Exhibit 1(a)
______________ Shares
Constellation Energy Group, Inc.
Common Stock
Sales Agency Agreement
________, 2001
[Agent Name Address]
Ladies and Gentlemen:
The undersigned, Constellation Energy Group, Inc., a Maryland
corporation (the "Company"), hereby confirms its agreement with
___________________________(the "Agent") as follows:
1. Issuance and Sale of Common Stock. The Company has authorized by
appropriate corporate action and proposes to issue and sell in the manner
contemplated by this Agreement up to __________ shares (the "Shares") of its
Common Stock (the "Common Stock"), having the terms and provisions set forth in
the Charter of the Company, as amended and restated as of April 30, 1999,
supplemented as of July 19, 1999 and corrected as of September 13, 1999 (a copy
of which has heretofore been delivered to the Agent) and summarized in the
Prospectus as defined in Section 5(a). Subject to the terms and conditions
stated in this Agreement, the Company hereby (a) appoints the Agent as its
exclusive sales agent for the purpose of soliciting purchases of the Shares from
the Company by others and (b) agrees that whenever it determines to sell Shares
directly to the Agent as principal for resale to others, it will enter into a
Terms Agreement (as defined in Section 2(b) hereof) with the Agent relating to
such sale in accordance with Section 2(b) hereof.
2. Solicitations as Agent; Purchases as Principal.
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(a) Solicitations as Agent. On the basis of the representations and warranties
herein contained, but subject to the terms and conditions herein set forth, the
Agent agrees, as an agent of the Company, to use its reasonable best efforts to
solicit offers to purchase the Shares. The Agent and the Company agree that such
solicitations and offers for the sale of the Shares shall commence upon receipt
of, and shall be made in accordance with, written instructions from the Company
to the Agent (which shall be substantially in the form of Exhibit A hereto and
which may
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take the form of an exchange of any standard form of written
telecommunication between the Agent and the Company) and shall continue until
such time as the Company has instructed the Agent that such solicitations and
offers shall be suspended in accordance with Section 8 hereof. The Company
reserves the right, in its sole discretion, to instruct the Agent, at any time
and from time to time after the Commencement Date (as defined in Section 7
hereof), to so commence or suspend such solicitations and offers for any period
of time or permanently in accordance with the provisions of this Agreement.
In soliciting purchases of the Shares from the Company by others
(including customers of the Agent), the Agent will be acting for the Company and
not as principal. The Agent, as the exclusive agent for the offer and sale of
the Shares, will use its reasonable best efforts to sell the Shares on behalf of
the Company as contemplated hereby; provided, however, that it is understood by
the Company that the Agent has no obligation to find purchasers of the Shares
and that the Agent in its sole discretion, upon notice thereof to the Company,
can suspend from time to time its efforts in offering for sale, and soliciting
purchases of, the Shares. In any transaction where the Agent has acted as agent
for the Company and has not purchased as principal, the Agent will use its
reasonable best efforts to obtain performance by each purchaser of Shares from
the Company, but the Agent will not have liability to the Company in the event
any such purchase is not consummated for any reason except as may be otherwise
provided by any applicable regulations and rules of the Exchanges (as defined in
Section 3(a) (i) hereof) on which the transaction was executed and except that
the Agent will complete the purchase in accordance with the customs of the
Exchanges in the case of transactions in which the Agent has also acted as
broker for the purchaser. The Company also understands that under no
circumstances shall the Agent be obligated to purchase any Shares for its own
account, except (i) pursuant to a Terms Agreement, (ii) as provided in the
preceding sentence and (iii) except to the extent that the Agent has acted as a
principal in purchasing a portion of a block as contemplated by Section 3
(a)(ii) hereof, or has made a firm commitment with the Company in connection
with an offering or distribution of the type contemplated by Section 3(a) (iii)
hereof that has been expressly authorized by the Company and agreed to by the
Agent.
(b) Purchases as Principal. Each sale of Shares to the Agent as
principal for resale to others shall be made in accordance with the terms of
this Agreement and, except for purchases made in accordance with the customs of
the Exchanges in the case of transactions in which the Agent has also acted as
broker for a purchaser and in the case of transactions permitted by Section 3(a)
(ii) hereof, a separate agreement that will
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provide for the sale of such Shares to, and the purchase and reoffering
thereof by, the Agent. Each such separate agreement (which shall be
substantially in the form of Exhibit B hereto and which may take the form
of an exchange of any standard form of written telecommunication between
the Agent and the Company) is herein referred to as a "Terms Agreement". The
Agent's commitment to purchase Shares pursuant to any Terms Agreement shall
be deemed to have been made on the basis of the representations and
warranties of the Company herein contained and shall be subject to the
terms and conditions herein set forth. Unless expressly authorized by
the Company in the Terms Agreement, or as otherwise provided herein, the
Agent will not be authorized to utilize a selling or dealer group in connection
with the resale of the Shares purchased. Such Terms Agreement shall also
specify the requirements for the opinions of counsel, comfort letter and
officer's certificate pursuant to Sections 7(b), 7(c), 7(d) and 7(e),
respectively, hereof.
3. Manner of Offer and Sale. (a) Method of Offer and Sale. The
Shares may be offered and sold by any of the following methods:
(i) Ordinary Brokers' Transactions. The Shares may be offered
and sold by the Agent in ordinary regular-way transactions in the
auction market on the floor of the New York Stock Exchange, Inc. (the
"NYSE") or any other stock exchange on which the Common Stock may be
listed or admitted to trading (the NYSE, together with such other stock
exchanges, the "Exchanges").
(ii) Block Transactions. The Agent may solicit offers to
purchase Shares, and offer Shares for sale, in transactions on the
Exchanges in "crosses" of blocks where the Agent acts as broker for the
buyers in addition to acting as agent for the Company. It is understood
that on occasion the Agent may also act as a principal and purchase for
its own account, with the consent of the Company, a portion of the
Shares being sold in the cross of a block. The Agent may also offer and
sell Shares in block transactions on the Exchanges in which other
broker-dealers are acting as broker for all or some of the buyers of
the Shares being sold in such transactions. In the discretion of the
Agent, the Agent may also sell Shares in block transactions to one or
more broker-dealers purchasing such Shares, or a portion of such
Shares, as principal for their own account, with the consent of the
Company. Any of the transactions contemplated by this Section 3(a) (ii)
may be executed in the over-the-counter market, with broker-dealers who
are not members of the Exchanges or otherwise, provided that the Agent
has obtained any necessary permission from
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officials of the Exchanges or such transactions are otherwise in
compliance with the rules of the Exchanges.
(iii) Fixed Price Offerings. With the prior authorization of
the Company, and any necessary permission from officials of the
Exchanges, the Agent may conduct fixed price offerings off the floor of
the Exchanges, in which the Agent has committed to purchase as
principal the Shares involved in such offerings and dealers selected by
the Agent participate in the resale of such Shares. With the prior
authorization of the Company, the Agent may also conduct "special
offerings" or "exchange distributions" of Shares on the NYSE in
accordance with Rule 391 and Rule 392, respectively, of the NYSE or on
any one or more of the other Exchanges in accordance with the
appropriate rules of such other Exchanges. It is understood that the
terms of "fixed price offerings," "special offerings" and "exchange
distributions" contemplated by this Section 3(a) (iii) will in each
case be subject to the prior approval of the Company.
(b) Market Prices. The Company understands that sales of Shares will be
made at market prices prevailing at the time of sale in the case of transactions
on the Exchanges and at prices negotiated by the Agent and related to prevailing
market prices in the case of over-the-counter transactions; provided, however,
that the price per share to be paid to the Company for the Shares shall be in
compliance with the terms of this Agreement and the Procedures.
(c) Discounts, Commissions, Concessions, Etc. The Company will (i) pay
to the Agent, on each Settlement Date (as defined in Section 4) in respect of
the sale of any Shares solicited by the Agent, in same day funds, commissions
for its services in acting as agent for the Company in the sale of such Shares
in an amount per share to be negotiated as provided in the Procedures (as
defined in Section 3(e) hereof) for the types of transactions involved (but not,
in any event, to exceed $_____ per share) (it being understood that the Company
and the Agent may agree upon payment for such commissions in such other manner
as they may determine in accordance with the Procedures) and (ii) pay the
reasonable fees and expenses of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ ("Counsel for the
Agent") in connection with the offer and sale of the Shares. Discounts,
commissions, concessions, the offering price and other terms of offerings or
distributions referred to in Sections 2(b) and 3(a) hereof will be agreed upon
by the Company and the Agent prior to any such offering or distribution. The
Company understands and agrees that, in any sale of Shares where the Agent is
also acting as broker for a buyer of Shares,
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the Agent may also receive a brokerage commission from the buyer in any
amount negotiated by the Agent and such buyer.
(d) Authorized Actions. The Company agrees that, concurrently with the
offer and sale of Shares on behalf of the Company as contemplated by this
Agreement, the Agent may (i) act as broker for the sale of shares of Common
Stock by customers other than the Company, (ii) to the extent permitted by the
rules and regulations of the Securities and Exchange Commission (the
"Commission") under the Securities Exchange Act of 1934, (the "Exchange Act"),
solicit the sale of shares of Common Stock by customers other than the Company
through the Agent as broker for the seller, solicit the sale of shares of Common
Stock by customers other than the Company to the Agent as principal and solicit
offers to purchase shares of Common Stock and (iii) offer and sell as principal
for its own account Shares that the Agent has purchased from the Company as
contemplated by Sections 2(b) and 3(a) (ii) or shares of Common Stock that the
Agent has otherwise acquired in transactions permitted by this Agreement.
(e) Procedures. Procedural details relating to the offer and sale of
the Shares, and the issue and delivery of the Shares and payment for the Shares,
are set forth in the Common Stock Procedures attached hereto as Exhibit C (the
"Procedures"). The Agent and the Company each agree to perform the respective
duties and obligations to be performed by them as provided in the Procedures as
amended from time to time. The Procedures may be amended only by a written
agreement of the Company and the Agent. The Agent agrees that the number of
Shares to be offered and sold from time to time, and the prices at which Shares
are to be offered and sold, will be in compliance with limitations established
by the Company with the Agent in accordance with the Procedures.
(f) Compliance with Laws and Regulations. The Agent agrees that in
carrying out the transactions contemplated by this Agreement, it will observe
and comply with (i) all applicable securities laws, regulations, rules and
ordinances of any jurisdiction in which the Shares may be offered, sold or
delivered and (ii) all applicable regulations and rules of the Exchanges on
which such transactions are executed.
4. Delivery of Shares. Delivery of Shares sold in transactions of the
types referred to in Section 3(a) hereof will take place through the book-entry
processing of the Depository Trust Company ("DTC") deposit withdrawal at
custodian ("DWAC") system on the date that is three Business Days (as defined
below) after the "trade date" for the sale of such Shares, against delivery to
the Company in same day funds of the purchase price for such Shares; provided,
however, that the Company and the
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Agent may agree upon delivery of and payment for Shares sold in particular
transactions at such other time and place and in such other manner as they may
determine in accordance with the Procedures. The date of delivery to the
Agent of Shares sold against delivery to the Company of funds in payment
therefor is herein called the "Settlement Date." Delivery of Shares, and
payment, for Shares sold pursuant to a Terms Agreement shall be made in
accordance with such Terms Agreement. Except as may be otherwise determined
by the NYSE, "Business Day" as used in this Agreement means any day on which the
NYSE is open for business other than any such day on which banking institutions
in New York, New York and Baltimore, Maryland are authorized or obligated by law
to close.
5. Representations and Warranties of the Company. The
Company represents and warrants to the Agent that:
(a) Filing of Registration Statement with Commission. A registration
statement on Form S-3 (No. 333-______), as supplemented by a Prospectus
Supplement dated __________, has been filed with the Commission under
the Securities Act of 1933, (the "Securities Act"), in accordance with Rule
415 of the published rules and regulations of the Commission (the "Regulations")
under the Securities Act. Such registration statement has been declared
effective by the Commission. References in this Agreement to the "Registration
Statement" at a particular time are to such registration statement, as it
may have been amended or supplemented at such time, including all exhibits
thereto and all documents that at such time are incorporated by reference
therein. References in this Agreement to the "Prospectus" at a particular
time are to the form of preliminary prospectus filed as a part of the
Registration Statement at such time and, thereafter, to the prospectus first
filed with the Commission pursuant to Rule 424(b) of the Regulations under the
Securities Act, as it may have been amended or supplemented at such time,
including all documents that at such time are incorporated by reference therein.
(b) Registration Statement; Prospectus and Incorporated Documents. (i)
The Registration Statement, at the date of this Agreement and any applicable
Terms Agreement and at the Commencement Date, as it may be amended or
supplemented at each such time, complies and will comply, as the case may be, in
all material respects with the Securities Act and the Regulations thereunder;
the Prospectus, at the date of this Agreement and any applicable Terms
Agreement, at the date it is first filed pursuant to Rule 424(b) of the
Regulations under the Securities Act and
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at the Commencement Date, as it may be
amended or supplemented at each such time, complies and will comply, as the case
may be, in all material respects with the Securities Act and the Regulations
thereunder; (ii) the Registration Statement at the date of this Agreement and
any applicable Terms Agreement and at the Commencement Date, as it may be
amended or supplemented at each such time, does not and will not, as the case
may be, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; the Prospectus, at the date of this Agreement and any
applicable Terms Agreement, at the date it is first filed pursuant to Rule
424(b) of the Regulations under the Securities Act and at the Commencement Date,
as it may be amended or supplemented at each such time, does not and will not,
as the case may be, contain an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided,
however, that these representations and warranties do not apply to statements or
omissions in such documents, based upon information furnished to the Company in
writing by the Agent expressly for use therein; and (iii) the documents
incorporated by reference in the Registration Statement or the Prospectus
pursuant to Item 12 of Form S-3 of the Securities Act, at the time they were
filed with the Commission, complied in all material respects with the
requirements of the Exchange Act, and the Regulations thereunder.
6. Covenants of the Company. The Company covenants and agrees that:
(a) Filing of Prospectus with Commission; No Stop Order. The Company
will cause the Prospectus, and any amendments or supplements thereto, to be
filed with, or transmitted for filing to, the Commission in accordance with Rule
424(b) of the Regulations under the Securities Act and will notify the Agent
immediately, and confirm such notice in writing, of the issuance by the
Commission of any stop order under the Securities Act suspending the
effectiveness of the Registration Statement or of the initiation of any
proceedings for that purpose. The Company will make every reasonable effort to
prevent the issuance by the Commission of any stop order and, if any such stop
order shall at any time be issued, to obtain the lifting thereof at the earliest
possible moment.
(b) Amendments and Supplements. From the time solicitation regarding
sale of the Shares is begun until all of the Shares have been sold (i) the
Company will advise the Agent promptly of any proposal to amend or supplement
the Registration Statement or the Prospectus by means of a post-effective
amendment, sticker, or supplement (including a prospectus filed pursuant to Rule
424(b) of the Regulations under the Securities Act that differs from the
Prospectus first filed pursuant to such
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Rule 424(b) but excepting post-effective
amendments, supplements, and stickers relating solely to pricing, if any and
incorporation of document(s) by reference into the Registration Statement or the
Prospectus) and relating to common shares pursuant to the terms of the
Agreement; (ii) the Company will afford the Agent a reasonable opportunity to
comment on any such proposed post-effective amendment, sticker or supplement;
and (iii) the Company will advise the Agent of the filing of any such
post-effective amendment, sticker or supplement.
(c) Copies of Registration Statement and Prospectus. The Company will
promptly deliver to the Agent a fully executed copy of the Registration
Statement as originally filed including documents incorporated by reference and
of all amendments thereto, heretofore or hereafter made, including any
post-effective amendment thereto (in each case including all exhibits filed
therewith not previously furnished), including signed copies of each consent and
certificate included therein or filed as an exhibit thereto, and will deliver to
the Agent as many conformed copies of the foregoing (excluding the exhibits) as
the Agent may reasonably request. The Company will deliver to the Agent from
time to time during the period when the Prospectus is required to be delivered
under the Securities Act, such number of copies of the Prospectus (including any
amendments or supplements thereto), as the Agent may reasonably request for the
purposes contemplated by the Securities Act and the Regulations thereunder. The
provisions of this subsection(c) shall not apply to any post-effective
amendment, prospectus or amendment or supplement thereto relating to any sale of
Common Shares other than pursuant to the Agreement.
(d) Compliance with the Securities Act. During the period when the
Prospectus is required to be delivered under the Securities Act, the Company
will comply so far as it is able, and at its own expense, with all requirements
imposed upon it by the Securities Act and by the Regulations thereunder, so far
as necessary to permit the continuance of sales of or dealing in the Shares
during such period in accordance with the provisions hereof and the Prospectus.
(e) Changes of Material Fact. If the Company determines that any event
relating to or affecting the Company shall occur as a result of which it is
necessary to amend or supplement the Prospectus (as it may be amended or
supplemented at such time) in order to make the Prospectus (as it may be amended
or supplemented at such time) not misleading in the light of the circumstances
existing at the time it is delivered to a purchaser, the Company will forthwith
(i) notify the Agent to suspend solicitations of offers to purchase, and offers
for the sale of, the Shares (and, if so notified by the Company, the
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Agent shall
forthwith suspend such solicitations and offers and cease using the Prospectus
as supplemented or amended) and (ii) prepare and furnish to the Agent, without
expense to the Agent, a reasonable number of copies of an amendment or
amendments or a supplement or supplements to the Prospectus (as it may be
amended or supplemented at such time) that will amend or supplement the
Prospectus (as it may be amended or supplemented at such time) so that as
amended or supplemented it will not include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing at the time the Prospectus
(as so amended or supplemented) is delivered to a purchaser, not misleading. For
the purpose of this Section 6(e) the Company will furnish such information as
the Agent may from time to time reasonably request.
(f) Earnings Statement. Not later than 45 days after the end of the
12-month period beginning at the end of the fiscal quarter of the Company in
which the Commencement Date occurs, the Company will make generally available to
its security holders an earnings statement (which need not be audited) covering
such 12-month period which will satisfy the provisions of Section 11(a) of the
Act.
(g) Blue Sky Qualification. During the period when the Prospectus is
required to be delivered under the Act, the Company will use its best efforts to
qualify the Shares for offer and sale under the blue sky laws of such
jurisdictions as the Agent may reasonably designate, and will file and make in
each year such statements or reports as are or may be reasonably required by the
laws of such jurisdictions; provided, however, that the Company shall not be
required to qualify as a foreign corporation or dealer in securities or to file
any consents to service of process under the laws of any jurisdiction.
(h) Payment of Expenses. Whether or not the transactions contemplated
hereunder are consummated or this Agreement or any applicable Terms Agreement is
terminated, the Company will pay all expenses incident to the performance of its
obligations under this Agreement or such Terms Agreement, including (i) the
preparation, printing and filing of this Agreement, such Terms Agreement, the
Registration Statement as originally filed and any amendments or supplements
thereto, the preliminary prospectuses filed as a part thereof, the Prospectus
and any amendments and supplements thereto and any documents incorporated by
reference therein and, in each case, the exhibits thereto, in each case in
quantities as required by the Agent under this Agreement, (ii) the issue and
delivery of the Shares as provided in Section 4 hereof, (iii) the fees and
expenses of the accountants, (iv) the expenses in connection with the
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qualification of the Shares under securities laws in accordance with the
provisions of Section 6(g) hereof, including filing fees and the fees and
disbursements of Counsel for the Agent in connection therewith and in connection
with the preparation of any Blue Sky Survey, (v) the reasonable fees and
expenses of Counsel for the Agent, (vi) the commissions and amounts payable in
accordance with Section 3(c) hereof and (vii) any advertising and other
out-of-pocket expenses of the Agent incurred with the approval of the Company.
If this Agreement is terminated in accordance with the provisions of Section 7
or 12 hereof, the Company shall pay for reasonable fees and disbursements of
Counsel for the Agent. The Company shall not in any event be liable to the Agent
for damages on account of the loss of anticipated profits.
7. Conditions of Agent's Obligations. The obligation of the Agent to
solicit offers to purchase the Shares as agent of the Company, the obligation of
any purchaser of Shares sold through the Agent as agent and the obligation of
the Agent to purchase Shares pursuant to any Terms Agreement shall be subject at
10:00 A.M., New York City time, on _____________, 2001, or at such later time
and date as the Agent and the Company may agree upon (the "Commencement Date"),
and at all times thereafter, to the accuracy in all material respects of the
representations and warranties on the part of the Company herein contained and
to the accuracy of the statements of the Company's officers made in any
certificate furnished pursuant to the provisions hereof, to the performance and
observance by the Company of all covenants and agreements herein contained and
to the following additional conditions precedent:
(a) Filing of Prospectus with Commission; No Stop Order; Regulatory
Approvals. The Prospectus and any amendments or supplements thereto, shall have
been filed with, or transmitted for filing to, the Commission in accordance with
Rule 424(b) of the Regulations under the Securities Act; no stop order with
respect to the effectiveness of the Registration Statement shall have been
issued under the Securities Act by the Commission and no proceedings therefor
shall have been instituted or, to the knowledge of the Company or the Agent
shall be contemplated by the Commission.
(b) Opinion of Counsel of the Company. On the Commencement Date and, if
specified in any Terms Agreement, on the Settlement Date therefor, the Agent
shall have received the favorable opinion dated as of the Commencement Date or
such Settlement Date, as the case may be, of legal counsel for the Company, in
form and substance satisfactory to Counsel for the Agent, to the effect that:
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(i) The Company, Baltimore Gas and Electric Company, ("BGE"),
Constellation Enterprises, Inc. ("CEI"), and Constellation Nuclear, LLC
have been duly incorporated and are validly existing as corporations or
limited liability companies, as the case may be, in good standing under
the laws of the State of Maryland, with power and authority (corporate
and other) to own their respective properties and conduct their
respective businesses as described in the Prospectus; the Company owns
all of the outstanding shares of common stock of BGE and CEI and all of
the membership interests of Constellation Nuclear, LLC; and the Company
is duly qualified to do business as a foreign corporation in good
standing in all jurisdictions in which the conduct of its business or
the ownership of its properties requires such qualification and the
failure to do so would have a material and adverse impact on its
financial condition;
(ii) the Shares have been duly authorized and will, upon
issuance and delivery thereof in compliance with this Agreement and
against payment therefor pursuant to this Agreement, be duly authorized
and issued, fully paid and non-assessable shares and the issuance of
the Shares is not subject to preemptive rights;
(iii) the Shares conform as to legal matters with the
statements concerning them in the Registration Statement and the
Prospectus under the caption "DESCRIPTION OF COMMON STOCK";
(iv) this Agreement or such Terms Agreement, as the
case may be, has been duly authorized, executed and delivered by the
Company;
(v) such counsel knows of no approval of any regulatory
authority which is legally required for the valid offering, issuance,
sale and delivery of the Shares by the Company under this Agreement
(except that such opinion need not pass upon the requirements of state
securities acts);
(vi) the Registration Statement has become effective under the
Securities Act, and, to the best of such counsel's knowledge, no stop
order suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose have been instituted or
are pending or contemplated under the Securities Act. The Registration
Statement (as of its effective date) and the Prospectus (as of the date
of this Agreement), and any amendments or supplements thereto, as of
their respective effective or issue dates, appeared to comply as to
form in all material respects with the requirements of Form S-3 under
the
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Securities Act and the Regulations of the Commission thereunder.
Such counsel has no reason to believe that either the Registration
Statement or the Prospectus, or any such amendment or supplement, as of
such respective dates, contained any untrue statement of a material
fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading. The
descriptions in the Registration Statement and Prospectus of statutes,
legal and governmental proceedings and contracts and other documents
are accurate and fairly present the information required to be shown.
Such counsel does not know of any legal or governmental proceedings
required to be described in the Prospectus which are not described as
required, nor of any contracts or documents of a character required to
be described in the Registration Statement or Prospectus or to be filed
as exhibits to the Registration Statement which are not described or
filed as required. It is understood that such counsel need express no
opinion as to the financial statements or other financial and
statistical information contained in the Registration Statement or the
Prospectus; and
(vii) the issuance, sale and delivery of the Shares as
contemplated by this Agreement are not subject to the approval of the
Commission under the provisions of the Public Utility Holding Company
Act of 1935, as amended (the "1935 Act").
In rendering the above opinions, counsel for the Company may rely, as to matters
of fact, to the extent deemed proper, on certificates of responsible officers of
the Company and public officials. References to the Prospectus in this Section
7(b) include any amendments or supplements thereto at the date such opinion is
rendered.
(c) Opinion of Counsel for the Agent. On the Commencement Date and, if
specified in any Terms Agreement, the Settlement Date therefor, the Agent shall
have received the favorable opinion dated as of the Commencement Date or such
Settlement Date, as the case may be, of Counsel for the Agent with respect to
the matters set forth in subheadings (iii), (iv), (v) and, the second sentence
of (vi) of paragraph (b) of this Section 7, and with respect to such other
matters as the Agent may reasonably require. In rendering such opinion, ▇▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ may rely, as to the incorporation of the Company, all other
matters governed by the laws of the State of Maryland and the applicability of
the 1935 Act, upon the opinion of counsel for the Company referred to above.
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In addition, such counsel shall state that it has participated in
conferences with officers and other representatives of the Company, counsel for
the Company, representatives of the independent public accountants of the
Company and representatives of the Agent at which conferences the contents of
the Registration Statement and the Prospectus and related matters were
discussed; and, although such counsel is not passing upon and does not assume
any responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement and Prospectus (except as to the matters
referred to in their opinion rendered pursuant to clause (iii) of paragraph (b)
of this Section 7), on the basis of the foregoing (relying as to materiality to
a large extent upon the opinions of officers, counsel and other representatives
of the Company), no facts have come to the attention of such counsel which lead
such counsel to believe that either the Registration Statement, as of its
effective date, or the Prospectus, as of the date of this Agreement, and any
amendments or supplements thereto, as of their respective effective or issue
dates, contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make such statements
therein, in light of the circumstances under which they were made, not
misleading (it being understood that such counsel need make no comment with
respect to the financial statements or other financial and statistical data
included or incorporated by reference in the Registration Statement or
Prospectus).
(d) Comfort Letter. On the Commencement Date and, if specified in any
Terms Agreement, the Settlement Date therefor, a letter dated as of the
Commencement Date or such Settlement Date, as the case may be, from
PricewaterhouseCoopers LLP, confirming that they are independent public
accountants within the meaning of the Securities Act and the Regulations
thereunder with respect to the Company and stating in effect that:
(i) In their opinion, the consolidated financial statements
and supporting schedules audited by them which are included in the
Company's Form 10-K, which is incorporated by reference in the
Registration Statement comply in form in all material respects with the
applicable accounting requirements of the Securities Act and the
Regulations thereunder and the Exchange Act and the Regulations
thereunder;
(ii) On the basis of procedures specified in such letter (but
not an audit in accordance with generally accepted auditing standards),
including reading the minutes of meetings of the shareholders, the
Board of Directors and the Executive Committee of the Company since the
end of the
13
year covered by the Form 10-K as set forth in the minute
books through a specified date not more than five days prior to the
Commencement Date, performing the procedures specified in Statement on
Auditing Standards No. 71, Interim Financial Information, on the
unaudited interim consolidated financial statements of the Company
incorporated by reference in the Registration Statement, if any, and
reading the latest available unaudited interim consolidated financial
statements of the Company, and making inquiries of certain officials of
the Company who have responsibility for financial and accounting
matters as to whether the latest available financial statements not
incorporated by reference in the Registration Statement are prepared on
a basis substantially consistent with that of the audited consolidated
financial statements incorporated in the Registration Statement,
nothing has come to their attention that has caused them to believe
that (1) any unaudited consolidated financial statements incorporated
by reference in the Registration Statement do not comply in form in all
material respects with the applicable requirements of the Securities
Act and the Regulations thereunder and the Exchange Act and the
Exchange Act Regulations thereunder or any material modifications
should be made to those unaudited consolidated financial statements for
them to be in conformity with generally accepted accounting principles;
(2) at the date of the latest available balance sheet not incorporated
by reference in the Registration Statement there was any change in the
capital stock, change in long-term debt or decrease in consolidated net
assets, the ratio of earnings to fixed charges (measured on the most
recent twelve-month period) 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, or in earnings per
share of common stock except in all instances of changes or decreases
that the Registration Statement discloses have occurred or may occur,
or which are described in such letter; or (3) at a specified date not
more than five days prior to the Commencement Date, there was any
change in the capital stock or long-term debt of the Company, the ratio
of earnings to fixed charges (measured on the most recent twelve-month
period), [or, at such date, there was any decrease in the net assets of
the Company] as compared with amounts shown in the latest balance sheet
incorporated by reference in the Registration Statement, [or
14
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 or net income] except in all cases
for instances of changes or decreases that the Registration Statement
discloses have occurred or may occur, or which are described in such
letter;
(iii) Certain specified procedures have been applied to
certain financial or other statistical information (to the extent such
information was obtained from the general accounting records of the
Company) set forth or incorporated by reference in the Registration
Statement and that such procedures have not revealed any disagreement
between the financial and statistical information so set forth or
incorporated and the underlying general accounting records of the
Company, except as described in such letter; and
(iv) shall cover such other matters as the Agent shall
reasonably request.
(e) Certificate as to No Material Adverse Change, Etc. On the
Commencement Date and on each Settlement Date in respect of a Terms Agreement,
there shall not have been, since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as may otherwise
be stated therein or contemplated thereby, any material adverse change in the
financial position or in the financial results of operations of the Company, and
the Agent shall have received a certificate of the Company signed by the
Chairman of the Board, and the Chief Executive Officer, the Vice Chairman, a
Co-President, or any Vice President of the Company reasonably satisfactory to
the Agent, dated as of the Commencement Date or, if specified in such Terms
Agreement, the Settlement Date therefor, as the case may be, to the effect that
to the best of their knowledge after reasonable investigation, and relying on
opinions of counsel to the extent that legal matters are involved, (i) there has
been no such material adverse change, (ii) the representations and warranties
contained in this Agreement are true and correct in all material respects as of
the Commencement Date or such Settlement Date, as the case may be, (iii) the
Company has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied under this Agreement or such Terms Agreement,
as the case may be, on or prior to the Commencement Date or such Settlement
Date, as the case may be, and (iv) no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings for that purpose
have been initiated or threatened by the Commission.
15
(f) Other Documents. On the Commencement Date, and on each Settlement
Date in respect of a Terms Agreement, Counsel for the Agent shall have been
furnished with such documents and opinions as they may reasonably require for
the purpose of enabling them to pass upon the issuance and sale of the Shares as
herein contemplated and related proceedings, or in order to evidence the
accuracy or completeness of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained, and all proceedings
taken by the Company in connection with the sale of the Shares as herein
contemplated shall be satisfactory in form and substance to the Agent and
Counsel for the Agent.
(g) The Exchanges shall have approved for listing upon official
notice of issuance, the Shares.
In case any of the conditions specified above in this Section 7 shall
not have been fulfilled, this Agreement or any applicable Terms Agreement may be
terminated by the Agent upon mailing or delivering written notice thereof to the
Company. Any such termination shall be without liability of either party to the
other party except as otherwise provided in Section 6(h) hereof and except for
any liability under Section 10 hereof.
8. Suspension of Offers and Solicitations. At any time and from time to
time after the Commencement Date (except any such time that the Agent owns any
Shares purchased as principal that are held for resale to others in accordance
with the terms of this Agreement), the Company may in its sole discretion orally
instruct the Agent to suspend solicitations of offers to purchase, and offers
for the sale of, the Shares as provided herein and in the Procedures. If at any
such time, or at any time that the Company has otherwise notified the Agent to
suspend such solicitations and offers under this Agreement, there shall be any
sales of Shares by the Company not yet settled outstanding, the Company will
promptly advise the Agent whether such sales may be settled and whether the
Prospectus as then in effect may be delivered in connection with the settlement
of such sales. If the Company determines that such sales may not be settled or
that such Prospectus may not be so delivered, the Agent will use its best
efforts to arrange for the cancellation of such sales, but the Company shall
have the sole responsibility for, and shall hold the Agent harmless from, any
losses, claims, damages or liabilities (and expenses in connection therewith)
that may result from the inability to make settlement of such sales.
16
9. Additional Representations and Warranties and Agreements of the
Company. The Company represents and warrants and agrees that:
(a) Affirmation of Representations and Warranties. Each authorization
by the Company to the Agent to solicit offers to purchase the Shares as provided
in the Procedures shall be deemed to be an affirmation that the representations
and warranties of the Company contained in this Agreement are true and correct
at the time of such authorization, and an undertaking that such representations
and warranties will be true and correct at the time of delivery of and payment
for Shares sold pursuant to such authorization as provided in Section 4 hereof,
in each case as though made at and as of each such time (except that such
representations and warranties shall be deemed to relate to the Registration
Statement and the Prospectus as amended or supplemented to each such time).
(b) From the time solicitation regarding the sale of the Shares is begun
until all of the Shares have been sold, each time the Company (i) amends or
supplements the Registration Statement or the Prospectus (other than in
reference solely to prices of Shares) by means of a post-effective amendment,
sticker, or supplement but not by means of incorporation of document(s) by
reference into the Registration Statement or the Prospectus; (ii) files an
annual report on Form 10-K under the Exchange Act; (iii) files its quarterly
reports on Form 10-Q under the Exchange Act; and (iv) files a report on Form 8-K
under the Exchange Act (the date of filing each of the aforementioned documents
is referred to as a "Representation Date"); the Company shall furnish the Agent
(but in the case of (iv) above only if requested by the Agent) with a
certificate of the Chairman of the Board, the Chief Executive Officer, the Vice
Chairman, President or any Vice President and a principal financial or
accounting officer of the Company, in form satisfactory to the Agent, to the
effect that on the Representation Date, to the best of their knowledge after
reasonable investigation and relying upon opinions of counsel to the extent
legal matters are involved, (i) the representations and warranties of the
Company in this Agreement are true and correct in all material respects; (ii)
the Company has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied hereunder at or prior to the Representation
Date; (iii) no stop order suspending the effectiveness of the Registration
Statement or of any part thereof has been issued and no proceedings for that
purpose have been instituted or are contemplated by the Commission; and (iv)
subsequent to the date of the most recent financial statements set forth or
incorporated by reference in the Prospectus, there has been no material adverse
change in the financial position or in the financial results of operations of
the Company, except as
17
set forth in or contemplated by the Prospectus or as
described in such certificate.
(c) From the time solicitation regarding the sale of the Shares is begun
until all of the Shares have been sold, at each Representation Date referred to
in Section 9(b) (i) or (ii) and, only if requested by the Agent, at each
Representation Date referred to in Section 9(b) (iii) or (iv), the Company shall
concurrently furnish the Agent with a written opinion or opinions of counsel for
the Company, dated the Representation Date or the date of such filing, in form
satisfactory to the Agent, to the effect set forth in Section 7(b) hereof, but
modified, as necessary, to relate to the Registration Statement and the
Prospectus as then amended or supplemented; provided, however, that in lieu of
such opinion, counsel may furnish the Agent with a letter to the effect that the
Agent may rely on a prior opinion delivered under Section 7(b) or this Section
9(c) to the same extent as if it were dated the date of such letter (except that
statements in such prior opinion shall be deemed to relate to the Registration
Statement and the Prospectus as amended or supplemented at such Representation
Date).
(d) From the time solicitation regarding the sale of the Shares is begun
until all of the Shares have been sold, at each Representation Date referred to
in Section 9(b) (i) or (ii) and, only if requested by the Agent, at each
Representation Date referred to in Section 9(b) (iii) or (iv), but in each case
only if such documents referred to in Section 9(b) include additional financial
information, the Company shall cause PricewaterhouseCoopers LLP concurrently to
furnish the Agent with a letter, addressed jointly to the Company and the Agent
and dated the Representation Date or the date of such filing, in form and
substance satisfactory to the Agent, to the effect set forth in Section 7(d)
hereof but modified to relate to the Registration Statement and the Prospectus
as amended or supplemented at such Representation Date, with such changes as may
be necessary to reflect changes in the financial statements and other
information derived from the accounting records of the Company; provided,
however, that if the Registration Statement or the Prospectus is amended or
supplemented solely to include financial information as of and for a fiscal
quarter, 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 Agent, should be covered by
such letter, in which event such letter shall also cover such other information
and procedures as shall be requested by the Agent.
18
10. Indemnification. (a) Indemnification of the Agent. The
Company will indemnify and hold harmless the Agent and each person, if
any, who controls the Agent within the meaning of Section 15 of the
Securities Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement or documents incorporated by reference therein
(or any amendment thereto), of the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary
to make the statements therein not misleading or arising out of any
untrue statement or alleged untrue statement of a material fact
contained in any related preliminary prospectus, the Prospectus (or any
amendment or supplement thereto) or the documents incorporated by
reference therein, or the omission or alleged omission therefrom of a
material fact necessary in order to make the statement therein, in the
light of the circumstances under which they were made, not misleading,
unless such untrue statement or omission or such alleged untrue
statement or omission was made in reliance upon and in conformity with
written information furnished to the Company by the Agent expressly for
use in the Registration Statement (or any amendment thereto) or such
preliminary prospectus or the Prospectus (or any amendment or
supplement thereto); provided, however, that any such indemnity with
respect to a Prospectus shall not inure to the benefit of the Agent (or
of any person controlling the Agent) on account of any losses,
liabilities, claims or damages arising from the sale of Shares to any
person if any amendments or supplements to such Prospectus shall have
been furnished to the Agent on a timely basis to permit the Agent to
send or give to such person, with or prior to the written confirmation
of such sale, a copy of such amended or supplemented Prospectus, except
the documents incorporated by reference therein, and the untrue
statement or omission of a material fact contained in such Prospectus
and giving rise to such losses, liabilities, claims or damages was
corrected in such amended or supplemented Prospectus (including the
documents incorporated by reference therein);
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, commenced or threatened or of any
claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, if such settlement is
effected with the written consent of the Company; and
19
(iii) against any and all expense whatsoever, as incurred, in
investigating, preparing or defending against any litigation, commenced
or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under clause
(i) or (ii) above.
(b) Indemnification of Company. The Agent agrees to indemnify and hold
harmless the Company, its directors, each of its officers who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the Act against any and all loss, liability, claim,
damage and expense described in the indemnity contained in Section 10(a) hereof,
as incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto) or any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with written
information furnished to the Company by the Agent expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary prospectus
or the Prospectus (or any amendment or supplement thereto).
(c) General. Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure so to notify an indemnifying
party shall not relieve it from any liability except to the extent that it has
been prejudiced in any material respect by such failure or from any liability
that it may have to such indemnified party otherwise than on account of this
indemnity agreement. In case any such action is brought against any indemnified
party, and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it may wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel satisfactory to such indemnified
party (who may, with the consent of the indemnified party, be counsel to the
indemnifying party), and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation.
(d) If recovery is not available under the foregoing indemnification
provisions of this Section 10 for any reason
20
other than as specified therein,
the parties entitled to indemnification by the terms thereof shall be entitled
to contribution to liabilities and expenses, except to the extent that
contribution is not permitted under Section 11(f) of the Act. In determining the
amount of contribution to which the respective parties are entitled, there shall
be considered the relative benefits received by each party from the offering of
the Shares (taking into account the portion of the proceeds of the offering
realized by each), the parties' relative knowledge and access to information
concerning the matter with respect to which the claim was asserted, the
opportunity to correct and prevent any statement or omission, and any other
equitable considerations appropriate under the circumstances. The Company and
the Agent and such controlling persons agree that it would not be equitable if
the amount of such contribution were determined by pro rata or per capita
allocation (even if the Agent and such controlling persons were treated as one
entity for such purpose). Notwithstanding the provisions of this subsection (d),
no Agent or controlling person shall be required to make contribution hereunder
which in the aggregate exceeds the total public offering price of the Shares
distributed to the public through it pursuant to this Agreement or upon resale
of Shares purchased by it from the Company, less the aggregate amount of any
damages which the Agent or such controlling person has otherwise been required
to pay in respect to the same claim or substantially similar claim. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
(e) Confirmation of Certain Statements. The Agent confirms that the
statements in the last paragraph under the caption "Plan of Distribution" in the
Prospectus are correct and were furnished in writing to the Company by the Agent
for inclusion in the Prospectus.
11. Survival of Representations and Warranties and Agreements. The
indemnity and other agreements of the Company and the Agent contained in
Sections 6(h) and 10 hereof and the representations, warranties and other
statements of the Company set forth in this Agreement or made by the Company
pursuant to this Agreement shall remain in full force and effect, regardless of
(a) any termination of this Agreement or any Terms Agreement, (b) any
investigation made by or on behalf of the Agent or any of its controlling
persons or by or on behalf of the Company or any of its officers, directors or
controlling persons and (c) acceptance of delivery of and payment for Shares
sold hereunder.
12. Termination. (a) Termination of this Agreement.This
Agreement may be terminated at any time by either party hereto upon the
giving of written notice of such termination to the other party
21
hereto effective at the close of business on the date such notice is received.
(b) Termination of a Terms Agreement. The Agent may, by notice to the
Company, terminate a Terms Agreement if, at any time after the date of this
Agreement and at or prior to the Settlement Date in respect thereof, (i) there
shall have occurred any change or any development involving a prospective change
not contemplated by the Prospectus in or affecting particularly the business or
properties of the Company which, in the reasonable judgment of the Agent,
materially impairs the investment quality of the Shares, or (ii) trading in
securities generally on the New York Stock Exchange shall have been suspended or
limited, other than a temporary suspension in trading to provide for an orderly
market, or minimum prices have been established on such Exchange, a banking
moratorium shall have been declared either by New York State or Federal
authorities or there shall have occurred an outbreak or material escalation of
hostilities or other calamity or crisis, the effect of which on the financial
markets of the United States is such as to make it, in the Agent's judgment,
impracticable to market the Shares.
(c) General. In the event of any termination under Section 12(a) or
12(b) hereof, neither party will have any liability to the other party hereto,
except that (i) the Agent shall be entitled to any commission earned in
accordance with Section 3(c) hereof, (ii) if at the time of termination (A) the
Agent shall own any Shares purchased pursuant to a Terms Agreement with the
intention of reselling them or (B) an offer to purchase any of the Shares has
been accepted by the Company but the time of delivery to the purchaser or his
agent of the Shares relating thereto has not occurred, the covenants set forth
in Sections 6 and 9 hereof shall remain in effect until such Shares have been
resold or delivered, as the case may be and (iii) the covenants set forth in
Sections 6(f) and 6(h) hereof, the indemnity and contribution agreement set
forth in Section 10 hereof and the provisions of Sections 11 and 16 hereof shall
remain in effect.
13. Notices. Except as otherwise specifically provided herein or
in the Procedures, all statements, instructions, requests, notices and
advances hereunder and under any applicable Terms Agreement shall be in
writing (or by telephone or telefax if subsequently confirmed in writing),
and shall be deemed to have been duly given if mailed, delivered or
transmitted by any standard form of telecommunication to (a) in the case of
the Agent, [Agent Name, address, contact person]_______________________with,
in the case of instructions given by the Company pursuant to Section 2(a) or 8
hereof, and
22
(b) in the case of the Company, Constellation Energy Group,
Inc., ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇, Attention:
▇. ▇. ▇▇▇▇▇▇, ▇▇., Treasurer, Telefax No.: ▇▇▇-▇▇▇-▇▇▇▇.
14. Parties. This Agreement and any applicable Terms Agreement shall
inure solely to the benefit of the Company and the Agent and, to the extent
provided in Sections 10 and 11 hereof, to any officer or director of the Company
or to any person who controls the Company or the Agent, and their respective
successors. No other person, partnership, association or corporation shall
acquire or have any right under or by virtue of this Agreement or any Terms
Agreement. The term "successors" shall not include any purchaser of any Shares
merely because of such purchase. The respective rights and obligations of the
Company and the Agent hereunder may not be assigned, transferred or contracted
to another.
15. Arm's Length Dealing. This Agreement and any applicable Terms
Agreement have been negotiated at arm's length between the Agent and the
Company, which regularly issues and sells securities in the public markets
through investment bankers, and the relationship created hereby or thereby is
not intended to be one of customer and member as the term "customer" is used in
the provisions pertaining to the protection of customers of the articles,
bylaws, rules, regulations and policies of the NYSE or the National Association
of Securities Dealers, Inc.
16. Governing Law. This Agreement and any Terms Agreement
shall be governed by and construed in accordance with the laws of the State of
New York without regard to principles of conflict of law.
17. Captions. Captions to Sections of this Agreement
are included for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose or in any way affect the
meaning of any provisions of this Agreement.
23
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument along with all counterparts will become a binding agreement
between the Agent and the Company in accordance with its terms.
Very truly yours,
CONSTELLATION ENERGY GROUP, INC.
By
----------------------------
Title: Vice President
Confirmed, accepted and agreed, as of the date first above written:
[Agent]
By
-------------------------
Title:
24
EXHIBIT A
CONSTELLATION ENERGY GROUP, INC.
_____________ Shares Common Stock
Continuous Offering Program
Volume and Pricing Parameters for Offers and Solicitations
[Date]
[Agent Name and Address]
Ladies and Gentlemen:
The Company hereby instructs you to commence solicitations of offers to
purchase, and offers for the sale of, up to an additional ___________ shares of
the Company's Common Stock, in accordance with the terms of the Sales Agency
Agreement, at prices not less than $_____ per share, or such higher prices as we
verbally communicate to you.
In addition, the sales price must be equal to or greater than the prior
day's closing price on the New York Stock Exchange less $0.50.
Including the above mentioned ________ shares, __________ shares remain
to be issued under the Continuous Offering Program.
The Company reserves the right, in its sole discretion, to instruct
you, at any time after the date hereof to suspend such solicitations and sales
for any period of time or permanently in accordance with the provisions of the
Sales Agency Agreement.
CONSTELLATION ENERGY GROUP, INC.
By:
-------------------------------------
Vice President
1
EXHIBIT B
CONSTELLATION ENERGY GROUP, INC.
[ ] Shares of Common Stock
Terms Agreement
[Date]
[Agent Name and Address]
Ladies and Gentlemen:
Pursuant to the terms and conditions set forth in the Sales Agency
Agreement, dated______________, 2001, between Constellation Energy Group, Inc.
(the "Company") and you (the "Agent") and the additional terms set forth below,
you are to purchase _______ shares of the Company's Common Stock (the "Shares").
Purchase Price per Share:
Public Offering Price per Share:
Settlement Date and Time:
Form of Settlement:
Additional Terms:
[If agreed to by you and the Company prior to the execution hereof: the Company
will not, between the date hereof and the Settlement Date and Time set forth
above, without your prior consent, offer or sell, or enter into any agreement to
sell, any of its Common Stock, except pursuant to the Company's Dividend
Reinvestment and Stock Purchase Plan and Employee Savings Plan.]
[Indicate whether the Company authorizes you to utilize a selling or dealer
group in connection with the resale of the Shares as required by Section 2(b) of
the Sales Agency Agreement.]
[Indicate whether the legal opinion, accountant's letter and/or the officer's
certificate described in Sections 7(b), 7(c), 7(d) and 7(e), respectively, of
the Sales Agency Agreement will or will not be required.]
CONSTELLATION ENERGY GROUP, INC.
By______________________________
Title:
Confirmed, accepted, and agreed, as of the date first above written:
[Agent Name]
By_____________________________________
Title:
2
EXHIBIT C
CONSTELLATION ENERGY GROUP, INC.
Common Stock Procedures
Pursuant to the Sales Agency Agreement dated as of ________ 2001 (the
"Sales Agency Agreement") between Constellation Energy Group, Inc. (the
"Company") and _____________________, as exclusive sales agent (the "Agent"), up
to __________ shares of the Company's Common Stock are being offered and sold.
Capitalized terms used herein and not otherwise defined herein shall have the
meanings ascribed to them in the Sales Agency Agreement.
The Shares have been registered with the Commission under the
Securities Act. ▇▇▇▇▇▇ Trust and Savings Bank acts as transfer agent and
registrar for the Common Stock (together with any successor transfer agent or
registrar, the "Transfer Agent").
Administrative procedures and specific terms of the offering are
explained below. Administrative responsibilities, accountable document control
and record-keeping responsibilities will be performed by the Company's Finance
Department. The Company will advise the Agent in writing of those persons
handling administrative responsibilities with whom the Agent is to communicate
regarding offers to purchase Shares and the details of their delivery.
I. Acceptance of Orders; Authorized Persons:
The Company will have the sole right
to give orders to sell, and accept
offers to purchase, Shares.
Instructions regarding offers and
sales of Shares will be given for the
Company by ▇. ▇. ▇▇▇▇▇,
▇. ▇. ▇▇▇▇▇▇, ▇▇., or by another
specifically named authorized
representative of the Company.
Such instructions will be accepted at the
Agent by _____________, or by another
specifically named authorized
representative of the Agent. Offers and
sales of the Shares will be made under
volume and price parameters and with such
commissions as agreed upon between the
Company and the Agent. Offers not
complying with such terms will be
communicated telephonically by the Agent
to the authorized representative of the
Company, including specific prices on
"block" transactions. The Company may
reject any offer to purchase Shares in
whole or in part. The Agent may reject
any
1
offer to purchase Shares in whole or
in part in the reasonable exercise of its
discretion.
II. Settlement: Settlement will occur on the third
Business Day after the Trade Date.
Delivery of Shares will take place
through the book-entry processing of
the Depository Trust Company ("DTC")
DWAC system (deposit withdrawal at
custodian). Another time, place or
method of settlement (e.g., same day for
"cash" sales) may be specified if
mutually agreed upon in writing by
authorized representatives of the
Company and the Agent.
III.Denominations: Since delivery of Shares will take place
through DWAC, a single certificate
evidencing the Shares for each day's
transactions will be registered in the
name of DTC or a nominee of DTC. The
Transfer Agent will hold all
certificates.
With regard to Shares sold by the Company
through the Agent, on any day, the Agent
will advise the Company by telephone of
the following key details of
any transactions that take place by the
end of such day:
IV. Details for Settlement:
1. The number of Shares sold.
2. The prices at which Shares were
sold.
3. The commissions payable to the Agent
by the Company.
4. Other applicable charges, such
as transfer taxes and fees
of the Commission.
5. The net proceeds payable to the
Company.
6. The Settlement Date or Dates.
The Agent will confirm the foregoing key
details by facsimile transmission within one
Business Day after the Trade Date (See Part
V below).
After receiving the key details by facsimile
transmission from the Agent, the Company
will promptly notify the Transfer Agent in
writing of the number of Shares sold and
instruct the Transfer Agent, on the
Settlement Date, to
2
accept the DWAC
transaction for the settlement of the Shares
sold.
On the Settlement Date, the following events
will take place:
1. Within the Company's brokerage
account at the Agent, a trade
will settle representing the
Shares sold and the net
proceeds payable to the Company.
2. The Agent will initiate a DWAC
transaction to credit the Shares
sold to its DTC participant account.
3. The Transfer Agent will subsequently
accept the DWAC transaction for the
appropriate number of such Shares,
per written instructions from the
Company as noted above.
4. Simultaneously with the Shares being
credited to the Agent's DTC
participant account, the Agent will
release from the Company's brokerage
account at the Agent the net
proceeds from the sale of the
Shares.
5. The Agent will wire transfer the
net proceeds as the Company may
direct.
The Company will notify the NYSE quarterly
of the number of outstanding shares and give
the NYSE any other notice of the issue of
Shares as may be required by the NYSE.
V. Confirmation: For each order to purchase Shares
solicited by the Agent and
accepted by or on behalf of the
Company, the Agent will issue a
written confirmation by facsimile
transmission within one Business
Day after the Trade Date to
Constellation Energy Group, Inc., ▇▇▇
▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: ▇. ▇. ▇▇▇▇▇▇, ▇▇.
Treasurer containing the key details
listed above.
VI. Delivery of The Company will deliver (through
DWAC) the Shares sold to the
Shares: Agent only against payment therefor
as specified in Section 4 of
the Sales Agency Agreement and as set
forth in "Details for Settlement" under
Part IV of these Procedures. See
"Delivery of Prospectus" under Part IX of
these Procedures as to the requirement to
3
deliver a current Prospectus with sale
transactions.
VII. Failure to Pay: Failure to make payment when due will be
subject to the regulations and rules of
the NYSE, as applicable, and the
provisions of Section
2(a) of the Sales Agency Agreement.
VIII.Suspension of The Company may instruct the
Agent to commence or suspend
Solicitation, solicitations of offers to purchase,
and offers for the sale of,
Amendment or Shares at any time in accordance with
the Sales Agency Agreement.
Supplement: Upon receipt of such instructions to
suspend, the Agent will
immediately suspend such activities until
such time as the Company has advised the
Agent that such activities may be
resumed. If the Company decides to amend
or supplement the Registration Statement
or the Prospectus, it will promptly
advise the Agent and will furnish the
Agent with the proposed amendment or
supplement as provided in the Sales
Agency Agreement. In the event that at
the time the Agent suspends such
activities there shall be any sales not
yet settled outstanding, the Company
will, consistent with its obligations
under the Sales Agency Agreement,
promptly advise the Agent whether such
sales may be settled and whether copies
of the Prospectus as in effect at the
time of the suspension may be delivered
in connection with the settlement of such
sales.
Subject to the preceding paragraph, the
Agent shall have the right in its sole
discretion, upon notice thereof to the
Company, to commence or suspend at any
time offers to sell and solicitations of
offers to buy the Shares.
IX. Delivery of Prospectus: Prior to any auction market sales of
Shares on the NYSE, copies of
the Prospectus as most recently
amended or supplemented must be
filed with such Exchange pursuant to
Rule 153 of the Regulations
under the Act. A copy of the Prospectus
as most recently amended
or supplemented must also accompany
each written confirmation of a
sale of
4
Shares by the Agent to a
customer of the Agent, or of a
sale of Shares by the Agent as
principal, in each case otherwise
than in the auction market. As used
above, the term Prospectus
does not include any documents
incorporated by reference therein.
X. Payment of Selling The Agent will send a written
confirmation by facsimile
Commissions, Transfer transmission within one Business Day
after the Trade Date to the
Taxes and Fees of the Company with respect to each
transaction setting forth the selling
Commission: commissions, transfer taxes and fees of
the Commission payable in
connection therewith. Such amounts are
obligations of the Company and will be
"netted" against proceeds paid to the
Company on the applicable Settlement
Date.
XI. Advertising The Company will determine with the
Agent the amount of advertising
Costs: that may be appropriate in offering
the Common Stock. Advertising
expenses will be paid by the Company.
5
EXHIBIT 1 (b)
CONSTELLATION ENERGY GROUP, INC.
__________________ SHARES COMMON STOCK
(without par value)
FORM OF PURCHASE AGREEMENT
INCLUDING
FORM OF STANDARD PURCHASE PROVISIONS
FORM OF PURCHASE AGREEMENT
[Date]
Constellation Energy Group, Inc.
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Dear Sirs:
Referring to the captioned shares of Common Stock for Constellation
Energy Group, Inc. (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 __________,2001 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 number of shares of such Common Stock
(the "Firm Shares") for the price described below set forth opposite the name of
each Purchaser on Schedule A hereto. In addition, the Company has granted the
Purchasers the right to purchase, at their election, the following number of
Optional Shares, if any, pursuant to Section 1(b) of the Standard Purchase
Provisions: ________ optional shares.
The price at which the Purchased Stock shall be purchased from the
Company by the Purchasers shall be $______ per share. The Purhased Stock will be
offered by the Purchaser as set forth in the Prospectus relating to such Shares.
The Closing Date for the sale of the Firm Shares shall be ___________, 2001.
The place to which the Purchased Stock may be checked, packaged and delivered
shall be:
Notices to the Purchaser(s) 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 "Constellation
Energy Group, Inc. 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.
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
CONSTELLATION ENERGY GROUP, INC.
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.
SCHEDULE A
Name of Purchaser Amount
Total
-------------------------
$
CONSTELLATION ENERGY GROUP, INC.
STANDARD PURCHASE PROVISIONS
From time to time, Constellation Energy Group, Inc., a Maryland
corporation (the "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. (a) Introductory. The Company proposes to issue and sell from
time to time its Common Stock (without par value) ("Stock") registered under the
registration statement referred to in Section 2(a). In addition, the Company
proposes to grant the Purchasers (defined below) an election to purchase
additional shares of Stock to cover over-allotments. The Stock sold by the
Company is hereinafter called the "Firm Shares" and the additional Stock to
cover over-allotments is hereinafter called the "Optional Shares." The Firm
Shares and the Optional Shares are hereinafter referred together as the
"Purchased Stock." 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 Stock. The Purchased Stock will be sold to the Purchasers for resale
in accordance with the terms of the offering determined at the time of the sale.
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.
(b) Optional Shares. The Company grants to the Purchasers the right to
purchase, at their election, up to the number of Optional Shares set forth in
the Purchase Agreement for the sole purpose of covering over-allotments in the
sale of the Firm Shares. The purchase price for the Optional Shares shall be the
purchase price per share set forth in the Purchase Agreement for Firm Shares.
The election to purchase Optional Shares may be exercised only by written notice
from you to the Company, given within a period of thirty (30) calendar days
after the date of this Agreement. The notice shall specify (i) the aggregate
number of Optional Shares to be purchased; and (ii) the date on which such
Optional Shares are to be delivered, as agreed to by you and the Company.
To the extent that the Purchasers exercise the election to purchase
Optional Shares, the Company agrees to sell to each of the Purchasers, and each
of the Purchasers agree, severally and not jointly, to purchase from the Company
that portion of the number of Optional Shares determined by multiplying such
number of Optional Shares by a fraction, the numerator of which is the
2
number of
Firm Shares set forth opposite each Purchaser's name on Schedule A of the
Purchase Agreement and the denominator of which is the number of the Firm Shares
that all of the Purchaser's are committed to purchase hereunder (rounded to
eliminate fractional shares).
No Optional Shares shall be sold or delivered unless the Firm Shares
previously have been, or simultaneously are, sold and delivered. The right to
purchase the Optional Shares, or any portion thereof, may be terminated at any
time upon written notice by you to the Company.
2. Representations and Warranties of the Company.
The Company represents and warrants to and agrees with each Purchaser that:
(a) A registration statement on Form S-3 (No. 333-__________)
covering the Purchased Stock, 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 does not include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, except that the
foregoing does not 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(a). Delivery and Payment for the Firm Shares. The Company will
deliver the Firm Shares to you for the accounts of the Purchasers, at the
offices of the Transfer Agent/Registrar (at the place specified in the Purchase
Agreement) against payment of the purchase price by certified or official bank
check
3
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, ▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇-▇▇▇▇ at the time agreed to pursuant to
the second paragraph of the Purchase 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 Firm Shares so to be
delivered will be in registered form registered in such names and amounts as you
request in writing not later than 3:00 p.m., New York Time, on the second 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 Firm Shares
available for checking and packaging at the offices of the Transfer
Agent/Registrar (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 preceding
the Closing Date. If you request that any Firm Shares be issued in a name or
names other than that of the Purchaser agreeing to purchase such Purchased Stock
hereunder, the Company shall not be obligated to pay any transfer taxes
resulting therefrom.
3(b). Delivery and Payment for the Optional Shares. To the extent
that the Purchasers exercise their election to purchase Optional Shares, the
Company will deliver the Optional Shares to you for the accounts of the
Purchasers, at the offices of the Transfer Agent/Registrar (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, ▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇-▇▇▇▇ at the
time agreed to pursuant to Section 1(b) of 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 "Second Closing Date." The
Optional Shares so to be delivered will be in such names and amounts as you
request in writing not later than 3:00 p.m., New York Time, on the second full
business day prior to the Second 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
Optional Shares available for checking and packaging at the offices of the
Transfer Agent/Registrar (at the place specified in the Purchase Agreement)
prior to the Second 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 preceding the Second Closing Date. If you request that any
Optional Shares be issued in a name or names other than that of the Purchaser
agreeing to purchase such Purchased Stock hereunder, the Company shall not be
obligated to pay any transfer taxes resulting therefrom.
4
4. Offering by the Purchasers. The several Purchasers
propose to offer the Purchased Stock 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 Stock
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 Purchased Stock as originally filed and all pre-effective
amendments thereto (at least one of which will be signed and will
include all exhibits except those incorporated by reference to previous
filings with the Commission); (ii) each prospectus relating to the
Purchased Stock; and (iii) during the time when a
5
prospectus relating to
the Purchased Stock 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 Stock).
(e) The Company will use its best efforts to obtain the
qualification of the Purchased Stock for sale and the determination of
their eligibility for investment under the laws of such jurisdictions as
you designate and will continue such qualifications in effect so long as
required for the distribution, provided, however, that the Company shall
not be required to qualify as a foreign corporation or to file any
consent to service of process under the laws of any jurisdiction or to
comply with any other requirements deemed by the Company to be unduly
burdensome.
(f) During the period of five years after the Closing Date, the
Company will furnish to you, and upon request, to each of the other
Purchasers: (i) as soon as practicable after the end of each fiscal
year, a copy of its annual report to shareholders for such year, (ii) as
soon as available, a copy of each report or definitive proxy statement
of the Company filed with the Commission under the Exchange Act or
mailed to shareholders, and (iii) from time to time, such other
information concerning the Company as you may reasonably request.
(g) The Company will pay all expenses incident to the performance
of its obligations under this Agreement, and will reimburse the
Purchasers for any expenses (including Blue Sky fees not exceeding
$6,000 and disbursements of counsel) incurred by them in connection with
qualification of the Purchased Stock 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
expenses incurred in connection with listing the Purchased Stock 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 additional shares of
its common stock, other than the Purchased Stock, prior to 30 days after
the Closing Date (other than pursuant to employee stock plans, dividend
reinvestment plans and similar plans) without the consent of the
Purchasers.
6. Conditions of the Obligations of the Purchasers.
--------------------------------------------------------
A. Firm Shares. The obligations of the several Purchasers to purchase and pay
for the Firm Shares will be subject to the
6
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 schedule audited by them which are
included in the Company's Form 10-K ("Form 10-K"), which is
incorporated by reference in the Registration Statement comply in
form in all material respects with the applicable accounting
requirements of the Act and the 33 Act Rules and Regulations and
the Exchange Act and the Exchange Act Rules and Regulations;
(ii) On the basis of procedures specified in such letter
(but not an audit in accordance with generally accepted auditing
standards), including reading the minutes of meetings of the
shareholders, the Board of Directors and the Executive Committee
of the Company since the end of the year covered by the Form 10-K
as set forth in the minute books through a specified date not
more than five days prior to the Closing Date, performing
procedures specified in Statement on Auditing Standards No. 71,
Interim Financial Information, on the unaudited interim
consolidated financial statements of the Company incorporated by
reference in the Registration Statement, if any, and reading the
latest available unaudited interim consolidated financial
statements of the Company, and making inquiries of certain
officials of the Company who have responsibility for financial
and accounting matters as to whether the latest available
financial statements not incorporated by reference in the
Registration Statement are prepared on a basis substantially
consistent with that of the audited consolidated financial
statements incorporated in the Registration Statement, nothing
has come to their attention that has caused them to believe that
(1) any unaudited consolidated financial statements incorporated
by reference in the Registration Statement do not comply in form
in all material respects with the applicable requirements of the
Act and the 33 Act Rules and Regulations and the Exchange Act and
the Exchange Act Rules and Regulations or any material
modifications should be made to those unaudited consolidated
financial statements for them to be in conformity with generally
accepted accounting principles; (2) at the date of the latest
available balance sheet not incorporated by
7
reference in the
Registration Statement there was any change in the capital stock,
change in long-term debt or decrease in consolidated net assets,
ratio of earnings to fixed charges (measured as the most recent
twelve-month period), 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 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, decrease in the ratio of
earnings to fixed charges (measured on the most recent
twelve-month period) 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, or net income,] 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.
8
(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 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 Stock, and (ii) 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
Stock.
(d) You shall have received an opinion, dated the Closing Date,
of a counsel for the Company to the effect that:
(i) The Company, Baltimore Gas and Electric Company,
(BGE), Constellation Enterprises, Inc. (CEI), and Constellation
Nuclear LLC have been duly incorporated and are validly existing
as corporations or limited liability companies, as the case may
be, in good standing under the laws of the State of Maryland,
with power and authority (corporate and other) to own their
respective properties and conduct their respective businesses as
described in the Prospectus; the Company owns all of the
outstanding shares of common stock of BGE and CEI and all of the
membership interests of Constellation Nuclear, LLC; 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) (a) The issuance and sale of the Purchased Stock (1)
have been duly authorized by all necessary corporate action of
the Company, are fully paid and nonassessable, (2) conform to
legal matters with the statements concerning them in the
Registration Statement and Prospectus under the caption
"Description of Common Stock" and (b) there are no preemptive
rights to purchase Purchased Stock.
9
(iii) The Registration Statement has become effective
under the Act and, (a) to the best of such counsel's knowledge,
no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose
have been instituted or are pending or contemplated under the
Act; (b) the Registration Statement (as of its effective date)
and the Prospectus (as of the date of 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 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; (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.
(iv) Counsel knows of no approval of any regulatory
authority which is legally required for the valid offering,
issuance, sale and delivery of the Purchased Stock by the Company
under this Agreement (except that such opinion need not pass upon
the requirements of state securities acts);
(v) To the best of such counsel's knowledge and belief,
the consummation of the transactions contemplated in this
Agreement 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;
10
(vi) This Agreement has been duly authorized, executed
and delivered by the Company;
(vii) The issuance, sale and delivery of the Purchased
Stock 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").
(e) The Purchasers shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇, counsel for the Purchasers, an opinion dated the Closing Date, with
respect to the matters referred to in paragraph 6(d) subheadings (ii) (a) (2),
(iii)(b), (vi), and (vii) and such other matters as the Purchasers 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.
In rendering such opinion, ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ may
rely, as to the incorporation of the Company, all other matters governed by
the laws of the State of Maryland and the applicability of the 1935 Act, upon
the opinion of Counsel for the Company referred to above.
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 (ii)(a)(2) 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, in light of the circumstances under which they were made,
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.
(f) You shall have received a certificate of the Chairman of the
Board, Co-President or any Vice President and a principal
11
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 its advice of counsel to the extent that legal
matters are involved, that the representations and warranties of the Company in
this Agreement are true and correct in all material respects, that the Company
has complied with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to the Closing Date, that no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been instituted or are contemplated by the
Commission, and that, subsequent to the date of the most recent financial
statements set forth or incorporated by reference in the Prospectus, there has
been 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.
(g) The Company will furnish you with such conformed copies of such opinions,
certificates, letters and documents as you reasonably request.
(h) The New York Stock Exchange, the Chicago Stock Exchange and the Pacific
Stock Exchange shall have approved for listing, upon official notice of
issuance, the Purchased Stock.
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.
(B) Optional Shares. The obligation of the Purchasers to purchase the
Optional Shares on the Second Closing Date, shall be subject to the accuracy of
the representations and warranties 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 satisfaction
of the conditions set forth in paragraphs (b), (c), (d), (e), (f), (g), and (h)
of this Section 6 (all dated as of the Second Closing Date rather the Closing
Date)
In case any such condition shall not have been satisfied, this Agreement
may be terminated with respect to the obligations to purchase Optional Shares on
the second Closing Date by you upon notice in writing or by telecopy to 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 Firm Shares and Optional
Shares, as applicable, are subject to the following condition precedent:
12
Prior to the Closing Date or the Second Closing Date, as
applicable, 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.
If this 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 at any time prior to the Closing Date, or at
anytime prior to the Second Closing Date with respect to the Optional
Shares, without any liability on the part of the Company or any
Purchaser, except as set forth in Section 10 hereof.
8. Indemnification.
---------------
(a) The Company will indemnify and hold harmless each Purchaser
and each person, if any, who controls any Purchaser within the meaning
of the Act or Exchange Act against any losses, claims, damages or
liabilities, joint or several, to which such Purchaser or such
controlling person may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the
Registration Statement or the Prospectus, or any related preliminary
prospectus or arise out of or are based upon the omission or alleged
omission to state therein a material fact 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 Stock
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
13
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 Stock
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.
(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
14
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 Stock
(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 Stock, purchased by the Purchaser
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. No
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.
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 the Firm Shares or Optional Shares hereunder
and the aggregate number of shares of Firm Shares or Optional Shares, as the
case may be, which such defaulting Purchaser or Purchasers agreed but failed to
purchase is 10% of the total number of Firm Shares or Optional Shares, as the
case may be, to have been purchased or less, you may make arrangements
satisfactory to the Company for the purchase of such Firm Shares or Optional
Shares,
15
as the case may be, by other persons, including any of the Purchasers,
but if no such arrangements are made by the Closing Date, in connection with the
Firm Shares, or the Second Closing Date, in connection with the Optional Shares,
the non-defaulting Purchasers shall be obligated severally, in proportion to
their respective commitments hereunder, to purchase the Firm Shares or Optional
Shares, as the case may be, which such defaulting Purchasers agreed but failed
to purchase. If any Purchaser or Purchasers so default and the aggregate
principal amount of Purchased Stock 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 Firm Shares or Optional Shares,
as the case may be, 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 Stock hereunder, the Company may, by prompt written notice to
the non-defaulting Purchasers, postpone the Closing Date, in connection with the
Firm Shares, or the Second Closing Date, in connection with the Optional Shares,
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 Stock. If this Agreement is terminated pursuant to Section 6,
7 or 9 or if for any reason the purchase of the Purchased Stock 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,
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 Stock 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
16
Company, will be delivered or telecopied and confirmed to it, attention of
Treasurer at ▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
telecopier (▇▇▇) ▇▇▇-▇▇▇▇;
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. The term
"successors" shall not include any purchaser of any Purchased Stock merely
because of such purchase.
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.
