Exhibit 1(a)
BGE Capital Trust I
% Trust Originated Preferred Securities (SM), Series___
(Liquidation amount $25 per security)
_____guaranteed to the extent the Trust
has available funds by
Baltimore Gas and Electric Company
Form of Purchase Agreement
____________, 1998
[Lead Underwriter]
Other Representatives
As representatives (the Representatives)
of the several Purchasers named
in Schedule A hereto,
Dear Sirs:
BGE Capital Trust I, a Delaware statutory business trust (the
"Trust"), and Baltimore Gas and Electric Company, a Maryland corporation ("BGE
or the Company"), propose, subject to the terms and conditions stated herein,
that the Trust issue and sell to the Purchasers named in Schedule A hereto (the
"Purchasers") _____,000_____% Trust Originated Preferred Securities, Series
____(liquidation amount $25 per security), representing undivided beneficial
interests in the assets of the Trust (the "Preferred Securities"), guaranteed by
BGE as to the payment of distributions and payments upon liquidation or
redemption, and benefiting from certain additional undertakings of BGE to the
extent set forth (i) in the Guarantee Agreement between BGE and _____, as
trustee thereunder (the "Guarantee Trustee"), to be dated as of the Time of
Delivery (as defined in Section 2 hereof) (the "Guarantee"), (ii) BGE's _____%
Deferrable Interest Junior Subordinated Debentures, Series _____ (the
"Subordinated Debentures"), to be executed at the Time of Delivery, (iii) the
Indenture between BGE and ___________as trustee thereunder (the "Debenture
Trustee"), dated as of ______, 1998, to be supplemented by the First
Supplemental Indenture thereto relating to the Subordinated Debentures
(collectively the "Indenture") and (iv) the trust agreement between BGE, as
depositor, and the trustees named therein (as amended and restated from time to
time, the "Trust Agreement").
Concurrently with the issuance of the Preferred Securities and
BGE's investment in the common securities of the Trust (the "Common Securities")
representing undivided beneficial interests in the assets of the Trust, the
Trust will loan the
proceeds thereof to BGE and, to evidence such loan, BGE will issue and deliver
to the Trust the Subordinated Debentures, which will be issued under the
Indenture.
The terms "you" and "your" refer to the Representatives 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
hereto, as the case may be.
1. Representations and Warranties. Each of the Company and the
Trust, jointly and severally, represents and warrants to and agrees with each
Purchaser that:
(a) A registration statement on Form S-3 (No. 333-_____),
covering the Preferred Securities, Subordinated Debentures and Guarantee
(collectively the "Registered Securities") including a prospectus has
been filed with the Securities and Exchange Commission ("Commission")
and has become effective (such registration statement, including (i) the
prospectus included therein, dated _________, as supplemented by a
prospectus supplement dated _______in the form first filed under Rule
424(b) (such prospectus as so supplemented, including each document
incorporated by reference therein is hereinafter called the
"Prospectus") ,(ii) if applicable, the information deemed by virtue of
Rule 430A to be part of the Registration Statement at the time it was
declared effective and (iii) all documents filed as part thereof or
incorporated by reference therein, is hereinafter called the
"Registration Statement").
(b) The Registration Statement conforms and the Prospectus will
conform in all respects to the requirements of the Securities Act of
1933, as amended ("Act"), and the pertinent published rules and
regulations of the Commission thereunder ("33 Act Rules and
Regulations") and the Trust Indenture Act of 1939, as amended ("Trust
Indenture Act"), and the Registration Statement, as of its effective
date, and the Prospectus, as of its date and of the Time of Delivery, do
not and will not include any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, except that the foregoing
does not apply to statements or omissions in such document based upon
written information furnished to the Trust or the Company by any
Representative 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
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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.
(c) The Trust has conducted and will conduct its business as
described in the Prospectus, and has conducted and will conduct no
business other than the transactions contemplated by this Agreement and
described in the Prospectus; the Trust is not a party to or bound by any
agreement or instrument other than this Agreement, the Trust Agreement
and the agreements and instruments contemplated by the Trust Agreement
and described in the Prospectus; and the Trust has no liabilities or
obligations other than those arising out of the transactions
contemplated by this Agreement and the Trust Agreement and described in
the Prospectus.
2. Delivery and Payment. The Preferred Securities to be purchased
by each Purchaser hereunder will be represented by a global certificate or
certificates in book-entry form which will be deposited by or on behalf of the
Trust with The Depository Trust Company ("DTC") or its designated custodian and
registered in the name of Cede & Co., as nominee of DTC. The Trust will deliver
the Preferred Securities to ____________, for the account of each Purchaser,
against payment by or on behalf of such Purchaser of the purchase price therefor
by wire transfer of immediately available funds to the Trust, by causing DTC to
credit the Preferred Securities to the account of ____________ at DTC. The time,
date and location of such delivery and payment (the "Time of Delivery") shall be
10:00 a.m., New York time, on _______, 1998, or at such other time and date as
the Representatives, the Trust and BGE may agree upon in writing at the office
of the Trust, 00 X. Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000.
At the Time of Delivery, BGE will pay, or cause to be paid, the
compensation payable to the Purchasers under Section 3 hereof by wire transfer
of immediately available funds to _________________, on behalf of the
Purchasers.
3. Sale to the Purchasers. Subject to the terms and conditions
herein set forth, the Trust agrees to issue and sell to each of the Purchasers,
and each of the Purchasers agrees, severally and not jointly, to purchase, at a
purchase price per share of $25.00 per Preferred Security, the number of
Preferred Securities set forth opposite the name of such Purchaser in Schedule A
hereto.
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As compensation to the Purchasers for their commitments
hereunder, and in view of the fact that the proceeds of the sale of the
Preferred Securities will be used by the Trust to purchase the Subordinated
Debentures of BGE, BGE hereby agrees to pay at the Time of Delivery
to__________, for the accounts of the several Purchasers, an amount equal to
$0.____per share for the Preferred Securities, except that such commission will
be $0.____per Preferred Security sold to certain institutions.
Upon the authorization by the Representatives of the release of
the Preferred Securities, the several Purchasers propose to offer the Preferred
Securities for sale upon the terms and conditions set forth in the Prospectus.
4. Agreement of the Trust and the Company. Each of the Trust and
the Company, jointly and severally, agrees with the several Purchasers that:
(a) It will promptly cause the Prospectus to be filed with the
Commission (pursuant to Rule 424 under the Act within the time
prescribed under Rule 424(b) or Rule 430(A)(3), as the case may be;
(b) For as long as a prospectus relating to the Preferred
Securities is required to be delivered under the Act, if any event
relating to or affecting the Trust or the Company or of which the Trust
or 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
Time of Delivery occurs, the Company will make generally available to
its security holders an
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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) It will furnish to you copies of the following documents, in
each case as soon as available after filing and in such quantities as
you reasonably request: (i) the Registration Statement relating to the
Preferred Securities 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
Preferred Securities; and (iii) during the time when a prospectus
relating to the Preferred Securities 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 Preferred Securities).
(e) It will use its best efforts to obtain the qualification of
the Preferred Securities 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 neither the Trust
nor the Company shall 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
Trust or the Company to be unduly burdensome.
(f) During the period of five years after the Time of Delivery,
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 or the Trust as you may reasonably
request.
(g) It 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 Preferred Securities for sale and determination of
their eligibility for investment under the laws of such jurisdictions as
you designate and the printing of memoranda relating thereto, for any
filing fees charged by investment rating agencies for the rating of the
Preferred Securities, for any expenses incurred in connection with
listing the Preferred Securities on a national securities exchange and
for expenses incurred
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in distributing prospectuses to the Purchasers, except that if this
Agreement is terminated by the Purchasers under Section 5(c)(iii)
hereof, the Company shall not be obligated to reimburse the Purchasers
for any of the foregoing expenses. It is understood, however, that,
except as provided in this Section, and Section 9 hereof, the Purchasers
will pay all of their own costs and expenses, including the fees of
their counsel, stock transfer taxes on resale of any of the Preferred
Securities by them, and any advertising expenses connected with any
offers they may make.
(h) It will not offer, sell, contract to sell or otherwise
dispose of any Preferred Securities, any other preferred beneficial
interests in the Trust or any securities of BGE which are substantially
similar to the Subordinated Debentures, the Guarantee or the Preferred
Securities, or any securities convertible into or exchangeable for or
representing the right to receive any of the aforementioned securities,
prior to ten business days after the Time of Delivery without the
consent of the Representatives.
(i) In the case of BGE, to issue the Guarantee and the
Subordinated Debentures concurrently with the issuance and sale of the
Preferred Securities as contemplated herein; and
(j) To use its best efforts to list, subject to notice of
issuance, (i) the Preferred Securities and (ii) the Subordinated
Debentures, upon any distribution upon the liquidation of the Trust to
holders of the Preferred Securities, in each case on the New York Stock
Exchange.
5. Conditions of the Obligations of the Purchasers. The
obligations of the several Purchasers to purchase and pay for the Preferred
Securities will be subject to the accuracy of the representations and warranties
on the part of the Trust and the Company herein, to the accuracy of the
statements of the Company officers made pursuant to the provisions hereof, to
the performance by the Trust and 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 Xxxxxxx & Xxxxxxx, dated the Time of Delivery,
confirming that they are independent public accountants within the
meaning of the Act and the 33 Act Rules and Regulations, and stating in
effect that:
(i) In their opinion, the consolidated financial
statements and supporting schedules audited by them which are
included in BGE's Form 10-K ("Form 10-K"), which is incorporated
by reference in the Registration Statement comply in form in all
material respects with
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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 BGE 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 BGE incorporated by reference in the
Registration Statement, if any, and reading the latest available
unaudited interim consolidated financial statements of BGE, and
making inquiries of certain officials of BGE who have
responsibility for financial and accounting matters as to whether
the latest available financial statements not incorporated by
reference in the Registration Statement are prepared on a basis
substantially consistent with that of the audited consolidated
financial statements incorporated in the Registration Statement,
nothing has come to their attention that has caused them to
believe that (1) any unaudited consolidated financial statements
incorporated by reference in the Registration Statement do not
comply in form in all material respects with the applicable
requirements of the Act and the 33 Act Rules and Regulations and
the Exchange Act and the Exchange Act Rules and Regulations or
any material modifications should be made to those unaudited
consolidated financial statements for them to be in conformity
with generally accepted accounting principles; (2) at the date of
the latest available balance sheet not incorporated by reference
in the Registration Statement there was any change in the capital
stock, change in long-term debt or decrease in consolidated net
assets or common shareholders' equity as compared with the
amounts shown in the latest balance sheet incorporated by
reference in the Registration Statement or for the period from
the closing date of the latest income statement incorporated by
reference in the Registration Statement to the closing date of
the latest available income statement read by them there were any
decreases, as compared with the corresponding period of the
previous year, in operating revenues, operating income, net
income, the ratio of earnings to fixed charges (measured on the
most recent twelve month period), or in earnings per share of
common stock except in all instances of changes or decreases that
the Registration Statement discloses have occurred or may occur,
or which are described in such letter; or (3) at a specified date
not more than five
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days prior to the Closing Date, there was any change in the
capital stock or long-term debt of BGE or, at such date, there
was any decrease in net assets of BGE as compared with amounts
shown in the latest balance sheet incorporated by reference in
the Registration Statement, [or for the period from the closing
date of the latest income statement incorporated by reference in
the Registration Statement to a specified date not more than
five days prior to the Closing Date, there were any decreases
as compared with the corresponding period of the previous
year, in operating revenues, operating income, net income or
in earnings applicable to common stock,] except in all cases for
changes or decreases which the Registration Statement discloses
have occurred or may occur, or which are described in such
letter; and
(iii) Certain specified procedures have been applied to
certain financial or other statistical information (to the extent
such information was obtained from the general accounting records
of BGE) 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 BGE, except as described in such
letter.
(b) Prior to the Time of Delivery, 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 BGE, the Trust or you, shall be contemplated by the
Commission.
(c) Subsequent to the date of this Agreement, (i) there shall not
have occurred any change or any development involving a prospective
change not contemplated by the Prospectus in or affecting particularly
the business or properties of BGE which, in the reasonable judgment of
all of the Representatives, materially impairs the investment quality
of the Preferred Securities, (ii) no rating of any BGE securities shall
have been lowered by any recognized rating agency and no such agency
shall have publicly announced that it has under surveillance or review
its rating of the Preferred Securities and any BGE security which in the
reasonable judgment of all of the Representatives makes it impracticable
to market the Preferred Securities, (iii) trading in any BGE securities
shall not have been suspended or materially limited by the Commission or
the New York Stock Exchange, 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, the
effect of which on the financial markets of the United
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States is such as to make it, in the reasonable judgment of the
Representatives after consultation with the Company, impracticable to
market the Preferred Securities, (iv) a banking moratorium shall not
have been declared either by New York State or Federal authorities, the
effect of which on the financial markets of the United States is such as
to make it, in the reasonable judgement of the Representatives,
impracticable to market the Preferred Securities, and (v) 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 the
reasonable judgment of all the Representatives, impracticable to market
the Preferred Securities.
(d) There shall not be in effect at the Time of Delivery any
order of the Public Service Commission of Maryland which would prevent
the issuance, sale and delivery of the Subordinated Debentures and
Guarantee in accordance with the terms contemplated by this Agreement.
(e) You shall have received an opinion, dated the Time of
Delivery, of an Associate General Counsel of BGE to the effect that:
(i) BGE and Constellation Holdings, Inc. have been duly
incorporated and are validly existing as corporations in good
standing under the laws of the State of Maryland, with power and
authority (corporate and other) to own their respective
properties and conduct their respective businesses as described
in the Prospectus; and BGE is duly qualified to do business as a
foreign corporation in good standing in the Commonwealth of
Pennsylvania and all other jurisdictions in which the conduct of
its business or the ownership of its properties requires such
qualification and the failure to do so would have a material
adverse impact on its financial condition;
(ii) The Trust Agreement, the Guarantee, the Indenture and
the Subordinated Debentures (collectively the "BGE Agreements"
have) been duly authorized, executed and delivered by BGE and are
valid instruments, legally binding on BGE and enforceable in
accordance with their terms, except as limited by bankruptcy,
insolvency, or other laws affecting the enforcement of creditors'
rights and by general principles of equity; and the Subordinated
Debentures are entitled to the benefits provided by the
Indenture;
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(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 this Agreement) and any
amendments or supplements thereto, as of their respective dates,
appeared to comply as to form in all material respects with the
requirements of Form S-3 under the Act and the 33 Act Rules and
Regulations and the Trust Indenture Act; (c) such counsel has no
reason to believe that either the Registration Statement (as of
its effective date) or the Prospectus as of the date of this
Agreement and as of the Time of Delivery, or any such amendment
or supplement, as of their respective dates, contained or
contains any untrue statement of a material fact or omitted or
omits to state any material fact required to be stated therein or
necessary to make the statement therein not misleading; (d) the
descriptions in the Registration Statement and Prospectus of
statutes, legal and governmental proceedings and contracts and
other documents are accurate and fairly present the information
required to be shown; (e) and such counsel does not know of any
legal or governmental proceedings required to be described in the
Prospectus which are not described as required, or of any
contracts or documents of a character required to be described in
the Registration Statement or Prospectus or to be filed as
exhibits to the Registration Statement which are not described or
filed as required; it being understood that such counsel, in
addressing the matters covered in this paragraph (iii) need
express no opinion as to the financial statements or other
financial and statistical information contained in the
Registration Statement or the Prospectus or incorporated therein
or attached as an exhibit thereto or as to the Statements of
Eligibility and Qualification on Form T-l of the Debenture
Trustee under the Indenture, The Guarantee Trustee under the
Guarantee, or the trustee under the Trust Agreement;
(iv) The approval of the Public Service Commission of
Maryland necessary for the valid issuance by BGE of the Guarantee
and the Subordinated Debentures pursuant to this Agreement has
been obtained and continues in full force and effect. Such
counsel knows of no other approval of any other regulatory
authority which is legally required for the valid offering,
issuance, sale and delivery of the Guarantee and the Subordinated
Debentures by BGE under this Agreement (except that such opinion
need not pass upon the requirements of state
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securities acts) or the consummation of the transactions
contemplated by this Agreement;
(v) To the best of such counsel's knowledge and belief,
the consummation of the transactions contemplated in this
Agreement, the issuance and sale of the Preferred Securities and
the Common Securities by the Trust, the issuance by BGE of the
Guarantee and the Subordinated Debentures, the compliance by BGE
with all of the provisions of this Agreement, the execution,
delivery and performance by BGE of the BGE Agreements, the
distribution of the Subordinated Debentures upon the liquidation
of the Trust in the circumstances contemplated by the Trust
Agreement and described in the Prospectus and the consummation of
the transactions herein and therein contemplated, did not and
will not result in a breach of any of the terms and provisions
of, or constitute a default under, BGE's Charter or By-Laws or
any indenture, mortgage or deed of trust or other agreement or
instrument to which BGE is a party or by which it is bound to
which any of its property or assets is subject, nor will such
action result in any violation of any statute, or any order, rule
or regulation known to such counsel of any court or government
agency having jurisdiction over BGE or its property;
(vi) This Agreement, has been duly authorized, executed
and delivered by BGE;
(vii) The Trust Agreement, the Indenture and the Guarantee
have been duly qualified under the Trust Indenture Act;
(viii) The issuance, sale and delivery of the Subordinated
Debentures, the Guarantee and the Preferred Securities 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 (the "1935 Act");
(ix) The Registered Securities and the Common Securities
conform as to legal matters to the statements concerning them in
the Prospectus; and the summaries of the BGE Agreements contained
in the Prospectus constitute correct summaries thereof for use
therein;
(x) The statements set forth in the Prospectus under the
captions "Description of the Preferred Securities," "Certain
Terms of the Preferred Securities," "Description of the
Guarantee," "Description of the "Debentures," and "Certain Terms
of the Series - Debentures," insofar as they constitute summaries
or
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matters of law or legal conclusions, fairly present the
information set forth;
(xi) To such counsel's knowledge, there are no legal or
governmental proceedings pending to which the Trust is a party or
of which any property of the Trust is the subject; and, to such
counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities;
(xii) Neither the Trust nor BGE is and upon the issuance and
sale of the Preferred Securities as contemplated by this
Agreement and the application of the proceeds therefrom as
described in the Prospectus will not be an "investment company"
or an entity "controlled" by an "investment company" required to
be registered under the Investment Company Act of 1940, as
amended; and
(xiii) The issuance and sale of the Preferred Securities and the
Common Securities by the Trust, the compliance by the Trust with
its obligations under this Agreement, the purchase of the
Subordinated Debentures by the Trust from BGE, the distribution
of the Subordinated Debentures upon the liquidation of the Trust
in the circumstances contemplated by the Trust Agreement and
described in the Prospectus, and the consummation of the
transactions contemplated herein and in the Trust Agreement, did
not and will not result in a breach of any of the terms and
provisions of, or constitute a default under, any agreement or
instrument known to such counsel to which the Trust is a party or
by which the Trust is bound or to which any of the property or
assets of the Trust is subject, nor will such action result in
any violation of the provisions of the Trust Agreement, or any
Maryland or Federal statute or any order, rule or regulation
known to such counsel of any Maryland or Federal court or
government agency or body having jurisdiction over the Trust or
any of its properties.
(xiv) At the Time of Delivery, all of the issued and
outstanding Common Securities of the Trust will be directly owned
by BGE subject only to the lien of its Mortgage and Deed of
Trust, as amended and restated on June 20, 1995.
In rendering such opinion, such counsel may rely as to all
matters of Delaware law and legal conclusions based thereon upon the opinion of
counsel referred to in Section 5(g) hereof.
(f) You shall have received from Xxxxxx Xxxxxx & Xxxxxxx, counsel
for the Purchasers, an opinion dated the Time of Delivery, with respect to the
matters referred to in paragraph
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5(e) subheadings (ii), (iii) (a) and (b), (vi), (vii), (ix) and (x), and such
other matters as the Purchasers shall reasonably request and such counsel shall
have received such documents as they request for the purpose of enabling them to
pass on such matters.
In rendering such opinion, Xxxxxx Xxxxxx & Xxxxxxx may rely, as
to all matters of Maryland law and legal conclusions based thereon upon the
opinion of counsel for BGE referred to in Section 5(e) hereof and as to all
matters of Delaware law and legal conclusions based thereon upon the opinion of
counsel referred to in Section 5(g) hereof.
In addition, such counsel shall state that it has participated in
conferences with officers, counsel and other representatives of BGE and the
Trust, representatives of the independent public accountants for BGE 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 5(f) above), on the basis of the
foregoing (relying as to materiality to the extent such counsel deems
appropriate upon the opinions of officers, counsel and other representatives of
BGE and the Trust), 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 as of
the Time of Delivery), and any subsequent amendments or supplements thereto, as
of their respective dates, contained or contains an untrue statement of a
material fact or omitted or omits to state a material fact required to be stated
therein or necessary to make such statements therein not misleading (it being
understood that such counsel need make no comment with respect to the financial
statements and other financial and statistical data included in the Registration
Statement or Prospectus or incorporated therein or as to the Statements of
Eligibility and Qualification on Form T-l of the Debenture Trustee under the
Indenture, the Guarantee Trustee under the Guarantee, or the trustee under the
Trust Agreement.)
(g) Xxxxxxxx, Xxxxxx & Finger P.A., special Delaware counsel for the
Trust and BGE, shall have furnished to the Representatives their written
opinion, dated the Time of Delivery, in form and substance satisfactory to the
Representatives, to the effect that:
(i) The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Business
Trust Act, and all filings required under the laws of the
State of Delaware with respect to
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the creation and valid existence of the Trust as a business
trust have been made;
(ii)Under the Delaware Business Trust Act and the Trust
Agreement, the Trust has the trust power and authority to own
property and conduct its business as described in the
Prospectus;
(iii)Under the Delaware Business Trust Act and the Trust
Agreement, the Trust has the trust power and authority (a) to
execute and deliver, and to perform its obligations under,
this Agreement and (b) to issue and perform its obligations
under the Preferred Securities and the Common Securities.
(iv)Under the Delaware Business Trust Act and the Trust
Agreement, the execution and delivery by the Trust of this
Agreement, and the performance by the Trust of its obligations
hereunder, have been duly authorized by all necessary trust
action on the part of the Trust;
(v) The Trust Agreement constitutes a valid and binding
obligation of BGE and the Trustees, enforceable against BGE
and the Trustees, in accordance with its terms, subject, as to
enforcement to the effect upon the Trust Agreement of (a)
bankruptcy, insolvency, moratorium, receivership, liquidation,
fraudulent conveyance, reorganization and other similar laws
relating to or affecting the remedies and rights of creditors,
(b) principles of equity, including applicable law relating to
fiduciary duties (regardless of whether considered or applied
in a proceeding in equity or at law) and (c) the effect of
applicable public policy on the enforceability of provisions
relating to indemnification or contribution;
(vi) The Preferred Securities have been duly authorized by the
Trust Agreement and are duly and validly issued and, subject
to the qualifications set forth herein, fully paid and
non-assessable undivided beneficial interests in the assets of
the Trust; the holders of the Preferred Securities, as
beneficial owners of the Trust (the "Securityholders"), are
entitled to the same limitation of personal liability extended
to stockholders of private corporations for profit organized
under the General Corporation law of the State of Delaware;
and provided that such counsel may note that the
Securityholders may be obligated, pursuant to the Trust
Agreement, to (a) provide indemnity and/or security in
connection with and pay a sum sufficient to cover any taxes or
governmental charges arising from transfers or exchanges of
Preferred Securities certificates and the issuance of
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replacement Preferred Securities certificates and (b) provide
security and/or indemnity in connection with requests of or
directions to the Property Trustee (as defined in the Trust
Agreement) to exercise its rights and powers under the Trust
Agreement; and under the Delaware Business Trust Act and the
Trust Agreement, the issuance of the Preferred Securities is
not subject to preemptive or other similar rights;
(vii) The Common Securities have been duly authorized by the
Trust Agreement and are duly and validly issued and fully paid
undivided beneficial interests in the assets of the Trust; and
under the Delaware Business Trust Act and the Trust Agreement,
the issuance of the Common Securities is not subject to
preemptive or other similar rights;
(viii) The issuance and sale by the Trust of the Preferred
Securities and the Common Securities, the execution, delivery
and performance by the Trust of this Agreement, the
consummation by the Trust of the transactions contemplated
herein and the compliance by the Trust with its obligations
hereunder do not violate (a) any of the provisions of the
Certificate of Trust of the Trust or the Trust Agreement or
(b) any applicable Delaware law or Delaware administrative
regulation;
(ix) Assuming that the Trust derives no income from or
connected with sources within the State of Delaware and has no
assets, activities (other than having a Delaware trustee as
required by the Delaware Business Trust Act and the filing of
documents with the Secretary of State of the State of
Delaware) or employees in the State of Delaware, no
authorization, approval, consent or order of any Delaware
court or Delaware governmental authority or Delaware agency is
required to be obtained by the Trust solely as a result of the
issuance and sale of the Preferred Securities, the
consummation by the Trust of the transactions contemplated
herein or the compliance by the Trust of its obligations
hereunder; and
(x) Assuming that the Trust derives no income from or
connected with sources within the State of Delaware and has no
assets, activities (other than having a Delaware trustee as
required by the Delaware Business Trust Act and the filing of
documents with the Secretary of State of the State of
Delaware) or employees in the State of Delaware, and assuming
that the Trust is treated as a grantor trust for federal
income tax purposes, the Securityholders (other than those
holders of the Preferred Securities who reside or are
domiciled in the State of Delaware) will have no
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liability for income taxes imposed by the State of Delaware
solely as a result of their participation in the Trust, and
the Trust will not be liable for any income tax imposed by
the State of Delaware (in rendering the opinion expressed in
this paragraph (g), such counsel need express no opinion
concerning the securities laws of the State of Delaware).
(h) You shall have received from Winthrop, Xxxxxxx, Xxxxxx & Xxxxxxx
special tax counsel to the Company and the Trust, an opinion dated the
Time of Delivery, to the effect that the statements made in the
Prospectus under the caption "United States Taxation" to the extent they
constitute matters of law or legal conclusions, have been reviewed by
such counsel and are accurate and correct in all material respects and
fairly present the information set forth therein.
(i) You shall have received a certificate of the Chairman of the
Board, Vice Chairman, President or any Vice President and a principal
financial or accounting officer of BGE, dated the Time of Delivery, in
which such officers shall state, to the best of their knowledge after
reasonable investigation, and relying on opinions of counsel to the
extent that legal matters are involved, that the representations and
warranties of BGE and the Trust in this Agreement are true and correct
in all material respects, that BGE has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied at or
prior to the Time of Delivery, 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 BGE except as set
forth or contemplated in the Prospectus or as described in such
certificate.
(j) The Company will furnish you with such conformed copies of
such opinions, certificates, letters and documents as you reasonably
request.
(k) The Preferred Securities shall have been duly listed, subject
to official notice of issuance, on the New York Stock Exchange.
(l) The Trust Agreement, the Guarantee and the Indenture shall
have been executed and delivered, in each case in a form reasonably
satisfactory to the Representatives.
(m) A Special Event (as defined in the Prospectus) shall not have
occurred and be continuing.
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In case any such condition shall not have been satisfied, this
Agreement may be terminated by you upon notice in writing or by facsimile to the
Company without liability or obligation on the part of the Company or any
Purchaser, except as set forth in Sections 4(g) and 9 hereof.
6. Conditions of the Obligations of BGE and the Trust. The
obligations of BGE and the Trust to sell and deliver the Subordinated Debentures
and Preferred Securities, respectively, are subject to the following conditions
precedent:
(a) Prior to the Time of Delivery, 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 BGE, the Trust or you, shall be contemplated by the
Commission.
(b) There shall not be in effect at the Time of Delivery any
order of the Maryland Public Service Commission which would prevent the
issuance, sale and delivery of the Subordinated Debentures or Guarantee
or which contains conditions or provisions with respect thereto which
are not acceptable to BGE or the Trust, it being understood that no
order in effect at the date of this Agreement contains any such
unacceptable conditions or provisions.
(c) A Special Event (as defined in the Prospectus) shall not have
occurred and be continuing.
If any such condition shall not have been satisfied, then BGE or
the Trust shall be entitled, by notice in writing or by facsimile to
you, to terminate this Agreement without any liability on the part of
BGE or the Trust or any Purchaser, except as set forth in Sections 4(g)
and 9 hereof.
7. Indemnification.
(a) The Trust and BGE jointly and severally 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
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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 as such expenses are incurred; provided,
however, that BGE or the Trust 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 BGE or the Trust by the
Representatives specifically for use therein unless such loss, claim,
damage or liability arises out of the offer or sale of the Subordinated
Debentures and Preferred Securities occurring after a Representative has
notified BGE or the Trust in writing that such information should no
longer be used therein. This indemnity agreement will be in addition to
any liability which BGE or the Trust may otherwise have.
The Trust and BGE shall not be liable for indemnity under
this Section 7(a) with respect to any prospectus to the extent that any
such loss, claim, damage or liability of such Purchaser results solely
from the fact that such Purchaser sold Preferred Securities to a person
to whom it is established that there was not sent or given, at or prior
to the written confirmation of such sale, a copy of a prospectus
(excluding documents incorporated by reference) in any case where such
delivery is required by the Act, if the Trust and BGE has previously
furnished to the Representatives on behalf of the Purchaser, including
such, Purchaser, the copies thereof theretofore requested by the
Representatives, and the loss, claim, damage or liability of such
Purchaser results from an untrue statement or omission of a material
fact contained in the prospectus that was corrected in a prospectus
supplement.
(b) Each Purchaser will indemnify and hold harmless BGE and the
Trust, each of their trustees or directors as applicable, each of their
officers who have signed the Registration Statement and each person, if
any, who controls BGE or the Trust within the meaning of the Act or the
Exchange Act, against any losses, claims, damages or liabilities to
which BGE or the Trust or any such director, trustee, 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
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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
BGE or the Trust by a Representative specifically for use therein; and
will reimburse any legal or other expenses reasonably incurred by BGE or
the Trust or any such director, trustee, 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 BGE or the Trust, or
any such director, trustee, 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 Preferred Securities occurring after such
Purchaser has notified BGE or the Trust 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 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
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to which the respective parties are entitled, there shall be considered
the relative benefits received by each party from the offering of the
Preferred Securities and Subordinated Debentures (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 Trust,
BGE 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
Preferred Securities, 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. The Purchasers'
obligations to contribute are several in proportion to their respective
underwriting obligations and are not joint.
8. Default of Purchasers. If any Purchaser or Purchasers default
in their obligations to purchase the Preferred Securities hereunder and the
aggregate principal amount of the Preferred Securities which such defaulting
Purchaser or Purchasers agreed but failed to purchase is 10% of the principal
amount of the Preferred Securities or less, you may make arrangements
satisfactory to the Trust and BGE for the purchase of such Preferred Securities
by other persons, including any of the Purchasers, but if no such arrangements
are made by the Time of Delivery the non-defaulting Purchasers shall be
obligated severally, in proportion to their respective commitments hereunder, to
purchase the Preferred Securities which such defaulting Purchasers agreed but
failed to purchase. If any Purchaser or Purchasers so default and the aggregate
principal amount of the Preferred Securities with respect to which such default
or defaults occur is more than the above percentage and arrangements
satisfactory to you, the Trust and BGE for the purchase of such Preferred
Securities 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 Trust or BGE, except as provided in Section 9.
In the event that any Purchaser or Purchasers default in their obligation to
purchase Preferred Securities hereunder, the Trust or BGE may, by prompt written
notice to the non-defaulting Purchasers, postpone the Time of Delivery 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
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documents, and the Trust or BGE 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.
9. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties, and other
statements of the Trust and BGE 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 Trust and BGE or any of its
officers or directors or any controlling person, and will survive delivery of
and payment for the Preferred Securities. If this Agreement is terminated
pursuant to Section 5, 6 or 8 or if for any reason the purchase of the Preferred
Securities by the Purchasers is not consummated, the Trust and BGE shall remain
responsible for the expenses to be paid or reimbursed by it pursuant to Section
4(g). Except as provided above, neither the Trust nor BGE shall be liable to the
Purchasers for damages on account of any other consequential damages or loss of
anticipated profits.
In addition, in such event the respective obligations of the
Trust and BGE and the Purchasers pursuant to Section 7 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 Preferred Securities by telephone or facsimile,
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.
In all dealings hereunder, the Representatives shall act on
behalf of each of the Purchasers and any action taken by any Representative will
be binding on each Purchaser, and the parties hereto shall be entitled to act
and rely upon any statement, request, notice or agreement on behalf of any
Purchaser made or given by the Representatives jointly or by __________ on
behalf of the Representatives.
10. Notices. All communications hereunder will be in writing,
and, if sent to the Purchasers will be delivered or sent by facsimile and
confirmed to the address furnished in writing for the purpose of such
communications hereunder, or, if sent to BGE or the Trust, will be delivered or
sent by xxxxxxxxx and confirmed to it, attention of Treasurer at 00 X. Xxxxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, xxxxxxxxxx (000) 000-0000; provided, however,
that any notice to a Purchaser pursuant to Section 7 will be mailed, delivered
or telecopied to such
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Purchaser at its address appearing in its Purchasers' Questionnaire. Any such
statements, requests, notices or agreements shall take effect upon receipt
thereof.
11. Successors. This Purchase Agreement will inure to the benefit
of and be binding upon the parties hereto and their respective successors and
the officers, directors and trustees and controlling persons referred to in
Section 7, and no other person will have any right or obligation hereunder. No
purchaser of any of the Preferred Securities from any Purchaser shall be deemed
a successor or assign by reason merely of such purchase.
12. Construction. This Purchase Agreement shall be governed by
and construed in accordance with the law of the State of Maryland (without
regard to conflict of law principles).
13. 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 one and
the same agreement.
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 among BGE, the Trust and the Purchasers in
accordance with its terms.
Very Truly yours,
BALTIMORE GAS AND ELECTRIC COMPANY
By _____________________
Title: _________________
BGE CAPITAL TRUST I
By: Baltimore Gas and Electric
Company, as Depositor
By ______________________
Title: __________________
The foregoing Purchase
Agreement is hereby confirmed
as of the date first above
written.
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[Firm Name]
By _____________________
Title: _________________
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SCHEDULE A
Name of Purchaser Amount
----------------- ---------
----------
Total
==========
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