-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FLudjVdYcwa3FnSnAVlXvuXs6GuGGp68WirsU+cXRHP03RTMDvQqHi51CVpdTW0j Q8geLJajhiSmrJzAhyddTg== 0001004440-02-000039.txt : 20020414 0001004440-02-000039.hdr.sgml : 20020414 ACCESSION NUMBER: 0001004440-02-000039 CONFORMED SUBMISSION TYPE: S-4 PUBLIC DOCUMENT COUNT: 10 FILED AS OF DATE: 20020212 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BALTIMORE GAS & ELECTRIC CO CENTRAL INDEX KEY: 0000009466 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 520280210 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 333-82560 FILM NUMBER: 02535726 BUSINESS ADDRESS: STREET 1: 39 WEST LEXINGTON STREET CITY: BALTIMORE STATE: MD ZIP: 21201 BUSINESS PHONE: 4107833624 MAIL ADDRESS: STREET 1: 39 WEST LEXINGTON STREET CITY: BALTIMORE STATE: MD ZIP: 21201 S-4 1 s4file.txt As filed with the Securities and Exchange Commission on February 11, 2002 Registration No. 333-___ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------- FORM S-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ---------------- BALTIMORE GAS AND ELECTRIC COMPANY (Exact name of registrant as specified in its charter) Maryland 221100 52-0280210 (State or (Primary Standard (I.R.S. Employer other jurisdiction Industrial Identification of incorporation Classification Number) or organization) Code Number) ---------------- Baltimore Gas and Electric Company 39 W. Lexington Street Baltimore, MD 21201 (410) 234-5000 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) ---------------- E. Follin Smith Chief Financial Officer Baltimore Gas and Electric Company 250 W. Pratt Street, 20th Floor Baltimore, MD 21201 (410) 783-3013 (Name, address, including zip code, and telephone number, including area code, of agent for service) ---------------- Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective. If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. [_] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, check the following box and list the Securities Act of 1933 registration statement number of the earlier effective registration statement for the same offering. [_] If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act of 1933, check the following box and list the Securities Act of 1933 registration statement number of the earlier effective registration statement for the same offering. [_] CALCULATION OF REGISTRATION FEE - -------------------------------------------------------------------------------- Proposed Proposed Maximum Amount of Title of Amount Maxium Aggregate Registration Each Class of to be Offering Offering Fee Securities Registered Price per Price to be Registered Unit(1)(2) (1)(2) - -------------------------------------------------------------------------------- 5.25% Notes Due December 15, 2006 $300,000,000 100% $300,000,000 $27,600 ________________________________________________________________________________ (1) Estimated solely for purposes of calculating the registration fee in accordance with Rule 457(f) under the Securities Act of 1933. (2) The Proposed Maximum Aggregate Offering Price is based on the book value of the notes, as of December 11, 2001, in the absence of a market for them as required by Rule 457(f)(2) under the Securities Act of 1933. The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. The information in this prospectus is not complete and may be changed. The registrant may not sell or issue these securities until the registration statement filed with the U.S. Securities and Exchange Commission is effective. This prospectus is not an offer to exchange these securities, and it is not soliciting an offer to exchange these securities in any state where the offer or exchange is not permitted. Subject to Completion--Dated February 11, 2002 Baltimore Gas and Electric Company 39 W. Lexington Street Baltimore, Maryland 21201 (410) 234-5000 [COMPANY LOGO] ------------------------------------------------- P R O S P E C T U S ------------------------------------------------- $300,000,000 Baltimore Gas and Electric Company Offer To Exchange 5.25% Notes Due December 15, 2006, Which Have Been Registered Under the Securities Act, For Any And All Outstanding 5.25% Notes Due December 15, 2006 This prospectus and the accompanying letter of transmittal relate to our offering to exchange our registered 5.25% notes, which we refer to as the exchange notes, for all of our outstanding unregistered 5.25% notes, which we refer to as the outstanding notes. We refer to the exchange notes and the outstanding notes collectively as the "Notes." The terms of the exchange notes are substantially identical to the terms of the outstanding notes except that the exchange notes are registered under the Securities Act of 1933 and, therefore, are freely transferable. The Notes are unsecured and rank equally with all of our other unsecured indebtedness. Material Terms of the Exchange Offer oThe exchange offer will expire at 5:00 p.m., oThe exchange of notes should not New York City time, on _______, 2002, be a taxable exchange for U.S. unless estended. In any event, the federal income tax purposes. exchange offer will be open for at least 30 days. oAll outstanding notes that are validly oWe will not receive any proceeds tendered and not withdrawn will be exchanged. from the exchange offer. oYou may withdraw tenders of outstandings oThe exchange offer is subject to notes at any time before the expiration customary conditions. of the exchange offer. oYou may only tender the outstanding notes oIf you fail to tender your in denominations of $1,000 and integral outstanding notes, you will multiples of $1,000. continue to hold unregistered securities and your ability to transfer them could be adverley affected. Please see "Risk Factors" beginning on page 7 for a discussion of factors that you should consider in connection with the exchange offer. Each broker-dealer that receives exchange notes pursuant to an exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. If the broker-dealer acquired the outstanding notes as a result of market making or other trading activities, such broker-dealer may use the prospectus for the exchange offer, as supplemented or amended, in connection with resales of the exchange notes. We are not making this exchange offer in any state or jurisdiction where it is not permitted. Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of the notes to be distributed in the exchange offer, nor determined that this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. The date of this prospectus is ___________, 2002. i TABLE OF CONTENTS Page Incorporation of Documents by Reference........................................i Where You Can Get More Information............................................ii Cautionary Note Regarding Forward-Looking Statements..........................ii Prospectus Summary.............................................................1 Summary of the Exchange Offer..................................................2 Summary of the Terms of the Exchange Notes.....................................5 Ratio of Earnings to Fixed Charges.............................................6 Risk Factors...................................................................7 Use of Proceeds................................................................9 Selected Consolidated Financial Data...........................................9 The Exchange Offer............................................................10 Description of the Exchange Notes.............................................18 Plan of Distribution..........................................................27 Legal Matters.................................................................28 Experts.......................................................................28 INCORPORATION OF DOCUMENTS BY REFERENCE .........BGE incorporates by reference the documents listed and any future filings it makes with the SEC under Section 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") after the date of this prospectus and prior to the termination of this offering. o BGE's Annual Report on Form 10-K for the year ended December 31, 2000. o BGE's Quarterly Reports on Form 10-Q for the quarters ended March 31, June 30, and September 30, 2001. o BGE's Reports on Form 8-K filed August 24, 2001, October 30, 2001, January 30, 2002 and January 31, 2002. o BGE's Reports on Form 11-K filed June 28, 2001. The SEC allows us also to incorporate by reference other important business and financial information that is not presented on or delivered with this prospectus. Documents relating to this information, excluding exhibits to those documents unless these are specifically incorporated by reference in this prospectus, are available without charge upon request. The information incorporated by reference is an important part of this prospectus, and information that BGE files with the SEC in the future will automatically update and supersede this information. You may request a copy of these documents and filings at no cost, by writing or contacting BGE at the following address: Shareholder Services Baltimore Gas and Electric Company 39 W. Lexington Street Baltimore, Maryland 21201 410-783-5920 In order to obtain delivery of these documents, holders of the outstanding notes must request this information no later than ___________, 2002 (five business days before the expiration date of the exchange offer). ii WHERE YOU CAN GET MORE INFORMATION We have filed a registration statement on Form S-4 with the SEC under the Securities Act of 1933, as amended (the "Securities Act"), for the exchange notes. This prospectus does not include all of the information included in the registration statement. The registration statement includes exhibits containing documents and information about us that you may find important. You should read these exhibits for a more complete understanding of the document or the matter involved. We are also subject to the informational requirements of the Exchange Act and in accordance therewith we file reports and other information with the SEC under File No. 1-1910. The registration statement, reports, information statements, and other information filed by us, can be inspected and copied at the public reference facilities maintained by the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549 and at its Regional Offices at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, IL 60661. Copies of these materials can be obtained at prescribed rates from the Public Reference Section of the SEC, 450 Fifth Street, N.W., Washington, D.C. 20549 and by accessing the SEC's web site, http://www.sec.gov. The public may obtain information on the operation of the Public Reference Room by calling the SEC at (800) SEC-0330. Our SEC filings may also be obtained from the website of Constellation Energy Group, Inc. at http://www.constellationergy.com; however, the information contained on Constellation Energy's website is not incorporated by reference into this prospectus. Copies of the Indenture under which the Notes will be issued are available at the offices of the exchange agent for the Notes. You should rely only on the information contained in this prospectus. BGE has not authorized anyone to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. BGE is not making an offer of these securities in any state where the offer is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front of this prospectus. CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS We make statements in this prospectus that are considered forward looking statements within the meaning of the Securities Act and the Exchange Act. Sometimes these statements will contain words such as "believes," "expects," "intends," "plans," and other similar words. These statements are not guarantees of our future performance and are subject to risks, uncertainties and other important factors that could cause our actual performance or achievements to be materially different from those we project. In addition to the risk factors described under the heading "Risk Factors," these risks, uncertainties, and factors include, but are not limited to: o The timing and extent of changes in commodity prices for energy including coal, natural gas, oil, and electricity. o The conditions of the capital markets generally, which are affected by interest rates and general economic conditions, as well as BGE's ability to maintain its current debt ratings. o The effectiveness of BGE's risk management policies and procedures and the ability of our counterparties to satisfy their financial commitments. o Operational factors affecting BGE's transmission and distribution facilities, including catastrophic weather related damages, unscheduled outages or repairs, unavailability of gas transportation or electric transmission services, workforce issues, terrorism and other events beyond our control. iii o The inability of BGE to recover all its costs associated with providing electric retail customers service during the electric rate freeze period. o The effect of weather and general economic and business conditions on energy supply, demand and prices. o Regulatory or legislative developments that affect demand for energy, or increase costs, including costs related to safety or environmental compliance. o Cost and other effects of legal and administrative proceedings that may not be covered by insurance, including environmental liabilities or the outcome of pending appeals regarding the Maryland Public Service Commission's orders on electric deregulation and the transfer of BGE's generation assets to affiliates. These factors and the other risk factors discussed in this prospectus are not necessarily all of the important factors that could cause BGE's actual results to differ materially from those expressed in any of its forward-looking statements. Other unknown or unpredictable factors also could have material adverse effects on BGE's future results. The forward-looking statements included in this prospectus are made only as of the date of this prospectus. BGE does not have and does not undertake any obligation to publicly update any forward-looking statements to reflect subsequent events or circumstances. All subsequent written and oral forward-looking statements attributable to BGE or persons acting on behalf of BGE are expressly qualified in their entirety by the factors discussed above. BGE cannot assure you that projected results or events will be achieved. 1 PROSPECTUS SUMMARY This summary highlights selected information contained elsewhere in this prospectus. Because it is a summary, it does not contain all of the information that is important to you. This summary is qualified in its entirety by the more detailed information that is contained elsewhere in this prospectus, and other documents to which we refer. You should carefully read this prospectus and the letter of transmittal in their entirety, particularly the section entitled "Risk Factors" and the financial statements and the related notes to those statements before making an investment decision. The terms "BGE", "we", "our", and "us" as used in this prospectus refer to BGE and its subsidiaries as a combined entity except where it is clear that the terms mean only BGE. The term "exchange notes" refers to the 5.25% Notes due December 15, 2006 being offered by BGE in this exchange offer. The term "outstanding notes" refers to BGE's currently outstanding 5.25% Notes due December 15, 2006 that were issued on December 11, 2001 and may be exchanged for the exchange notes. The term "Notes" refers to the outstanding notes and the exchange notes, collectively. The term "Indenture" refers to the Indenture that applies to both the outstanding notes and the exchange notes. The Company BGE, a wholly-owned subsidiary of Constellation Energy Group, Inc., or Constellation Energy, is a regulated electric and gas public utility company transmitting and distributing electricity throughout a 2,300-square-mile service territory and distributing natural gas throughout a 600-square-mile service territory in Central Maryland. Effective on July 1, 2000 electric customer choice and competition among electric suppliers was implemented in Maryland. For a more detailed discussion of the Maryland law authorizing customer choice and competition, and the Maryland Public Service Commission order (Restructuring Order) that resolved major issues surrounding electric restructuring, please refer to our Annual Report on Form 10-K for the year ended December 31, 2000. See "Where You Can Find More Information." As part of the implementation of electric customer choice and competition in Maryland, our generating assets were deregulated. As a result, on July 1, 2000, we transferred, at book value, all of our nuclear and fossil generating assets and related liabilities, including partial ownership in two coal plants and a hydroelectric plant located in Pennsylvania to Constellation Energy subsidiaries. All of these assets were transferred subject to the lien of BGE's mortgage. In total, these generating assets represent 6,240 megawatts of generation capacity with a total net book value at June 30, 2000 of approximately $2.4 billion. The electric generation portion of our business represented about one-half of our operating income. In addition, on July 1, 2000 the electric fuel rate was discontinued. The electric fuel rate allowed BGE to pass on to ratepayers its actual cost of fuel. BGE also transferred to Constellation Energy subsidiaries approximately $278 million of its tax exempt debt related to the transferred assets, along with equity associated with the generating assets. BGE remains primarily liable for repayment of this tax exempt debt if the subsidiaries fail to pay. BGE's fossil fuel and nuclear fuel inventories, materials and supplies, and certain power purchase contracts were also transferred. In addition, BGE received from one of Constellation Energy's subsidiaries $366 million in unsecured promissory notes. All of the unsecured promissory notes have been paid and the proceeds were used exclusively to redeem long-term debt of BGE. Under the Restructuring Order, BGE provides electricity (standard offer service) to customers at fixed rates over various time periods until June 30, 2006, if customers do not choose an alternate supplier. Constellation Power Source, Inc., a Constellation Energy subsidiary, provides BGE with the energy and capacity required to meet all of its standard offer service obligations at fixed prices through June 30, 2003. Between July 1, 2003 and June 30, 2006, Constellation Power Source, Inc. has contracted to provide BGE 2 with 90%, and Allegheny Energy Supply Company has contracted to provide BGE with 10% of its standard offer service obligations. Effective July 1, 2000, BGE also reduced residential base rates by approximately 6.5% on average, about $54 million a year through July 2006. On October 26, 2001, Constellation Energy announced that it had cancelled prior plans to separate BGE and other retail energy businesses from the wholesale merchant generation business and had decided to remain a single company. For more information on the cancellation of the separation plan, please refer to our Report on Form 8-K filed October 30, 2001 and Quarterly Report on Form 10-Q for the quarter ended September 30, 2001. See "Where You Can Find More Information." We terminated our contract for sale of gas to Enron's affiliates prior to Enron Corporation's bankruptcy filing, and therefore, have no material financial exposure to Enron. Address and Telephone Number BGE is a corporation organized under the laws of the State of Maryland. BGE's mailing address is 39 W. Lexington Street, Baltimore, MD 21201, and telephone number is (410) 234-5000. SUMMARY OF THE EXCHANGE OFFER The Exchange Offer.......................... BGE is offering to exchange in denominations of $1,000 and integral multiples thereof, principal amount of its exchange notes, which have been registered under the Securities Act, for each denomination of $1,000 and integral multiples thereof, principal amount of its unregistered outstanding notes. BGE issued the outstanding notes on December 11, 2001 in a private offering. In order for your outstanding notes to be exchanged, you must properly tender them before the expiration of the exchange offer. All outstanding notes that are validly tendered and not validly withdrawn will be exchanged. BGE will issue the exchange notes on or promptly after the expiration of the exchange offer. Outstanding notes may be tendered for exchange in whole or in part in denominations of $1,000 and integral multiples thereof. Registration Rights Agreement............... BGE sold the outstanding notes on December 11, 2001 to a group of initial purchasers consisting of Lehman Brothers Inc., Banc of America Securities LLC, BNY Capital Markets, Inc., Salomon Smith Barney Inc., Scotia Capital (USA) Inc., and SunTrust Capital Markets, Inc. Simultaneously with that sale, BGE signed a registration rights agreement (the "Registration Rights Agreement") relating to the outstanding notes with these initial purchasers which requires BGE to conduct this exchange offer. You have the right under the Registration Rights Agreement to exchange your outstanding notes for exchange notes with substantially identical terms. This exchange offer is intended to 3 satisfy this right. Except in limited circumstances, after the exchange offer is complete, you will no longer be entitled to any exchange or registration rights with respect to your outstanding notes. For a description of the procedures for tendering outstanding notes, see "The Exchange Offer-- Procedures for Tendering Outstanding Notes." Consequences of Failure to Exchange Your Outstanding Notes............. If you do not exchange your outstanding notes for exchange notes in the exchange offer, you will still have the restrictions on transfer provided in the outstanding notes and in the Indenture. In general, the outstanding notes may not be offered or sold unless registered or exempt from registration under the Securities Act, or in a transaction not subject to the Securities Act and applicable state securities laws. BGE does not plan to register the outstanding notes under the Securities Act. Accordingly, the liquidity of the market for the outstanding notes could be adversely affected. Expiration Date............................. The exchange offer will expire at 5:00 p.m., New York City time, on_______________ , 2002. This will be the expiration date unless extended by BGE. If BGE does extend the exchange offer, the expiration date will be the latest date and time to which the exchange offer is extended. In any event, the exchange offer will be open for at least 30 days. See "The Exchange Offer--Expiration Date; Extensions; Amendments." Conditions to the Exchange Offer ........... The exchange offer is subject to customary conditions, which we may waive. We currently anticipate that each of the conditions will be satisfied and that we will not need to waive any conditions. We reserve the right to terminate or amend the exchange offer at any time before the expiration date if any such condition occurs. For additional information, see "The Exchange Offer - Conditions to the Exchange Offer." Procedures for Tendering Outstanding Notes .................. If you are a holder of notes who wishes to accept the exchange offer, you must: - complete and sign the accompanying letter of transmittal according to the instructions contained in the letter of transmittal; and - forward the letter of transmittal by mail, facsimile transmission or hand delivery, together with any other required documents, to the exchange agent, either with the outstanding notes to be tendered or in compliance with the specified procedures for guaranteed delivery of such outstanding notes. 4 If you hold outstanding notes through the Depository Trust Company and wish to accept the exchange offer, you must do so through the Depository Trust Company's Automated Tender Offer Program, pursuant to which you will agree to be bound by the letter of transmittal. See "The Exchange Offer--Procedures for Tendering Outstanding Notes." By executing or agreeing to be bound by the letter of transmittal, you will be making a number of important representations to BGE, as described under the "The Exchange Offer--Purpose and Effect of the Exchange Offer." Please do not send your letter of transmittal or certificates representing your outstanding notes to BGE. Those documents should be sent only to the exchange agent. Questions regarding how to tender and requests for information should be directed to the exchange agent. See "The Exchange Offer--Exchange Agent." Special Procedures for Beneficial ................................ Owners If your outstanding notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee, BGE urges you to contact such person promptly if you wish to tender your outstanding notes. See "The Exchange Offer--Procedures for Tendering Outstanding Notes." Withdrawal Rights........................... You may withdraw the tender of your outstanding notes at any time before the expiration date. To do this, you should deliver a written notice of your withdrawal to the exchange agent according to the withdrawal procedures described under the heading "The Exchange Offer--Withdrawal Rights." Resales of Exchange Notes................... BGE believes that you will be able to offer for resale, resell or otherwise transfer exchange notes issued in the exchange offer without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that: - you are acquiring the exchange notes in the ordinary course of your business; - you are not participating, and have no arrangement or understanding with any person to participate, in the distribution of the exchange notes; and - you are not an affiliate of BGE. BGE's belief is based on interpretations by the Staff of the SEC, set forth in certain no-action letters including Exxon Capital Holdings Corporation (available May 13, 1988), Morgan Stanley & Co. Incorporated (available June 5, 1991) and Shearman & Sterling (available July 2, 1993). The Staff of the SEC has not considered this exchange offer in the context of a no-action letter, and BGE cannot assure you that the Staff of the SEC 5 would make a similar determination with respect to this exchange offer. See "The Exchange Offer--Purpose and Effect of the Exchange Offer" for additional representations that are required. If BGE's belief is not accurate and you transfer an exchange note without delivering a prospectus meeting the requirements of the Securities Act or without an exemption from such requirements, you may incur liability under the Securities Act. BGE does not and will not assume, or indemnify you against, such liability. Each broker-dealer that receives exchange notes for its own account in exchange for outstanding notes which were acquired by such broker-dealer as a result of market-making or other trading activities must acknowledge that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such exchange notes. A broker-dealer may use this prospectus for an offer to sell, resale or other transfer of exchange notes. See "Plan of Distribution." Exchange Agent.............................. The exchange agent for the exchange offer for the outstanding notes is The Bank of New York. The address and the telephone and facsimile numbers of the exchange agent are shown in "The Exchange Offer--Exchange Agent" section of this prospectus and in the letter of transmittal. Use of Proceeds............................ BGE will not receive any cash proceeds from the issuance of the exchange notes offered hereby. See "Use of Proceeds." United States Federal Income Tax Consequences..................... We believe your acceptance of the exchange offer and the related exchange of your outstanding notes for exchange notes will not be a taxable exchange for United States federal income tax purposes. You should not recognize any taxable gain or loss as a result of the exchange. See "The Exchange Offer--United States Federal Income Tax Consequences." See "The Exchange Offer" section for more detailed information concerning the exchange offer. SUMMARY OF THE TERMS OF THE EXCHANGE NOTES The exchange offer relates to the exchange of up to $300 million principal amount of exchange notes for up to an equal principal amount of outstanding notes. The form and terms of the exchange notes are substantially identical to the form and terms of the outstanding notes, except the exchange notes will be registered under the Securities Act. Therefore, the exchange notes will not bear legends restricting their transfer and will not be entitled to any registration rights under the Securities Act. The exchange notes will evidence the same debt as the outstanding notes (which they replace). The outstanding notes and the exchange notes are governed by the same Indenture. Issuer......................................Baltimore Gas and Electric Company. 6 Total Amount of Exchange Notes Offered............................ $300 million in total principal amount of 5.25% Notes due December 15, 2006. Maturity.................................... December 15, 2006. Interest Payment Dates...................... June 15 and December 15, beginning on June 15, 2002. Ranking..................................... The Notes will rank equally with all of BGE's other unsecured and unsubordinated debt. The Indenture does not limit the amount of debt BGE may incur. The exchange notes will be subordinated to our outstanding secured debt. As of the date of this prospectus, BGE had approximately $1.1 billion of unsecured and unsubordinated debt outstanding and approximately $1.0 billion of secured debt outstanding. See "Description of the Exchange Notes--Ranking." Optional Redemption......................... We may redeem all or part of the Notes at any time at a redemption price equal to the principal amount of the Notes to be redeemed and a make-whole premium, together with accrued interest on such Notes to the redemption date. The redemption provisions are more fully described in this prospectus under "Description of the Exchange Notes--Optional Redemption". Transfer Restrictions....................... Once registration of the exchange notes is effective, the exchange notes generally will be freely transferable. See "Description of the Exchange Notes--Exchange Offer and Registration Rights." Use of Proceeds ............................ BGE will not receive any cash proceeds from the issuance of the exchange notes. See "Use of Proceeds." See "Risk Factors" for a discussion of factors that you should consider carefully before tendering any outstanding notes for exchange notes. RATIO OF EARNINGS TO FIXED CHARGES The ratio of earnings to fixed charges for BGE are set forth below for the nine months ended September 30, 2001 and for each year in the five-year period ended December 31, 2000. Nine Twelve Months Ended Months Ended September 30, December 31, 2001 2000 1999 1998 1997 1996 ---- ---- ---- ---- ---- ---- 2.31 2.27 3.45 2.94 2.78 3.10 - ------------------------------------------------------------------------------- For additional information, please see our most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q. See "Where You Can Find More Information.". 7 RISK FACTORS You should consider carefully the following risk factors, as well as all other information contained in this prospectus, before deciding whether to tender your outstanding notes for exchange notes pursuant to the exchange offer. Risks Related to BGE's Business As a result of deregulation, BGE's revenues may decline. Under deregulation, until our customers choose an alternate supplier for electricity, we will continue to provide electricity to them under our standard offer service. Once customers begin to choose alternate suppliers, our revenues from the sale of electricity will decline; however, the cost to BGE of procuring the electricity will also decline. Therefore, at some point in the future, our revenues will come primarily from the delivery service we provide to our gas and electric customers. No assurance can be given as to the amount of revenues we will earn in the future, which will be affected by the electric rate freeze discussed below and also by the same primary influences that affect our revenues today: o the rates approved by the Maryland Public Service Commission that we are allowed to charge our customers for the services we provide; o the weather; o the number of customers; o the amount of electricity and gas each customer uses; and o competition. BGE may not be able to recover increased operating costs through a rate increase due to frozen electric base rates to customers. BGE is required to offer electricity to its residential customers at frozen rates through June 30, 2006 and to commercial and industrial customers through June 30, 2004. It is possible that BGE will experience an increase in its costs, including operating and maintenance costs, transmission costs or energy supply costs during this period. Increased costs could result from events such as (1) the occurrence of a catastrophic storm or terrorist act which causes damage to BGE's systems in an amount that exceeds the amounts covered by insurance or (2) defaults by BGE's energy suppliers. Although BGE may, under certain circumstances, apply for recovery of costs resulting from catastrophic events through electric rate increases, there can be no assurance that relief from frozen base rates would be permitted by the Maryland Public Service Commission. If retail bidding for standard offer service is implemented for BGE's electric customers prior to July 1, 2006, BGE may have exposure under its power supply contracts. Consistent with BGE's electric restructuring settlement, the Maryland Public Service Commission may institute a proceeding on or before July 1, 2003 to consider whether to implement retail bidding for standard offer service for BGE's customers on or after July 1, 2004. If retail bidding is instituted, other retail suppliers would be assigned to provide standard offer service to all, or a portion, of BGE's electric customers through June 30, 2006, the end of the rate freeze period. If the Maryland Public Service Commission does decide to institute retail bidding, BGE would still be obligated to purchase the electricity it has contracted for under its supply contracts, even though all or a portion of its customers would be obtaining their electricity 8 from others. Depending upon market conditions prevailing at that time, BGE might be unable to resell any excess electricity at prices equal to or higher than what BGE has paid for it. Risks Related to the Offering Some holders of exchange notes may be subject to various transfer restrictions. You may generally sell exchange notes without complying with the registration requirements of the Securities Act, unless you are: - - an "affiliate" of BGE within the meaning of Rule 405 under the Securities Act; - - a broker-dealer that acquired outstanding notes as a result of market-making or other trading activities; or - - a broker-dealer that acquired outstanding notes directly from BGE for resale pursuant to Rule 144A or another available exemption under the Securities Act. "Affiliates" of BGE may sell exchange notes only in compliance with the provisions of Rule 144 under the Securities Act or another available exemption. The broker-dealers described above must deliver a prospectus in connection with any resale of exchange notes. See "The Exchange Offer" and "Plan of Distribution." There is no established trading market for the exchange notes, which could make it more difficult for you to sell exchange notes and could adversely affect the price of your exchange notes. The outstanding notes and exchange notes constitute a new issue of securities for which no established trading market exists. If the exchange notes are traded after their initial issuance, the liquidity of the trading market in the exchange notes, and the market price quoted for these exchange notes, may be adversely affected by changes in the overall market for high yield securities and by changes in BGE's financial performance or prospects or in the prospects for companies in the electric and gas utility industry generally. As a result, you cannot be sure that an active trading market will develop for the exchange notes. BGE has been informed by the initial purchasers of the outstanding notes that they intend to make a market in the exchange notes. However, the initial purchasers have no obligations to do so, and may discontinue any market-making activities at any time without notice. BGE does not intend to list the exchange notes on any national securities exchange or automated quotation system. BGE cannot assure you of the development of any market or liquidity of any market that may develop for the exchange notes following the exchange offer. Holders of outstanding notes who fail to tender may experience diminished liquidity after the exchange offer. BGE has not registered nor does it intend to register the outstanding notes under the Securities Act. Outstanding notes that remain after consummation of the exchange offer will therefore remain subject to transfer restrictions under applicable securities laws. Unexchanged outstanding notes will continue to bear a legend reflecting these restrictions on transfer. Furthermore, BGE has not conditioned the exchange offer on receipt of any minimum or maximum principal amount of outstanding notes. As outstanding notes are tendered and accepted in the exchange offer, the principal amount of remaining outstanding notes will decrease. This decrease will reduce the liquidity of the trading market for the outstanding notes. BGE cannot assure you of the liquidity, or even the continuation, of the trading market for the outstanding notes following the exchange offer. 9 In order to receive exchange notes, you must follow the exchange offer procedures. You are responsible for complying with all exchange offer procedures. You will receive exchange notes in exchange for your outstanding notes only if, prior to the expiration date, you deliver the following to the exchange agent: - - certificates for the outstanding notes or a book-entry confirmation of a book-entry transfer of the outstanding notes into the exchange agent's account at the Depository Trust Company; a properly completed and duly executed letter of transmittal (or a facsimile thereof), or an electronic message agreeing to be bound by the letter of transmittal properly transmitted through the Depository Trust Company's Automated Tender Offer Program for a book-entry transfer, together with any required signature guarantees; and - - any other documents required by the letter of transmittal. You should allow sufficient time to ensure that the exchange agent receives all required documents before the expiration of the exchange offer. Neither BGE nor the exchange agent has any duty to inform you of defects or irregularities with respect to the tender of your outstanding notes for exchange. See "The Exchange Offer." USE OF PROCEEDS The exchange offer is intended to satisfy the obligations of BGE under the Registration Rights Agreement. BGE will not receive any cash proceeds from the issuance of the exchange notes. In consideration for issuing the exchange notes as contemplated in this prospectus, BGE will receive, in exchange, an equal number of outstanding notes in like principal amount. The form and terms of the exchange notes are identical in all material respects to the form and terms of the outstanding notes, except as otherwise described in the section entitled "The Exchange Offer--Terms of the Exchange Offer." The outstanding notes surrendered in exchange for the exchange notes will be retired and cancelled and cannot be reissued. SELECTED CONSOLIDATED FINANCIAL DATA The following selected consolidated financial data as of and for each of the five years ended December 31, 2000 are derived from our audited Consolidated Financial Statements and the related notes, which have been audited by PricewaterhouseCoopers LLP, independent public accountants. Selected consolidated financial data as of and for the nine months ended September 30, 2001 are unaudited. You should read this information along with the materials incorporated by reference in this prospectus. As of December 31, ------------------------- ------------------------------------------ Sept. 30, 2001 2000 1999 1998 1997 1996 ------------------------- ------------------------------------------ (Dollar amounts in millions, except per share amounts) Summary of Operations Total Revenues $2,158.4 $2,746.8 $3,092.2 $3,386.4 $3,307.6 $3,153.2 Total Expenses 1,862.0 2,336.7 2,387.9 2,647.9 2,584.0 2,483.7 - -------------------------------------s------------------------------------------ Income From Operations 296.4 410.1 704.3 738.5 723.6 669.5 Other Income (Expense) 1.7 9.8 8.4 5.7 (52.8) 6.1 - -------------------------------------------------------------------------------- Income Before Fixed Charges 298.1 419.9 712.7 744.2 670.8 675.6 and Income Taxes Fixed Charges 119.2 184.0 205.9 238.8 230.0 198.5 - -------------------------------------------------------------------------------- Income Before Income Taxes 178.9 235.9 506.8 505.4 440.8 477.1 Income Taxes 70.2 92.4 178.4 177.7 158.0 166.3 - -------------------------------------------------------------------------------- Income Before 108.7 143.5 328.4 327.7 282.8 310.8 Extraordinary Items Extraordinary Loss, Net of Income Taxes -- -- (66.3) -- -- -- - -------------------------------------------------------------------------------- Net Income 108.7 143.5 262.1 327.7 282.8 310.8 Preference Stock Dividends 9.9 13.2 13.5 21.8 28.7 38.5 - -------------------------------------------------------------------------------- Earnings Applicable to $98.8 $130.3 $248.6 $305.9 $254.1 $272.3 Common Stock - -------------------------------------------------------------------------------- 10 As of December 31 -------------- ------------------------------------------- Sept. 30, 2001 2000 1999 1998 1997 1996 -------------- ------------------------------------------- (Dollar amounts in millions, except per share amounts) Summary of Financial Condition Total Assets $4,618.3 $4,654.2 $7,272.6 $9,434.1 $8,900.0 $8,678.2 - -------------------------------------------------------------------------------- Capitalization Long-term debt $1,669.9 $1,864.4 $2,206.0 $3,128.1 $2,988.9 $2,758.8 Redeemable -- --- --- --- 90.0 134.5 preference stock Preference stock not subject to mandatory redemption 190.0 190.0 190.0 190.0 210.0 210.0 Common shareholders' 897.1 802.3 2,355.4 2,981.5 2,870.4 2,854.7 equity - -------------------------------------------------------------------------------- Total Capitalization$2,757.0 $2,856.7 $4,751.4 $6,299.6 $6,159.3 $5,958.0 - -------------------------------------------------------------------------------- Certain prior-year amounts have been reclassified to conform with the current year's presentation. THE EXCHANGE OFFER Purpose and Effect of the Exchange Offer On December 11, 2001 we sold the outstanding notes. The initial purchasers to whom we issued the outstanding notes have advised us that they subsequently resold the outstanding notes to "qualified institutional buyers" in reliance on Rule 144A of the Securities Act. In connection with the sale of the outstanding notes, BGE entered into a Registration Rights Agreement with the initial purchasers of the outstanding notes. Pursuant to the Registration Rights Agreement, BGE agreed to file and to use commercially reasonable efforts to cause to become effective with the SEC a registration statement with respect to the exchange of the outstanding notes for exchange notes with terms identical in all material respects to the terms of the outstanding notes. A copy of the Registration Rights Agreement has been filed as an exhibit to the Registration Statement of which this prospectus is a part. The exchange offer is being made to satisfy the contractual obligations of BGE under the Registration Rights Agreement. By tendering outstanding notes in exchange for exchange notes, each holder represents to BGE that: (1) the holder of the outstanding notes is not an "affiliate," as such term is defined under the Securities Act, of BGE; (2) the exchange notes acquired pursuant to the exchange offer are being obtained in the ordinary course of business of the holder; (3) the holder is not engaging in or intends to engage in a "distribution," as such term is defined under the Securities Act, of such exchange notes; (4) the holder has no arrangement or understanding with any person to participate in a distribution of such exchange notes; (5) the holder acknowledges and agrees that any person who is a broker-dealer registered under the Exchange Act and receives exchange notes for its own account in exchange for outstanding notes pursuant to the exchange offer, by tendering outstanding notes and executing the letter of transmittal, will represent and agree that such outstanding notes were acquired by such broker-dealer for its own account as a result of market-making activities or other trading activities and it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of exchange notes (provided that, by so acknowledging and by delivering a prospectus, such broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act); 11 (6) the holder acknowledges and agrees that any person who is participating in the exchange offer for the purpose of distributing the exchange notes must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction of the exchange notes or interests therein acquired by such person and cannot rely on the position of the Staff of the SEC set forth in certain no-action letters; (7) the holder understands that a secondary resale transaction described in the representation above and any resales of exchange notes or interests therein obtained by such holder in exchange for outstanding notes or interests therein originally acquired by such holder directly from BGE should be covered by an effective registration statement containing the selling security holder information required by Item 507 or Item 508, as applicable, of Regulation S-K or the SEC; (8) the holder has full power and authority to tender, exchange, sell, assign and transfer the outstanding notes tendered hereby and that, when the same are accepted for exchange, BGE will acquire good, marketable and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances; and (9) the outstanding notes tendered hereby are not subject to any adverse claims or proxies. The exchange offer is not being made to, nor will BGE accept tenders for exchange from, holders of outstanding notes in any jurisdiction in which the exchange offer or the acceptance of the exchange notes would be in violation of the securities or blue sky laws of that jurisdiction. Unless the context requires otherwise, the term "holder" with respect to the exchange offer means any person in whose name the outstanding notes are registered on the books of The Bank of New York, the Trustee, or any other person who has obtained a properly completed bond power from the registered holder, or any participant in the Depository Trust Company ("DTC") whose name appears on a security position listing as a holder of outstanding notes (which, for purposes of the exchange offer, include beneficial interests in the outstanding notes held by direct or indirect participants in DTC and outstanding notes held in definitive form). BGE may be required to file with the SEC a shelf registration statement for a continuous offer in connection with the outstanding notes or exchange notes. Pursuant to the Registration Rights Agreement, BGE will be required to file a shelf registration statement if (1) BGE is not permitted to consummate the exchange offer because the exchange offer is not permitted by applicable law or SEC policy or (2) the exchange offer is not consummated within 210 days after the original issuance of the outstanding notes or (3) the holder of outstanding notes that is a qualified institutional buyer or a broker-dealer as described in clause (c) notifies BGE prior to the 20th business day following commencement of the exchange offer that (a) it is prohibited by law or SEC policy from participating in the exchange offer, (b) it may not resell the exchange notes acquired by it in the exchange offer to the public without delivering a prospectus and the prospectus contained in the exchange offer registration statement is not appropriate or available for such resales or (c) it is a broker-dealer and owns outstanding notes acquired directly from BGE or an affiliate of BGE. If we are obligated to file a shelf registration statement, we will use our commercially reasonable efforts to keep the shelf registration statement effective for up to two years. Terms of the Exchange Offer BGE hereby offers, upon the terms and subject to the conditions shown in this prospectus and in the accompanying letter of transmittal, to exchange in denominations of $1,000 and integral multiples thereof principal amount of exchange notes for denominations of $1,000 and integral multiples thereof principal amount of outstanding notes properly tendered before the expiration date and not properly withdrawn according to the procedures described below. Holders may tender their outstanding notes in whole or in part in denominations of $1,000 and integral multiples thereof. 12 The form and terms of the exchange notes are the same as the form and terms of the outstanding notes except that (1) the exchange notes have been registered under the Securities Act and therefore are not subject to the restrictions on transfer applicable to the outstanding notes and (2) holders of the exchange notes will not be entitled to some of the rights of holders of the outstanding notes under the Registration Rights Agreement. The exchange notes evidence the same indebtedness as the outstanding notes (which they replace) and will be issued pursuant to, and entitled to the benefits of, the Indenture. The exchange offer is not conditioned on any minimum principal amount of outstanding notes being tendered for exchange. BGE reserves the right in its sole discretion to purchase or make offers for any outstanding notes that remain outstanding after the expiration date in the exchange offer or, as shown under "--Conditions to the Exchange Offer," to terminate the exchange offer and, to the extent permitted by applicable law, purchase outstanding notes in the open market, in privately negotiated transactions or otherwise. The terms of any such purchases or offers could differ from the terms of the exchange offer. As of the date of this prospectus, $300 million principal amount of outstanding notes are outstanding. Holders of outstanding notes do not have any appraisal or dissenters' rights in connection with the exchange offer. Outstanding notes which are not tendered for, or are tendered but not accepted in connection with, the exchange offer will remain outstanding. Holders of outstanding notes who fail to tender may experience diminished liquidity after the exchange offer. See "Risk Factors--Risks Related to the Offering". If any tendered outstanding notes are not accepted for exchange because of an invalid tender, the occurrence of particular other events shown herein or otherwise, certificates for any such unaccepted outstanding notes will be returned, without expense, to the tendering holder thereof promptly after the expiration date. Holders who tender outstanding notes in connection with the exchange offer will not be required to pay brokerage commissions or fees or, subject to the instructions in the letter of transmittal, transfer taxes with respect to the exchange of the outstanding notes in connection with the exchange offer. BGE will pay all charges and expenses, other than specified applicable taxes. See "--Fees and Expenses" BGE MAKES NO RECOMMENDATION TO THE HOLDERS OF THE OUTSTANDING NOTES AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING ALL OR ANY PORTION OF THEIR OUTSTANDING NOTES IN THE EXCHANGE OFFER. IN ADDITION, NO ONE HAS BEEN AUTHORIZED TO MAKE ANY SUCH RECOMMENDATION. HOLDERS OF THE OUTSTANDING NOTES MUST MAKE THEIR OWN DECISION WHETHER TO TENDER PURSUANT TO THE EXCHANGE OFFER, AND, IF SO, THE AGGREGATE AMOUNT OF OUTSTANDING NOTES TO TENDER AFTER READING THIS PROSPECTUS AND THE LETTER OF TRANSMITTAL AND CONSULTING WITH THEIR ADVISERS, IF ANY, BASED ON THEIR FINANCIAL POSITION AND REQUIREMENTS. Expiration Date; Extensions; Amendments The "expiration date" for the exchange offer is 5:00 p.m., New York City time, on ____________, 2002 unless the exchange offer is extended by BGE. If BGE does extend the exchange offer, the "expiration date" will be the latest date and time to which the exchange offer is extended. In any event, the exchange offer will be open for at least 30 days. BGE expressly reserves the right in its sole and absolute discretion, subject to applicable law, at any time and from time to time, (1) to delay or terminate the exchange offer (whether or not any outstanding notes have theretofore been accepted for exchange) if BGE determines, in its sole and absolute discretion, that any of the events or conditions referred to under "-- Conditions to the Exchange Offer" has occurred or exists or has not been satisfied with respect to the exchange offer, (2) to extend the expiration date of the exchange offer and retain all outstanding notes tendered pursuant to the exchange offer, subject, however, to the right of holders of outstanding notes to withdraw their tendered outstanding notes as described under "--Withdrawal Rights" and (3) to waive any condition or otherwise amend the terms of the exchange offer in any respect. If the exchange offer is amended in a manner determined by BGE to constitute a material change, or if BGE waives a material condition of the exchange offer, BGE will promptly disclose such amendment by means of a prospectus supplement that will be distributed to the registered holders of the outstanding notes, and BGE will extend the exchange offer to the extent required by Rule 14e-1 under the Exchange Act and the Registration Rights Agreement. Any such delay in acceptance, termination, extension or amendment will be followed promptly by oral or written notice thereof to the exchange agent (any such oral notice to be confirmed promptly in writing) and by making a public announcement, and such announcement in the case of an extension will be made no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date. Without limiting the manner in which BGE may choose to make any public announcement, and subject to applicable laws, BGE shall have no obligation to publish, advertise or otherwise communicate any such public announcement other than by issuing a release to an appropriate news agency. Acceptance for Exchange and Issuance of Exchange Notes Upon the terms and subject to the conditions of the exchange offer, BGE will exchange, and will issue to the exchange agent, exchange notes for outstanding notes validly tendered and not withdrawn (pursuant to the withdrawal rights described under "--Withdrawal Rights") promptly after the expiration date. In all cases, delivery of exchange notes in exchange for outstanding notes tendered and accepted for exchange pursuant to the exchange offer will be made only after timely receipt by the exchange agent of (1) outstanding notes or a book-entry confirmation of a book-entry transfer of outstanding notes into the exchange agent's account at DTC, (2) a properly completed and duly executed letter of transmittal (or facsimile thereof), or an electronic message agreeing to be bound by the letter of transmittal properly transmitted through DTC's Automated Tender Offer Program for a book-entry transfer, with any required signature guarantees, and (3) any other documents required by the letter of transmittal. Accordingly, the delivery of exchange notes might not be made to all tendering holders at the same time, and will depend upon when outstanding notes, book-entry confirmations with respect to outstanding notes and other required documents are received by the exchange agent. The term "book-entry confirmation" means a timely confirmation of a book-entry transfer of outstanding notes into the exchange agent's account at DTC. Subject to the terms and conditions of the exchange offer, BGE will be deemed to have accepted for exchange, and thereby exchanged, outstanding notes validly tendered and not withdrawn as, if and when BGE gives oral or written notice to the exchange agent (any such oral notice to be confirmed promptly in writing) of BGE's acceptance of such outstanding notes for exchange pursuant to the exchange offer. BGE's acceptance for exchange of outstanding notes tendered pursuant to any of the procedures described above will constitute a binding agreement between the tendering holder and BGE upon the terms and subject to the conditions of the exchange offer. The exchange agent will act as agent for BGE for the purpose of receiving tenders of outstanding notes, letters of transmittal and related documents, and as agent for tendering holders for the purpose of receiving outstanding notes, letters of transmittal and related documents and transmitting exchange notes to holders who validly tendered outstanding notes. Such exchange will be made promptly after the expiration date of the exchange offer. If for any reason the acceptance for exchange or the exchange of any outstanding notes tendered pursuant 13 to the exchange offer is delayed (whether before or after BGE's acceptance for exchange of outstanding notes), or BGE extends the exchange offer or is unable to accept for exchange or exchange outstanding notes tendered pursuant to the exchange offer, then, without prejudice to BGE's rights set forth herein, the exchange agent may, nevertheless, on behalf of BGE and subject to Rule 14e-1(c) under the Exchange Act, retain tendered outstanding notes and such outstanding notes may not be withdrawn except to the extent tendering holders are entitled to withdrawal rights as described under "--Withdrawal Rights." Procedures for Tendering Outstanding Notes Valid Tender Except as set forth below, in order for outstanding notes to be validly tendered pursuant to the exchange offer, either (1) (a) a properly completed and duly executed letter of transmittal (or facsimile thereof), or an electronic message agreeing to be bound by the letter of transmittal properly transmitted through DTC's Automated Tender Offer Program for a book-entry transfer, with any required signature guarantees and any other required documents, must be received by the exchange agent at the address or the facsimile number set forth under "--Exchange Agent" prior to the expiration date and (b) tendered outstanding notes must be received by the exchange agent, or such outstanding notes must be tendered pursuant to the procedures for book-entry transfer set forth below and a book-entry confirmation must be received by the exchange agent, in each case prior to the expiration date, or (2) the guaranteed delivery procedures set forth below must be complied with. If less than all of the outstanding notes are tendered, a tendering holder should fill in the amount of outstanding notes being tendered in the appropriate box on the letter of transmittal. The entire amount of outstanding notes delivered to the exchange agent will be deemed to have been tendered unless otherwise indicated. If any letter of transmittal, endorsement, bond power, power of attorney or any other document required by the letter of transmittal is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person should so indicate when signing. Unless waived by BGE, evidence satisfactory to BGE of such person's authority to so act also must be submitted. Any beneficial owner of outstanding notes that are held by or registered in the name of a broker, dealer, commercial bank, trust company or other nominee or custodian is urged to contact such entity promptly if such beneficial holder wishes to participate in the exchange offer. The method of delivery of outstanding notes, the letter of transmittal and all other required documents is at the option and sole risk of the tendering holder. Delivery will be deemed made only when actually received by the exchange agent. Instead of delivery by mail, it is recommended that holders use an overnight or hand delivery service. In all cases, sufficient time should be allowed to assure timely delivery and proper insurance should be obtained. No letter of transmittal or outstanding notes should be sent to BGE. Holders may request their respective brokers, dealers, commercial banks, trust companies or nominees to effect these transactions for them. Book-Entry Transfer The exchange agent will make a request to establish an account with respect to the outstanding notes at DTC for purposes of the exchange offer. Any financial institution that is a participant in DTC's book-entry transfer facility system should make a book-entry delivery of the outstanding notes by causing DTC to transfer such outstanding notes into the exchange agent's account at DTC in accordance with DTC's procedures for transfers. DTC's Automated Tender Offer Program ("ATOP") is the only method of processing exchange offers through DTC. To accept the exchange offer through ATOP, participants in 14 DTC must send electronic instructions to DTC through DTC's system instead of sending a signed, hard-copy letter of transmittal. DTC is obligated to communicate those electronic instructions to the exchange agent. To tender outstanding notes through ATOP, the electronic instructions sent to DTC and transmitted by DTC to the exchange agent must contain the character by which the participant acknowledges its receipt of and agrees to be bound by the letter of transmittal. DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT. Signature Guarantees Certificates for outstanding notes need not be endorsed and signature guarantees on a letter of transmittal or a notice of withdrawal, as the case may be, are unnecessary unless (a) a certificate for outstanding notes is registered in a name other than that of the person surrendering the certificate or (b) a registered holder completes the box entitled "Special Issuance Instructions" or "Special Delivery Instructions" in the letter of transmittal. In the case of (a) or (b) above, such certificates for outstanding notes must be duly endorsed or accompanied by a properly executed bond power, with the endorsement or signature on the bond power and on the letter of transmittal or the notice of withdrawal, as the case may be, guaranteed by a firm or other entity identified in Rule 17Ad-15 under the Exchange Act as an "eligible guarantor institution," including (as such terms are defined therein) (1) a bank, (2) a broker, dealer, municipal securities broker or dealer or government securities broker or dealer, (3) a credit union, (4) a national securities exchange, registered securities association or clearing agency or (5) a savings association that is a participant in a Securities Transfer Association (each an "Eligible Institution"), unless surrendered on behalf of such Eligible Institution. See Instruction 2 to the letter of transmittal. Guaranteed Delivery If a holder desires to tender outstanding notes pursuant to the exchange offer and the certificates for such outstanding notes are not immediately available or time will not permit all required documents to reach the exchange agent before the expiration date, or the procedures for book-entry transfer cannot be completed on a timely basis, such outstanding notes may nevertheless be tendered, provided that all of the following guaranteed delivery procedures are complied with: (1) such tenders are made by or through an Eligible Institution; (2) prior to the expiration date, the exchange agent receives from such Eligible Institution a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form accompanying the letter of transmittal, or an electronic message through ATOP with respect to guaranteed delivery for book-entry transfers, setting forth the name and address of the holder of outstanding notes and the amount of outstanding notes tendered, stating that the tender is being made thereby and guaranteeing that within three New York Stock Exchange trading days after the date of execution of the Notice of Guaranteed Delivery or transmission of such electronic message through ATOP for book-entry transfers, the certificates for all physically tendered outstanding notes, in proper form for transfer, or a book-entry confirmation, as the case may be, and any other documents required by the letter of transmittal will be deposited by the Eligible Institution with the exchange agent; and (3) the certificates (or book-entry confirmation) representing all tendered outstanding notes, in proper form for transfer, together with a properly completed and duly executed letter of transmittal with any required signature guarantees (or a facsimile thereof) or a properly transmitted electronic message through ATOP in the case of book-entry transfers, and any other documents required by the letter of transmittal, are received by the exchange agent within three New York Stock Exchange trading days after the date of execution of the Notice of Guaranteed Delivery or transmission of such electronic message through ATOP with respect to guaranteed delivery for book-entry transfers. 15 Determination of Validity All questions as to the form of documents, validity, eligibility (including time of receipt) and acceptance for exchange of any tendered outstanding notes will be determined by BGE, in its sole discretion, which determination shall be final and binding on all parties. BGE reserves the absolute right, in its sole and absolute discretion, to reject any and all tenders it determines not to be in proper form or the acceptance for exchange of which may, in the view of counsel to BGE, be unlawful. BGE also reserves the absolute right, subject to applicable law, to waive any of the conditions of the exchange offer as set forth under "--Conditions to the Exchange Offer" or any defect or irregularity in any tender of outstanding notes of any particular holder whether or not similar defects or irregularities are waived in the case of other holders. BGE's interpretation of the terms and conditions of the exchange offer (including the letter of transmittal and the instructions thereto) will be final and binding on all parties. No tender of outstanding notes will be deemed to have been validly made until all defects or irregularities with respect to such tender have been cured or waived. None of BGE, any affiliates of BGE, the exchange agent or any other person shall be under any duty to give any notification of any defects or irregularities in tenders or incur any liability for failure to give any such notification. Resales of Exchange Notes Based on interpretations by the staff of the SEC, as set forth in certain no-action letters including Exxon Capital Holdings Corporation (available May 13, 1988), Morgan Stanley & Co. Incorporated (available June 5, 1991) and Shearman & Sterling (available July 2, 1993), BGE believes that holders of outstanding notes who exchange their outstanding notes for exchange notes may offer for resale, resell and otherwise transfer such exchange notes without compliance with the registration and prospectus delivery provisions of the Securities Act. This would not apply, however, to any holder that is a broker-dealer that acquired outstanding notes as a result of market-making activities or other trading activities or directly from BGE for resale under an available exemption under the Securities Act. Also, resale would only be permitted for exchange notes that are acquired in the ordinary course of a holder's business, where such holder has no arrangement or understanding with any person to participate in the distribution of such exchange notes and such holder is not an "affiliate" of BGE. The staff of the SEC has not considered this exchange offer in the context of a no-action letter, and there can be no assurance that the staff of the SEC would make a similar determination with respect to this exchange offer. Each broker-dealer that receives exchange notes for its own account in exchange for outstanding notes under the exchange offer, where such outstanding notes were acquired by such broker-dealer as a result of market-making or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. See "Plan of Distribution." Withdrawal Rights Except as otherwise provided herein, tenders of outstanding notes may be withdrawn at any time prior to 5:00 p.m., New York City time, on __________________ , 2002, or such date and time to which the exchange offer is extended. In order for a withdrawal to be effective, such withdrawal must be in writing and timely received by the exchange agent at its address or the facsimile number set forth under "--Exchange Agent" or by telegram or telex, prior to 5:00 p.m., New York City time, on the expiration date. Any such notice of withdrawal must specify the name of the holder who tendered the outstanding notes to be withdrawn, include a statement that such holder is withdrawing his election to have such outstanding notes exchanged, the principal amount of outstanding notes to be withdrawn, and (if certificates for such outstanding notes have been tendered) the name of the registered holder of the outstanding notes as set forth on the outstanding notes, if different from that of the person who tendered such outstanding notes. If certificates for outstanding notes have been delivered or otherwise identified to 16 the exchange agent, the notice of withdrawal must specify the serial numbers on the particular certificates for the outstanding notes to be withdrawn and the signature on the notice of withdrawal must be guaranteed by an Eligible Institution, except in the case of outstanding notes tendered for the account of an Eligible Institution. If outstanding notes have been tendered pursuant to the procedures for book-entry transfer set forth in "--Procedures for Tendering Outstanding Notes," the notice of withdrawal must specify the name and number of the account at DTC to be credited with the withdrawal of outstanding notes and must otherwise comply with the procedures of DTC. Withdrawals of tenders of outstanding notes may not be rescinded. Outstanding notes properly withdrawn will not be deemed validly tendered for purposes of the exchange offer, but may be retendered at any subsequent time prior to the expiration date of the exchange offer by following any of the procedures described above under "-- Procedures for Tendering Outstanding Notes." All questions as to the validity, form and eligibility (including time of receipt) of such withdrawal notices will be determined by BGE, in its sole discretion, which determination shall be final and binding on all parties. Neither BGE, any affiliates of BGE, the exchange agent or any other person shall be under any duty to give any notification of any defects or irregularities in any notice of withdrawal or incur any liability for failure to give any such notification. Any outstanding notes which have been tendered but which are withdrawn will be returned to the holder promptly after withdrawal. Interest on the Exchange Notes Interest on the exchange notes will be payable every six months on June 15 and December 15 of each year at a rate of 5.25% per annum, commencing June 15, 2002. The exchange notes will mature on December 15, 2006. Conditions to the Exchange Offer Notwithstanding any other provisions of the exchange offer or any extension of the exchange offer, BGE will not be required to accept for exchange, or to exchange, any outstanding notes for any exchange notes and will not be required to issue exchange notes in exchange for any outstanding notes and, as described below, may at any time and from time to time, terminate or amend the exchange offer, whether or not any outstanding notes have been accepted to exchange, or may waive any conditions to or amend the exchange offer, if any of the following conditions have occurred or exists or have not been satisfied before the expiration date: a change in the current interpretation by the staff of the SEC which permits resale of exchange notes as described under "--Resales of Exchange Notes;" the institution or threat of an action or proceeding in any court or by or before any governmental agency or body with respect to the exchange offer which, in BGE's judgment, would reasonably be expected to impair the ability of BGE to proceed with the exchange offer; the adoption or enactment of any law, statute, rule or regulation which, in BGE's judgment, would reasonably be expected to impair the ability of BGE to proceed with the exchange offer; the issuance of a stop order by the SEC or any state securities authority suspending the effectiveness of the registration statement, or proceedings for that purpose; and any change or development involving a prospective change in the business or financial affairs of BGE which BGE believes might materially impair its ability to proceed with the exchange offer. If BGE determines in its sole and absolute discretion that any of the foregoing events or conditions has occurred or exists or has not been satisfied at any time prior to the expiration date, BGE 17 may, subject to applicable law, terminate the exchange offer (whether or not any outstanding notes have theretofore been accepted for exchange) or may waive any such condition or otherwise amend the terms of the exchange offer in any respect. If such waiver or amendment constitutes a material change to the exchange offer, BGE will promptly disclose such waiver or amendment by means of a prospectus supplement that will be distributed to the registered holders of the outstanding notes. In this case, BGE will extend the exchange offer to the extent required by Rule 14e-1 under the Exchange Act and the Registration Rights Agreement. United States Federal Income Tax Consequences The following discussion summarizes material federal income tax consequences of the exchange of the outstanding notes under existing federal income tax law. These consequences may change in the future, which change may be applied retroactively in a manner that could affect you adversely. This summary does not discuss all aspects of federal income taxation which may be relevant to you in light of your personal investment circumstances or if you receive special treatment under the federal income tax laws because you are a financial institution, insurance company, tax-exempt organization, broker-dealer, person holding outstanding notes or exchange notes as part of a "straddle," "hedge" or "conversion transaction" or foreign taxpayer. This summary does not discuss any aspects of other federal taxes or state, local or foreign tax law and assumes that you hold and will continue to hold your outstanding notes for investment as capital assets under the Internal Revenue Code of 1986. You are advised to consult your tax advisors as to the specific tax consequences of exchanging your outstanding notes, including the application and effect of federal, state, local and foreign income and other tax laws. An exchange of your outstanding notes for exchange notes should not be treated as an event in which gain or loss, if any, is realized for federal income tax purposes, because the terms of your exchange notes do not differ materially in kind or extent from the terms of your outstanding notes. As a result, you should not recognize any gain or loss for federal income tax purposes if you participate in the exchange offer, and the exchange notes received in the exchange offer should be treated as a continuation of your outstanding notes surrendered in the exchange offer. You should have the same basis and holding period in your exchange notes as you had in your outstanding notes. Exchange Agent The Bank of New York has been appointed as the exchange agent. Delivery of the letters of transmittal and any other required documents and requests for additional copies of this prospectus or of the letter of transmittal should be directed to the exchange agent as follows: By Registered or Certified Mail: The Bank of New York Attn: Santino Ginocchietti 15 Broad Street, 16th Floor New York, NY 10007 By Overnight Courier The Bank of New York Reorganization Department Attn: Santino Ginocchietti 15 Broad Street, 16th Floor New York, NY 10007 By Hand Delivery in New York: The Bank of New York 18 Reorganization Department Attn: Santino Ginocchietti 15 Broad Street, 16th Floor New York, NY 10007 By Facsimile (for Eligible Institutions only): The Bank of New York Reorganization Department Attn: Santino Ginocchietti (212) 235-2261 Confirm by telephone: (212) 235-2363 DELIVERY TO OTHER THAN THE ABOVE ADDRESSES OR FACSIMILE NUMBER WILL NOT CONSTITUTE A VALID DELIVERY. Fees and Expenses The expenses of soliciting tenders will be borne by BGE. The principal solicitation is being made by mail. Additional solicitation may be made personally or by telephone or other means by officers, directors or employees of BGE. BGE has not retained any dealer-manager or similar agent in connection with the exchange offer and will not make any payments to brokers, dealers or others soliciting acceptances of the exchange offer. BGE has agreed to pay the exchange agent reasonable and customary fees for its services and will reimburse it for its reasonable out-of-pocket expenses in connection therewith. Holders who tender their outstanding notes for exchange will not be obligated to pay any transfer taxes in connection therewith, except that if exchange notes are to be delivered to, or are to be issued in the name of, any person other than the registered holder of the outstanding notes tendered, or if a transfer tax is imposed for any reason other than the exchange of outstanding notes in connection with the exchange offer, then the amount of any such transfer tax (whether imposed on the registered holder or any other persons) will be payable by the tendering holder. If satisfactory evidence of payment of such transfer tax or exemption therefrom is not submitted with the letter of transmittal, the amount of such transfer tax will be billed directly to such tendering holder. DESCRIPTION OF THE EXCHANGE NOTES BGE issued the outstanding notes under the Indenture among itself and The Bank of New York, as Trustee. The terms of the exchange notes are identical in all material respects to the outstanding notes, except that (1) the exchange notes will have been registered under the Securities Act and therefore will not be subject to certain restrictions on transfer applicable to the outstanding notes and (2) holders of the exchange notes will not be entitled to certain rights of holders of outstanding notes under the Registration Rights Agreement. The terms of the outstanding notes included and the terms of the exchange notes will be those stated in the Indenture and those made a part of the Indenture by reference to the Trust Indenture Act of 1939 as in effect on the date of the Indenture (the "Trust Indenture Act"). The exchange notes are subject to all such terms, and holders of the exchange notes should refer to the Indenture and the Trust Indenture Act for a complete statement of applicable terms. The following description is a summary of the material provisions of the Indenture and the Registration Rights Agreement. It does not restate those agreements in their entirety. We urge you to read the Indenture and the Registration Rights Agreement because they, and not this description, define your rights as holders of the exchange notes. Copies of the forms of Indenture and Registration Rights 19 Agreement are filed as exhibits to the registration statement of which this prospectus forms a part and are available from BGE upon request. Ranking These exchange notes are unsecured general obligations of BGE and rank equally in right of payment with other unsecured and unsubordinated indebtedness of BGE. The exchange notes are subordinated to our First Refunding Mortgage Bonds, which are secured by a mortgage lien on all our assets. The Indenture permits BGE to issue an unlimited amount of notes from time to time. As of the date of this prospectus, there are approximately $1.1 billion in principal amount of unsecured notes outstanding under the Indenture, and $1.0 billion of secured debt outstanding. Principal, Maturity and Interest BGE will issue the exchange notes under the Indenture in a maximum aggregate principal amount of $300 million. BGE will issue the exchange notes in denominations of $1,000 and integral multiples thereof. The exchange notes will mature on December 15, 2006. Interest on these exchange notes will accrue at the rate of 5.25% per year and will be payable semi-annually in arrears on June 15 and December 15, beginning on June 15, 2002. BGE will make each interest payment to the holders of record of these exchange notes on the immediately preceding November 30 and May 31. Interest on these exchange notes will accrue from the date of original issuance or, if interest has already been paid, from the date it was most recently paid on the outstanding notes or exchange notes. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months. Accrued interest will not be paid on the date of exchange. The next interest payment will be paid as stated in the previous paragraph. Optional Redemption We have the option to redeem all or any part of the Notes at any time prior to their maturity date. We will give notice of any redemption at least 30 days, but not more than 60 days, before a redemption date. We will pay a redemption price equal to the sum of: 1) 100% of the principal amount of Notes being redeemed, plus 2) all accrued and unpaid interest on those Notes, plus 3) any "make-whole premium." We will appoint an independent investment banking institution of national standing to calculate the make-whole premium. Lehman Brothers Inc. will make that calculation if: 1) we do not appoint someone else at least 30 days before the redemption date or 2) the institution we appoint is unwilling or unable to make the calculation. If Lehman Brothers Inc. is unwilling or unable to make the calculation, then The Bank of New York, who is the Trustee, will appoint an independent investment banking institution of national standing to make the calculation. The amount of the make-whole premium, if any, will be equal to the excess of: 1) the sum of the present values, calculated as of the redemption date, of: a) each interest payment on each interest payment date after the redemption date that would have been paid on the Notes. (this does not include any accrued interest paid at the redemption date); and 20 b) the principal amount that would have been payable at the final maturity of the Notes being redeemed; over 2) the principal amount of the Notes being redeemed. An independent investment banker will calculate the present values of interest and principal payments in accordance with generally accepted principles of financial analysis. The present values will be calculated by discounting the amount of each payment of interest or principal from the date that each payment would have been paid to the redemption date on a semi-annual basis assuming a 360-day year consisting of twelve 30-day months at a discount rate that is equal to the Treasury Yield (as defined below) plus 25 basis points. The Treasury Yield in the calculation will be an annual interest rate that is equal to the weekly average yield to maturity of United States Treasury Notes having a constant maturity corresponding to the remaining term to maturity of the Notes that will be redeemed. This interest rate will be calculated to the nearest 1/12th of a year. The independent investment banker will determine the Treasury Yield on the third business day before the redemption date. The independent investment banker will determine the weekly average yields of United States Treasury Notes from the most recent statistical release published by the Federal Reserve Bank of New York entitled "H.15(519) Selected Interest Rates" or any successor publication. If the H.15 Statistical Release gives a weekly average yield for United States Treasury Notes having a constant maturity that is the same as the remaining term of the Notes, then the Treasury Yield will equal that weekly average yield. In all other cases, the independent investment banker will calculate the Treasury Yield by interpolating, on a straight-line basis, the weekly average yields from the H.15 Statistical Release on the United States Treasury Notes having a constant maturity closest to but greater than the remaining term of the Notes and the United States Treasury Notes having a constant maturity closest to and less than the remaining term. The independent investment banker will round any weekly average yields calculated by interpolation to the nearest 1/100th of 1%, and will round the percentage up for any figure of 1/200th of 1% or above. If weekly average yields for United States Treasury Notes are not available in the H.15 Statistical Release, or anywhere else, the independent investment banker will select comparable rates and calculate the Treasury Yield using these rates. The redemption will not be made unless the redemption moneys are received by the trustee by the redemption date. The failure to redeem will not be an event of default. Except as described above, the Notes will not be redeemable at BGE's option prior to December 15, 2006. Payment and Paying Agent In the event that any payment date is not a Business Day, payment will be made on the next Business Day, except that if such Business Day is in the succeeding calendar month, payment will be made on the preceding Business Day. Business Day" means any day other than a Saturday or Sunday or a day on which banking institutions in New York, New York or Baltimore, Maryland are authorized or obligated by law or executive order to close. The record date for any Notes will be 15 calendar days before each interest payment date. 21 Interest on each Note on each interest payment date will be paid to the person in whose name such Note is registered as of the close of business on the record date for the interest payment date. However, interest payable at maturity will be paid to the person to whom principal is paid. If there has been a default in the payment of interest on any Note, the defaulted interest may be payable to the holder of that Note as of the close of business on a date not less than five days prior to the date proposed by BGE for payment of such defaulted interest or in any other manner permitted by any securities exchange or automated quotation system on which the Note may be listed, if the Indenture Trustee finds it workable. The principal of and interest on the Notes at maturity will be payable upon presentation of the Notes at the corporate trust office of The Bank of New York, in the City of New York, as paying agent for BGE. BGE may change the place of payment on the Notes, may appoint one or more additional paying agents (including BGE) and may remove any paying agent, all at its discretion. Transfer and Exchange A holder may transfer or exchange the Notes in accordance with the Indenture. The Trustee may require a holder, among other things, to furnish appropriate endorsements and transfer documents and BGE may require a holder to pay any taxes or other governmental charges in connection with such transfer or exchange. The registered holder of a Note will be treated as the owner of it for all purposes. Events of Default and Remedies "Event of Default" means any of the following: o failure to pay the principal of (or premium, if any, on) any note of a series when due and payable; o failure to pay for 30 days any interest on any note of any series; o failure to perform any other requirements in the notes, or in the Indenture in regard to such notes, for 60 days after notice; or o certain events of insolvency. An Event of Default for a particular series of notes does not necessarily mean that an Event of Default has occurred for any other series of notes issued under the Indenture. If an Event of Default shall have occurred and be continuing the Trustee or the holders of at least 25% of the principal amount of the notes of the series affected by an Event of Default may require us to repay the entire principal of the notes of such series immediately. Subject to certain conditions, this requirement may be rescinded by the holders of at least a majority in aggregate principal amount of the notes of the series then outstanding. The Trustee must within 90 days after a default occurs, notify the holders of the notes of the series of the default if we have not remedied it (default is defined to include the events specified above without the grace periods or notice). The Trustee may withhold notice to the holders of such notes of any default (except in the payment of principal or interest), if it in good faith considers such withholding in the interest of the holders. We are required to file an annual certificate with the Trustee, signed by an officer, about any default by us under any provisions of the Indenture. Subject to the provisions of the Indenture relating to its duties in case of default, the Trustee shall be under no obligation to exercise any of its rights or powers under the Indenture at the request, order or direction of any holders unless such holders offer the Trustee reasonable indemnity. Subject to the provisions for indemnification and certain other limitations, the holders of a majority in principal amount of 22 the notes of any series may direct the time, method and place of conducting any proceedings for any remedy available to, or exercising any trust or power conferred on, the Trustee with respect to such notes. Consolidation, Merger or Sale We may not merge or consolidate with any corporation or sell substantially all of our assets as an entirety unless: o we are the continuing corporation or the successor corporation expressly assumes the payment of principal, and premium, if any, and interest on the Notes and the performance and observance of all the covenants and conditions of the Indenture binding on us; and o we, or the successor corporation, are not immediately after the merger, consolidation, or sale in default in the performance of a covenant or condition in the Indenture. Modification of Indenture Under the Indenture, without the consent of the holders of the Notes, we may make certain specified changes to the Indenture and the Notes. Other changes require the consent of the holders of not less than 66 2/3% in aggregate principal amount of the outstanding notes of all series to be affected, voting as one class. However, no changes to the terms of payment of principal or interest, or reducing the percentage required for changes, is effective against any holder without its consent. Concerning the Trustee The Trustee, The Bank of New York, provides general banking services, including those as a depository, for BGE. No Personal Liability of Directors, Officers, Employees, Incorporators and Stockholders No director, officer, employee, incorporator or stockholder of BGE shall have any liability for any obligations of BGE under the Notes, the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. Such waiver may not be effective to waive liabilities under the federal securities laws and it is the view of the SEC that such a waiver is against public policy. Governing Law The Indenture and the Notes will be governed by and construed in accordance with the laws of the State of Maryland. Book Entry, Delivery and Form The certificates representing the outstanding and exchange notes have been and will be issued in fully registered form, without coupons. Except for certificated Notes issued to institutional accredited investors, the Notes will be deposited with, or on behalf of, DTC, and registered in the name of Cede & Co., as DTC's nominee in the form of one or more global certificates or will remain in the custody of the Trustee pursuant to a FAST Balance Certificate Agreement between DTC and the Trustee. Upon the issuance of the global certificates, DTC or its custodian credits, on its internal system, the respective principal amount of the individual beneficial interests represented by such global certificates to the accounts of persons who have accounts with such depositary. Such accounts initially will be designated by or on behalf of the initial purchasers. Ownership of beneficial interests in a global certificate will be limited to persons who have 23 accounts with DTC ("participants") or persons who hold interests through participants. Ownership of beneficial interests in a global certificate will be shown on, and the transfer of that ownership will be effected only through, records maintained by DTC or its nominee (with respect to interests of participants) and the records of participants (with respect to interests of persons other than participants). Qualified institutional buyers may hold their interests in a global certificate directly through DTC if they are participants in such system or indirectly through organizations which are participants in such system. Investors that purchased outstanding notes pursuant to Regulation S may hold their interests directly through Clearstream Banking, societe anonyme ("Clearstream Luxembourg") or the Euroclear System ("Euroclear"), if they are participants in such systems, or indirectly through organizations that are participants in such systems. Beginning 40 days after the date of initial issuance of the outstanding notes but not earlier, investors may also hold such interests through organizations other than Clearstream Luxembourg or Euroclear that are participants in the DTC system. Clearstream Luxembourg and Euroclear will hold interests in the global certificate representing outstanding notes purchased pursuant to Regulation S on behalf of their participants through DTC. So long as DTC, or its nominee, is the registered owner or holder of a global certificate, DTC or such nominee, as the case may be, will be considered the sole owner or holder of the Notes represented by such global certificate for all purposes under the Indenture and the Notes. No beneficial owner of an interest in a global certificate will be able to transfer the interest except in accordance with DTC's applicable procedures, in addition to those provided for under the Notes, the Indenture and, if applicable, those of Euroclear and Clearstream Luxembourg. Payments of the principal of and interest on a global certificate will be made to DTC or its nominee, as the case may be, as the registered owner thereof. Neither BGE, the Trustee nor any paying agent will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in a global certificate or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. DTC or its nominee, upon receipt of any payment of principal or interest in respect of a global certificate, will credit participants' accounts with payments in amounts proportionate to their respective beneficial interests in the principal amount of such global certificate as shown on the records of DTC or its nominee. BGE also expects that payments by participants to owners of beneficial interests in such global certificate held through such participants will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers registered in the names of nominees for such customers. Such payments will be the responsibility of such participants. Transfers between participants in DTC will be effected in the ordinary way in accordance with DTC rules. If a holder requires physical delivery of a certificated note for any reason, including to sell Notes to persons in jurisdictions which require such delivery of such Notes or to pledge such Notes, such holder must transfer its interest in a Global Certificate in accordance with the procedures under DTC's applicable procedures, the procedures set forth in the Indenture and, if applicable, those of Euroclear and Clearstream Luxembourg. DTC will take any action permitted to be taken by a holder of Notes (including the presentation of Notes for such exchange as described below) only at the direction of one or more participants to whose account the DTC interests in a global certificate is credited and only in respect of such portion of the aggregate principal amount of the Notes as to which such participant or participants has or have given such direction. However, if there is an Event of Default under the Notes, DTC will exchange a global certificate for certificated notes, which it will distribute to its participants. DTC is a limited purpose trust company organized under the laws of the State of New York, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the Uniform Commercial Code and a "Clearing Agency" registered pursuant to the provisions of Section 17A of the 24 Securities Exchange Act of 1934. DTC was created to hold securities for its participants and facilitate the clearance and settlement of securities transactions between participants through electronic book-entry changes in accounts of its participants, thereby eliminating the need for physical movement of certificates. Participants include securities brokers and dealers, banks, trust companies and clearing corporations and may include certain other organizations. Indirect access to the DTC system is available to others such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a participant, either directly or indirectly (indirect participants). The rules applicable to DTC and its participants are on file with the SEC. Although DTC, Euroclear and Clearstream Luxembourg are expected to follow the foregoing procedures in order to facilitate transfers of interests in the Notes represented by global certificates among their respective participants, they are under no obligation to perform or continue to perform such procedures, and such procedures may be discontinued at any time. Neither BGE nor the Trustee will have any responsibility for the performance by DTC, Euroclear or Clearstream Luxembourg or their respective participants or indirect participants of their respective obligations under the rules and procedures governing their operations. If DTC is at any time unwilling or unable to continue as a depositary for a global certificate and a successor depositary is not appointed by BGE within 90 days, BGE will issue certificated notes in exchange for a global certificate. Settlement for the Notes were made by the initial purchasers in immediately available funds. All payments of principal and interest will be made by BGE in immediately available funds. Secondary trading in long-term bonds and notes of corporate issuers is generally settled in clearing-house or next-day funds. In contrast, beneficial interests in the Notes that are not certificated Notes will trade in DTC's Same Day Funds Settlement System until maturity. Therefore, the secondary market trading activity in such interests will settle in immediately available funds. No assurance can be given as to the effect, if any, of settlement in immediately available funds on trading activity in the Notes. The information under this sub-caption "Book-Entry, Delivery and Form" concerning DTC and DTC's book-entry system has been obtained from sources that BGE believes to be reliable, but BGE does not take any responsibility for the accuracy thereof. Certificated Notes--Registration and Transfer If we issue certificated notes, they will be registered in the name of the holder of the Notes. The notes may be transferred or exchanged, pursuant to administrative procedures in the Indenture, without the payment of any service charge (other than any tax or other governmental charge), by contacting the paying agent. Exchange Offer and Registration Rights We entered into a Registration Rights Agreement with the initial purchasers for the benefit of the holders of the outstanding notes in which we agreed for the benefit of the holders of the outstanding notes that we will use commercially reasonable efforts (i) to file with the SEC within 90 calendar days after the issuance of the outstanding notes, a registration statement with respect to exchange notes identical in all material respects to the outstanding notes (except that the exchange notes will not contain transfer restrictions and will not provide for any increase in the interest rate or interest premium under the circumstances described below) and (ii) to cause the registration statement to be declared effective under the Securities Act within 180 calendar days after the issuance of the outstanding notes. Promptly after the registration statement has been declared effective, we will offer to holders of the outstanding notes the opportunity to exchange all their outstanding notes for exchange notes. We will keep the exchange offer 25 open for not less than 30 calendar days (or longer if required by applicable law) after the date the registration statement is declared effective. For each outstanding note validly tendered to us pursuant to the exchange offer, the holder of that outstanding note will receive an exchange note having a principal amount equal to the principal amount of the tendered outstanding note. Interest on each exchange note will accrue from the last interest payment date to which interest was paid on the outstanding note surrendered in exchange or, if no interest has been paid on the outstanding note, from the issuance of the outstanding notes. Based on existing interpretations of the Securities Act by the staff of the SEC set forth in several no-action letters to third parties, and subject to the immediately following sentence, we believe that the exchange notes to be issued in the exchange offer may be offered for resale, resold and otherwise transferred by the holders thereof (other than holders who are broker-dealers) without further compliance with the registration and prospectus delivery provisions of the Securities Act. However, any purchaser of an outstanding note who is an affiliate of ours who acquired the outstanding note, or is acquiring the exchange note to be received, other than in the ordinary course of its business, or who intends to participate in the exchange offer for the purpose of distributing the exchange notes, or any broker-dealer who purchased the outstanding notes from us for resale pursuant to Rule 144A or any other available exemption under the Securities Act (i) will not be able to rely on the interpretations of the staff of the SEC set forth in these no-action letters, (ii) will not be entitled to tender its outstanding notes in the exchange offer, and (iii) must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any sale or transfer of the Notes unless such sale or transfer is made pursuant to an exemption from such requirements. We do not intend to seek our own no-action letter, and there can be no assurance that the staff of the SEC would make a similar determination with respect to the exchange notes as it has in such no-action letters to third parties. Each holder of outstanding notes (other than certain specified holders) who wishes to exchange the outstanding notes for exchange notes in the exchange offer will be required to represent that (i) it is not an affiliate of ours, (ii) the outstanding notes to be exchanged for exchange notes in the exchange offer were acquired in the ordinary course of its business, (iii) it is not a broker-dealer tendering outstanding notes acquired directly from us, and (iv) at the time of the exchange offer, it has no arrangement with any person to participate in the distribution (within the meaning of the Securities Act) of the exchange notes. In addition, in connection with any resale of exchange notes, any broker-dealer who acquired the exchange notes for its own account as a result of market-making or other trading activities (a "participating broker-dealer") must deliver a prospectus meeting the requirements of the Securities Act. The SEC has taken the position that participating broker-dealers may fulfill their prospectus delivery requirements with respect to the exchange notes, other than a resale of an unsold allotment from the original sale thereof, with the prospectus contained in the exchange offer registration statement. Under the Registration Rights Agreement, we are required to allow participating broker-dealers and other persons, if any, subject to similar prospectus delivery requirements to use the prospectus contained in the exchange offer registration statement in connection with the resale of such exchange notes for a period of 210 calendar days from the date the exchange offer registration statement is declared effective. If: (i) because of any change in law or in currently prevailing interpretations of the staff, we are not permitted to effect the exchange offer, (ii) the exchange offer is not consummated within 210 calendar days of the issuance of the outstanding notes, or (iii) any holder of an outstanding note that is a qualified institutional buyer notifies us prior to the 20th day following the commencement of the exchange offer that (i) such holder was prohibited by applicable law or SEC policy from participating in the exchange offer, (ii) that such holder may not resell the exchange notes to the public without delivering a prospectus and that the prospectus contained in the exchange offer registration statement is not appropriate or available for such resale by such holder or (iii) that it is a participating broker-dealer and holds Notes acquired directly from us or one of our affiliates, then in each case, we will (x) promptly deliver to the holders written notice thereof and (y) at our sole expense (a) as promptly as practicable (but in no event more than 90 days after so required or requested pursuant to the Registration Rights Agreement), file a shelf registration statement covering resale of those Notes (b) use commercially reasonable efforts to cause the shelf registration 26 statement to be declared effective under the Securities Act (but in no event more than 120 days after so required or requested pursuant to the Registration Rights Agreement) and (c) use commercially reasonable efforts to keep effective the shelf registration statement until the earlier of two years (or, if Rule 144(k) is amended to provide a shorter restrictive period, such shorter period) after the issuance of the outstanding notes or such time as all of the applicable Notes have been sold under the shelf registration statement. We will, if a shelf registration is declared effective, provide to each holder copies of the prospectus that is a part of the shelf registration statement, notify each such holder when the shelf registration statement for the Notes has become effective and take any other actions as are required to permit unrestricted resales of the Notes. A holder that sells Notes pursuant to the shelf registration statement will be required to be named as a selling security holder in the related prospectus, to provide information related thereto and to deliver that prospectus to purchasers, will be subject to certain of the civil liability provisions under the Securities Act in connection with the sales and will be bound by the provisions of the Registration Rights Agreement that are applicable to such a holder (including certain indemnification rights and obligations). We will not have any obligation to include in the shelf registration statement holders who do not deliver that information to us. If we fail to comply with certain provisions of the Registration Rights Agreement, as described below, then a special interest premium will become payable in respect of the Notes. If: (i) the exchange offer registration statement is not filed with the SEC on or before the 90th calendar day after the issuance of the outstanding notes, (ii) the exchange offer registration statement is not declared effective on or before the 180th calendar day after the issuance of the outstanding notes, (iii) the exchange offer is not consummated on or before the 210th calendar day after the issuance of the outstanding notes, (iv) a shelf registration statement is required to be filed and is not filed within 90 days after being so required or (v) a shelf registration statement is required to be filed and is not declared effective on or prior to the 120th day after being so required, the special interest premium will accrue in respect of the Notes from and including the next calendar day following each of (a) such 90-day period in the case of clause (i) above, (b) such 180-day period in the case of clause (ii) above, (c) such 210-day period in the case of clause (iii) above, (d) such 90-day period in the case of clause (iv) above or (e) such 120-day period in the case of clause (v) above in each case at a rate equal to 0.25% per year. The aggregate amount of the special interest premium in respect of the Notes payable pursuant to the above provisions will in no event exceed 1.0% per year and provided, further, that if a shelf registration statement is required and we request holders of the Notes to provide the information called for by the Registration Rights Agreement for inclusion in the shelf registration statement, the Notes owned by holders who do not deliver such information to us when required pursuant to the Registration Rights Agreement will not be entitled to any such increase in the interest rate. Upon (1) the filing of an exchange offer registration statement after the 90-day period described in clause (i) above, (2) the effectiveness of the exchange offer registration statement after the 180-day period described in clause (ii) above or (3) the consummation of the exchange offer, after the 210-day period described in clause (iii) above, (4) the filing of the shelf registration statement after the 90-day period described in clause (iv) above or (5) the effectiveness of the shelf registration statement after the 120-day period described in clause (v) above, the interest rate on the Notes from and including the day of such filing, effectiveness or consummation, as the case may be, will be reduced to the original interest rate set forth on the cover page of this prospectus. If a shelf registration statement is declared effective pursuant to the foregoing paragraphs, and if such shelf registration statement ceases to be continuously effective or the prospectus contained in such shelf registration statement ceases to be usable for resales (x) at any time prior to the earlier of two years (or if Rule 144(k) is amended to provide a shorter restrictive period, such shorter period) after the issuance of the outstanding notes or such time as all of the applicable Notes have been sold under the shelf registration statement or (y) due to corporate developments, public filings with the SEC or similar events, or because the prospectus contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading, and such failure continues for more than 60 days (whether or not consecutive and whether or not arising out of a single or multiple circumstances) in any twelve-month period (the day, with respect to (x), or the 61st day, with respect to (y), 27 being referred to as the "default day"), then from the default day until the earlier of (i) the date that the shelf registration statement and the prospectus are again deemed effective and usable for resales, respectively, (ii) the date that is the second anniversary of the issuance of the outstanding notes (or, if Rule 144(k) is amended to provide a shorter restrictive period, such shorter period), or (iii) the date as of which all of the Notes are sold pursuant to the shelf registration statement, the special interest premium in respect of the Notes will accrue at a rate equal to 0.25% per year. The aggregate amount of the special interest premium in respect of the Notes payable pursuant to all of the above provisions will in no event exceed 1.0% per year. The interest premium shall be the sole remedy and extent of damages payable to or recoverable by the holders of the Notes as a result of our failure to satisfy any of our obligations regarding the exchange offer or under the Registration Rights Agreement. If the interest premium must be paid, it will be paid to you on the same dates and terms as other interest payments on the Notes. If we fail to keep the shelf registration statement continuously effective or useable for resales pursuant to the preceding paragraph, we will give the holders notice to suspend the sale of the Notes and will extend the relevant period referred to above during which we are required to keep effective the shelf registration statement (or the period during which participating broker-dealers are entitled to use the prospectus included in an exchange offer registration statement in connection with the resale of the exchange notes) by the number of days during the period from and including the date of the giving of such notice to and including the date when holders will have received copies of the supplemented or amended prospectus necessary to permit resales of the Notes or to and including the date on which we have given notice that the sale of the Notes may be resumed, as the case may be. Each outstanding note will contain a legend to the effect that the holder of the outstanding note, by its acceptance thereof, will be deemed to have agreed to be bound by the provisions of the Registration Rights Agreement. The Registration Rights Agreement will be governed by, and construed in accordance with the laws of the State of New York. The summary herein of certain provisions of the Registration Rights Agreement does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all the provisions of the Registration Rights Agreement, a form of which is available upon request to us. In addition, the information set forth above concerning certain interpretations and positions taken by the staff of the SEC is not intended to constitute legal advice, and prospective investors should consult their own legal advisors with respect to these matters. PLAN OF DISTRIBUTION Based on an interpretation by the staff of the SEC in "no-action" letters issued to third parties in similar transactions, we believe that exchange notes issued to you in the exchange offer in exchange for your outstanding notes may be offered for resale, resold and otherwise transferred by you, unless you are an "affiliate" of BGE or any of our subsidiaries, within the meaning of Rule 405 under the Securities Act, without compliance with the registration and prospectus delivery provisions of the Securities Act. However, this applies only if your exchange notes are acquired in the ordinary course of your business and you have no arrangement with any person to participate in the distribution of your exchange notes. We refer you to the "Exxon Capital Holdings Corporation" SEC No-Action Letter available May 13, 1988, the "Morgan Stanley & Co. Incorporated" SEC No-Action Letter available June 5, 1991, the "Shearman & Sterling" SEC No-Action Letter available July 2, 1993 and the "Brown & Wood LLP" SEC No-Action Letter available February 7, 1997 for support of our belief. 28 A broker-dealer that is the holder of outstanding notes that were acquired for the account of such broker-dealer as a result of market-making or other trading activities (other than outstanding notes acquired directly from us or any affiliate of ours) may exchange such outstanding notes for exchange notes pursuant to the exchange offer; provided that each broker-dealer that receives exchange notes for its own account in exchange for outstanding notes, where such outstanding notes were acquired by such broker-dealer as a result of market-making or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of exchange notes received in exchange for outstanding notes where such outstanding notes were acquired as a result of market-making activities or other trading activities. We have agreed that for a period of not to exceed 210 days after the effective date of the registration statement (or such shorter period during which broker-dealers are required by law to deliver this prospectus), we will use commercially reasonable efforts to make this prospectus, as it may be amended or supplemented from time to time, available to any broker-dealer for use in connection with any such resale. We will not receive any proceeds from any sale of exchange notes by broker-dealers or any other holder of exchange notes. Exchange notes received by broker-dealers for their own account pursuant to the exchange offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the exchange notes or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer and/or the purchasers of any such exchange notes. Any broker-dealer that resells exchange notes that were received by it for its own account pursuant to the exchange offer and any broker-dealer that participates in a distribution of such exchange notes may be deemed to be an "underwriter" within the meaning of the Securities Act and any profit on any such resale of exchange notes and any commissions or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The letter of transmittal states that by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. For a period of not to exceed 210 days after the effective date of the registration statement (or such shorter period during which broker-dealers are required by law to deliver this prospectus), we will promptly send additional copies of this prospectus and any amendment or supplement to this prospectus to any broker-dealer that requests such documents in the letter of transmittal. We have agreed to pay all expenses incident to the exchange offer and to our performance of, or compliance with, the Registration Rights Agreement (other than commissions or concessions of any brokers or dealers) and will indemnify the holders of the Notes (including any broker-dealers) against certain liabilities, including liabilities under the Securities Act. LEGAL MATTERS Certain legal matters with respect to the validity of the exchange notes is being passed upon by Sally Samuel, Esq., counsel to BGE. EXPERTS The consolidated financial statements and financial statement schedule incorporated in this prospectus by reference to the Annual Report on Form 10-K of Baltimore Gas and Electric Company for the year ended December 31, 2000 have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, independent accountants, given on the authority of said firm as experts in auditing and accounting. ================================================================================ [COMPANY LOGO] Offer to Exchange $300,000,000 All Outstanding 5.25% Notes due December 15, 2006 for Registered 5.25%Notes due December 15, 2006 ---------------------------- PROSPECTUS ---------------------------- [Date to be filled in] ================================================================================ All dealers that effect transactions in these securities, whether or not participating in this offering may be required to deliver a prospectus. II-1 Part II INFORMATION NOT REQUIRED IN PROSPECTUS Item 20. Indemnification of Directors and Officers The following description of indemnification allowed under Maryland statutory law is a summary rather than a complete description. Reference is made to Section 2-418 of the Corporations and Associations Article of the Maryland Annotated Code, which is incorporated herein by reference, and the following summary is qualified in its entirety by such reference. By a Maryland statute, a Maryland corporation may indemnify any director who was or is a party or is threatened to be made a party to any threatened, pending, or completed action, suit or proceeding, whether civil, criminal, administrative or investigative ("Proceeding") by reason of the fact that he is a present or former director of the corporation and any person who, while a director of the corporation, is or was serving at the request of the corporation as a director, officer, partner, trustee, employee, or agent of another corporation, partnership, joint venture, trust, other enterprise, or employee benefit plan ("Director"). Such indemnification may be against judgments, penalties, fines, settlements and reasonable expenses actually incurred by him in connection with the Proceeding unless it is proven that (a) the act or omission of the Director was material to the matter giving rise to the Proceeding and (i) was committed in bad faith, or (ii) was the result of active and deliberate dishonesty; or (b) the Director actually received an improper personal benefit in money, property, or services; or (c) in the case of any criminal proceeding, the Director had reasonable cause to believe his act or omission was unlawful. However, the corporation may not indemnify any Director in connection with a Proceeding by or in the right of the corporation if the Director has been adjudged to be liable to the corporation. A Director or officer who has been successful in the defense of any Proceeding described above shall be indemnified against reasonable expenses incurred in connection with the Proceeding. The corporation may not indemnify a Director in respect of any Proceeding charging improper personal benefits to the Director in which the Director was adjudged to be liable on the basis that personal benefit was improperly received. The corporation may not indemnify a director or advance expenses for a proceeding brought by the director against the corporation except if the proceeding is brought to enforce indemnification by the corporation or if the corporation's charter or bylaws, a board resolution or contract provides otherwise. Notwithstanding the above provisions, a court of appropriate jurisdiction, upon application of the Director or officer, may order indemnification if it determines that in view of all the relevant circumstances, the Director or officer is fairly and reasonably entitled to indemnification; however, indemnification with respect to any Proceeding by or in the right of the corporation or in which liability was adjudged on the basis that personal benefit was improperly received shall be limited to expenses. A corporation may advance reasonable expenses to a Director under certain circumstances, including a written undertaking by or on behalf of such Director to repay the amount if it shall ultimately be determined that the standard of conduct necessary for indemnification by the corporation has not been met. A corporation may indemnify and advance expenses to an officer of the corporation to the same extent that it may indemnify Directors under the statute. The indemnification and advancement of expenses provided by statute is not exclusive of any other rights, by indemnification or otherwise, to which a Director or officer may be entitled under the charter, by-laws, a resolution of shareholders or directors, an agreement or otherwise. A corporation may purchase and maintain insurance on behalf of any person who is or was a Director or officer, whether or not the corporation would have the power to indemnify a Director or officer against liability under the provision of this section of Maryland law. Further, a corporation may provide similar protection, including a trust fund, letter of credit or surety bond, not inconsistent with the statute. II-2 Article V of the Company's Charter reads as follows: "A director or officer of the corporation shall not be personally liable to the corporation or its stockholders for monetary damages except (i) to the extent that it is proved that the person actually received an improper benefit or profit in money, property, or services for the amount of the benefit or profit in money, property or services actually received or (ii) to the extent that a judgment or other final adjudication adverse to the person is entered in a proceeding based on a finding in the proceeding that the person's action or failure to act was the result of active and deliberate dishonesty and was material to the cause of action adjudicated in the proceeding. It is the intent of this Article that the liability of directors and officers shall be limited to the fullest extent permitted by the Maryland General Corporation Law, as amended from time to time. Any repeal or modification of the foregoing paragraph by the stockholders of the corporation shall not adversely affect any right or protection of a director or officer of the corporation existing at the time of such repeal or modification." Article IV of the Company's By-Laws reads as follows: "Each person made or threatened to be made a party to an action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was a director or officer of the Company, or, at its request, is or was a director or officer of another corporation, shall be indemnified by the Company (to the extent indemnification is not otherwise provided by insurance) against the liabilities, costs and expenses of every kind actually and reasonably incurred by him as a result of such action, suit or proceeding, or any threat thereof or any appeal thereon, but in each case only if and to the extent permissible under applicable common or statutory law, state or federal. The foregoing indemnity shall not be inclusive of other rights to which such person may be entitled." The Directors and officers of the Company are covered by insurance indemnifying them against certain liabilities which might be incurred by them in their capacities as such, including certain liabilities arising under the Securities Act of 1933. The premium for this insurance is paid by the Company. Also, see indemnification provisions in the Purchase Agreement and Registration Rights Agreement included in Exhibits 4(a) and 4(b) to this registration statement. Item 21. Exhibits See Exhibit Index at page II-5 of this registration statement. Item 22. Undertakings (a) The undersigned registrant hereby undertakes to file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) to include any prospectus required by Section 10(a)(3) of the Securities Act; (ii) to reflect in the prospectus any facts or events arising after the effective date of this registration statement (or the most recent post-effective amendment hereof) which, individually or in the aggregate, represents a fundamental change in the information set forth in this registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Securities and Exchange Commission II-3 pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in this registration statement when it becomes effective; and (iii) to include any material information with respect to the plan of distribution not previously disclosed in this registration statement or any material change to such information in this registration statement. (b) The undersigned registrant hereby undertakes that, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) The undersigned registrant hereby undertakes to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (d) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in this registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (e) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted b such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. (f) The undersigned registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in this registration statement when it became effective. (g) The undersigned registrant hereby undertakes to deliver or cause to be delivered with the prospectus, to each person to whom the prospectus is sent or given, the latest annual report to security holders that is incorporated by reference in the prospectus and furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of 1934; and, where interim financial information rquired to be presented by Article 3 of Regulation S-X are not set forth in the prospectus, to deliver, or cause to be delivered to each person to whom the prospectus is sent or given, the latest quarterly report that is specifically incorporated by reference in the prospectus to provide such interim financial information. (h) The undersigned registrant hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11 or 13 of this form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This undertaking includes information contained in documents filed subsequent to the effective date of this registration statement through the date of responding to the request. II-4 SIGNATURES Pursuant to the requirements of Securities Act of 1933, BGE has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Baltimore, Maryland, on this 11th day of February, 2002. Baltimore Gas and Electric Company By: /s/ E. Follin Smith -------------------- E. Follin Smith Chief Financial Officer Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed below by the following persons in the capacities and on the dates indicated. Signature Title Date Principal executive officer and director: *Frank O. Heintz President, CEO February 11, 2002 and Director Principal financial and accounting officer: /s/ E. Follin Smith Chief Financial February 11, 2002 Officer Directors: * Thomas F. Brady *David A. Brune February 11, 2002 *Christian H. Poindexter *Mayo A. Shattuck, III By: /s/ E. Follin Smith ------------------------------------------- E. Follin Smith, Attorney-in-Fact II-5 EXHIBIT INDEX Exhibit Number 3(a)* Charter of Baltimore Gas and Electric Company, restated as of August 16, 1996 (Designated as Exhibit No. 3 in Form 10-Q dated November 14, 1996, File No. 1-1910). 3(b)* By-Laws of Baltimore Gas and Electric Company, as amended to October 16, 1998 (Designated as Exhibit No. 3 in Form 10-Q dated November 13, 1998, File No. 1-1910). 4(a)** Purchase Agreement dated December 4, 2001 by and between Baltimore Gas and Electric Company and Lehman Brothers, Inc., on behalf of itself and as representative of Banc of America Securities LLC, BNY Capital Markets, Inc., Salomon Smith Barney, Inc., Scotia Capital (USA), Inc. and SunTrust Capital Markets, Inc. 4(b)** Registration Rights Agreement dated December 11, 2001 by and between Baltimore Gas and Electric Company and Lehman Brothers, Inc., on behalf of itself and as representative of Banc of America Securities LLC, BNY Capital Markets, Inc., Salomon Smith Barney, Inc., Scotia Capital (USA), Inc. and SunTrust Capital Markets, Inc. 4(c)* Indenture dated as of July 1, 1985 between Baltimore Gas and Electric Company and The Bank of New York (successor to Mercantile-Safe Deposit and Trust Company), Trustee (Designated as Exhibit 4(a) in File 2-98443 Registration Statement). 4(d)* Supplemental Indenture dated as of October 1, 1987 between Baltimore Gas and Electric Company and The Bank of New York (successor to Mercantile-Safe Deposit and Trust Company), Trustee (Designated as Exhibit 4(a) in Form 8-K dated November 13, 1987, File No. 1-1910). 4(e)* Supplemental Indenture dated as of January 26, 1993 between Baltimore Gas and Electric Company and The Bank of New York (successor to Mercantile-Safe Deposit and Trust Company), Trustee (Designated as Exhibit 4(b) in Form 8-K dated January 29, 1993, File No. 1-1910). 4(f)** Form of 5.25% Note, due December 15, 2006. 4(g)** Form of Registered 5.25% Note, due December 15, 2006. 4(h)* Supplemental Indenture between Baltimore Gas and Electric Company and Bankers Trust Company, as Trustee, dated as of June 20, 1995, supplementing, amending and restating Deed of Trust dated February 1, 1919. (Designated as Exhibit No. 4 in Form 10-Q dated August 11, 1995, File No. 1-1910.); and the following Supplemental Indentures between BGE and Bankers Trust Company, Trustee: II-6 Designated In Exhibit Dated File No. Number - ----- -------- ------ *July 15, 1977 2-59772 2-3 (3 Indentures) *August 15, 1991 33-45259 (Form S-3 Registration) 4(a)(i) *January 15, 1992 33-45259 (Form S-3 Registration) 4(a)(ii) *July 1, 1992 1-1910 (Form 8-K Report for January 29, 1993) 4(a) *February 15,1993 1-1910 (Form 10-K Annual Report for 1992) 4(a)(i) *March 1, 1993 1-1910 (Form 10-K Annual Report for 1992) 4(a)(ii) *March 15, 1993 1-1910 (Form 10-K Annual Report for 1992) 4(a)(iii) *April 15, 1993 1-1910 (Form 10-Q dated May 13, 1993) 4 *July 1, 1993 1-1910 (Form 10-Q dated August 13, 1993) 4(a) *October 15, 1993 1-1910 (Form 10-Q dated November 12, 1993) 4 *June 15, 1996 1-1910 (Form 10-Q dated August 13, 1996) 4 4(i)* Form of Subordinated Indenture between Baltimore Gas and Electric Company and The Bank of New York, as Trustee in connection with the issuance of the Junior Subordinated Debentures. (Designated as Exhibit 4(d) in Form S-3 dated May 28, 1998, File No. 333-53767. 4(j)* Form of Supplemental Indenture between the Baltimore Gas and Electric Company and The Bank of New York, as Trustee, in connection with the issuance of the Junior Subordinated Debentures. (Designated as Exhibit 4(e) in Form S-3 dated May 28, 1998, File No. 333-53767). 4(k)* Form of Preferred Securities Guarantee (Designated as Exhibit 4(f) in Form S-3 dated May 28, 1998, File No. 333-53767). 4(l)* Form of Junior Subordinated Debenture (Designated as Exhibit 4(h) in Form S-3 dated May 28, 1998, File No. 333-53767). 4(m)* Form of Amended and Restated Declaration of Trust (including Form of Preferred Security) (Designated as Exhibit 4(c)in Form S-3 dated May 28, 1998, File No. 333-53767). 4(n)* Specimen Note for $173,000,000 6.75% Remarketable or Redeemable Securities (ROARSSM) due 2012 (Designated as Exhibit 4(f) in Form 8-K dated December 20, 2000, File No. 1-1910). 5** Opinion of Baltimore Gas and Electric Company's Counsel. 10(a)* Baltimore Gas and Electric Company Retirement Plan for Non-Employee Directors, as amended and restated. (Designated as Exhibit No. 10(m) in Form 10-Q dated May 14, 1999, File Nos. 1-12869 and 1-19101.) 10(b)* Form of Severance Agreements between Baltimore Gas and Electric Company and seven key employees. (Designated as Exhibit No. 10(j) in Form 10-Q dated May 14, 1999, File Nos. 1-12869 and 1-19101). 10(c)* Full Requirements Service Agreement between Constellation Power Source, Inc. and Baltimore Gas and Electric Company. (Designated as Exhibit No. 10(a) in Form 10-Q dated August 14, 2000, File Nos. 1-12869 and 1-1910). II-7 10(d)* Full Requirements Service Agreement between Baltimore Gas and Electric Company and Constellation Power Source, Inc. (portions of this exhibit have been omitted pursuant to a request for confidential treatment). (Designated as Exhibit 10(a) in Form 10-Q filed November 14, 2001, File No. 1-12869 and 1-1910). 10(e)* Full Requirements Service Agreement between Baltimore Gas and Electric Company and Allegheny Energy Supply Company, L.L.C. (portions of this exhibit have been omitted pursuant to a request for confidential treatment). (Designated as Exhibit 10(b) in Form 10-Q filed November 14, 2001, File No. 1-12869 and 1-1910). 12* Statement re Computation of Ratio of Earnings to Fixed Charges (Designated as Exhibit 12(b) in Form 10-Q for the quarterly period ended September 30, 2001, filed November 14, 2001, File No. 1-1910). 13* Baltimore Gas and Electric Company's Annual Report on Form 10-K for year ended December 31, 2000 and BGE's Quarterly Report on Form 10-Q for quarter ended March 31, 2001, June 30, 2001 and September 30, 2001. 21** Subsidiaries of Baltimore Gas and Electric Company 23(a)** Consent of Baltimore Gas and Electric Company's Counsel (included in Exhibit 5). 23(b)** Consent of PricewaterhouseCoopers LLP, Independent Accountants. 24** Power of Attorney. 25** Statement of Eligibility under the Trust Indenture Act of 1939 (Form T-1) of The Bank of New York, Trustee. - ------------------------------ * Incorporated by reference. **Filed herewith EX-4 2 purchase.txt PURCHASE AGREEMENT Exhibit 4(a) Baltimore Gas and Electric Company $300,000,000 5.25% Notes due December 15, 2006 PURCHASE AGREEMENT December 4, 2001 Lehman Brothers Inc. Banc of America Securities LLC BNY Capital Markets, Inc. Salomon Smith Barney Inc. Scotia Capital (USA) Inc., SunTrust Capital Markets, Inc. c/o Lehman Brothers Inc. 101 Hudson Street Jersey City, NJ 07302 Ladies and Gentlemen: 1. Introduction. Baltimore Gas and Electric Company, a Maryland corporation (the "Company") proposes to issue and sell to Lehman Brothers Inc., Banc of America Securities LLC, BNY Capital Markets, Inc., Salomon Smith Barney Inc., Scotia Capital (USA) Inc., and SunTrust Capital Markets, Inc. (the "Initial Purchasers"), its $300,000,000 5.25% Notes due December 15, 2006, described in Annex I (the "Securities"), subject to the terms and conditions set forth herein. The Securities are to be issued pursuant to the provisions of the Indenture dated as of July 1, 1985 and supplemented on October 1, 1987 and January 26, 1993, creating the Securities (the "Indenture"), between the Company and The Bank of New York (successor to Mercantile-Safe Deposit and Trust Company), as Trustee (the "Trustee"). The Securities will bear interest at a rate of 5.25 % per year. The Initial Purchasers and their direct and indirect transferees will be entitled to the benefits of a registration rights agreement dated December 11, 2001 and in a form reasonably satisfactory to the Initial Purchasers and the Company (the "Registration Rights Agreement"), pursuant to which the Company will use its commercially reasonable efforts to file a registration statement with the Securities Exchange Commission (the "SEC") under the Securities Act of 1933, as amended (the "Securities Act") covering the exchange offer referred to in the Registration Rights Agreement (the "Exchange Offer"). 2. Terms of Offering. The Securities will be offered and sold to the Initial Purchasers pursuant to one or more exemptions from the registration requirements under the Securities Act. The Company has prepared and delivered a preliminary offering memorandum (the "Preliminary Offering Memorandum") dated December 3, 2001 and has prepared and will 2 deliver a final offering memorandum (the "Final Offering Memorandum") dated December 4, 2001 and will deliver to the Initial Purchasers, on the date hereof or the next succeeding day, copies of the Final Offering Memorandum, relating to the Securities, for use by each of Initial Purchasers in connection with the solicitation of, purchases of, or offering of, the Securities. "Offering Memorandum" means, with respect to any date or time referred to in this Agreement, the most recent offering memorandum (including any amendment or supplement to such document as of such date), including exhibits thereto and any documents incorporated therein by reference, which has been prepared and delivered by the Company to the Initial Purchasers in connection with the solicitation of, purchases of, or offering of, the Securities. The Initial Purchasers have advised the Company that the Initial Purchasers will, and the Company agrees that the Initial Purchasers may, make offers (the "Exempt Resales") of the Securities purchased hereunder on the terms set forth in the Offering Memorandum solely to persons whom the Initial Purchasers reasonably believe each to be (i) "qualified institutional buyers" as defined in Rule 144A under the Securities Act ("QIBs"), (ii) other institutional "accredited investors" as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act that execute and deliver a certificate containing certain representations and agreements ("Institutional Accredited Investors"), and (iii) non-U.S. persons to whom offers and sales of the Securities may be made in reliance upon the provisions of Regulation S under the Securities Act (such persons collectively being referred to herein as the "Eligible Purchasers"). The Initial Purchasers will offer the Securities to Eligible Purchasers initially at a price equal to 99.56% of the principal amount thereof. Such price may be changed at any time without notice. Upon original issuance thereof, and until such time as the same is no longer required pursuant to the Indenture with respect thereto, the Securities shall bear the following legend: "THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED OTHER THAN (A) (1) TO THE COMPANY, (2) IN A TRANSACTION ENTITLED TO ANY EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT, (3) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY), (4) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY), (5) TO AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a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a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT AND THAT IT IS HOLDING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION OR (3) A NON-U.S. PERSON OUTSIDE THE UNITED STATES WITHIN THE MEANING OF, OR AN ACCOUNT SATISFYING THE REQUIREMENTS OF RULE 902 UNDER, REGULATION S UNDER THE SECURITIES ACT. IF THIS NOTE IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY (THE "DEPOSITARY") (55 WATER STREET, NEW YORK, NEW YORK) OR ITS NOMINEE, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY UNLESS AND UNTIL THIS NOTE IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO. HAS AN INTEREST HEREIN." 3. Representation and Warranties of the Company. The Company represents and warrants to the Initial Purchasers, that: (a) The Preliminary Offering Memorandum and, the Final Offering Memorandum as of their respective dates did not and the Offering Memorandum does not, and at the Closing Date (as hereinafter defined) the Offering Memorandum will not, contain an untrue statement of a material fact or omit to state a material fact necessary in 4 order to make the statements made therein not misleading; on said dates. The documents listed under the heading WHERE YOU CAN FIND MORE INFORMATION that are or will be incorporated by reference in the Offering Memorandum (the "Incorporated Documents"), taken together as a whole, fully complied or will comply in all material respects with the applicable provisions of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the applicable rules and regulations of the SEC thereunder, and, when read together with the Offering Memorandum on said dates did not 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 not misleading; provided that the foregoing representations and warranties in this paragraph (a) shall not apply to statements or omissions made in reliance upon and in conformity with the information furnished to the Company in writing by, or on behalf of Initial Purchasers expressly for use in the Offering Memorandum. (b) The Company has been incorporated and is validly existing as a corporation and is in good standing under the laws of the jurisdiction of its incorporation, has the corporate power and authority to own, lease and operate its properties and to conduct its business as presently conducted and as set forth in or contemplated by the Offering Memorandum, and the Company is qualified as a foreign corporation to transact business and in good standing in each jurisdiction in which such qualification is required and is in which the failure to be so qualified would have a material adverse effect on the financial position or financial results of operations of the Company and its subsidiaries taken as a whole. (c) The Company is not in violation of its Articles or Certificate of Incorporation, or in default in the performance or observance of any material obligation, agreement, covenant or condition contained in any mortgage or any material contract, lease, note or other instrument to which it is a party or by which it may be bound, or materially in violation of any law, administrative regulation or administrative, arbitration or court order, except in each case to such extent as may be set forth in the Offering Memorandum; and the execution and delivery of this Agreement, the incurrence of the obligations herein set forth and the consummation of the transactions herein contemplated will not conflict with or constitute a breach of, or default under, the Articles of Incorporation or by-laws of the Company or any mortgage, material contract, lease, note or other instrument to which the Company is a party or by which the Company may be bound, or any law, administrative regulation or administrative, arbitration or court order. (d) The approval of the Maryland Public Service Commission necessary for the valid issuance by the Company of the Securities has been obtained and continues in full force and effect. Other than as provided in the immediately preceding sentence, no consent of or approval by any public board or body or administrative agency, federal or state, is necessary to authorize the issuance and sale of the Securities, except that there must be compliance with the Blue Sky or securities laws of the states in which the Securities are to be sold. Subject to compliance by the Initial Purchasers with the representations and warranties set forth in Section 7 and, with respect to sales to Eligible Purchasers, compliance by the Initial Purchasers with the provision of Rule 144A, 5 Regulation D or Regulation S applicable to the Initial Purchasers in connection with such sales, it is not necessary in connection with the offer, sale and delivery of the Securities by the Company to the Initial Purchasers, and by the Initial Purchasers to each Eligible Purchaser, in the manner contemplated by this Agreement and the Offering Memorandum to register the Securities under the Securities Act or to qualify the Indenture under the Trust Indenture Act of 1939, as amended. (e) The Company has not, directly or indirectly, solicited any offer to buy or offered to sell, and will not, directly or indirectly, solicit any offer to buy or offer to sell, in the United States or to any United States citizen or resident, any security which is or would be integrated with the sale of the Securities in a manner that would require the Securities to be registered under the Securities Act. (f) The Securities are eligible for resale pursuant to Rule 144A and will not be, at the Closing Date, of the same class as securities listed on a national securities exchange registered under the Section 6 of the Exchange Act, or quoted in a U.S. automated interdealer quotation system. (g) None of the Company, its affiliates, as such term is defined in Rule 501(b) under the Securities Act ("Affiliates"), or any person acting on its or any of their behalf (other than the Initial Purchasers, as to whom the Company makes no representation) has engaged or will engage, in connection with the offering of the Securities, in any form of general solicitation or general advertising within the meaning of Rule 502(c) under the Securities Act. (h) With respect to those Securities sold in reliance on Regulation S (A) none of the Company, its Affiliates or any person acting on its or their behalf (other than the Initial Purchasers, as to whom the Company makes no representation) has engaged or will engage in any directed selling efforts within the meaning of Regulation S and (B) each of the Company and its Affiliates and any person acting on its or their behalf (other than the Initial Purchasers, as to whom the Company makes no representation) has complied and will comply with the offering restriction requirements of Regulation S. (i) Except as set forth in or contemplated by the Offering Memorandum, no material adverse change has occurred in the financial condition of the Company, since the respective dates as of which information is given in the Offering Memorandum. (j) This Agreement has been duly authorized, executed and delivered by the Company. (k) The Registration Rights Agreement has been duly and validly authorized by all necessary corporate action. (l) The Indenture has been duly and validly authorized by all necessary corporate action; and the Indenture has been duly and validly executed and delivered and is a valid and enforceable instrument in accordance with its terms, except as enforcement of the provisions of the Indenture may be limited by bankruptcy or other applicable laws affecting the enforcement of creditors' rights or by general principles of equity. 6 (m) The issuance and sale of the Securities have been duly and validly authorized by all necessary corporate action, and on the Closing Date, (assuming authentication by the Trustee) will be duly executed and delivered and constitute legal, valid and binding obligations of the Company, enforceable in accordance with their terms, except as enforcement may be limited by bankruptcy or other applicable laws effecting the enforcement of creditor's rights or by general principles of equity. (n) The Exchange Securities (as defined in the Registration Rights Agreement) have been duly and validly authorized by all necessary corporate action and when duly issued, authenticated and delivered will constitute legal, valid and binding obligations of the Company, enforceable in accordance with their terms, except as enforcement may be limited by bankruptcy or other applicable laws effecting the enforcement of creditor's rights or by general principals of equity. Any certificate signed by any officer of the Company and delivered to you or to counsel for the Initial Purchasers shall be deemed a representation and warranty by the Company to the Initial Purchasers as to the matters covered thereby. The Company acknowledges that the Initial Purchasers, and, for purposes of the opinions to be delivered to the Initial Purchasers pursuant to Section 8 hereof, counsel to the Company and counsel to the Initial Purchasers will rely upon the accuracy and truth of the foregoing representations, and the Company hereby consents to such reliance. 4 Purchase and Sale. On the basis of the representations and warranties herein contained, and subject to the terms and conditions herein set forth, the Company agrees to sell to the Initial Purchasers, severally, and the Initial Purchasers each agree to purchase from the Company, severally, at the time and place herein specified, the principal amount of the Securities listed next to their respective names in Schedule A hereto at a purchase price equal to 99.06% of the principal amount thereof. 5. Time and Place of Closing. Delivery of the Securities against payment therefor by wire transfer in federal funds shall be made at the offices of Baltimore Gas and Electric Company, 39 West Lexington Street, Baltimore, Maryland, at 9:00 A.M., New York City Time, on December 11, 2001 or at such other place, time and date as shall be agreed upon in writing by the Company and the Initial Purchasers. The hour and date of such delivery and payment are herein called the "Closing Date". The Securities sold to QIBs in reliance on Rule 144A will be issued in the form of one or more global notes in fully registered form (the "144A Global Notes"). The Securities sold to non-U.S. persons in offshore transactions in reliance on Regulation S will be issued in the form of one or more global notes in fully registered form (the "Regulation S Global Notes," and together with the 144A Global Notes are referred to herein as the "Global Notes"). The Global Notes shall be delivered on the Closing Date, or on such other date and time as agreed by the Initial Purchasers, the Company, The Depository Trust Company ("DTC") or The Bank of New York, to DTC or The Bank of New York, as custodian for DTC, in fully registered form in the name of CEDE & Co. for the account of the Initial Purchasers or as directed by the Initial 7 Purchasers not later than the close of business on the second business day prior to the Closing Date. Certificates representing the Securities sold to Institutional Accredited Investors shall be delivered on the Closing Date to the Initial Purchasers, or as directed by the Initial Purchasers, in fully registered form in denominations of $100,000 and in integral multiples of $1,000 in excess thereof and registered in such names as the Initial Purchasers shall reasonably request in writing not later than the close of business on the second business day prior to the Closing Date, or, to the extent not so requested, registered in the names of the Initial Purchasers in such authorized denomination as the Company shall determine. The Company agrees to make the Securities available to the Initial Purchasers for checking purposes not later than 10:00 A.M., New York Time, on the last business day preceding the Closing Date at the offices of The Bank of New York, 5 Penn Plaza - 13th Floor, New York NY 10001-1810. 6. Covenants of the Company. The Company agrees with the Initial Purchasers as follows: (a) To advise the Initial Purchasers (i) of the issuance by any state securities commission of any stop order suspending the qualification or exemption from qualification of any of the Securities for offering or sale, or the initiation of any proceeding by any state securities commission or any other federal or state regulatory authority for such purpose and (ii) of the happening of any event during the period referred to in Section 6(c) below that makes any statement of a material fact made in the Offering Memorandum untrue or that requires any additions to or changes in the Offering Memorandum in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The Company shall use its best efforts to prevent the issuance of any stop order suspending the qualification or exemption of any of the Securities under any state securities or blue-sky laws and, if at any time any state securities commission or other federal or state regulatory authority shall issue an order suspending the qualification or exemption of any of the Securities under any state securities or blue-sky laws, the Company shall use its best efforts to obtain the prompt withdrawal or lifting of such order. (b) To furnish the Initial Purchasers, without charge, as many copies of the Offering Memorandum, and any amendments or supplements thereto, and Incorporated Documents, as the Initial Purchasers may reasonably request. Subject to the Initial Purchasers' compliance with representations and warranties and agreements set forth in Section 7 hereof, the Company consents to the use of the Offering Memorandum, and any amendments and supplements thereto required pursuant hereto, by the Initial Purchasers in connection with Exempt Resales. (c) If, during such period (not exceeding the nine month period following the date of this Agreement) as in the opinion of counsel for the Initial Purchasers an Offering Memorandum is required by law to be delivered in connection with Exempt Resales by the Initial Purchasers, any event relating to or affecting the Company or of which the 8 Company shall be advised in writing by the Initial Purchasers shall occur which, in the Company's reasonable opinion, should be set forth in a supplement to, or an amendment of, the Offering Memorandum in order to make the Offering Memorandum not misleading in the light of the circumstances when such Offering Memorandum is delivered to an Eligible Purchaser, the Company will, at its expense, prepare an appropriate amendment or supplement to such Offering Memorandum so that the Offering Memorandum, as so amended or supplemented, 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 when the Offering Memorandum is delivered to an Eligible Purchaser, not misleading; provided that should such event relate solely to information furnished in writing to the Company by or on behalf of the Initial Purchasers for use in connection with the preparation of the Preliminary Offering Memorandum, the Final Offering Memorandum or any Offering Memorandum (or any amendment or supplement thereto), then the Initial Purchasers shall assume the expense of preparing and furnishing any such amendment or supplement. In case the Initial Purchasers are required to deliver an Offering Memorandum after the expiration of nine months from the date of this Agreement, the Company, upon the Initial Purchasers' request, will furnish to the Initial Purchasers, at the Initial Purchasers' expense, a reasonable quantity of any such amendment or supplement referred to in this Section 6(c). (d) To advise the Initial Purchasers promptly of any proposal to amend or supplement the Offering Memorandum. The Initial Purchasers' delivery of any such amendment or supplement, shall not constitute a waiver of any of the conditions set forth in Section 8. (e) To furnish such proper information as may be lawfully required and otherwise cooperate in qualifying the Securities for offer and sale to the Initial Purchasers and pursuant to Exempt Resales under the blue-sky laws of such jurisdictions as the Initial Purchasers may designate, provided that the Company shall not be required to register or qualify as a foreign corporation or dealer in securities, to file any consents to service of process under the laws of any jurisdiction, or to meet any other requirements deemed by the Company to be unduly burdensome. (f) To take all reasonable action necessary to enable the ratings agencies rating the Securities to provide their ratings of the Securities. (g) So long as any of the Securities remain outstanding and during any period in which the Company is not subject to Section 13 or 15(d) of the Exchange Act, to make available to any holder of Securities in connection with any sale thereof and any prospective purchaser of such Securities from such holder, the information ("Rule 144A Information") required by Rule 144A(d)(4) under the Securities Act. (h) Except as herein provided, whether or not the transactions contemplated herein are consummated or this Agreement is terminated, to pay all expenses and taxes (except transfer taxes) in connection with the performance by the Company of its obligations under this Agreement, including without limitation (i) the preparation by it of 9 the Preliminary Offering Memorandum and the Offering Memorandum, (ii) the issuance and delivery of the Securities as provided in Section 5 hereof, (iii) the qualification of the Securities under blue-sky laws (including counsel fees not to exceed $7,500), and (iv) the printing and delivery to the Initial Purchasers of reasonable quantities of the Offering Memorandum and, except as provided in Section 6(c) hereof, of any amendments or supplements thereto. The Company shall not, however, be required to pay any amount for any expenses of the Initial Purchasers, except that, if this Agreement shall be terminated in accordance with the provisions of Section 8 or 10 hereof, the Company will reimburse the Initial Purchasers for the reasonable fees and disbursements of counsel for the Initial Purchasers, whose reasonable fees and disbursements the Initial Purchasers agree to pay in any other event, and will reimburse the Initial Purchasers for their reasonable out-of-pocket expenses, in an aggregate amount not exceeding $5,000, incurred in contemplation of the performance of this Agreement. The Company shall not in any event be liable to the Initial Purchasers for damages on account of loss of anticipated profits. (i) To obtain the approval of DTC for "book-entry" transfer of the Securities, except those Securities sold to Institutional Accredited Investors, and to comply with all of its agreements in the Registration Rights Agreement and set forth in the representation letter of the Company to DTC relating to the approval of the Securities by DTC for "book-entry" transfer. (j) During the period beginning on the date hereof and continuing to the Closing Date, not to offer, sell, contract to sell or otherwise transfer or dispose of any debt securities of the Company or any warrants, rights or options to purchase or otherwise acquire debt securities of the Company substantially similar to the Securities (other than (i) the Securities and (ii) commercial paper issued in the ordinary course of business), without the prior written consent of the Initial Purchasers. (k) Not to sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in the Securities Act) that would be integrated with the sale of the Securities to the Initial Purchasers or pursuant to Exempt Resales in a manner that would require the registration of any such sale of the Securities under the Securities Act. (l) None of the Company, its Affiliates or any person acting on its or their behalf (other than the Initial Purchasers) will engage in any direct selling efforts (as that term is defined in Regulation S under the Securities Act) with respect to the Securities sold pursuant to Regulation S, and the Company and its Affiliates and each person acting on its or their behalf (other than the Initial Purchasers) will comply with the offering restrictions of Regulation S with respect to those Securities sold pursuant thereto. (m) Until the expiration of two years after the original issuance of the Securities, the Company will not, and will cause its Affiliates not to, purchase or agree to purchase or otherwise acquire any Securities which are "restricted securities" (as such term is defined in Rule 144(a)(3) under the Securities Act), whether as beneficial owner or otherwise (except as agent acting as a securities broker on behalf of and for the 10 account of customers in the ordinary course of business in unsolicited broker's transactions) unless, promptly upon any such purchase, the Company or any Affiliate shall submit such Securities to the Trustee for cancellation. (n) In connection with the original distribution of the Securities, prior to any offer or sale of the Securities by the Initial Purchasers, the Initial Purchasers and its counsel shall have the right to make reasonable inquiries into the business of the Company, The Company also agrees to provide answers to each prospective subsequent purchaser of Securities who so requests concerning the Company (to the extent that such information is available or can be acquired and made available to prospective subsequent purchasers without unreasonable effort or expense and to the extent that the provision thereof is not prohibited by applicable law and, in the case of confidential or proprietary information, subject to appropriate confidentiality arrangements regarding such information) and the terms and conditions of the Securities, as provided in the Offering Memorandum. 7. Initial Purchasers' Representations and Warranties. Each Initial Purchaser represents and warrants to and agrees with the Company, that: (a) It is a QIB or an Institutional Accredited Investor, as the case may be, with such knowledge and experience in financial and business matters as is necessary in order to evaluate the merits and risks of an investment in the Securities. (b) It is not acquiring the Securities with any present intention of offering or selling any of the Securities in a transaction that would violate the Securities Act or the securities laws of any state of the United States or any other applicable jurisdiction. (c) No form of general solicitation or general advertising (within the meaning of Regulation D under the Securities Act) has been or will be used by it or any of its representatives in connection with the offer and sale of the Securities pursuant hereto, including, but not limited to, articles, notices or other communications published in any newspaper, magazine or similar medium or broadcast over television or radio, or any seminar or meeting whose attendees have been invited by any general solicitation or general advertising. (d) In connection with Exempt Resales, it will solicit offers to buy the Securities only from, and will offer to sell the Securities only to, Eligible Purchasers that agree that (x) the Securities purchased by them may be resold, pledged or otherwise transferred only (I) to the Company, (II) so long as the Securities are eligible for resale pursuant to Rule 144A under the Securities Act to a person whom the seller reasonably believes is a QIB purchasing for its own account or for the account of a QIB in a transaction meeting the requirements of Rule 144A under the Securities Act, (III) in an offshore transaction (as defined in Rule 902 of Regulation S) meeting the requirements of Rule 904 of Regulation S, (IV) in a transaction entitled to an exemption from registration provided by Rule 144 under the Securities Act, (V) to an Institutional Accredited Investor that, prior to such transfer, furnishes the Trustee a signed letter (substantially in the form of Appendix I to the Offering Memorandum), or (VI) in accordance with another 11 applicable exemption from the registration requirements of the Securities Act (and based upon an opinion of counsel acceptable to the Company) and, in each case, in accordance with the applicable securities laws of each state of the United States or any other applicable jurisdiction and (y) they will deliver to each person, as required by applicable law, to whom such Securities or an interest therein is transferred a copy of the Offering Memorandum. (e) It will not offer, sell or deliver any of the Securities in any jurisdiction outside the United States, except in accordance with Regulation S under the Securities Act. Each Initial Purchaser acknowledges that the Company and, for purposes of the opinions to be delivered to the several Initial Purchasers pursuant to Section 8 hereof, counsel to the Company and counsel for the Initial Purchasers, will rely upon the accuracy and truth of the foregoing representations and each Initial Purchaser hereby consents to such reliance. 8. Conditions of the Initial Purchaser's Obligations. The obligation of each Initial Purchaser to purchase and pay for the Securities shall be subject to the accuracy of the representations and warranties made herein on the part of the Company, to the performance by the Company of its obligations to be performed hereunder prior to the Closing Date, and to the following conditions: (a) On the Closing Date, the Initial Purchasers shall have received from Sally Samuel, Esq., counsel for the Company, an opinion in form and substance reasonably satisfactory to the Initial Purchasers with such changes therein as may be agreed upon by the Company and the Initial Purchasers, with the approval of counsel for the Initial Purchasers, and the Initial Purchasers shall have received from Cahill Gordon & Reindel, counsel for the Initial Purchasers, an opinion in form and substance reasonably satisfactory to the Initial Purchasers. (b) Subsequent to the signing of this Agreement, the Initial Purchasers shall have received a letter of PricewaterhouseCoopers LLP, dated the Closing Date, confirming that they are independent public accountants within the meaning of the Securities Act and the rules and regulations thereunder, 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 Offering Memorandum comply in form in all material respects with the applicable accounting requirements of the Securities Act and the rules and regulations thereunder and the Exchange Act and the rules and 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 shareholder and the Board of Directors of the Company since the end of the year covered by the Form 12 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 Offering Memorandum 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 Offering Memorandum are prepared on a basis substantially consistent with that of the audited consolidated financial statements incorporated in the Offering Memorandum, nothing has come to their attention that has caused them to believe that (1) any unaudited consolidated financial statements incorporated by reference in the Offering Memorandum do not comply in form in all material respects with the applicable requirements of the Securities Act and the rules and regulations thereunder and the Exchange Act and the rules and 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 Offering Memorandum there was any change in the capital stock, change in long-term debt or decrease in consolidated net assets or ratio of earnings to fixed charges (measured on the most recent twelve-month period) of the Company as compared with the amounts shown in the latest balance sheet incorporated by reference in the Offering Memorandum or for the period from the closing date of the latest income statement incorporated by reference in the Offering Memorandum 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 or net income except in all instances for changes or decreases that the Offering Memorandum discloses have occurred or may occur, or which are described in such letter; or (3) at a specified date not more than five days prior to the Closing Date, there was any change in the capital stock or long-term debt of the Company or any decreases in consolidated net assets or in the ratio of earnings to fixed charges (measured on the most recent twelve-month period) of the Company as compared with amounts shown in the latest balance sheet incorporated by reference in the Offering Memorandum, except in all cases for changes or decreases which the Offering Memorandum 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 Offering Memorandum and that such 13 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. (c) Since the most recent dates as of which information is given in the Offering Memorandum, there shall not have been any material adverse change in the financial position or financial results of operations of the Company and its consolidated subsidiaries, considered as a whole and, at the Closing Date, the Initial Purchasers shall have received a certificate to such effect dated the Closing Date and signed by an officer of the Company. (d) Since the date of this Agreement, neither Moody's Investor Services Inc. nor Standard & Poor's Ratings Services shall have downgraded or publicly announced that it has under surveillance or review, with possible negative implications, its rating of any securities of the Company which are of the same class as the Securities or the financial condition of the Company. (e) Prior to the Closing Date, the Company shall have furnished to the Initial Purchasers such further information, certificates and documentation as the Initial Purchasers may reasonably request. (f) The approval of the Maryland Public Service Commission necessary for the valid issuance by the Company of the Securities shall have been obtained and be continuing in full force and effect. In case any of the conditions specified above in this Section 8 shall not have been fulfilled, this Agreement may be terminated by Lehman Brothers Inc. on behalf of the Initial Purchasers upon written notice hereof to the Company. Any such termination shall be without liability of any party to any other party except as otherwise provided in Sections 6(h) and 9 hereof. 9. Indemnification. (a) The Company shall indemnify, defend and hold harmless each Initial Purchaser and each person who controls any Initial Purchaser within the meaning of the Securities Act or the Exchange Act from and against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Securities Act or any other statute or common law and shall reimburse each Initial Purchaser and any such controlling person for any legal or other expenses (including, to the extent hereinafter provided, reasonable counsel fees) incurred by them in connection with investigating any such losses, claims, damages or liabilities or in connection with defending any actions, insofar as such losses, claims, damages, liabilities, expenses or actions arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Preliminary Offering Memorandum, the Final Offering Memorandum or any Offering Memorandum (or any amendment or supplement thereto), or the omission or alleged omission to state therein a material fact required to be stated 14 therein or necessary to make the statements therein in the light of the circumstances under which they were made not misleading; provided, however, that the indemnity agreement contained in this Section 9 shall not apply to any such losses, claims, damages, liabilities, expenses or actions arising out of, or based upon, any such untrue statement or alleged untrue statement, or any such omission or alleged omission, if such statement or omission was made in reliance upon information furnished in writing to the Company by or on behalf of the Initial Purchasers for use in connection with the preparation of the Preliminary Offering Memorandum and the Final Offering Memorandum or any Offering Memorandum (or any amendment or supplement thereto); and provided further, that the indemnity agreement contained in this Section 9 shall not inure to the benefit of any Initial Purchaser (or of any person controlling any Initial Purchaser) on account of any such losses, claims, damages, liabilities, expenses or actions arising from the sale of the Securities to any subsequent purchaser if a copy of the Offering Memorandum (including any amendment or supplement thereto), shall have been furnished to the Initial Purchasers or any subsequent purchaser at or prior to the time of written confirmation of the sale involved and such amendment or supplement corrected the alleged omission or alleged untrue statement in the Preliminary Offering Memorandum or the Offering Memorandum (exclusive of any documents incorporated by reference), and where the Company shall have provided to the Initial Purchasers in a timely manner sufficient copies of such Offering Memorandum or amendment or supplement thereof, shall not have been given or sent to such subsequent purchaser by or on behalf of the Initial Purchasers with or prior to the written confirmation of the sale involved. The indemnity agreement of the Company contained in this Section 9 and the representations and warranties of the Company contained in Section 3 hereof shall remain operative and in full force and effect regardless of any termination of this Agreement or of any investigation made by or on behalf of the Initial Purchasers or any such controlling person, and shall survive the delivery of the Securities. This indemnity agreement will be in addition to any liability which the Company may otherwise have. (b) Each Initial Purchaser shall indemnify, defend and hold harmless the Company, its officers and directors, and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act, from and against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Securities Act or any other statute or common law and shall reimburse each of them for any legal or other expenses (including, to the extent hereinafter provided, reasonable counsel fees) incurred by them in connection with investigating any such losses, claims, damages or liabilities or in connection with defending any actions, insofar as such losses, claims, damages, liabilities, expenses or actions arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Preliminary Offering Memorandum, the Final Offering Memorandum, or any Offering Memorandum (or any amendment or supplement thereto), or 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, if such statement or omission was made in reliance upon and in conformity with information furnished in writing to the Company by or on behalf of the Initial Purchasers for use in connection with the preparation of the Preliminary Offering Memorandum, the Final Offering Memorandum or any Offering Memorandum (or any amendment or supplement thereto). 15 The Initial Purchasers hereby furnishs to the Company in writing expressly for use in the Preliminary Offering Memorandum and Final Offering Memorandum (i) the statements relating to the offering price on the front cover and (ii) the first, second, third, fourth, fifth (exclusive of the first sentence thereof) and sixth paragraphs under PLAN OF DISTRIBUTION. The Company acknowledges and agrees that the information referred to in the previous sentence is the only information the Initial Purchasers have furnished to the Company for use in the Preliminary Offering Memorandum or Final Offering Memorandum. The indemnity agreement of the Initial Purchasers contained in this Section 9 shall remain operative and in full force and effect regardless of any termination of this Agreement or of any investigation made by or on behalf of the Company, its directors or its officers, the Initial Purchasers, or any such controlling person, and shall survive the delivery of the Securities. This indemnity agreement will be in addition to any liability which the Initial Purchasers may have. (c) The Company and the Initial Purchasers shall, upon the receipt of notice of the commencement of any action against it or any person controlling it as aforesaid, in respect of which indemnity may be sought on account of any indemnity agreement contained herein, promptly give written notice of the commencement thereof to the party or parties against whom indemnity shall be sought hereunder, but the omission so to notify such indemnifying party or parties of any such action shall not relieve such indemnifying party or parties from any liability which it or they may have to the indemnified party otherwise than on account of such indemnity agreement. In case such notice of any such action shall be so given, such indemnifying party shall be entitled to participate at its own expense in the defense, or, if it so elects, to assume (in conjunction with any other indemnifying parties) the defense of such action, in which event such defense shall be conducted by counsel chosen by such indemnifying party or parties and satisfactory to the indemnified party or parties who shall be defendant or defendants in such action, and such defendant or defendants shall bear the fees and expenses of any additional counsel retained by them, but if the indemnifying party shall elect not to assume the defense of such action, such indemnifying party will reimburse such indemnified party or parties for the reasonable fees and expenses of any counsel retained by them; provided, however, if the defendants in any such action include both the indemnified party and the indemnifying party and counsel for the indemnified party shall have reasonably concluded that there may be a conflict of interest involved in the representation by such counsel of both the indemnifying party and the indemnified party, the indemnified party or parties shall have the right to select separate counsel, satisfactory to the indemnifying party, to participate in the defense of such action on behalf of such indemnified party or parties (it being understood, however, that the indemnifying party shall not be liable for the expenses of more than one separate counsel (in additional to local counsel) representing the indemnified parties who are parties to such action). Each of the Company and the Initial Purchasers agrees that without the other party's prior written consent, which consent shall not be unreasonably withheld, it will not settle, compromise or consent to the entry of any judgment in any claim in respect of which indemnification may be sought under the indemnification provisions of this Agreement, unless such settlement, compromise or consent (i) includes an unconditional release of such other party from all liability arising out of such claim and (ii) does not include a 16 statement as to or an admission of fault, culpability or a failure to act by or on behalf of such other party. (d) If the indemnification provided for in subparagraph (a) or (b) above shall be unenforceable under applicable law by an indemnified party, each indemnifying party agrees to contribute to such indemnified party with respect to any and all losses, claims, damages, liabilities and expenses for which each such indemnification provided for in subparagraph (a) or (b) above shall be unenforceable, in such proportion as shall be appropriate to reflect (i) the relative fault of each indemnifying party on the one hand and the indemnified party on the other in connection with the statements or omissions which have resulted in such losses, claims, damages, liabilities and expenses, (ii) the relative benefits received by the Company on the one hand and the Initial Purchasers on the other hand from the offering of the Securities pursuant to this Agreement, and (iii) any other relevant equitable considerations; provided, however, (x) that in no case shall any Initial Purchaser be responsible for any amount in excess of the aggregate commission applicable to the Securities purchased by such Initial Purchaser and (y) that no indemnified party guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any indemnifying party not guilty of such fraudulent misrepresentation. Relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by such indemnifying party or the indemnified party and each such party's relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The Company and the Initial Purchasers agree that it would not be just and equitable if contributions pursuant to this subparagraph (d) were to be determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to above. Notwithstanding the provisions of this Section 9, no Initial Purchaser shall be required to contribute in excess of the amount equal to the excess of (i) the total price at which the Securities purchased by it were offered to Eligible Purchasers, over (ii) the amount of any damages which the Initial Purchasers have otherwise been required to pay by reason of any such untrue or alleged untrue statement or omission or alleged omission. 10. Termination. Lehman Brothers Inc., on behalf of the Initial Purchasers, may terminate this Agreement, in its absolute discretion, by written notice to the Company, at any time prior to the Closing Date, if (a) prior to such time there has been, since the date of this Agreement or since the respective dates as of which information is given in the Offering Memorandum, any material adverse change in the financial position or financial results of operations of the Company and its subsidiaries considered as one enterprise, (b) after the date hereof and at or prior to the Closing Date there shall have occurred any suspension or material limitation of trading of any of the Constellation Energy Group, Inc. or the Company's securities on the New York Stock Exchange, Inc. ("NYSE") or any general suspension of trading in securities on the NYSE, the American Stock Exchange, Inc. ("AMEX") or the NASDAQ Stock Market, Inc. ("NASDAQ") or there shall have been established by the NYSE, AMEX or NASDAQ or by the 17 Commission or by any federal or state agency or by the decision of any court, any general limitation on prices for such trading or any general restrictions on the distribution of securities, or a general banking moratorium declared by New York or federal authorities, or (c) there shall have occurred any (i) new material outbreak of hostilities or (ii) new material other national or international calamity (including a terrorist attack) or crises, including, but not limited to, an escalation of hostilities which existed prior to the date of this Agreement, or (iii) material adverse change in the financial markets in the United States, and the effect of any such event specified in clause (b) or (c) above on the financial markets of the United States shall be such as to in the reasonable judgement of Lehman Brothers Inc. make it impracticable for the Initial Purchasers to enforce contracts for the sale of the Securities. This Agreement may also be terminated at any time prior to the Closing Date by Lehman Brothers Inc., on behalf of the Initial Purchasers, if the subject matter of any amendment or supplement to the Offering Memorandum (other than an amendment or supplement relating solely to the activity of the Initial Purchasers) prepared and issued by the Company after the effectiveness of this Agreement shall have disclosed a material adverse change in the financial position or financial results of operations of the Company and its consolidated subsidiaries, considered as a whole, that has materially impaired the marketability of the Securities. Any termination hereof pursuant to this Section 10 shall be without liability of any party to any other party except as otherwise provided in Section 6(h) and 9 hereof. 11. Miscellaneous. THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. This Agreement shall inure to the benefit of the Company, the Initial Purchasers and with respect to the provisions of Section 9 hereof, each director, officer and controlling person referred to in said Section 9, and their respective successors. Nothing herein is intended or shall be construed to give to any other person, firm or corporation any legal or equitable right, remedy or claim under or in respect of any provision of this Agreement. The term "successor" as used herein shall not include any purchaser, as such purchaser, of any of the Securities from the Initial Purchasers. 12. Notices. All communications hereunder shall be in writing, and, if to the Initial Purchasers, shall be mailed or delivered to the Initial Purchasers at the address set forth above (with a copy to the General Counsel of Lehman Brothers Inc.), or, if to the Company, shall be mailed or delivered to it at 250 West Pratt Street, 20th Floor, Baltimore, Maryland 21201, Attention: Treasurer. 13. Survival. The respective agreements, representations, warranties, indemnities and other statements of the Company or its officers and of the Initial Purchasers set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf of the Initial Purchasers or the Company or any of the officers, directors or controlling persons referred to in Section 9 hereof, and will survive delivery of and payment for the Securities. The provisions of Sections 6(h) and 9 shall survive the termination or cancellation of this Agreement. 18 By signature below in the space provided below for that purpose, Lehman Brothers Inc. on behalf of the Initial Purchasers indicates acceptance hereof, whereupon this letter and acceptance shall constitute a binding agreement between the Company and the Initial Purchasers in accordance with its terms. Very truly yours, BALTIMORE GAS AND ELECTRIC COMPANY By: /s/ Thomas E. Ruszin, Jr. Name: Thomas E. Ruszin, Jr. Title: Treasurer and Assistant Secretary Accepted and delivered as of the date first above written LEHMAN BROTHERS INC. On behalf of the Initial Purchasers By: /s/ Martin Goldberg Name: Martin Goldberg Title: Senior Vice President 19 SCHEDULE A BALTIMORE GAS AND ELECTRIC COMPANY Debt Securities Aggregate Principal Amount of 5.25% Underwriter Notes due 2006 Lehman Brothers Inc $165,000,000 Banc of America Securities LLC $ 75,000,000 BNY Capital Markets, Inc. $ 15,000,000 Salomon Smith Barney Inc. $ 15,000,000 Scotia Capital (USA) Inc. $ 15,000,000 SunTrust Capital Markets, Inc. $ 15,000,000 Total $300,000,000 20 Annex I =============================================================================== Description of Securities $300,000,000 5.25% Notes due December 15, 2006, interest payable on June 15, and December 15 of each year commencing June 15, 2002. Purchase Price 99.56% of the principal amount EX-4 3 regrights.txt REGISTRATION RIGHTS AGREEMENT Exhibit 4(b) REGISTRATION RIGHTS AGREEMENT THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and entered into as of December 11, 2001 by and among Baltimore Gas and Electric Company, a Maryland corporation (the "Company"), and Lehman Brothers Inc., on behalf of itself and as representative of Banc of America Securities LLC, BNY Capital Markets, Inc., Salomon Smith Barney Inc., Scotia Capital (USA), Inc., and SunTrust Capital Markets, Inc. ( the "Initial Purchasers"). This Agreement is made pursuant to the Purchase Agreement dated December 4, 2001 (the "Purchase Agreement"), by and among the Company, as issuer of $300,000,000 aggregate principal amount of 5.25% Notes due 2006 (the "Notes"), and the Initial Purchasers, which provide for, among other things, the sale by the Company to the Initial Purchasers of the Notes specified therein. In order to induce the Initial Purchasers to enter into the Purchase Agreement, the Company has agreed to provide to the Initial Purchasers and their direct and indirect transferees the registration rights set forth in this Agreement. The execution and delivery of this Agreement is a condition to the closing under the Purchase Agreement. In consideration of the foregoing, the parties hereto agree as follows: 1. Definitions. As used in this Agreement, the following capitalized defined terms shall have the following meanings: "Advice" shall have the meaning set forth in the last paragraph of Section 3 hereof. "Affiliate" has the meaning given to that term in Rule 405 under the Securities Act or any successor rule thereunder. "Applicable Period" shall have the meaning set forth in Section -3(t) hereof. "Business Day" shall mean any day other than a Saturday, a Sunday, or a day on which banking institutions in The City of New York or the City of Baltimore, Maryland are authorized or required by law or executive order to remain closed. "Closing Date" shall mean December 11, 2001, the initial date of delivery of the Notes from the Company to the Initial Purchasers. "Company" shall have the meaning set forth in the preamble to this Agreement and also includes the Company's successors and permitted assigns. "Depositary" shall mean The Depository Trust Company, or any other depositary appointed by the Company; provided, however, that such depositary must have an address in the Borough of Manhattan, The City of New York. "Effectiveness Period" shall have the meaning set forth in Section 2(b) hereof. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended from time to time. "Exchange Notes" shall mean the 5.25% Notes due December 15, 2006 issued by the Company under the Indenture containing terms identical in all material respects to the Notes except that (i) interest thereon shall accrue from the last date on which interest was paid or duly provided for on the Notes or, if no such interest has been paid, from the date of their original issue, (ii) they will not contain terms with respect to transfer restrictions under the Securities Act, and (iii) they will not provide for any Special Interest Premium thereon. "Exchange Offer" shall mean the offer by the Company to the Holders to exchange all of the Registrable Notes held by each such Holder for a like amount of Exchange Notes pursuant to Section 2(a) hereof. "Exchange Offer Registration" shall mean a registration under the Securities Act effected pursuant to Section 2(a) hereof. "Exchange Offer Registration Statement" shall mean an exchange offer registration statement on Form S-4 (or, if applicable, on another appropriate form), and all amendments and supplements to such registration statement, in each case including the Prospectus contained therein, all exhibits thereto and all documents incorporated by reference therein. "Exchange Period" shall have the meaning set forth in Section 2(a) hereof. "Holder" shall mean any Initial Purchaser, for so long as it owns any Registrable Notes, and each of its successors, assigns and direct and indirect transferees and others who become registered owners of Registrable Notes under the Indenture. "Indenture" shall mean the Indenture, dated as of July 1, 1985 and supplemented as of October 1, 1987 and January 26, 1993, between the Company, as issuer, and Bank of New York, as trustee, as the same may be amended or supplemented from time to time in accordance with the terms thereof. "Initial Purchasers" shall mean Lehman Brothers Inc., Banc of America Securities LLC, BNY Capital Markets, Inc., Salomon Smith Barney Inc., Scotia Capital (USA), Inc., and SunTrust Capital Markets, Inc.. "Inspectors" shall have the meaning set forth in Section 3(o) hereof. "Majority Holders" shall mean the Holders of a majority of the aggregate principal amount of outstanding Notes or Exchange Notes, as the case may be. "Notes" shall have the meaning set forth in the preamble to this Agreement. "Parent" shall mean Constellation Energy Group, Inc., the sole holder of all of the common stock of the Company. "Participating Broker-Dealer" shall have the meaning set forth in Section-3(t) hereof. "Person" shall mean an individual, partnership, corporation, trust or unincorporated organization, limited liability company, or a government or agency or political subdivision thereof or other legal entity. "Prospectus" shall mean the prospectus included in a Registration Statement, including any preliminary prospectus, and any such prospectus as amended or supplemented by any prospectus supplement, including a prospectus supplement with respect to the terms of the offering of any portion of the Registrable Notes covered by a Shelf Registration Statement, and by all other amendments and supplements to a prospectus, including post-effective amendments, and in each case including all documents incorporated by reference therein. "Purchase Agreement" shall have the meaning set forth in the preamble to this Agreement. "Records" shall have the meaning set forth in Section-3(o) hereof. "Registration Notes" shall mean the Notes, until the earliest to occur of (a) the date on which any Note has been exchanged by a Person other than a Participating Broker-Dealer for Exchange Notes in the Exchange Offer, (b) following the exchange by a Broker-Dealer in the Exchange Offer of any Note for one or more Exchange Notes, the date on which such Exchange Notes are sold to a purchaser in accordance with the Exchange Offer Registration Statement, (c) the date on which any Note has been registered under the Securities Act and disposed of in accordance with the Shelf Registration Statement and (d) the date on which any Note is eligible to be distributed to the public pursuant to Rule 144(k) under the Securities Act. "Registration Expenses" shall mean any and all expenses incident to performance of or compliance by the Company with this Agreement, including without limitation: (i) all SEC or National Association of Securities Dealers, Inc. (the "NASD") registration and filing fees, including, if applicable, the fees and expenses of any "qualified independent underwriter" (and its counsel) that is required to be retained by any Holder of Registrable Notes in accordance with the rules and regulations of the NASD, (ii) all fees and expenses incurred in connection with compliance with state securities or blue sky laws (including reasonable fees and disbursements of one counsel for all underwriters and Holders as a group in connection with blue sky qualification of any of the Exchange Notes or Registrable Notes) and compliance with the rules of the NASD, (iii) all expenses of any Persons in preparing or assisting in preparing, word processing, printing and distributing any Registration Statement, any Prospectus and any amendments or supplements thereto, and in preparing or assisting in preparing, printing and distributing any underwriting agreements, Notes sales agreements and other documents relating to the performance of and compliance with this Agreement, (iv) all rating agency fees, (v) the fees and disbursements of counsel for the Company and of the independent certified public accountants of the Company and its subsidiaries, including the expenses of any "cold comfort" letters required by or incident to the performance of and compliance with this Agreement, (vi) the reasonable fees and expenses of the Trustee and its counsel and any exchange agent or custodian, and (vii) the reasonable fees and expenses of any special experts retained by the Company in connection with any Registration Statement. "Registration Statement" shall mean any registration statement of the Company which covers any of the Exchange Notes or Registrable Notes pursuant to the provisions of this Agreement, and all amendments and supplements to any such Registration Statement, including post-effective amendments, in each case including the Prospectus contained therein, all exhibits thereto and all documents incorporated by reference therein. "Rule 144(k) Period" shall mean the period of two years (or such shorter period as may hereafter be referred to in Rule 144(k) under the Securities Act (or similar successor rule)) commencing on the Closing Date. "SEC" shall mean the Securities and Exchange Commission. "Securities Act" shall mean the Securities Act of 1933, as amended from time to time. "Shelf Registration" shall mean a registration effected pursuant to Section 2(b) hereof. "Shelf Registration Event" shall have the meaning set forth in Section 2(b) hereof. "Shelf Registration Event Date" shall have the meaning set forth in Section 2(b) hereof. "Shelf Registration Statement" shall mean a "shelf" registration statement of the Company pursuant to the provisions of Section 2(b) hereof which covers all of the Registrable Notes (except Registrable Notes which have been, or will be, exchanged by a Person for Exchange Notes in the Exchange Offer and Registrable Notes which the Holders have elected not to include in such Shelf Registration Statement or the Holders of which have not complied with their obligations under the penultimate paragraph of Section 3 hereof or under the first paragraph of Section 2(b) hereof) on an appropriate form under Rule 415 under the Securities Act, or any similar rule that may be adopted by the SEC, and all amendments and supplements to such registration statement, including post-effective amendments, in each case including the Prospectus contained therein, all exhibits thereto and all documents incorporated by reference therein "Special Interest Premium" shall have the meaning set forth in Section 2(e) hereof. "TIA" shall have the meaning set forth in Section 3(l) hereof. "Trustee" shall mean the trustee under the Indenture. 2. Registration Under the Securities Act. (a) Exchange Offer. Except as set forth in Section 2(b) below, the Company shall, for the benefit of the Holders, at the Company's cost, use commercially reasonable efforts to (i) file with the SEC within 90 calendar days after the Closing Date an Exchange Offer Registration Statement on an appropriate form under the Securities Act relating to the Exchange Offer, (ii) cause such Exchange Offer Registration Statement to be declared effective under the Securities Act by the SEC not later than the date which is 180 calendar days after the Closing Date, and (iii) provided such Exchange Offer Registration Statement has been declared effective under the Securities Act by the SEC, commence the Exchange Offer and keep the Exchange Offer open for not less than 30 days, or longer if required by applicable law, after the date on which such Registration Statement was declared effective by the SEC (such period referred to herein as the "Exchange Period") and at the termination thereof issue, Exchange Notes in exchange for all Registrable Notes tendered prior thereto in the Exchange Offer. Each Holder of Registrable Notes to be exchanged in the Exchange Offer shall be required, as a condition to participating in the Exchange Offer, to represent that it acquired the Exchange Notes in the ordinary course of such Holder's business and that it (i) is not an Affiliate of the Company, (ii) does not hold any Notes to be exchanged for Exchange Notes in the Exchange Offer that were acquired other than in the ordinary course of business, (iii) is not a broker-dealer tendering Registrable Notes acquired directly from the Company, (iv) at the time of the Exchange Offer, has no arrangements or understandings with any Person to participate in the Exchange Offer for the purpose of distributing the Exchange Notes. In connection with the Exchange Offer, the Company shall: (i) mail to each Holder a copy of the Prospectus forming part of the Exchange Offer Registration Statement, together with an appropriate letter of transmittal and related documents; (ii) utilize the services of the Depositary for the Exchange Offer with respect to Notes represented by a global certificate; (iii) permit Holders to withdraw tendered Registrable Notes at any time prior to the close of business, New York City time, on the last Business Day of the Exchange Period, by sending to the institution specified in the notice to Holders, a telegram, telex, facsimile transmission or letter setting forth the name of such Holder, the principal amount of Registrable Notes delivered for exchange, and a statement that such Holder is withdrawing his election to have such Registrable Notes exchanged; (iv) notify each Holder that any Registrable Security not tendered by such Holder in the Exchange Offer will remain outstanding and continue to accrue interest but will not retain any rights under this Agreement (except in the case of the Initial Purchasers and Participating Broker-Dealers as provided herein); and (v) otherwise comply in all material respects with all applicable laws and regulations relating to the Exchange Offer. As soon as practicable after the close of the Exchange Offer, the Company shall: (i) accept for exchange all Registrable Notes or portions thereof duly tendered and not validly withdrawn pursuant to the Exchange Offer in accordance with the terms of the Exchange Offer Registration Statement and letter of transmittal; (ii) deliver, or cause to be delivered, to the Trustee for cancellation all Registrable Notes or portions thereof so accepted for exchange by the Company; and (iii) issue, and cause the Trustee under the Indenture to promptly authenticate and deliver to each Holder, Exchange Notes equal in principal amount to the principal amount of the Notes as are surrendered by such Holder. Interest on each Exchange Note issued pursuant to the Exchange Offer will accrue from the last date on which interest was paid or duly provided for on the Note surrendered in exchange therefor or, if no interest has been paid on such Note, from the date of original issue of such Note. To the extent not prohibited by any judicial order, judgment, law, regulation or applicable interpretation of the staff of the SEC, the Company shall use commercially reasonable efforts to complete the Exchange Offer as provided above, and shall comply with the applicable requirements of the Securities Act, the Exchange Act and other applicable laws and regulations in connection with the Exchange Offer. The Exchange Offer shall not be subject to any conditions other than the conditions referred to in Section 2(b)(i) and (ii) below and those conditions that are customary in similar exchange offers, except as may be required by applicable law. Each Holder of Registrable Notes who wishes to exchange such Registrable Notes for Exchange Notes in the Exchange Offer will be required to make certain customary representations in connection therewith, including, in the case of any Holder, representations that (i) it is not an Affiliate of the Company, (ii) it is not a broker-dealer tendering Registrable Notes acquired directly from the Company, (iii) the Notes being exchanged, and the Exchange Notes to be received, by it have been or are being acquired in the ordinary course of its business and (iv) at the time of the Exchange Offer, it has no arrangements or understandings with any Person to participate in the distribution (within the meaning of the Securities Act) of the Exchange Notes. The Company shall inform the Initial Purchasers, after consultation with the Trustee, of the names and addresses of the Holders to whom the Exchange Offer is made, and the Initial Purchasers shall have the right to contact such Holders in order to facilitate the tender of Registrable Notes in the Exchange Offer. Upon consummation of the Exchange Offer in accordance with this Section 2(a), the provisions of this Agreement shall continue to apply, mutatis mutandis, solely with respect to Exchange Notes held by Initial Purchasers and Participating Broker-Dealers, and the Company shall have no further obligation to register the Registrable Notes held by any other Holder pursuant to Section 2(b) of this Agreement. (b) Shelf Registration. If (i) because of any change in law, regulation or in currently prevailing interpretations thereof by the staff of the SEC or after the filing of the Exchange Offer Registration Statement, the Company reasonably determines that, the Company is not permitted to effect the Exchange Offer as contemplated by Section 2(a) hereof, (ii) the Exchange Offer is not consummated within 210 days after the Closing Date or (iii) any Holder of Registrable Notes that is a "qualified institutional buyer" (as defined in Rule 144A under the Securities Act) shall notify the Company prior to the 20th day following the commencement of the Exchange Offer (A) that such Holder was prohibited by applicable law or SEC policy from participating in the Exchange Offer, or (B) that such Holder may not resell the Exchange Notes acquired by it in the Exchange Offer to the public without delivering a prospectus and that the Prospectus contained in the Exchange Offer Registration Statement is not appropriate or available for such resales by such Holder, or (C) that such Holder is a Participating Broker-Dealer and holds Notes acquired directly from the Company or one of its Affiliates (any of the events specified in (i), (ii) or (iii) being a "Shelf Registration Event", and the date of occurrence thereof, the "Shelf registration EventDate"), then in addition to or in lieu of conducting the Exchange Offer contemplated by Section 2(a), as the case may be, the Company shall promptly notify the Holders in writing thereof and shall, at its cost, file as promptly as practicable after such Shelf Registration Event Date and, in any event, within 90 days after such Shelf Registration Event Date, a Shelf Registration Statement providing for the sale by the Holders of all of the Registrable Notes (other than Registrable Notes owned by Holders who have elected not to include such Registrable Notes in such Shelf Registration Statement or who have not complied with their obligations under the penultimate paragraph of Section 3 hereof or under this paragraph or by Holders who have exchanged or will be exchanging, their Notes for Exchange Notes in the Exchange Offer pursuant to Section 2(a)), and shall use its commercially reasonable efforts to cause such Shelf Registration Statement to be declared effective by the SEC as soon as practicable and in any event, on or before the 120th day after the Shelf Registration Event Date. No Holder of Registrable Notes shall be entitled to include any of its Registrable Notes in any Shelf Registration pursuant to this Agreement unless and until such Holder agrees in writing to be bound by all of the provisions of this Agreement applicable to such Holder and furnishes to the Company in writing, within 10 days after receipt of a request therefor, such information as the Company may, after conferring with counsel with regard to information relating to Holders that would be required by the SEC to be included in such Shelf Registration Statement or Prospectus included therein, reasonably request for inclusion in any Shelf Registration Statement or Prospectus included therein. Each Holder as to which any Shelf Registration is being effected agrees to furnish to the Company, without request and as soon as practicable, all information with respect to such Holder necessary to make the information previously furnished to the Company by such Holder not materially misleading. The Company agrees to use its commercially reasonable efforts to keep the Shelf Registration Statement continuously effective and the Prospectus usable for resales for the earlier of: (x) the expiration of the Rule 144(k) Period or (y) such time as all of the Notes covered by the Shelf Registration Statement have been sold pursuant to the Shelf Registration Statement or cease to be Registrable Notes (the period from the effective date of the Shelf Registration Statement until the earlier of the events described in clauses (x) or (y) being the "Effectiveness Period"). The Company will, in the event a Shelf Registration Statement is declared effective, provide to each Holder of Registrable Notes covered thereby, a reasonable number of copies of the Prospectus which is a part of the Shelf Registration Statement, notify each such Holder when the Shelf Registration has become effective and take any other action required to permit unrestricted resales of the Registrable Notes. The Company further agrees to supplement or amend the Shelf Registration Statement, if required by the rules, regulations or instructions applicable to the registration form used by the Company for such Shelf Registration Statement or by the Securities Act or by any other rules and regulations thereunder for shelf registrations, and the Company agrees to furnish to the Holders of Registrable Notes covered by such Shelf Registration Statement copies of any such supplement or amendment promptly after its being used or filed with the SEC. (c) Expenses. The Company shall pay all Registration Expenses in connection with any Registration Statement filed pursuant to Section 2(a) and/or 2(b) hereof and will reimburse the Initial Purchasers for the reasonable fees and disbursements Cahill Gordon & Reindel incurred in connection with the Exchange Offer. Except as provided herein, each Holder shall pay all expenses of its counsel, underwriting discounts and commissions and transfer taxes, if any, relating to the sale or disposition of such Holder's Registrable Notes pursuant to the Shelf Registration Statement. (d) Effective Registration Statement. An Exchange Offer Registration Statement pursuant to Section 2(a) hereof or a Shelf Registration Statement pursuant to Section 2(b) hereof will not be deemed to have become effective unless it has been declared effective by the SEC; provided, however, that if, after it has been declared effective, the offering of Registrable Notes pursuant to such Exchange Offer Registration Statement or Shelf Registration Statement is interfered with by any stop order, injunction or other order or requirement of the SEC or any other governmental agency or court, or if the Company has provided notice to Holders of an event described in Section 3(f)(v), such Exchange Offer Registration Statement or Shelf Registration Statement will be deemed not to have been effective during the period of such interference, until the offering of Registrable Notes pursuant to such Registration Statement may legally resume. (e) Special Interest Premium. In the event that: (i) the Exchange Offer Registration Statement is not filed with the SEC on or prior to the 90th day after the Closing Date, then, commencing on the 91st day after the Closing Date, a special interest premium (the "Special Interest Premium") shall accrue on the principal amount of the Notes at a rate of 0.25% per annum; (ii) the Exchange Offer Registration Statement is not declared effective by the SEC on or prior to the 180th day after the Closing Date, then, commencing on the 181st day after the Closing Date, a Special Interest Premium shall accrue on the principal amount of the Notes at a rate of 0.25% per annum; (iii) the Company has not exchanged Exchange Notes for all Notes validly tendered, in accordance with the terms of the Exchange Offer, on or prior to the 210th day after the Closing Date, then, commencing on the 211th day after the Closing Date, a Special Interest Premium shall accrue on the principal amount of the Notes at the rate of 0.25% per annum; (iv) a Shelf Registration Event occurs and the Shelf Registration Statement is not filed on or prior to the 90th day after the Shelf Registration Event Date, then, commencing on the 91st day after the Shelf Registration Event Date, a Special Interest Premium shall accrue on the principal amount of the Notes at a rate of 0.25% per annum; (v) a Shelf Registration Event occurs and the Shelf Registration Statement is not declared effective on or prior to the 120th day after the Shelf Registration Event Date, then, commencing on the 121st day after the Shelf Registration Event Date, a Special Interest Premium shall accrue on the principal amount of the Notes at a rate of 0.25% per annum; (vi) the Shelf Registration Statement has been declared effective and such Shelf Registration Statement ceases to be continuously effective or the Prospectus contained in such Shelf Registration Statement ceases to be usable for resales (A) at any time prior to the expiration of the Effectiveness Period or (B) if related to corporate developments, public filings with the SEC or similar events or because the Prospectus contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading, and such failure continues for more than 60 days (whether or not consecutive and whether or not arising out of a single or multiple circumstances) in any twelve-month period, then the Special Interest Premium shall accrue on the principal amount of the Notes at a rate of 0.25% per annum commencing on the day that (in the case of (A) above), or the 61st (cumulative) day after (in the case of (B) above), such Shelf Registration Statement ceases to be effective or the Prospectus ceases to be usable for resales; provided, however, that the aggregate amount of the Special Interest Premium in respect of the Notes may not exceed 1.0% per annum (regardless of whether multiple events triggering a Special Interest Premium under this subsection (e) exist); provided, further, however, that on the date of (1) the filing of the Exchange Offer Registration Statement (in the case of clause (i) above), (2) the effectiveness of the Exchange Offer Registration Statement (in the case of clause (ii) above), (3) the exchange of Exchange Notes for all Notes validly tendered (in the case of clause (iii) above), (4) the filing of the Shelf Registration Statement ( in the case of clause (iv) above, (5) the effectiveness of the Shelf Registration Statement (in the case of clause (v) above), and (6) the earlier of (y) such time as the Shelf Registration Statement which had ceased to remain effective or the Prospectus which had ceased to be usable for resales again becomes effective and usable for resales, as applicable, and (z) the expiration of the Effectiveness Period (each in the case of clause (vi) above), the Special Interest Premium on the principal amount of the Notes as a result of such clause (or the relevant subclause thereof) shall cease to accrue and the interest rate shall return to the rate of 5.25% per annum; provided, further, however, that if the Company shall request Holders to provide the information required by the SEC for inclusion in the Shelf Registration Statement, the Notes owned by Holders who do not provide such information when required pursuant to Section 2(b) will not be entitled to any Special Interest Premium, regardless of the existence of any events which would otherwise trigger a Special Interest Premium under this subsection (e) for such Holders. Any Special Interest Premium due pursuant to Section 2(e)(i), (ii), (iii), (iv), (v), or (vi) above will be payable in cash on the next succeeding June 15 or December 15, as the case may be, to eligible Holders (as determined under this subsection (e)) on the relevant record dates for the payment of interest pursuant to the Indenture. (f) Limitation of Liability. The Holders agree that the Special Interest Premium as provided for in Section 4(e) shall be the sole and exclusive remedy and measure of damages for the Company's failure to satisfy its obligations under Section 2(a) and 2(b) hereof. 3. Registration Procedures. In connection with the obligations of the Company with respect to the Registration Statements pursuant to Sections 2(a) and 2(b) hereof, the Company shall: (a) prepare and file with the SEC a Registration Statement or Registration Statements as prescribed by Sections 2(a) and 2(b) hereof within the relevant time period specified in Section 2 hereof on the appropriate form under the Securities Act, which form shall (i) be selected by the Company, (ii) in the case of a Shelf Registration, be available for the sale of the Registrable Notes by the selling Holders thereof and, in the case of an Exchange Offer, be available for the exchange of Registrable Notes, and (iii) comply as to form in all material respects with the requirements of the applicable form and include all financial statements required by the SEC to be filed therewith; and use its commercially reasonable efforts to cause such Registration Statement to become effective and remain effective (and, in the case of a Shelf Registration Statement, the Prospectus to be usable for resales) in accordance with Section 2 hereof; provided, however, that if (1) such filing is pursuant to Section 2(b), or (2) a Prospectus contained in an Exchange Offer Registration Statement filed pursuant to Section 2(a) is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes, before filing any Registration Statement or Prospectus or any amendments or supplements thereto, the Company shall furnish to and afford the Holders of the Registrable Notes and each such Participating Broker-Dealer, as the case may be, covered by such Registration Statement, their counsel and the managing underwriters, if any, a reasonable opportunity to review copies of all such documents (including copies of any documents to be incorporated by reference therein and all exhibits thereto) proposed to be filed; and the Company shall not file any Registration Statement or Prospectus or any amendments or supplements thereto in respect of which the Holders must be afforded an opportunity to review prior to the filing of such document if the Majority Holders of the Registrable Notes, depending solely upon which Holders must be afforded the opportunity of such review, or such Participating Broker-Dealer, as the case may be, their counsel or the managing underwriters, if any, shall reasonably object in a timely manner; (b) prepare and file with the SEC such amendments and post-effective amendments to each Registration Statement as may be necessary to keep such Registration Statement effective for the Effectiveness Period or the Applicable Period, as the case may be, and cause each Prospectus to be supplemented, if so determined by the Company or requested by the SEC, by any required prospectus supplement and as so supplemented to be filed pursuant to Rule 424 (or any similar provision then in force) under the Securities Act, and comply with the provisions of the Securities Act, the Exchange Act and the rules and regulations promulgated thereunder applicable to it with respect to the disposition of all Notes covered by each Registration Statement during the Effectiveness Period or the Applicable Period, as the case may be, in accordance with the intended method or methods of distribution by the selling Holders thereof described in this Agreement (including sales by any Participating Broker-Dealer); (c) in the case of an Exchange Offer Registration Statement, if required by applicable law or the staff of the SEC prior to the effectiveness of such statement, provide a supplemental letter to the SEC (i) stating that the Company is registering the Exchange Offer in reliance on the position of the SEC enunciated in Exxon Capital Holdings Corporation (available May 13, 1988), Morgan Stanley and Co., Inc. (available June 5, 1991), Brown & Wood LLP (available February 7, 1997) and (ii) including a representation that the Company has not entered into any arrangement or understanding with any Person to distribute the Exchange Notes to be received in the Exchange Offer and that, to the best of the Company's information and belief, each Holder participating in the Exchange Offer is acquiring the Exchange Notes in its ordinary course of business and has no arrangement or understanding with any Person to participate in the distribution of the Exchange Notes received in the Exchange Offer; (d) in the case of a Shelf Registration, (i) notify each Holder of Registrable Notes included in the Shelf Registration Statement, at least three Business Days prior to filing, that a Shelf Registration Statement with respect to the Registrable Notes is being filed and advising such Holder that the distribution of Registrable Notes will be made in accordance with the method selected by the Majority Holders of the Registrable Notes included in the Shelf Registration Statement, (ii) furnish to each Holder of Registrable Notes included in the Shelf Registration Statement and to each underwriter of an underwritten offering of Registrable Notes, if any, without charge, as many copies of each Prospectus, including each preliminary prospectus, and any amendment or supplement thereto, and such other documents as such Holder or underwriter may reasonably request, in order to facilitate the public sale or other disposition of the Registrable Notes and (iii) consent to the use of the Prospectus or any amendment or supplement thereto by each of the selling Holders of Registrable Notes included in the Shelf Registration Statement in connection with the offering and sale of the Registrable Notes covered by the Prospectus or any amendment or supplement thereto; (e) in the case of a Shelf Registration, register or qualify the Registrable Notes under all applicable state securities or "bule sky" laws of such jurisdictions by the time the applicable Registration Statement is declared effective by the SEC as any Holder of Registrable Notes covered by a Registration Statement and each underwriter of an underwritten offering of Registrable Notes shall reasonably request in writing within 30 days in advance of such date of effectiveness, and do any and all other acts and things which may be reasonably necessary or advisable to enable such Holder and underwriter to consummate the disposition in each such jurisdiction of such Registrable Notes owned by such Holder; provided, however, that the Company shall not be required to (i) qualify as a foreign corporation or as a dealer in securities in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(e), (ii) file any general consent to service of process in any jurisdiction where it would not otherwise be subject to such service of process or (iii) subject itself to taxation in any such jurisdiction if it is not then so subject; (f) (1) in the case of a Shelf Registration or (2) if Participating Broker-Dealers from whom the Company has received prior written notice that they will be utilizing the Prospectus contained in the Exchange Offer Registration Statement as provided in Section 3(t) hereof, are seeking to sell Exchange Notes and are required to deliver Prospectuses, promptly notify each Holder of Registrable Notes, or such Participating Broker-Dealers, as the case may be, their counsel and the managing underwriters, if any, and promptly confirm such notice in writing (i) when a Registration Statement has become effective and when any post-effective amendments thereto become effective, (ii) of any request by the SEC or any state securities authority for amendments and supplements to a Registration Statement or Prospectus or for additional information after the Registration Statement has become effective, (iii) of the issuance by the SEC or any state securities authority of any stop order suspending the effectiveness of a Registration Statement or the qualification of the Registrable Notes or the Exchange Notes to be offered or sold by any Participating Broker-Dealer in any jurisdiction described in Section 3(e) hereof or the initiation of any proceedings for that purpose, (iv) in the case of a Shelf Registration, if, between the effective date of a Registration Statement and the closing of any sale of Registrable Notes covered thereby, the representations and warranties of the Company contained in any purchase agreement, securities sales agreement or other similar agreement cease to be true, correct and complete in all material respects, (v) of the happening of any event or the failure of any event to occur or the discovery of any facts, during the Effectiveness Period, which makes any statement made in such Registration Statement or the related Prospectus untrue in any material respect or which causes such Registration Statement or Prospectus to 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, as well as any other corporate developments, public filings with the SEC or similar events causing such Registration Statement not to be effective or the Prospectus not to be useable for resales and (vi) of the reasonable determination of the Company that a post-effective amendment to the Registration Statement would be appropriate; (g) obtain the withdrawal of any order suspending the effectiveness of a Registration Statement as soon as practicable; (h) in the case of a Shelf Registration, furnish to each Holder of Registrable Notes included within the coverage of such Shelf Registration Statement, without charge, at least one conformed copy of each Registration Statement relating to such Shelf Registration and any post-effective amendment thereto (without documents incorporated therein by reference or exhibits thereto, unless requested); (i) in the case of a Shelf Registration, cooperate with the selling Holders of Registrable Notes to facilitate the timely preparation and delivery of certificates representing Registrable Notes to be sold and not bearing any restrictive legends (except any customary legend borne by securities held through The Depository Trust Company or any similar depository) and in such denominations (consistent with the provisions of the Indenture and the officer's certificate establishing the forms and the terms of the Notes pursuant to the Indenture) and registered in such names as the selling Holders or the underwriters may reasonably request (provided such names are consistent with the names of the selling securityholders set forth in the Shelf Registration Statement) at least two Business Days prior to the closing of any sale of Registrable Notes pursuant to such Shelf Registration Statement; (j) in the case of a Shelf Registration or an Exchange Offer Registration, promptly after the occurrence of any event specified in Section 3(f)(ii), 3(f)(iii), 3(f)(v) (subject to the 60-day cumulative grace period within any twelve-month period provided for in Section 2(e)(iv)(B)) or 3(f)(vi) hereof, prepare a supplement or post-effective amendment to such Registration Statement or the related Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of the Registrable Notes, such Prospectus will not include any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and the Company shall notify each Holder to suspend use of the Prospectus as promptly as practicable after the occurrence of such an event, and each Holder hereby agrees to suspend use of the Prospectus until the Company has amended or supplemented the Prospectus to correct such misstatement or omission; (k) obtain a CUSIP number, and any other appropriate security identification number, for the Exchange Notes or the Registrable Notes, as the case may be, not later than the effective date of a Registration Statement, and provide the Trustee with certificates for the Exchange Notes or the Registrable Notes, as the case may be, in a form eligible for deposit with the Depositary; (l) cause the Indenture to be qualified under the Trust Indenture Act of 1939, as amended (the "TIA"), in connection with the registration of the Exchange Notes or Registrable Notes, as the case may be, and effect such changes to such documents as may be required for them to be so qualified in accordance with the terms of the TIA and execute, and cause the Trustee to execute, all documents as may be required to effect such changes, and all other forms and documents required to be filed with the SEC to enable such documents to be so qualified in a timely manner; (m) in the case of a Shelf Registration, enter into such agreements (including underwriting agreements) as are customary in underwritten offerings and take all such other appropriate actions in connection therewith as are reasonably requested by the Holders of at least 25% in aggregate principal amount of the Registrable Notes being sold in order to expedite or facilitate the registration or the disposition of the Registrable Notes; (n) in the case of a Shelf Registration, whether or not an underwriting agreement is entered into and whether or not the registration is an underwritten registration, if requested by (x) an Initial Purchaser, in the case where such Initial Purchaser holds Notes acquired by it as part of its initial placement, or (y) Holders of at least 25% in aggregate principal amount of the Registrable Notes covered thereby: (i) make such representations and warranties to Holders of such Registrable Notes and the underwriters (if any), with respect to the business of the Company as then conducted and the Registration Statement, Prospectus and documents, if any, incorporated or deemed to be incorporated by reference therein, in each case, as are customarily made by issuers to underwriters in underwritten offerings, and confirm the same if and when requested; (ii) obtain opinions of counsel to the Company and updates thereof (which may be in the form of a reliance letter) in form and substance reasonably satisfactory to the managing underwriters (if any) and the Holders of a majority in amount of the Registrable Notes being sold, addressed to each selling Holder and the underwriters (if any) covering the matters customarily covered in opinions requested in underwritten offerings and such other matters as may be reasonably requested by such underwriters (it being agreed that the matters to be covered by such opinion may be subject to customary qualifications and exceptions); (iii) obtain "cold comfort" letters and updates thereof in form and substance reasonably satisfactory to the managing underwriters from the independent certified public accountants of the Company, addressed to each of the underwriters, such letters to be in customary form and covering matters of the type customarily covered in "cold comfort" letters in connection with underwritten offerings and such other matters as reasonably requested by such underwriters in accordance with Statement on Auditing Standards No. 72; and (iv) if an underwriting agreement is entered into, the same shall contain indemnification provisions and procedures no less favorable than those set forth in Section 4 hereof (or such other provisions and procedures acceptable to Holders of a majority in aggregate principal amount of Registrable Notes covered by such Registration Statement and the managing underwriters) customary for such agreements with respect to all parties to be indemnified pursuant to said Section (including, without limitation, such underwriters and selling Holders); and in the case of an underwritten registration, the above requirements shall be satisfied at each closing under the related underwriting agreement or as and to the extent required thereunder; (o) if (1) a Shelf Registration is filed pursuant to Section 2(b) or (2) a Prospectus contained in an Exchange Offer Registration Statement filed pursuant to Section 2(a) is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, make reasonably available for inspection by any selling Holder of Registrable Notes or Participating Broker-Dealer, as applicable, who certifies to the Company that it has a current intention to sell Registrable Notes pursuant to the Shelf Registration, any underwriter participating in any such disposition of Registrable Notes, if any, and any attorney, accountant or other agent retained by any such selling Holder, Participating Broker-Dealer, as the case may be, or underwriter (collectively, the "Inspectors"), at the offices where normally kept, during the Company's normal business hours, all financial and other records, pertinent organizational and operational documents and properties of the Company and the Parent (collectively, the "Records") as shall be reasonably necessary to enable them to conduct due diligence activities, and cause the officers, trustees and employees of the Company and the Parent to supply all relevant information in each case reasonably requested by any such Inspector in connection with such Registration Statement; Records and information which the Company determines, in good faith, to be confidential and any Records and information which it notifies the Inspectors are confidential shall not be disclosed to any Inspector except where (i) the disclosure of such Records or information is necessary to avoid or correct a material misstatement or omission in such Registration Statement, (ii) the release of such Records or information is ordered pursuant to a subpoena or other order from a court of competent jurisdiction or is necessary in connection with any action, suit or proceeding or (iii) such Records or information previously has been made generally available to the public; each selling Holder of such Registrable Notes and each such Participating Broker-Dealer will be required to agree in writing that Records and information obtained by it as a result of such inspections shall be deemed confidential and shall not be used by it as the basis for any market transactions in the securities of the Company unless and until such is made generally available to the public through no fault of an Inspector, a Participating Broker-Dealer, or a selling Holder; and each selling Holder of such Registrable Notes and each such Participating Broker-Dealer will be required to further agree in writing that it will, upon learning that disclosure of such Records or information is sought in a court of competent jurisdiction, or in connection with any action, suit or proceeding, give notice to the Company and allow the Company at its expense to undertake appropriate action to prevent disclosure of the Records and information deemed confidential; (p) comply with all applicable rules and regulations of the SEC so long as any provision of this Agreement shall be applicable and make generally available to its security holders earning statements satisfying the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar rule promulgated under the Securities Act) no later than 45 days after the end of any 12-month period (or 90 days after the end of any 12-month period if such period is a fiscal year) (i) commencing at the end of any fiscal quarter in which Registrable Notes are sold to underwriters in a firm commitment or best efforts underwritten offering and (ii) if not sold to underwriters in such an offering, commencing on the first day of the first fiscal quarter of the Company after the effective date of a Registration Statement, which statements shall cover said 12-month periods, provided that the obligations under this paragraph (p) shall be satisfied by the timely filing of quarterly and annual reports on Forms 10-Q and 10-K under the Exchange Act; (q) if an Exchange Offer is to be consummated, upon delivery of the Registrable Notes by Holders to the Company (or to such other Person as directed by the Company ), in exchange for the Exchange Notes, the Company shall mark, or cause to be marked, on such Notes delivered by such Holders that such Notes are being cancelled in exchange for the Exchange Notes; it being understood that in no event shall such Notes be marked as paid or otherwise satisfied; (r) cooperate with each seller of Registrable Notes covered by any Registration Statement and each underwriter, if any, participating in the disposition of such Registrable Notes and their respective counsel in connection with any filings required to be made with the NASD; (s) take all other steps necessary to effect the registration of the Registrable Notes covered by a Registration Statement contemplated hereby; (t) (A) in the case of the Exchange Offer Registration Statement (i) include in the Exchange Offer Registration Statement a section entitled "Plan of Distribution", which section shall be reasonably acceptable to Lehman Brothers Inc. on behalf of the Initial Purchasers or another representative of the Participating Broker-Dealers, and which shall contain a summary statement of the positions taken or policies made by the staff of the SEC with respect to the potential "underwriters" status of any broker-dealer that holds Registrable Notes acquired for its own account as a result of market-making activities or other trading activities (a "Participating Broker-Dealer") and that will be the beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of Exchange Notes to be received by such broker-dealer in the Exchange Offer, whether such positions or policies have been publicly disseminated by the staff of the SEC or such positions or policies, in the reasonable judgment of the Initial Purchasers or such other representative, represent the prevailing views of the staff of the SEC, including a statement that any such broker-dealer who receives Exchange Notes for Registrable Notes pursuant to the Exchange Offer may be deemed a statutory underwriter and must deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such Exchange Notes, (ii) furnish to each Participating Broker-Dealer who has delivered to the Company the notice referred to in Section 3(f), without charge, as many copies of each Prospectus included in the Exchange Offer Registration Statement, including any preliminary Prospectus, and any amendment or supplement thereto, as such Participating Broker-Dealer may reasonably request (the Company hereby consents to the use of the Prospectus forming part of the Exchange Offer Registration Statement or any amendment or supplement thereto by any Person subject to the prospectus delivery requirements of the Securities Act, including all Participating Broker-Dealers, in connection with the sale or transfer of the Exchange Notes covered by the Prospectus or any amendment or supplement thereto), (iii) use its commercially reasonable efforts to keep the Exchange Offer Registration Statement effective and to amend and supplement the Prospectus contained therein in order to permit such Prospectus to be lawfully delivered by all Persons subject to the prospectus delivery requirements of the Securities Act for such period of time as such Persons must comply with such requirements under the Securities Act and applicable rules and regulations in order to resell the Exchange Notes; provided, however, that such period shall not be required to exceed 210 days (or such longer period if extended pursuant to the last sentence of Section 3 hereof) (the "Applicable Period"), and (iv) include in the transmittal letter or similar documentation to be executed by an exchange offeree in order to participate in the Exchange Offer (x) the following provision: "If the exchange offeree is a broker-dealer holding Registrable Notes acquired for its own account as a result of market-making activities or other trading activities, it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of Exchange Notes received in respect of such Registrable Notes pursuant to the Exchange Offer"; and (y) a statement to the effect that by a Participating Broker-Dealer making the acknowledgment described in clause (x) and by delivering a Prospectus in connection with the exchange of Registrable Notes, the Participating Broker-Dealer will not be deemed to admit that it is an underwriter within the meaning of the Securities Act; and (B) in the case of any Exchange Offer Registration Statement, the Company agrees to deliver to Lehman Brothers Inc. on behalf of the Initial Purchasers or to another representative of the Participating Broker-Dealers, if reasonably requested by an Initial Purchaser or such other representative of Participating Broker-Dealers, on behalf of the Participating Broker-Dealers upon consummation of the Exchange Offer (i) an opinion of counsel in form and substance reasonably satisfactory to such Initial Purchaser or such other representative of the Participating Broker-Dealers, covering the matters customarily covered in opinions requested in connection with Exchange Offer Registration Statements and such other matters as may be reasonably requested (it being agreed that the matters to be covered by such opinion may be subject to customary qualifications and exceptions), (ii) an officer's certificate substantially similar to that specified in Section 8(c) of the Purchase Agreement and such additional certifications as are customarily delivered in a public offering of debt Notes and (iii) upon the effectiveness of the Exchange Offer Registration Statement, comfort letters, in each case, in customary form if permitted by Statement on Auditing Standards No. 72. The Company may require each seller of Registrable Notes as to which any registration is being effected to furnish to the Company such information regarding such seller as may be required by the staff of the SEC to be included in a Registration Statement. The Company may exclude from such registration the Registrable Notes of any seller who unreasonably fails to furnish such information within 10 days after receiving such request. The Company shall have no obligation to register under the Securities Act the Registrable Notes of a seller who so fails to furnish such information. In the case of a Shelf Registration Statement, or if Participating Broker-Dealers who have notified the Company that they will be utilizing the Prospectus contained in the Exchange Offer Registration Statement as provided in this Section 3(t) are seeking to sell Exchange Notes and are required to deliver Prospectuses, each Holder agrees that, upon receipt of any notice from the Company of the occurrence of any event specified in Section 3(f)(ii), 3(f)(iii), 3(f)(v) or 3(f)(vi) hereof, such Holder will forthwith discontinue disposition of Registrable Notes pursuant to a Registration Statement until such Holder's receipt of the copies of the supplemented or amended Prospectus contemplated by Section 3(j) hereof or until it is advised in writing (the "Advice") by the Company that the use of the applicable Prospectus may be resumed, and, if so directed by the Company, such Holder will deliver to the Company (at the Company's expense) all copies in such Holder's possession, other than permanent file copies then in such Holder's possession, of the Prospectus covering such Registrable Notes or Exchange Notes, as the case may be, current at the time of receipt of such notice. If the Company shall give any such notice to suspend the disposition of Registrable Notes or Exchangeable Notes, as the case may be, pursuant to a Registration Statement, the Company shall use its commercially reasonable efforts to file and have declared effective (if an amendment), as soon as practicable after the resolution of the related matters, an amendment or supplement to the Registration Statement and shall extend the period during which such Registration Statement is required to be maintained effective and the Prospectus usable for resales pursuant to this Agreement by the number of days in the period from and including the date of the giving of such notice to and including the date when the Company shall have made available to the Holders (x) copies of the supplemented or amended Prospectus necessary to resume such dispositions or (y) the Advice. 4. Indemnification and Contribution. (a) In connection with a Shelf Registration Statement or in connection with any delivery of a Prospectus contained in an Exchange Offer Registration Statement by any Participating Broker-Dealer or Initial Purchaser, as applicable, who seeks to sell Exchange Notes, the Company shall indemnify and hold harmless each Holder of Registrable Notes included within any such Shelf Registration Statement and each Participating Broker-Dealer or Initial Purchaser selling Exchange Notes, and each Person, if any, who controls any such Person within the meaning of Section 15 of the Securities Act.: (i) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of, or based upon, any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement (or any amendment or supplement thereto), covering Registrable Notes or Exchange Notes, as applicable, or the omission or alleged omission therefrom of a material fact required to be stated or necessary in order 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 Prospectus, or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; (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, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission; provided that any such settlement is effected with the prior written consent of the Company; and (iii) against any and all expenses whatsoever, as incurred (including the reasonable fees and disbursements of counsel chosen by such Holder, such Participating Broker-Dealer, or any underwriter (except to the extent otherwise expressly provided in Section 4(c) hereof)), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, 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 subparagraph (i) or (ii) of this Section 4(a); provided, however, that this indemnity does not apply to any loss, liability, claim, damage or expense to the extent arising out of (i) an untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished in writing to the Company by the Initial Purchasers or any Holder, underwriter or Participating Broker-Dealer for use in a Registration Statement (or any amendment thereto) or any Prospectus (or any amendment or supplement thereto) or (ii) the failure of any Holder to comply with the provisions of the last paragraph of Section 3. (b) Each of the Initial Purchasers and each Holder, underwriter or Participating Broker-Dealer agrees, severally and not jointly, to indemnify and hold harmless the Company and each Person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, against any and all loss, liability, claim, damage and expense whatsoever described in the indemnity contained in Section 4(a) hereof, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in a Registration Statement (or any amendment thereto) or any Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with written information furnished to the Company by such Initial Purchaser, Holder, underwriter or Participating Broker-Dealer expressly for use in such Registration Statement (or any amendment thereto), or any such Prospectus (or any amendment or supplement thereto); provided, however, that in the case of a Shelf Registration Statement, no such Holder shall be liable for any claims hereunder in excess of the amount of net proceeds received by such Holder from the sale of Registrable Notes pursuant to such Shelf Registration Statement. (c) Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying party of any action commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve such indemnifying party from any liability which it may have under this Section 4 to the extent that it is not materially prejudiced by such failure as a result thereof, and in any event shall not relieve it from liability which it may have otherwise on account of this Agreement. In the case of parties indemnified pursuant to Section 4(a) or (b) above, counsel to the indemnified parties shall be selected by such parties. An indemnifying party may participate at its own expense in the defense of such action; provided, however, that counsel to the indemnifying party shall not (except with the consent of the indemnified party) also be counsel to the indemnified party. In no event shall the indemnifying parties be liable for the fees and expenses of more than one counsel (in addition to local counsel), separate from their own counsel, for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances. No indemnifying party shall, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever in respect of which indemnification or contribution could be sought under this Section 4 (whether or not the indemnified parties are actual or potential parties thereto), unless such settlement, compromise or consent (i) includes an unconditional written release of each indemnified party from all liability arising out of such litigation, investigation, proceeding or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party. (d) In order to provide for just and equitable contribution in circumstances under which any of the indemnity provisions set forth in this Section 4 is for any reason held to be unenforceable by an indemnified party although applicable in accordance with its terms, the Company and the Holders shall contribute to the aggregate losses, liabilities, claims, damages and expenses of the nature contemplated by such indemnity agreement incurred by the Company and the Holders, as incurred; provided, however, that 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 that was not guilty of such fraudulent misrepresentation. As between the Company and the Holders, such parties shall contribute to such aggregate losses, liabilities, claims, damages and expenses of the nature contemplated by this Agreement in such proportion as shall be appropriate to reflect the relative fault of the Company, on the one hand, and the Holders, on the other hand, with respect to the statements or omissions which resulted in such loss, liability, claim, damage or expense, or action in respect thereof, as well as any other relevant equitable considerations. The relative fault of the Company, on the one hand, and of the Holders, on the other hand, shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company, on the one hand, or by or on behalf of the Holders, on the other, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Holders agree that it would not be just and equitable if contribution pursuant to this Section 4 were to be determined by pro rata allocation or by any other method of allocation that does not take into account the relevant equitable considerations. For purposes of this Section 4, each Affiliate of a Holder, and each director, officer and employee and Person, if any, who controls a Holder or such Affiliate within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have the same rights to contribution as such Holder and each Person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have the same rights to contribution as the Company. 5. Participation in an Underwritten Registration. No Holder may participate in an underwritten registration hereunder unless such Holder (a) agrees to sell such Holder's Registrable Notes on the basis provided in the underwriting arrangement approved by the Persons entitled hereunder to approve such arrangements and (b) completes and executes all reasonable questionnaires, powers of attorney, indemnities, underwriting agreements, lock-up letters and other documents reasonably required under the terms of such underwriting arrangements. 6. Selection of Initial Purchasers. The Holders of Registrable Notes covered by the Shelf Registration Statement who desire to do so may sell the Notes covered by such Shelf Registration in an underwritten offering, subject to the provisions of Section 3(m) hereof. In any such underwritten offering, the underwriter or underwriters and manager or managers that will administer the offering will be selected by the Holders of a majority in aggregate principal amount of the Registrable Notes included in such offering; provided, however, that such underwriters and managers must be reasonably satisfactory to the Company. 7. Miscellaneous. (a) Rule 144 and Rule 144A. For so long as the Company is subject to the reporting requirements of Section 13 or 15 of the Exchange Act and any Registrable Notes remain outstanding, the Company will file the reports required to be filed by it under the Securities Act and Section 13(a) or 15(d) of the Exchange Act and the rules and regulations adopted by the SEC thereunder; provided, however, that if the Company ceases to be so required to file such reports, it will, upon the request of any Holder of Registrable Notes, (a) make publicly available such information as is necessary to permit sales of its securities pursuant to Rule 144 under the Securities Act, (b) deliver such information to a prospective purchaser as is necessary to permit sales of its securities pursuant to Rule 144A under the Securities Act, and (c) take such further action that is reasonable in the circumstances, in each case, to the extent required from time to time to enable such Holder to sell its Registrable Notes without registration under the Securities Act within the limitation of the exemptions provided by (i) Rule 144 under the Securities Act, as such rule may be amended from time to time, (ii) Rule 144A under the Securities Act, as such rule may be amended from time to time, or (iii) any similar rules or regulations hereafter adopted by the SEC. Upon the request of any Holder of Registrable Notes, the Company will deliver to such Holder a written statement as to whether it has complied with such requirements. (b) No Inconsistent Agreements. The Company and the Parent have not entered into, nor will the Company or the Parent on or after the date of this Agreement enter into, any agreement which is inconsistent with the rights granted to the Holders of Registrable Notes in this Agreement or otherwise conflicts with the provisions hereof without the written consent of Holders of a majority in aggregate principal amount of the outstanding Registrable Notes. The rights granted to the Holders hereunder do not in any way conflict with and are not inconsistent with the rights granted to the holders of the Company's or the Parent's other issued and outstanding securities under any such agreements. (c) Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the Company has obtained the written consent of Holders of a majority in aggregate principal amount of the outstanding Registrable Notes affected by such amendment, modification, supplement, waiver or departure; provided that no amendment, modification or supplement or waiver or consent to the departure with respect to the provisions of Section 4 hereof shall be effective as against any Holder of Registrable Notes unless consented to in writing by such Holder of Registrable Notes. Notwithstanding the foregoing sentence, (i) this Agreement may be amended, without the consent of any Holder of Registrable Notes, by written agreement signed by the Company and the Initial Purchasers, to cure any ambiguity, correct or supplement any provision of this Agreement that may be inconsistent with any other provision of this Agreement or to make any other provisions with respect to matters or questions arising under this Agreement which shall not be inconsistent with other provisions of this Agreement, (ii) this Agreement may be amended, modified or supplemented, and waivers and consents to departures from the provisions hereof may be given, by written agreement signed by the Company and the Initial Purchasers to the extent that any such amendment, modification, supplement, waiver or consent is, in their reasonable judgment, necessary or appropriate to comply with applicable law and regulation (including any interpretation of the Staff of the SEC) or any change therein and (iii) to the extent any provision of this Agreement relates to an Initial Purchaser, such provision may be amended, modified or supplemented, and waivers or consents to departures from such provisions may be given, by written agreement signed by such Initial Purchaser and the Company. (d) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, registered first-class mail, telex, telecopier, or any courier guaranteeing overnight delivery (i) if to a Holder, at the most current address given by such Holder to the Company by means of a notice given in accordance with the provisions of this Section 7(d), which address initially is, with respect to the Initial Purchasers: Lehman Brothers Inc. Banc of America Securities LLC BNY Capital Markets, Inc. Salomon Smith Barney Inc. Scotia Capital (USA) Inc. SunTrust Capital Markets, Inc. c/o Lehman Brothers Inc. 101 Hudson Street Jersey City, NJ 07302 With a Copy to: General Counsel of Lehman Brothers Inc. and (ii) if to the Company, initially at the Company's address: Baltimore Gas and Electric Company 39 W. Lexington Street Baltimore, MD 21201 Attention: General Counsel and thereafter at such other address, notice of which is given in accordance with the provisions of this Section 7(d). All such notices and communications shall be deemed to have been duly given at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt is acknowledged, if telecopied; and on the next Business Day, if timely delivered to an air courier guaranteeing overnight delivery. Copies of all such notices, demands, or other communications shall be concurrently delivered by the Person giving the same to the Trustee, at the address specified in the Indenture. (e) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors, assigns and transferees of the Initial Purchaser, including, without limitation and without the need for an express assignment, subsequent Holders; provided, however, that nothing herein shall be deemed to permit any assignment, transfer or other disposition of Registrable Notes in violation of the terms of the Purchase Agreement or the Indenture. If any transferee of any Holder shall acquire Registrable Notes in any manner, whether by operation of law or otherwise, such Registrable Notes shall be held subject to all of the terms of this Agreement, and by taking and holding such Registrable Notes, such Person shall be conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions of this Agreement and such Person shall be entitled to receive the benefits hereof. (f) Third Party Beneficiaries. Each Holder and any Participating Broker-Dealer shall be third party beneficiaries of the agreements made hereunder among the Initial Purchasers and the Company, and the Initial Purchasers shall have the right to enforce such agreements directly to the extent it deems such enforcement necessary or advisable to protect its rights or the rights of Holders hereunder. (g) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. (h) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. (i) GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO HAVE BEEN MADE IN THE STATE OF NEW YORK. THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. (j) Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby. (k) Notes Held by the Company or its Affiliates. Whenever the consent or approval of Holders of a specified percentage of Registrable Notes is required hereunder, Registrable Notes held by the Company or its Affiliates shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. BALTIMORE GAS AND ELECTRIC COMPANY By: /s/ Thomas E. Ruszin, Jr. Name: Thomas E. Ruszin, Jr. Title: Treasurer and Assistant Secretary Confirmed and accepted as of the date first above written: LEHMAN BROTHERS INC. By: LEHMAN BROTHERS INC. For itself and as Representative of the several Initial Purchasers By: /s/ Martin Goldberg Authorized Signatory EX-4 4 note.txt ORIGINIAL NOTE Exhibit 4(f) THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED OTHER THAN (A) (1) TO THE COMPANY, (2) IN A TRANSACTION ENTITLED TO ANY EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT, (3) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY), (4) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY), (5) TO AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a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a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT AND THAT IT IS HOLDING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION OR (3) A NON-U.S. PERSON OUTSIDE THE UNITED STATES WITHIN THE MEANING OF, OR AN ACCOUNT SATISFYING THE REQUIREMENTS OF RULE 902 UNDER, REGULATION S UNDER THE SECURITIES ACT. IF THIS NOTE IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY (THE "DEPOSITARY") (55 WATER STREET, NEW YORK, NEW YORK) OR ITS NOMINEE, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY UNLESS AND UNTIL THIS NOTE IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO. HAS AN INTEREST HEREIN. [FRONT] - --- CUSIP 059165 DT 4 (144A)CUSIP 059165 DU 1 (ACCD INVS) CUSIP U 05899 AC 0 (REG S) BALTIMORE GAS AND ELECTRIC COMPANY INCORPORATED UNDER THE LAWS OF THE STATE OF MARYLAND 5.25% NOTES DUE December 15, 2006 Baltimore Gas and Electric Company, a Maryland corporation (herein called the "Company" which term includes any successor corporation under the Indenture, as hereinafter defined), for value received, promises to pay to Cede & Co. or its registered assigns, the principal sum of THREE HUNDRED MILLION DOLLARS ($300,000,000) on December 15, 2006 ("Stated Maturity"). The Company shall pay interest on said principal sum in arrears at the rate of 5.25% per annum from December 11, 2001, if interest has not been paid on this Note, or from the most recent Interest Payment Date for which interest has been paid or duly provided for until Stated Maturity or, if applicable, upon redemption. "Interest Payment Date" means each of December 15 and June 15 of each year through December 15, 2006. Each payment of interest payable on an Interest Payment Date, at Stated Maturity or, if applicable, upon redemption shall include interest to, but excluding, such Interest Payment Date, the date of Stated Maturity or redemption. In the event this Note is issued between a Record Date (the first day of the month in which each Interest Payment Date falls whether or not such day shall be a Business Day) and an Interest Payment Date or on an Interest Payment Date, the first day that interest shall be payable will be on the Interest Payment Date following the next succeeding Record Date. In the event of a default in the payment of interest, interest will be payable as provided in that certain Indenture, dated as of July 1, 1985 and supplemented on October 1, 1987 and January 26, 1993, (the "Indenture"), by and between the Company and The Bank of New York (successor to Mercantile-Safe Deposit and Trust Company), a corporation duly organized and existing under the laws of the State of New York, as Trustee (herein called the "Trustee," which term includes any successor Trustee under the Indenture). Pursuant to the provisions of the Indenture, the Company will maintain an agency at The Bank of New York in The City of New York, New York (the "Bank"), or at such other agencies as may from time to time be designated, where this Note may be presented for payment, for registration of transfer and exchange, and where notices or demands to, or upon, the Company may be served. The interest so payable on the dates specified above will, subject to certain exceptions provided in the Indenture, be paid to the person in whose name this Note is registered at the close of business on the Record Date for such Interest Payment Date; provided, however, that interest payable at Stated Maturity or, if applicable, upon redemption, shall be payable to the person to whom principal shall be payable. Payment of the principal of and interest on this Note will be made at the Bank in U.S. dollars; provided, however, that payments of interest (other than any interest payable at Stated Maturity or upon redemption) may be made at the option of the Company (i) by checks mailed to the addresses of the persons entitled thereto as such addresses shall appear in the register of the Notes or (ii) by wire transfer to persons who are holders of record at such other addresses that have been filed with the Bank on or prior to the Record Date. Payment of the principal and interest payable at Stated Maturity, or, if applicable, upon redemption, on this Note will be made in immediately available funds at the request of the holder provided that this Note is presented to the Bank in time for the Bank to make such payments in such funds in accordance with its normal procedures. Reference is made to the further provisions of this Note set forth on the reverse hereof, which shall have the same effect as though fully set forth at this place. Unless the certificate of authentication hereon has been executed by or on behalf of the Trustee or a duly designated authentication agent by manual signature, this Note shall not be entitled to any benefit under said Indenture, or be valid or obligatory for any purpose. IN WITNESS WHEREOF, Baltimore Gas and Electric Company has caused this instrument to be executed in its corporate name with the manual or facsimile signature of its President and a facsimile of its corporate seal to be imprinted hereon, attested by the manual or facsimile signature of its Secretary or an Assistant Secretary. Dated: December 11, 2001 BALTIMORE GAS AND ELECTRIC COMPANY By: /s/ Frank O. Heintz President ATTEST: /s/ Thomas E. Ruszin, Jr. [SEAL] Assistant Secretary CERTIFICATE OF AUTHENTICATION This is one of the Securities of the series designated herein issued under the Indenture described herein. Dated: December 11, 2001 THE BANK OF NEW YORK By: /s/ Geovani Barris Authorized Signatory (REVERSE) BALTIMORE GAS AND ELECTRIC COMPANY $300,000,000 5.25% NOTES DUE DECEMBER 15, 2006 1. General. This Note is one of a duly authorized issue of debt securities (the "Securities") of the Company, of a series designated as its 5.25% Notes due December 15, 2006 (herein called the "Notes"), issued and to be issued under the Indenture, to which Indenture and all relevant indentures supplemental thereto reference is hereby made for a statement of the respective rights, obligations, duties and immunities thereunder of the Company, the Trustee, the Bank and the Securityholder and the terms upon which the Notes are, and are to be, authenticated and delivered. Notes issued on December 11, 2001 (the "Issue Date") will be limited (except as otherwise provided in the Indenture) in aggregate principal amount to $300,000,000, but the Company may increase the aggregate principal amount by issuing additional Notes, without the consent of existing noteholders, on the same terms and conditions and with the same CUSIP numbers as this Note. The Securities, of which the Notes constitute a series, may be issued in one or more series, which different series may be issued in various aggregate principal amounts, may mature at different times, may bear interest at different rates, may be subject to different covenants and Events of Default and may otherwise vary as in the Indenture provided. All capitalized terms not otherwise defined herein shall have the definitions assigned to them in the Indenture. 2. Interest. Interest on the Notes shall: o Be payable in US dollars at rates determined semi-annually as described below; o Be computed for each interest period on the basis of a 360-day year consisting of 12 30-day months; o Be payable in arrears on December 15 and June 15 each year through December 15, 2006, commencing June 15, 2002; and o Originally accrue from, and include the Issue Date. o Record Date is to be 15 days prior to the Interest Payment Date. In the case of this Note, the Record Date will be November 30 and May 31 of each year through and including November 30, 2006, commencing May 31, 2002. If any Interest Payment Date specified on the face hereof would otherwise be a day that is not a Business Day, the Interest Payment Date shall be postponed to the next day that is a Business Day, except that if such Business Day is in the next succeeding calendar month, such Interest Payment Date shall be the preceding Business Day. "Business Day" means any day other than a Saturday or Sunday or a day on which banking institutions in New York, New York, or in Baltimore, Maryland are authorized or obligated by law or executive order to close. 3. Redemption. The Company has the option to redeem all or any part of the Notes at any time prior to their maturity date. The Company will give notice of any redemption at least 30 days, but not more than 60 days, before a redemption date. The Company will pay a redemption price equal to the sum of: 1) 100% of the principal amount of Notes being redeemed, plus 2) all accrued and unpaid interest on those Notes, plus 3) any "make-whole premium." The Company will appoint an independent investment banking institution of national standing to calculate the make-whole premium. Lehman Brothers Inc. will make that calculation if: 1) The Company does not appoint someone else at least 30 days before the redemption date, or 2) the institution the Company appoints is unwilling or unable to make the calculation. If Lehman Brothers Inc. is unwilling or unable to make the calculation, then The Bank of New York, who is the trustee, will appoint an independent investment banking institution of national standing to make the calculation. The amount of the make-whole premium, if any, will be equal to the excess of: 1) the sum of the present values, calculated as of the redemption date, of: a) each interest payment on each Interest Payment Date after the redemption date that would have been paid on the Notes. (this does not include any accrued interest paid at the redemption date); and b) the principal amount that would have been payable at the Sstated Maturity of the Notes being redeemed; over 2) the principal amount of the Notes being redeemed. An independent investment banker will calculate the present values of interest and principal payments in accordance with generally accepted principles of financial analysis. The present values will be calculated by discounting the amount of each payment of interest or principal from the date that each payment would have been paid to the redemption date at a discount rate that is equal to the Treasury Yield (as defined below) plus 25 basis points. The Treasury Yield in the calculation will be an annual interest rate that is equal to the weekly average yield to maturity of United States Treasury Notes having a constant maturity corresponding to the remaining term to maturity of the Notes that will be redeemed. This interest rate will be calculated to the nearest 1/12th of a year. The independent investment banker will determine the Treasury Yield on the third business day before the redemption date. The independent investment banker will determine the weekly average yields of United States Treasury Notes from the most recent statistical release published by the Federal Reserve Bank of New York entitled "H.15(519) Selected Interest Rates" or any successor publication. If the H.15 Statistical Release gives a weekly average yield for United States Treasury Notes having a constant maturity that is the same as the remaining term of the Notes, then the Treasury Yield will equal that weekly average yield. In all other cases, the independent investment banker will calculate the Treasury Yield by interpolating, on a straight-line basis, the weekly average yields from the H.15 Statistical Release on the United States Treasury Notes having a constant maturity closest to but greater than the remaining term of the Notes and the United States Treasury Notes having a constant maturity closest to and less than the remaining term. The independent investment banker will round any weekly average yields calculated by interpolation to the nearest 1/100th of 1%, and will round the percentage up for any figure of 1/200th of 1% or above. If weekly average yields for United States Treasury Notes are not available in the H.15 Statistical Release, or anywhere else, the independent investment banker will select comparable rates and calculate the Treasury Yield using these rates. The redemption will not be made unless the redemption moneys are received by the Trustee by the redemption date. The failure to redeem will not be an event of default. 4. Miscellaneous. The Notes will not be subject to conversion, redemption at the option of the Securityholder, amortization or any sinking fund. As provided in the Indenture and subject to certain limitations herein and therein set forth, the transfer of this Note may be registered on the register of the Notes, upon surrender of this Note for registration of transfer at the Bank, or at such other agencies as may be designated pursuant to the Indenture, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Trustee or the Bank duly executed by, the holder hereof or his attorney duly authorized in writing, and thereupon one or more new Notes, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. The Notes are issuable only as registered Notes without coupons in denominations of $100,000 or any amount in excess thereof that is an integral multiple of $1,000. As provided in the Indenture, and subject to certain limitations herein and therein set forth, the Notes are exchangeable for a like aggregate principal amount of Notes of other authorized denominations having the same interest rate, Stated Maturity, optional redemption or repurchase provisions, if any, and Issue Date, as requested by the Securityholder surrendering the same. No service charge will be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. The Company, the Trustee, the Bank, the Security registrar and any agent of the Company, the Trustee, the Bank, or the Security registrar may treat the Securityholder in whose name this Note is registered as the absolute owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Note is overdue, and neither the Company, the Trustee, the Bank, the Security registrar nor any such agent shall be affected by notice to the contrary. If an Event of Default (as defined in the Indenture) with respect to the Notes shall occur and be continuing, the principal of all the Notes may be declared due and payable in the manner and with the effect provided in the Indenture. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the holders of the Securities of any series under the Indenture at any time by the Company with the consent of the holders of not less than 66-2/3% in aggregate principal amount of the Securities at the time outstanding to be affected (voting as one class). The Indenture also permits the Company and the Trustee to enter into supplemental indentures without the consent of the holders of Securities of any series for certain purposes specified in the Indenture, including the making of such other provisions in regard to matters arising under the Indenture which shall not adversely affect the interest of the holders of such Securities. The Indenture also contains provisions permitting the holders of specified percentages in aggregate principal amount of the Securities of any series at the time outstanding, on behalf of the holders of all the Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the holder of this Note shall be conclusive and binding upon such holder and upon all future holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof whether or not notation of such consent or waiver is made upon this Note. The Indenture provides that no holder of any Security of any series may enforce any remedy with respect to such series under the Indenture except in the case of refusal or neglect of the Trustee to act after notice of a continuing Event of Default and after written request by the holders of not less than 25% in aggregate principal amount of the outstanding Securities of such series and the offer to the Trustee of reasonable indemnity; provided, however, that such provision shall not prevent the holder hereof from enforcing payment of the principal of or interest on this Note. No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed. No recourse shall be had for the payment of the principal of or the interest on this Note, or for any claim based hereon, or otherwise in respect hereof, or based on or in respect of the Indenture or any indenture supplemental thereto, against any incorporator, stockholder, officer or director, as such, past, present or future, of the Company or any predecessor or successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issue hereof, expressly waived and released. This Note shall be governed by and construed in accordance with the laws of the State of New York. ASSIGNMENT FORM To assign this Note, fill in the form below: Assignee's Social Security or Tax I. D. Number: ________________ FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto - ------------------------------------------------------------------------------- (Print or Type Assignee's Name, Address and Zip Code) the within Note of the Company and hereby does irrevocably constitute and appoint - ------------------------------------------------------------------------------- Attorney to transfer the said Note on the books of the Company, with full power of substitution in the premises. - -------------------- ------------------------- Signature of Assignor (Sign exactly as name appears on the face of the Note) Dated: _______________ CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER RESTRICTED SECURITIES This certificate relates to $_______ principal amount of Notes held in (check applicable space) _____ book-entry or ___ definitive form by the undersigned. The undersigned has requested the Trustee by written order to exchange or register the transfer of a Note or Notes. In connection with any transfer of any of the Notes evidenced by this certificate occurring prior to the expiration of the period referred to in Rule 144(k) under the Securities Act, the undersigned confirms that such Notes are being transferred in accordance with its terms: CHECK ONE BOX BELOW (1) to the Company; or (2) to the Securities registrar for the registration in the name of the Holder, without transfer; or (3) inside the United States to a "qualified institutional buyer" (as defined in Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), that purchases for its own account or for the account of a qualified institutional buyer to whom notice is given that such transfer is being made in reliance on Rule 144A, in each case pursuant to and in compliance with Rule 144A under the Securities Act; or (4) outside the United States in an offshore transaction within the meaning of Regulation S under the Securities Act in compliance with Rule 904 under the Securities Act; or (5) to an institution that is an "accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act that is acquiring the Note(s) for investment purposes and not for distribution; or (6) pursuant to another available exemption from registration provided by Rule 144 under the Securities Act. Unless one of the boxes is checked, the Trustee will refuse to register any of the Notes evidenced by this certificate in the name of any Person other than the registered holder thereof; provided, however, that if box (4), (5) or (6) is checked, the Trustee may require, prior to registering any such transfer of the Notes, such legal opinions, certifications and other information as the Company has reasonably requested to confirm that such transfer is being made pursuant to an exemption from or in a transaction not subject to, the registration requirements of the Securities Act. - ----------------------- -------------------------------------------------------- ------------------------------------------- Your Signature - ----------------------- -------------------------------------------------------- - ----------------------- -------------------------------------------------------- Signature Guarantee: __________________________ - --------------------- -------------------------------------------------------- - --------------------- -------------------------------------------------------- Date: _________________ ___________________________________________ Signature of Signature Guarantee Signature must be guaranteed by a participant in a recognized signature guaranty medallion program or other signature guarantor acceptable to the Trustee - ---------------------- -------------------------------------------------------- =========================================================== TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a "qualified institutional buyer" within the meaning of Rule 144A under the Securities Act of 1933, as amended, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned's foregoing representations in order to claim the exemption from registration provided Rule 144A. Dated: _______________________ ___________________________________ NOTICE: To be executed by an executive officer ===================================================================== FORM OF ACCREDITED INVESTOR CERTIFICATE TO BE COMPLETED IF (5) ABOVE IS CHECKED Ladies and Gentlemen: In connection with our proposed purchase of the 5.25% Notes due December 15, 2006 (the "Notes") issued by Baltimore Gas and Electric Company ("Issuer"), we confirm that: 1. We have received a copy of the Offering Memorandum dated December 4, 2001 (the "Offering Memorandum") relating to the Notes and such other information as we deem necessary in order to make our investment decision. We acknowledge that we have read and agree to the matters stated under the caption NOTICE TO INVESTORS in such Offering Memorandum, and the restrictions on duplication or circulation of, or disclosure relating to, such Offering Memorandum. 2. We understand that any subsequent transfer of the Notes is subject to certain restrictions and conditions set forth in the Notes and in the Indenture dated as of July 1, 1985 and supplemented on October 1, 1987 and January 26, 1993,, between the Issuer and The Bank of New York (successor to Mercantile Safe Deposit and Trust Company), as trustee (the "Trustee"), (the "Indenture"), pursuant to which the Notes have been issued, and that any subsequent transfer of the Notes is subject to certain restrictions and conditions set forth under NOTICE TO INVESTORS in the Offering Memorandum and the undersigned agrees to be bound by, and not to resell, pledge or otherwise transfer the Notes except in compliance with such restrictions and conditions and the Securities Act of 1933, as amended ("Securities Act"). 3. We understand that the offer and sale of the Notes have not been registered under the Securities Act, and that the Notes may not be offered or sold except as permitted in the following sentence. We agree, on our own behalf and on behalf of any accounts for which we are acting as hereinafter stated, that if we sell any Notes, we will do so only (A) to the Issuer, (B) to a person whom we reasonably believe is a "qualified institutional buyer" within the meaning of Rule 144A under the Securities Act that purchases for its own account or for the account of a qualified institutional buyer to whom notice is given that the resale, pledge or transfer is being made in reliance on Rule 144A, (C) to an institutional "accredited investor" (as defined below) that, prior to such transfer, furnishes to the Trustee (as defined in the Indenture) a signed letter containing certain representations and agreements relating to the restrictions on transfer of the Notes (substantially in the form of this letter), (D) in an offshore transaction in accordance with Rule 904 of Regulation S under the Securities Act, (E) pursuant to the exemption from registration provided by Rule 144 under the Securities Act (if available), or (F) in accordance with another applicable exemption from the registration requirements of the Securities Act, and we further agree to provide to any person purchasing any of the Notes from us a notice advising such purchaser that resales of the Notes are restricted as stated herein. 4. We understand that, on any proposed resale of any Notes, we will be required to furnish to the Trustee and the Issuer such certifications, legal opinions and other information as the Trustee and the Issuer may reasonably require to confirm that the proposed sale complies with the foregoing restrictions. We further understand that the Notes purchased by us will bear a legend to the foregoing effect. 5. We are an institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Notes, and we and any accounts for which are acting are each able to bear the economic risk of our or its investment. 6. We are acquiring the Notes purchased by us for our own account or for one or more accounts (each of which is an institutional "accredited investor") as to each of which we exercise sole investment discretion. You, the Issuer and the Trustee are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby. Very truly yours, By: Name: Title: EX-4 5 notenew.txt REGISTERED NOTES - NOTE Exhibit 4(g) IF THIS NOTE IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY (THE "DEPOSITARY") (55 WATER STREET, NEW YORK, NEW YORK) OR ITS NOMINEE, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY UNLESS AND UNTIL THIS NOTE IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO. HAS AN INTEREST HEREIN. [FRONT] CUSIP (ACCD INVS) CUSIP (REG S) BALTIMORE GAS AND ELECTRIC COMPANY INCORPORATED UNDER THE LAWS OF THE STATE OF MARYLAND 5.25% NOTES DUE December 15, 2006 _________________________________________________________________ Baltimore Gas and Electric Company, a Maryland corporation (herein called the "Company" which term includes any successor corporation under the Indenture, as hereinafter defined), for value received, promises to pay to Cede & Co. or its registered assigns, the principal sum of THREE HUNDRED MILLION DOLLARS ($300,000,000) on December 15, 2006 ("Stated Maturity"). The Company shall pay interest on said principal sum in arrears at the rate of 5.25% per annum from December 11, 2001, if interest has not been paid on this Note, or from the most recent Interest Payment Date for which interest has been paid or duly provided for until Stated Maturity or, if applicable, upon redemption. "Interest Payment Date" means each of December 15 and June 15 of each year through December 15, 2006. Each payment of interest payable on an Interest Payment Date, at Stated Maturity or, if applicable, upon redemption shall include interest to, but excluding, such Interest Payment Date, the date of Stated Maturity or redemption. In the event this Note is issued between a Record Date (the first day of the month in which each Interest Payment Date falls whether or not such day shall be a Business Day) and an Interest Payment Date or on an Interest Payment Date, the first day that interest shall be payable will be on the Interest Payment Date following the next succeeding Record Date. In the event of a default in the payment of interest, interest will be payable as provided in that certain Indenture, dated as of July 1, 1985 and supplemented on October 1, 1987 and January 26, 1993, (the "Indenture"), by and between the Company and The Bank of New York (successor to Mercantile-Safe Deposit and Trust Company), a corporation duly organized and existing under the laws of the State of New York, as Trustee (herein called the "Trustee," which term includes any successor Trustee under the Indenture). Pursuant to the provisions of the Indenture, the Company will maintain an agency at The Bank of New York in The City of New York, New York (the "Bank"), or at such other agencies as may from time to time be designated, where this Note may be presented for payment, for registration of transfer and exchange, and where notices or demands to, or upon, the Company may be served. The interest so payable on the dates specified above will, subject to certain exceptions provided in the Indenture, be paid to the person in whose name this Note is registered at the close of business on the Record Date for such Interest Payment Date; provided, however, that interest payable at Stated Maturity or, if applicable, upon redemption, shall be payable to the person to whom principal shall be payable. Payment of the principal of and interest on this Note will be made at the Bank in U.S. dollars; provided, however, that payments of interest (other than any interest payable at Stated Maturity or upon redemption) may be made at the option of the Company (i) by checks mailed to the addresses of the persons entitled thereto as such addresses shall appear in the register of the Notes or (ii) by wire transfer to persons who are holders of record at such other addresses that have been filed with the Bank on or prior to the Record Date. Payment of the principal and interest payable at Stated Maturity, or, if applicable, upon redemption, on this Note will be made in immediately available funds at the request of the holder provided that this Note is presented to the Bank in time for the Bank to make such payments in such funds in accordance with its normal procedures. Reference is made to the further provisions of this Note set forth on the reverse hereof, which shall have the same effect as though fully set forth at this place. Unless the certificate of authentication hereon has been executed by or on behalf of the Trustee or a duly designated authentication agent by manual signature, this Note shall not be entitled to any benefit under said Indenture, or be valid or obligatory for any purpose. IN WITNESS WHEREOF, Baltimore Gas and Electric Company has caused this instrument to be executed in its corporate name with the manual or facsimile signature of its President and a facsimile of its corporate seal to be imprinted hereon, attested by the manual or facsimile signature of its Secretary or an Assistant Secretary. Dated: BALTIMORE GAS AND ELECTRIC COMPANY By: ____________________ President ATTEST: ____________________ [SEAL] Assistant Secretary CERTIFICATE OF AUTHENTICATION This is one of the Securities of the series designated herein issued under the Indenture described herein. Dated: THE BANK OF NEW YORK By: ____________________ Authorized Signatory (REVERSE) BALTIMORE GAS AND ELECTRIC COMPANY $300,000,000 5.25% NOTES DUE DECEMBER 15, 2006 1. General. This Note is one of a duly authorized issue of debt securities (the "Securities") of the Company, of a series designated as its 5.25% Notes due December 15, 2006 (herein called the "Notes"), issued and to be issued under the Indenture, to which Indenture and all relevant indentures supplemental thereto reference is hereby made for a statement of the respective rights, obligations, duties and immunities thereunder of the Company, the Trustee, the Bank and the Securityholder and the terms upon which the Notes are, and are to be, authenticated and delivered. These Notes, which are re-issues of Notes originally issued on December 11, 2001 (the "Issue Date"), will be limited (except as otherwise provided in the Indenture) in aggregate principal amount to $300,000,000, but the Company may increase the aggregate principal amount by issuing additional Notes, without the consent of existing noteholders, on the same terms and conditions and with the same CUSIP numbers as this Note. The Securities, of which the Notes constitute a series, may be issued in one or more series, which different series may be issued in various aggregate principal amounts, may mature at different times, may bear interest at different rates, may be subject to different covenants and Events of Default and may otherwise vary as in the Indenture provided. All capitalized terms not otherwise defined herein shall have the definitions assigned to them in the Indenture. 2. Interest. Interest on the Notes shall: o Be payable in US dollars at rates determined semi-annually as described below; o Be computed for each interest period on the basis of a 360-day year consisting of 12 30-day months; o Be payable in arrears on December 15 and June 15 each year through December 15, 2006, commencing June 15, 2002; and o Originally accrue from, and include the Issue Date. o Record Date is to be 15 days prior to the Interest Payment Date. In the case of this Note, the Record Date will be November 30 and May 31 of each year through and including November 30, 2006, commencing May 31, 2002. If any Interest Payment Date specified on the face hereof would otherwise be a day that is not a Business Day, the Interest Payment Date shall be postponed to the next day that is a Business Day, except that if such Business Day is in the next succeeding calendar month, such Interest Payment Date shall be the preceding Business Day. "Business Day" means any day other than a Saturday or Sunday or a day on which banking institutions in New York, New York, or in Baltimore, Maryland are authorized or obligated by law or executive order to close. 3. Redemption. The Company has the option to redeem all or any part of the Notes at any time prior to their maturity date. The Company will give notice of any redemption at least 30 days, but not more than 60 days, before a redemption date. The Company will pay a redemption price equal to the sum of: 1) 100% of the principal amount of Notes being redeemed, plus 2) all accrued and unpaid interest on those Notes, plus 3) any "make-whole premium." The Company will appoint an independent investment banking institution of national standing to calculate the make-whole premium. Lehman Brothers Inc. will make that calculation if: 1) The Company does not appoint someone else at least 30 days before the redemption date, or 2) the institution the Company appoints is unwilling or unable to make the calculation. If Lehman Brothers Inc. is unwilling or unable to make the calculation, then The Bank of New York, who is the trustee, will appoint an independent investment banking institution of national standing to make the calculation. The amount of the make-whole premium, if any, will be equal to the excess of: 1) the sum of the present values, calculated as of the redemption date, of: a) each interest payment on each Interest Payment Date after the redemption date that would have been paid on the Notes. (this does not include any accrued interest paid at the redemption date); and b) the principal amount that would have been payable at the Stated Maturity of the Notes being redeemed; over 2) the principal amount of the Notes being redeemed. An independent investment banker will calculate the present values of interest and principal payments in accordance with generally accepted principles of financial analysis. The present values will be calculated by discounting the amount of each payment of interest or principal from the date that each payment would have been paid to the redemption date at a discount rate that is equal to the Treasury Yield (as defined below) plus 25 basis points. The Treasury Yield in the calculation will be an annual interest rate that is equal to the weekly average yield to maturity of United States Treasury Notes having a constant maturity corresponding to the remaining term to maturity of the Notes that will be redeemed. This interest rate will be calculated to the nearest 1/12th of a year. The independent investment banker will determine the Treasury Yield on the third business day before the redemption date. The independent investment banker will determine the weekly average yields of United States Treasury Notes from the most recent statistical release published by the Federal Reserve Bank of New York entitled "H.15(519) Selected Interest Rates" or any successor publication. If the H.15 Statistical Release gives a weekly average yield for United States Treasury Notes having a constant maturity that is the same as the remaining term of the Notes, then the Treasury Yield will equal that weekly average yield. In all other cases, the independent investment banker will calculate the Treasury Yield by interpolating, on a straight-line basis, the weekly average yields from the H.15 Statistical Release on the United States Treasury Notes having a constant maturity closest to but greater than the remaining term of the Notes and the United States Treasury Notes having a constant maturity closest to and less than the remaining term. The independent investment banker will round any weekly average yields calculated by interpolation to the nearest 1/100th of 1%, and will round the percentage up for any figure of 1/200th of 1% or above. If weekly average yields for United States Treasury Notes are not available in the H.15 Statistical Release, or anywhere else, the independent investment banker will select comparable rates and calculate the Treasury Yield using these rates. The redemption will not be made unless the redemption moneys are received by the Trustee by the redemption date. The failure to redeem will not be an event of default. 4. Miscellaneous. The Notes will not be subject to conversion, redemption at the option of the Securityholder, amortization or any sinking fund. As provided in the Indenture and subject to certain limitations herein and therein set forth, the transfer of this Note may be registered on the register of the Notes, upon surrender of this Note for registration of transfer at the Bank, or at such other agencies as may be designated pursuant to the Indenture, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Trustee or the Bank duly executed by, the holder hereof or his attorney duly authorized in writing, and thereupon one or more new Notes, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. The Notes are issuable only as registered Notes without coupons in denominations of $1,000 or any amount in excess thereof that is an integral multiple of $1,000. As provided in the Indenture, and subject to certain limitations herein and therein set forth, the Notes are exchangeable for a like aggregate principal amount of Notes of other authorized denominations having the same interest rate, Stated Maturity, optional redemption or repurchase provisions, if any, and Issue Date, as requested by the Securityholder surrendering the same. No service charge will be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. The Company, the Trustee, the Bank, the Security registrar and any agent of the Company, the Trustee, the Bank, or the Security registrar may treat the Securityholder in whose name this Note is registered as the absolute owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Note is overdue, and neither the Company, the Trustee, the Bank, the Security registrar nor any such agent shall be affected by notice to the contrary. If an Event of Default (as defined in the Indenture) with respect to the Notes shall occur and be continuing, the principal of all the Notes may be declared due and payable in the manner and with the effect provided in the Indenture. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the holders of the Securities of any series under the Indenture at any time by the Company with the consent of the holders of not less than 66-2/3% in aggregate principal amount of the Securities at the time outstanding to be affected (voting as one class). The Indenture also permits the Company and the Trustee to enter into supplemental indentures without the consent of the holders of Securities of any series for certain purposes specified in the Indenture, including the making of such other provisions in regard to matters arising under the Indenture which shall not adversely affect the interest of the holders of such Securities. The Indenture also contains provisions permitting the holders of specified percentages in aggregate principal amount of the Securities of any series at the time outstanding, on behalf of the holders of all the Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the holder of this Note shall be conclusive and binding upon such holder and upon all future holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof whether or not notation of such consent or waiver is made upon this Note. The Indenture provides that no holder of any Security of any series may enforce any remedy with respect to such series under the Indenture except in the case of refusal or neglect of the Trustee to act after notice of a continuing Event of Default and after written request by the holders of not less than 25% in aggregate principal amount of the outstanding Securities of such series and the offer to the Trustee of reasonable indemnity; provided, however, that such provision shall not prevent the holder hereof from enforcing payment of the principal of or interest on this Note. No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed. No recourse shall be had for the payment of the principal of or the interest on this Note, or for any claim based hereon, or otherwise in respect hereof, or based on or in respect of the Indenture or any indenture supplemental thereto, against any incorporator, stockholder, officer or director, as such, past, present or future, of the Company or any predecessor or successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issue hereof, expressly waived and released. This Note shall be governed by and construed in accordance with the laws of the State of Maryland. ASSIGNMENT FORM To assign this Note, fill in the form below: Assignee's Social Security or Tax I. D. Number: ________________ FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto _______________________________________________________________________________ _______________________________________________________________________________ (Print or Type Assignee's Name, Address and Zip Code) the within Note of the Company and hereby does irrevocably constitute and appoint ______________________________________________________________________________ ______________________________________________________________________________ Attorney to transfer the said Note on the books of the Company, with full power of substitution in the premises. ____________________ _________________________ Signature of Assignor (Sign exactly as name appears on the face of the Note) Dated: _______________ EX-5 6 opinion.txt Exhibit 5 Sally Samuel 250 W. Pratt Street Counsel 23rd Floor Baltimore, Maryland 21201-2437 410-783-3082 410-783-3079 fax February 11, 2002 Baltimore Gas and Electric Company c/o E. Follin Smith 39 W. Lexington Street Baltimore, MD 21201 Dear Sirs and Madam: This opinion is provided in connection with the registration statement (the "Registration Statement") being filed by Baltimore Gas and Electric Company ("BGE") with the Securities and Exchange Commission ("SEC") under the Securities Act of 1933, regarding the proposed issuance of $300,000,000 principal amount of 5.25% Note due December 15, 2006 in exchange for outstanding 5.25% Note due December 15, 2006 (the "Notes"). I am a Counsel of Constellation Energy Group, Inc. a Maryland orporation, and a member of the Corporate Unit in its Legal Department. Constellation Energy Group, Inc. is the sole common shareholder of BGE. I am acting as BGE's counsel in regard to this transaction. In connection with this opinion, I have considered, among other things (1) the Charter of BGE as restated as of August 16, 1996; (2) the By-Laws of BGE as amended as of October 16, 1998; (3) the corporate proceedings for the approval and issuance of the Notes; (4) the Purchase Agreement dated December 4, 2001 between BGE and Lehman Brothers Inc. for itself and on behalf of Banc of America Securities LLC, BNY Capital Markets, Inc., Salomon Smith Barney Inc., Scotia Capital (USA) Inc. and SunTrust Capital Markets, Inc. (the "Agreement"); (5) the Registration Rights Agreement dated December 11, 2001 between BGE and Lehman Brothers Inc. for itself and on behalf of Banc of America Securities LLC, BNY Capital Markets, Inc., Salomon Smith Barney Inc., Scotia Capital (USA) Inc. and SunTrust Capital Markets, Inc. (the "Registration Rights Agreement"); (6) the Indenture, dated as of July 1, 1985, as supplemented by Supplemental Indentures dated as of October 1, 1987 and January 26, 1993 (collectively, the "Indenture") by and between BGE and The Bank of New York (successor to Mercantile-Safe Deposit and Trust Company), as Trustee (the "Trustee"), under which BGE is issuing the Notes; (7) the Registration Statement; and (8) such other documents, transactions, and matters of law as I deemed necessary in order to render this opinion. This opinion is subject to: (1) the Registration Statement becoming effective under the Securities Act of 1933; (2) the proper execution, authentication, and delivery of the Notes upon receipt of the outstanding notes to be exchanged for the Notes; and (3) the qualification of the Indenture under the Trust Indenture Act of 1939. It is my opinion that when there has been compliance with the Securities Act of 1933 and the applicable state securities laws, the Notes, when issued and delivered pursuant to the Agreement and Registration Rights Agreement, will constitute legally issued and binding obligations of BGE. The opinion expressed herein concerns only the effect of the law (excluding the principles of conflicts of law) of the State of Maryland and the United States of America as currently in effect. This opinion is provided solely for your benefit and may not be relied upon by, or quoted to, any other person or entity, in whole or in part, without my prior written consent. I hereby consent to the filing of this opinion as an exhibit to the Registration Statement. I am the attorney referred to in the Registration Statement and I consent to the references to me in the Registration Statement (and any amendments thereto) or the prospectus constituting a part of the Registration Statement (and any amendments or supplements thereto). In so doing, I do not admit that I am in the category of persons whose consent is required under Section 7 of the Securities Act of 1933 or the rules and regulations of the SEC promulgated thereunder. Very truly yours, /s/ Sally Samuel EX-21 7 bgesubs.txt Exhibit 21 SUBSIDIARIES OF BALTIMORE GAS AND ELECTRIC COMPANY* Jurisdiction of Incorporation BGE Capital Trust I Delaware * The name of a certain subsidiary (partnership) has been omitted because it would not constitute a significant subsidiary pursuant to Rule 1-02(2) of Regulation S-X. EX-23 8 consent.txt EXH 23(B) - PWC Exhibit 23(b) CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in this Registration Statement on Form S-4 of Baltimore Gas and Electric Company of our report dated January 17, 2001 relating to the consolidated financial statements and financial statement schedule, which appears in Baltimore Gas and Electric Company's Annual Report on Form 10-K for the year ended December 31, 2000. We also consent to the references to us under the headings "Experts" and "Selected Consolidated Financial Data" in such Registration Statement. /s/ PricewaterhouseCoopers LLP PricewaterhouseCoopers LLP Baltimore, Maryland February 11, 2002 EX-24 9 power.txt Exhibit 24 Page 1 of 2 BALTIMORE GAS AND ELECTRIC COMPANY POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned directors and officers of Baltimore Gas and Electric Company hereby constitute and appoint Frank O. Heintz and E. Follin Smith and each of them their true and lawful attorneys and agents to do any and all acts and things and to execute, in their name any and all instruments which said attorneys and agents, or any of them, may deem necessary or advisable to enable said corporation to comply with the Securities Act of 1933, as amended, and any rules, regulations and requirements of the Securities and Exchange Commission in respect thereof in connection with the registration under said Act of $300,000,000 principal amount of 5.25% Notes due December 15, 2006 of said Company, all as authorized by, Resolutions adopted by the Board of Directors of Baltimore Gas and Electric Company including specifically, but without limiting the generality of the foregoing, power and authority to sign the names of the undersigned directors and officers in the capacities indicated below, to any registration statements to be filed with the Securities and Exchange Commission in respect of said 5.25% Notes, to any and all amendments to any registration statement in respect to said 5.25% Notes, or to any instruments or documents filed as part of or in connection with said registration statement or amendments to such documents; and each of the undersigned hereby ratifies and confirms all that said attorneys and agents, or any of them, shall do or cause to be done by virtue hereof. IN WITNESS WHEREOF, each of the undersigned has subscribed, or caused to be subscribed, these presents this 11th day of February, 2002. Signature Principal Executive Officer and Director /s/ Frank O. Heintz Frank O. Heintz President, CEO and Director Chief Financial Officer /s/ E. Follin Smith E. Follin Smith Chief Financial Officer Exhibit 24 Page 2 of 2 Power of Attorney in connection with the registration $300 million 5.25% Notes Directors /s/ Thomas F. Brady Thomas F. Brady /s/ David A. Brune David A. Brune /s/ C. H. Poindexter C. H. Poindexter /s/ Mayo A. Shattuck Mayo A. Shattuck Dated: February 11, 2002 EX-25 10 t1.txt Exhibit 25 ==================================================================== FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) |__| THE BANK OF NEW YORK (Exact name of trustee as specified in its charter) New York 13-5160382 (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) One Wall Street, New York, N.Y. 10286 (Address of principal executive offices) (Zip code) BALTIMORE GAS AND ELECTRIC COMPANY (Exact name of obligor as specified in its charter) Maryland 52-0280210 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) Baltimore Gas and Electric Company 39 W. Lexington Street Baltimore, Maryland 21201 (Address of principal executive offices) (Zip code) _____________ 5.25% Notes Due December 15, 2006 (Title of the indenture securities) ======================================================================== (a) Name and address of each examining or supervising authority to which it is subject. - -------------------------------------------------------------------------------- Name Address - -------------------------------------------------------------------------------- Superintendent of Banks of the State of 2 Rector Street, New York, New York N.Y. 10006, and Albany, N.Y. 12203 Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045 Federal Deposit Insurance Corporation Washington, D.C. 20429 New York Clearing House Association New York, New York 10005 (b) Whether it is authorized to exercise corporate trust powers. Yes. 2. Affiliations with Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. 16. List of Exhibits. Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d). 1. A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637.) 4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 33-31019.) 6. The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.) 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. SIGNATURE Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 6th day of February, 2002. THE BANK OF NEW YORK By: /s/ MING SHIANG Name: MING SHIANG Title: VICE PRESIDENT Exhibit 25 Consolidated Report of Condition of THE BANK OF NEW YORK of One Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business September 30, 2001, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act. Dollar Amounts ASSETS In Thousands Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin.. $3,238,092 Interest-bearing balances........................... 5,255,952 Securities: Held-to-maturity securities......................... 127,193 Available-for-sale securities....................... 12,143,488 Federal funds sold and Securities purchased under agreements to resell................................ 281,677 Loans and lease financing receivables: Loans and leases held for sale................ 786 Loans and leases, net of unearned income............... 46,206,726 LESS: Allowance for loan and lease losses............ 607,115 Loans and leases, net of unearned income and allowance.............................. 45,599,611 Trading Assets......................................... 9,074,924 Premises and fixed assets (including capitalized leases)............................................. 783,165 Other real estate owned................................ 935 Investments in unconsolidated subsidiaries and associated companies................................ 200,944 Customers' liability to this bank on acceptances outstanding......................................... 311,521 Intangible assets...................................... Goodwill............................................ 1,546,125 Other intangible assets............................. 8,497 Other assets........................................... 8,761,129 --------- Total assets........................................... $87,334,039 LIABILITIES Deposits: In domestic offices................................. $28,254,986 Noninterest-bearing....................... 10,843,829 Interest-bearing.......................... 17,411,157 In foreign offices, Edge and Agreement subsidiaries, and IBFs............................ 31,999,406 Noninterest-bearing........................ 1,006,193 Interest-bearing.......................... 30,993,213 Federal funds purchased and securities sold under agreements to repurchase............................ 6,004,678 Trading liabilities.................................... 2,286,940 Other borrowed money: (includes mortgage indebtedness and obligations under capitalized leases)....... 1,845,865 Bank's liability on acceptances executed and outstanding......................................... 440,362 Subordinated notes and debentures...................... 2,196,000 Other liabilities...................................... 7,606,565 Total liabilities...................................... $80,634,802 EQUITY CAPITAL Common stock........................................... 1,135,284 Surplus................................................ 1,050,729 Retained earnings...................................... 4,436,230 Accumulated other comprehensive income......... 76,292 Other equity capital components..................... 0 - --------------------------------------------- Total equity capital................................... 6,698,535 Total liabilities and equity capital................... $87,334,039 I, Thomas J. Mastro, Senior Vice President and Comptroller of the above-named bank do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true to the best of my knowledge and belief. ================================================================================ Thomas J. Mastro, Senior Vice President and Comptroller We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true and correct. Thomas A. Renyi Gerald L. Hassell Directors Alan R. Griffith - --------------------------------------------------------------------------- -----END PRIVACY-ENHANCED MESSAGE-----