more than five days prior to the Closing Date, performing
procedures specified in Statement on Auditing Standards No. 71,
Interim Financial Information, on the unaudited interim
consolidated financial statements of the Company incorporated by
reference in the Registration Statement, if any, and reading the
latest available unaudited interim consolidated financial
statements of the Company, and making inquiries of certain
officials of the Company who have responsibility for financial
and accounting matters as to whether the latest available
financial statements not incorporated by reference in the
Registration Statement are prepared on a basis substantially
consistent with that of the audited consolidated financial
statements incorporated in the Registration Statement, nothing
has come to their attention that has caused them to believe that
(1) any unaudited consolidated financial statements incorporated
by reference in the Registration Statement do not comply in form
in all material respects with the applicable requirements of the
Act and the 33 Act Rules and Regulations and the Exchange Act and
the Exchange Act Rules and Regulations or any material
modifications should be made to those unaudited consolidated
<PAGE>
-6-
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 Closing Date, there was any change in
the capital stock or long-term debt of the Company or, at such
date, there was any decrease in net assets of the Company as
compared with amounts shown in the latest balance sheet
incorporated by reference in the Registration Statement, [or for
the period from the closing date of the latest income statement
incorporated by reference in the Registration Statement to a
specified date not more than five days prior to the Closing Date,
there were any decreases as compared with the corresponding
period of the previous year, in operating revenues, operating
income, net income or in earnings applicable to common stock,]
except in all cases for changes or decreases which the
Registration Statement discloses have occurred or may occur, or
which are described in such letter; and
(iii) Certain specified procedures have been applied to
certain financial or other statistical information (to the extent
such information was obtained from the general accounting records
of the Company) set forth or incorporated by reference in the
Registration Statement and that such procedures have not revealed
any disagreement between the financial and statistical
information so set forth or incorporated and the underlying
general accounting records of the Company, except as described in
such letter.
(b) Prior to the Closing Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and
no proceedings for that purpose shall have been instituted, or to the
knowledge of the Company or you, shall be contemplated by the
Commission.
<PAGE>
-7-
(c) Subsequent to the date of this Agreement, (i) there shall not
have occurred any change or any development involving a prospective
change not contemplated by the Prospectus as amended or supplemented
as of the date of this Agreement in or affecting particularly the
business or properties of the Company which, in the judgment of a
majority in interest of the Purchasers including you, materially
impairs the investment quality of the Purchased Notes, (ii) no rating
of any of the Company's debt securities shall have been lowered by any
recognized rating agency and (iii) trading in securities generally on
the New York Stock Exchange shall not have been suspended nor limited,
other than a temporary suspension in trading to provide for an orderly
market, nor shall minimum prices have been established on such
Exchange, a banking moratorium shall not have been declared either by
New York State or Federal authorities and there shall not have
occurred an outbreak or escalation of major hostilities in which the
United States is involved or other substantial national or
international calamity or crisis, the effect of which on the financial
markets of the United States is such as to make it, in your judgment,
impracticable to market the Purchased Notes.
(d) There shall not be in effect on the Closing Date any order of
the Public Service Commission of Maryland which would prevent the
issuance, sale and delivery of the Purchased Notes in accordance with
the terms contemplated by this Agreement.
(e) You shall have received an opinion, dated the Closing Date,
of a counsel for the Company to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Maryland, with power and authority (corporate and other)
to own its properties and conduct its business as described in
the Prospectus; and the Company is duly qualified to do business
as a foreign corporation in good standing in all other
jurisdictions in which the conduct of its business or the
ownership of its properties requires such qualification and the
failure to do so would have a material and adverse impact on its
financial condition;
(ii) The Indenture has been duly authorized, executed and
delivered by the Company and is a valid instrument, legally
binding on the Company and enforceable in accordance with its
terms, except as limited by bankruptcy, insolvency, or other laws
affecting the enforcement of creditors' rights and by general
principles of equity;
<PAGE>
-8-
(iii) The issuance and sale of the Purchased Notes have
been duly authorized by all necessary corporate action of the
Company. The Purchased Notes being delivered to the Purchasers at
the Closing (assuming that they have been duly authenticated by
the Trustee or a duly designated Authentication Agent under the
Indenture, which fact counsel need not verify by an inspection of
the Purchased Notes), have been duly issued and constitute legal,
valid, and binding obligations of the Company enforceable in
accordance with their terms, and are entitled to the benefits
provided by the Indenture except as such enforceability or
entitlement may be limited by bankruptcy, insolvency, or other
laws affecting the enforcement of creditors' rights and by
general principles of equity;
(iv) The Registration Statement has become effective under
the Act and, (a) to the best of such counsel's knowledge, no stop
order suspending the effectiveness of the Registration Statement
has been issued and no proceedings for that purpose have been
instituted or are pending or contemplated under the Act; (b) the
Registration Statement (as of its effective date) and the
Prospectus (as of its date and as of the Closing Date) and any
amendments or supplements thereto, as of their respective dates,
appeared to comply as to form in all material respects with the
requirements of Form S-3 under the Act and the 33 Act Rules and
Regulations and the Trust Indenture Act; (c) such counsel has no
reason to believe that either the Registration Statement or the
Prospectus, or any such amendment or supplement, as of such
respective dates, contained any untrue statement of a material
fact or omitted to state any material fact required to be stated
therein or necessary to make the statement therein not
misleading; (d) the descriptions in the Registration Statement
and Prospectus of statutes, legal and governmental proceedings
and contracts and other documents are accurate and fairly present
the information required to be shown; (e) and such counsel does
not know of any legal or governmental proceedings required to be
described in the Prospectus which are not described as required,
or of any contracts or documents of a character required to be
described in the Registration Statement or Prospectus or to be
filed as exhibits to the Registration Statement which are not
described or filed as required; it being understood that such
counsel, in addressing the matters covered in this paragraph (iv)
need express no opinion as to the financial statements or other
financial and statistical information contained in the
Registration Statement or the Prospectus or incorporated therein
or attached as an exhibit thereto or as to the Statement of
Eligibility and Qualification on Form T-l of the Trustee under
the Indenture.
<PAGE>
-9-
(v) The approval of the Public Service Commission of
Maryland necessary for the valid issuance by the Company of the
Purchased Notes pursuant to this Agreement has been obtained and
continues in full force and effect. The Company has received the
approval of FERC for the issuance of Purchased Notes on or before
December 31, 2000 with maturities of not more than 12 months
after the date of issuance and the approval of FERC will be
required for the issuance of any Purchased Notes after December
31, 2000 and such counsel knows of no other approval of any other
regulatory authority which is legally required for the valid
offering, issuance, sale and delivery of the Purchased Notes by
the Company under this Agreement (except that such opinion need
not pass upon the requirements of state securities acts);
(vi) To the best of such counsel's knowledge and belief,
the consummation of the transactions contemplated in this
Agreement and the compliance by the Company with all the terms of
the Indenture did not and will not result in a breach of any of
the terms and provisions of, or constitute a default under, the
Company's Charter or By-Laws or any indenture, mortgage or deed
of trust or other agreement or instrument to which the Company is
a party;
(vii) Each of this Agreement and the Interest Calculation
Agency Agreement has been duly authorized, executed and delivered
by the Company;
(viii) The Indenture is duly qualified under the Trust
Indenture Act;
(ix) The issuance, sale and delivery of the Purchased
Notes as contemplated by this Agreement are not subject to the
approval of the Securities and Exchange Commission under the
provisions of the Public Utility Holding Company Act of 1935 (the
"1935 Act"); and
(x) The Notes and Indenture conform as to legal matters
with the statements concerning them in the Registration Statement
and Prospectus under the caption "DESCRIPTION OF NOTES" and on
the cover page of the Prospectus.
(f) The Agents shall have received from Cahill Gordon & Reindel,
counsel for the Agents, an opinion dated the Closing Date, with respect to the
matters referred to in paragraph 6(e) subheadings (ii), (iii), (iv)b, (v),
(vii), (viii) and (x) and such other matters as the Agents shall reasonably
request and the Company shall have furnished to such counsel such documents as
they request for the purpose of enabling them to pass on such matters.
<PAGE>
-10-
In rendering such opinion, Cahill Gordon & Reindel may rely, as
to the incorporation of the Company, the approval of the Public Service
Commission of Maryland required for the issuance, sale and delivery of the
Purchased Notes and all other matters governed by the laws of the State of
Maryland, the applicability of the 1935 Act, and FERC approval for the
issuance, sale and delivery of the Purchased Notes, upon the opinion of Counsel
for the Company referred to above.
In addition, such counsel shall state that such counsel has participated in
conferences with officers,counsel and other representatives of the Company,
representatives of the independent public accountants for the Company and
representatives of the Purchasers at which the contents of the Registration
Statement and the Prospectus and related matters were discussed; and, although
such counsel is not passing upon and does not assume responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement and Prospectus (except as to the matters referred to in
their opinion rendered pursuant to subheading (x) above), on the basis of the
foregoing (relying as to materiality to a large extent upon the opinions of
officers, counsel and other representatives of the Company), no facts have come
to the attention of such counsel which lead such counsel to believe that either
the Registration Statement (as of its effective date) or the Prospectus (as of
the date of this Agreement), and any subsequent amendments or supplements
thereto, as of their respective dates, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make such statements therein not misleading (it being understood
that such counsel need make no comment with respect to the financial statements
and other financial and statistical data included in the Registration Statement
or Prospectus or incorporated therein or as to the Statement of Eligibility and
Qualification on Form T-l of the Trustee under the Indenture).
(g) You shall have received a certificate of the Chairman of the
Board, President or any Vice President and a principal financial or
accounting officer of the Company, dated the Closing Date, in which such
officers shall state, to the best of their knowledge after reasonable
investigation, and relying on opinions of counsel to the extent that
legal matters are involved, that the representations and warranties of
the Company in this Agreement are true and correct in all material
respects, that the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied at or
prior to the Closing Date, that no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or are contemplated by
the Commission, and that, subsequent to the date of the most recent
financial statements set forth or incorporated by reference in the
<PAGE>
-11-
Prospectus, there has been no material adverse change in the financial
position or in the financial results of operation of the Company except
as set forth or contemplated in the Prospectus.
(h) The Company will furnish you with such conformed copies of
such opinions, certificates, letters and documents as you reasonably
request.
In case any such condition shall not have been satisfied, this
Agreement may be terminated by you upon notice in writing or by telecopy to the
Company without liability or obligation on the part of the Company or any
Purchaser, except as set forth in Section 10 hereof.
7. Conditions of the Obligations of the Company. The obligations
of the Company to sell and deliver the Purchased Notes are subject to the
following conditions precedent:
(a) Prior to the Closing Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and
no proceedings for that purpose shall have been instituted or, to the
knowledge of the Company or you, shall be contemplated by the
Commission.
(b) There shall not be in effect on the Closing Date any order of
the Maryland Commission or Federal Energy Regulatory Commission which
would prevent the issuance, sale and delivery of the Purchased Notes or
which contains conditions or provisions with respect thereto which are
not acceptable to the Company, it being understood that no order in
effect at the date of this Agreement contains any such unacceptable
conditions or provisions.
If any such condition shall not have been satisfied, then the
Company shall be entitled, by notice in writing or by telecopy to you,
to terminate this Agreement without any liability on the part of the
Company or any Purchaser, except as set forth in Section 10 hereof.
8. Indemnification.
(a) The Company will indemnify and hold harmless each Purchaser
and each person, if any, who controls any Purchaser within the meaning
of the Act or Exchange Act against any losses, claims, damages or
liabilities, joint or several, to which such Purchaser or such
controlling person may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the
Registration Statement or the Prospectus, or any related preliminary
<PAGE>
-12-
prospectus or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading; and will
reimburse each Purchaser and each such controlling person for any legal
or other expenses reasonably incurred by such Purchaser or such
controlling person in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that
the Company will not be liable to such Purchaser or controlling person
in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in any such
documents in reliance upon and in conformity with written information
furnished to the Company by such Purchaser or such controlling person
specifically for use therein unless such loss, claim, damage or
liability arises out of the offer or sale of the Purchased Notes
occurring after such Purchaser or controlling person has notified the
Company in writing that such information should no longer be used
therein. This indemnity agreement will be in addition to any liability
which the Company may otherwise have.
(b) Each Purchaser will indemnify and hold harmless the Company,
each of its directors, each of its officers who have signed the
Registration Statement and each person, if any, who controls the Company
within the meaning of the Act or the Exchange Act, against any losses,
claims, damages or liabilities to which the Company or any such
director, officer or controlling person may become subject, under the
Act, or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement or the Prospectus, or any
related preliminary prospectus or arise out of or are based upon the
omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity
with written information furnished to the Company by such Purchaser
specifically for use therein; and will reimburse any legal or other
expenses reasonably incurred by the Company or any such director,
officer or controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, that such Purchaser will not
be liable to the Company, or any such director, officer or controlling
person in any such case to the extent that any such loss, claim, damage
or liability arises out of the offer or sale of Purchased Notes
occurring after such Purchaser has notified the Company in writing that
such information should no longer be used therein. This indemnity
agreement will be in addition to any liability which such Purchaser may
otherwise have.
<PAGE>
-13-
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under (a) and (b) above, notify the indemnifying
party of the commencement thereof; but the omission so to notify the
indemnifying party will not relieve it from any liability which it may
have to any indemnified party otherwise than under this Section. In case
any such action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the
extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party (who may, with the consent of the
indemnified party, be counsel to the indemnifying party) and who shall
not be counsel to any other indemnified party who may have interests
conflicting with those of such indemnified party, and after notice from
the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party will not be liable to
such indemnified party under this Section for any legal or other
expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation.
(d) If recovery is not available under the foregoing
indemnification provisions of this Section, for any reason other than as
specified therein, the parties entitled to indemnification by the terms
thereof shall be entitled to contribution to liabilities and expenses,
except to the extent that contribution is not permitted under Section
11(f) of the Act. In determining the amount of contribution to which the
respective parties are entitled, there shall be considered the relative
benefits received by each party from the offering of the Purchased Notes
(taking into account the portion of the proceeds of the offering
realized by each), the parties' relative knowledge and access to
information concerning the matter with respect to which the claim was
asserted, the opportunity to correct and prevent any statement or
omission, and any other equitable considerations appropriate under the
circumstances. The Company and the Purchasers and such controlling
persons agree that it would not be equitable if the amount of such
contribution were determined by pro rata or per capita allocation (even
if the Purchasers and such controlling persons were treated as one
entity for such purpose). Notwithstanding the provisions of this
subsection (d), no Purchaser or controlling person shall be required to
make contribution hereunder which in the aggregate exceeds the total
public offering price of the Purchased Notes, purchased by the Purchaser
<PAGE>
-14-
under this Agreement, less the aggregate amount of any damages which
such Purchaser or such controlling person has otherwise been required to
pay in respect of the same claim or any substantially similar claim. The
Purchasers' obligations to contribute are several in proportion to their
respective underwriting obligations and are not joint.
9. Default of Purchasers. If any Purchaser or Purchasers default
in their obligations to purchase Purchased Notes hereunder and the aggregate
principal amount of Purchased Notes which such defaulting Purchaser or
Purchasers agreed but failed to purchase is 10% of the principal amount of
Purchased Notes or less, you may make arrangements satisfactory to the Company
for the purchase of such Purchased Notes by other persons, including any of the
Purchasers, but if no such arrangements are made by the Closing Date the
non-defaulting Purchasers shall be obligated severally, in proportion to their
respective commitments hereunder, to purchase the Purchased Notes which such
defaulting Purchasers agreed but failed to purchase. If any Purchaser or
Purchasers so default and the aggregate principal amount of Purchased Notes with
respect to which such default or defaults occur is more than the above
percentage and arrangements satisfactory to you and the Company for the purchase
of such Purchased Notes by other persons are not made within thirty-six hours
after such default, this Agreement will terminate without liability on the part
of any non-defaulting Purchaser or the Company, except as provided in Section
10. In the event that any Purchaser or Purchasers default in their obligation to
purchase Purchased Notes hereunder, the Company may, by prompt written notice to
the non-defaulting Purchasers, postpone the Closing Date for a period of not
more than seven full business days in order to effect whatever changes may
thereby be made necessary in the Registration Statement or the Prospectus or in
any other documents, and the Company will promptly file any amendments to the
Registration Statement or supplements to the Prospectus which may thereby be
made necessary. As used in this Agreement, the term "Purchaser" includes any
person substituted for a Purchaser under this Section. Nothing herein will
relieve a defaulting Purchaser from liability for its default.
10. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties, and other
statements of the Company or its officers and of the several Purchasers set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation, or statement as to the results thereof,
made by or on behalf of any Purchaser or the Company or any of its officers or
directors or any controlling person, and will survive delivery of and payment
for the Purchased Notes. If this Agreement is terminated pursuant to Section 6,
7 or 9 or if for any reason the purchase of the Purchased Notes by the
Purchasers is not consummated, the Company shall remain responsible for the
expenses to be paid or reimbursed by it pursuant to Section 5(g). In addition,
<PAGE>
-15-
in such event the respective obligations of the Company and the Purchasers
pursuant to Section 8 shall remain in effect; provided, however, that you will
use your best efforts to promptly notify each other Purchaser and each dealer
and prospective customer to whom you have delivered a Prospectus for the
Purchased Notes by telephone or telegraph, confirmed by letter in either case,
of such termination or failure to consummate, including in such notice
instructions regarding the continued use of the Registration Statement, the
Prospectus, or any amendment or supplement thereto, or any related preliminary
prospectus.
11. Notices. All communications hereunder will be in writing,
and, if sent to the Purchasers will be delivered or telecopied and confirmed to
the address furnished in writing for the purpose of such communications
hereunder, or, if sent to the Company, will be delivered or telecopied and
confirmed to it, attention of Treasurer at 250 W. Pratt Street, 20th Floor,
Baltimore, Maryland 21201, telecopier (410) 783-3619; provided, however, that
any notice to a Purchaser pursuant to Section 8 will be mailed, delivered or
telecopied to such Purchaser at its address appearing in its Purchasers'
Questionnaire.
12. Successors. This Purchase Agreement will inure to the benefit
of and be binding upon the parties hereto and their respective successors and
the officers and directors and controlling persons referred to in Section 8, and
no other person will have any right or obligation hereunder.
13. Construction. This Purchase Agreement shall be governed by
and construed in accordance with the laws of the State of Maryland.
14. Counterparts. This Agreement may be executed in one or more
counterparts and it is not necessary that the signatures of all parties appear
on the same counterpart, but such counterparts together shall constitute but one
and the same agreement.
<PAGE>
Exhibit D
to Agency Agreement
PURCHASE AGREEMENT
(for purchaser's account)
[Date]
Baltimore Gas and Electric Company
250 W. Pratt Street, 20th floor
Baltimore, Maryland 21201
Attention: Treasurer
The undersigned agrees to purchase the following principal amount
of the Notes described in the Agency Agreement among Baltimore Gas and Electric
Company, Lehman Brothers Inc., Banc of America Securities LLC
and Goldman, Sachs & Co. dated _____________, 2000 (the "Agency Agreement"):
Principal Amount: $
Fixed Interest Rate (if applicable): _________________%
Floating Interest Rate (if applicable):
Interest Rate Basis: ___________________
Spread: ___________________
Spread Multiplier: ___________________
Index Maturity: ___________________
Initial Interest Rate: ___________________
Maximum Interest Rate: ___________________
Minimum Interest Rate: ___________________
Interest Reset Dates: ___________________
Interest Determination Dates: ___________________
Calculation Agent: ___________________
<PAGE>
Interest Payment Dates: ___________________
Stated Maturity: ___________________
Redeemable at the option Redemption Prices
of the Company on or after: (% of Principal Amount):
_____________________ _____________________
_____________________ _____________________
_____________________ _____________________
Subject to repurchase by
the Company at the option Repurchase Prices
of the holder on: (% of Principal Amount):
______________________ ______________________
______________________ ______________________
______________________ ______________________
Discount: __________% of Principal Amount
Price to be paid
to Company
(in immediately
available funds): $____________________
Settlement Date: _______________, 20___
Except as otherwise expressly provided therein, all terms used
herein which are defined in the Agency Agreement shall have the same meanings as
in the Agency Agreement. The term Agent, as used in the Agency Agreement, shall
be deemed to refer only to the undersigned for purposes of this Agreement.
This Agreement incorporates by reference Sections 4, 6, 7, 12 and
13 of the Agency Agreement, the first and last sentences of Section 9 thereof
and, to the extent applicable, the Procedures. You and we agree to perform, to
the extent applicable, our respective duties and obligations specifically
provided to be performed by each of us in the Procedures.
Our obligation to purchase Notes hereunder is subject to the
accuracy on the above Settlement Date of your representations and warranties
contained in Section 2 of the Agency Agreement (it being understood that such
representations and warranties shall relate to the Registration Statement and
the Prospectus as amended at such Settlement Date) and to your performance and
observance of all covenants and agreements contained in Sections 4 and 6
thereof. Our obligation hereunder is also subject to the following conditions:
<PAGE>
(a) the satisfaction, at such Settlement Date, of each of the conditions
set forth in subsections (a), (b) and (d) through (h) of Section 5 of the Agency
Agreement (it being understood that each document so required to be delivered
shall be dated such Settlement Date and that each such condition and the
statements contained in each such document that relate to the Registration
Statement or the Prospectus shall be deemed to relate to the Registration
Statement or the Prospectus, as the case may be, as amended or supplemented at
the time of settlement on such Settlement Date and except that the opinion
described in Section 5(d) of the Agency Agreement shall be modified so as to
state that the Notes being sold on such Settlement Date, when delivered against
payment therefor as provided in the Indenture and this Agreement, will have been
duly executed, authenticated, issued and delivered and will constitute valid and
legally binding obligations of the Company enforceable in accordance with their
terms, subject only to the exceptions as to enforcement set forth in clause (ii)
of Section 5(d) of the Agency Agreement, and will conform to the description
thereof contained in the Prospectus as amended or supplemented at such
Settlement Date); and
(b) there shall not have occurred (i) any change, or any development
involving a prospective change not contemplated by the Prospectus as amended or
supplemented as of the date of this Agreement, in or affecting particularly the
business or properties of the Company which, in our judgment, materially impairs
the investment quality of the Notes, (ii) any downgrading in the rating of the
Company's debt securities by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the Act); (iii) any
suspension or limitation of trading, other than a temporary suspension in
trading to provide for an orderly market, in securities generally on the New
York Stock Exchange, or any setting of minimum prices for trading on such
exchange, or any suspension of trading of any securities of the Company on any
exchange or in the over-the-counter market; (iv) any banking moratorium declared
by Federal or New York authorities; or (v) any outbreak or escalation of major
hostilities in which the United States is involved, any declaration of war by
Congress or any other substantial national or international calamity or
emergency if, in our judgment, the effect of any such outbreak, escalation,
declaration, calamity or emergency makes it impractical or inadvisable to
proceed with completion of the sale of and payment for the Notes.
In further consideration of our agreement hereunder, you agree
that between the date hereof and the above Settlement Date, you will not offer
or sell, or enter into any agreement to sell, any debt securities of the Company
in the United States, other than sales of Notes, borrowings under your revolving
<PAGE>
credit agreements and lines of credit, the private placement of securities and
issuances of your commercial paper.
If for any reason our purchase of the above Notes is not
consummated, you shall remain responsible for the expenses to be paid or
reimbursed by you pursuant to Section 4 of the Agency Agreement and the
respective obligations of you and the undersigned pursuant to Section 7 shall
remain in effect. If for any reason our purchase of the above Notes is not
consummated other than because of our default or a failure to satisfy a
condition set forth in clause (iii), (iv) or (v) of paragraph (b) above, you
shall reimburse us, severally, for all out-of-pocket expenses reasonably
incurred by us in connection with the offering of the above Notes and not
otherwise required to be reimbursed pursuant to Section 4 of the Agency
Agreement.
<PAGE>
This Agreement shall be governed by and construed in accordance
with the laws of the State of Maryland. This Agreement may be executed in
counterparts and the executed counterparts shall together constitute a single
instrument.
[Insert Name of Purchaser]
By:______________________
CONFIRMED AND ACCEPTED, as of
the date first above written:
BALTIMORE GAS AND ELECTRIC COMPANY
By:___________________________
