-----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, Np0GwSVjddrTByZREtAzRjQsuIBhDuHnP3HO8QrEuQ+8DPguKeQ3LsumcTfyoFcF yJU0pOBlFPPERPqEIvTT4g== 0001047469-03-000906.txt : 20030114 0001047469-03-000906.hdr.sgml : 20030114 20030109165427 ACCESSION NUMBER: 0001047469-03-000906 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 10 FILED AS OF DATE: 20030109 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-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-102432 FILM NUMBER: 03509466 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-3 1 a2097345zs-3.txt S-3 Registration No. 333- ================================================================================ SECURITIES AND EXCHANGE COMMISSION ---------- FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ---------- BALTIMORE GAS AND ELECTRIC COMPANY (Exact Name of Registrant as Specified in its Charter) MARYLAND (State of Incorporation) 52-0280210 (I.R.S. Employer Identification No.) 39 W. LEXINGTON STREET, BALTIMORE, MARYLAND 21201 (410) 234-5000 (Address, including Zip Code, and Telephone Number, including Area Code of Registrant's Principal Executive Offices) E. FOLLIN SMITH, SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER 750 E. PRATT STREET, BALTIMORE, MARYLAND 21202 (410) 783-3013 (Address, including Zip Code, and Telephone Number, including Area Code of Registrant's Agent for Service) APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: After the effective date of this Registration Statement as determined by market conditions. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [ ] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [X] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ] ----------
CALCULATION OF REGISTRATION FEE =================================================================================================================================== PROPOSED PROPOSED TITLE OF EACH CLASS OF AMOUNT TO MAXIMUM OFFERING MAXIMUM AGGREGATE AMOUNT OF SECURITIES TO BE REGISTERED BE REGISTERED PRICE PER UNIT OFFERING PRICE REGISTRATION FEE - ----------------------------------------------------------------------------------------------------------------------------------- Unsecured Debt Securities $400,000,000 100%* $400,000,000 $36,800 ===================================================================================================================================
* Inserted solely for the purpose of calculating the registration fee. 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. ================================================================================ [BGE LOGO] $400,000,000 Baltimore Gas and Electric Company UNSECURED DEBT 39 W. Lexington Street SECURITIES Baltimore, Maryland 21201 (410) 234-5000 - -------------------------------------------------------------------------------- P R O S P E C T U S - -------------------------------------------------------------------------------- This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission utilizing a "shelf" registration process. Under this shelf process, we may, from time to time, sell the debt securities described in this prospectus in one or more offerings up to a total dollar amount of $400,000,000. This prospectus provides you with a general description of the debt securities we may offer. Each time we sell debt securities, we will provide a prospectus supplement that will contain specific information about the terms of that offering. The supplement may also add, update or change information contained in this prospectus. THERE ARE RISKS INVOLVED WITH PURCHASING THE DEBT SECURITIES WE MAY OFFER. PLEASE REFER TO THE "RISK FACTORS" DISCUSSION BEGINNING ON PAGE 5 OF THIS PROSPECTUS. - -------------------------------------------------------------------------------- WE URGE YOU TO CAREFULLY READ THIS PROSPECTUS AND THE PROSPECTUS SUPPLEMENT WHICH WILL DESCRIBE THE SPECIFIC TERMS OF THE OFFERING TOGETHER WITH ADDITIONAL INFORMATION DESCRIBED UNDER THE HEADING WHERE YOU CAN FIND MORE INFORMATION BEFORE YOU MAKE YOUR INVESTMENT DECISION. - -------------------------------------------------------------------------------- NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY BODY HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. (ONCE THE REGISTRATION STATEMENT IS EFFECTIVE, THE DATE OF THE PROSPECTUS WILL BE INSERTED HERE.) TABLE OF CONTENTS FORWARD LOOKING STATEMENTS........................................... 3 SUMMARY.............................................................. 4 RISK FACTORS......................................................... 5 USE OF PROCEEDS...................................................... 7 RATIO OF EARNINGS TO FIXED CHARGES................................... 8 DESCRIPTION OF THE DEBT SECURITIES................................... 9 PLAN OF DISTRIBUTION.................................................15 LEGAL MATTERS........................................................17 EXPERTS..............................................................17 WHERE YOU CAN FIND MORE INFORMATION..................................17
2 FORWARD-LOOKING STATEMENTS We make statements in this prospectus and may make statements in any prospectus supplement that are considered forward looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. Sometimes these statements will contain words such as "believes," "expects," "intends," "plans," and other similar words. These statements are not guarantees of our future performance and are subject to risks, uncertainties and other important factors that could cause our actual performance or achievements to be materially different from those we project. These risks, uncertainties, and factors include, 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, interest rates, availability of credit, liquidity and general economic conditions, as well as Constellation Energy Group Inc.'s and BGE's ability to maintain their current debt ratings. o The effectiveness of BGE's risk management policies and procedures and the ability of our counterparties to satisfy their financial and performance 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, liabilities associated with catastrophic events, and other events beyond our control. 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 deregulation in Maryland or in the Pennsylvania-New Jersey-Maryland Interconnection, transmission and distribution rates and revenues, 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. o The actual outcome of uncertainties associated with assumptions and estimates using judgment when applying critical accounting policies and preparing financial statements. o Changes in accounting practices and principles. These factors and the other risk factors discussed in this prospectus, including under the heading, "Risk Factors" 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. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Please see BGE's periodic reports filed with the SEC for more information on these factors. The forward-looking statements included in this prospectus or any prospectus supplement are made only as of the date of this prospectus or such prospectus supplement. 3 SUMMARY BGE, a wholly-owned subsidiary of Constellation Energy Group, Inc. ("Constellation Energy"), is a regulated electric and gas public transmission and distribution company. BGE delivers electricity to approximately 1.2 million customers and natural gas to approximately 600,000 customers in a service territory that includes the City of Baltimore and all or part of 10 counties in Central Maryland. BGE's electric delivery territory has a population of 2.7 million and its natural gas delivery territory has a population of 2 million. BGE is regulated by the Maryland Public Service Commission and the Federal Energy Regulatory Commission, or FERC, with respect to rates and other aspects of its business. ELECTRIC BUSINESS Effective on July 1, 2000 electric customer choice and competition among electric suppliers was implemented in Maryland. As a result of deregulation, BGE's electric customers can purchase their electricity from other sources. If a customer chooses an alternate supplier, BGE collects a delivery service charge to recover its fixed costs for the service we provide. BGE remains obligated to provide electricity to different classes of customers who do not choose an alternate supplier at fixed rates over various time periods until at least June 30, 2006 (known as standard offer service). Effective July 1, 2000, BGE also reduced residential base rates by approximately 6.5%, which on average is about $54 million a year through June 2006. Since July 1, 2002, large commercial and industrial customers are no longer eligible for standard offer service and, if they choose to continue to receive their electric supply from BGE, are charged market rates. As a result, currently customers representing approximately 96% (approximately 1,000 megawatts) of load from this class purchase their electricity from an alternate supplier. Beginning on July 1, 2004, all other commercial and industrial customers will no longer be eligible for standard offer service. Currently, this class of customers represents approximately 2,200 megawatts of load. If they choose to continue to receive their electric supply from BGE after July 1, 2004, they will be charged market rates. Beginning July 1, 2006, BGE's current obligation to provide standard offer service to residential customers will end. However, BGE's (and other Maryland utilities') role in providing electricity supply to customers after those obligations end is currently the subject of a proceeding at the Maryland Public Service Commission. Specifically, BGE has entered into a settlement agreement with parties representing customers, industry, utilities, suppliers, the Maryland Energy Administration, the Maryland Public Service Commission's Staff and the Office of People's Counsel that would extend BGE's obligation to supply standard offer service to its customers beyond the dates set forth above. Under the proposed settlement agreement BGE's obligation to provide standard offer service to residential customers could extend until June 30, 2010 and for commercial and industrial customers for a one, two or four year period beyond June 30, 2004, depending on customer size. Rates charged during this time would be based on market prices with an administrative fee added. The settlement agreement is currently before The Maryland Public Service Commission for approval. We purchase 100% of the energy and capacity to meet our standard offer service requirements until June 30, 2003 from Constellation Power Source, Inc., a Constellation Energy subsidiary. Between July 1, 2003 and June 30, 2006, Constellation Power Source, Inc. has contracted to provide BGE with 90%, and Allegheny Energy Supply Company has contracted to provide BGE with 10% of its standard offer service obligations. The amount we pay under these contracts for energy and capacity does not exceed the rates we receive from our customers during these time periods. See "Risk Factors" for a discussion of the status of our contract with Allegheny. 4 As a result of electric competition, BGE's generating assets were deregulated, and on July 1, 2000 we transferred all of our generating assets (6,240 megawatts) and related liabilities, at book value, to Constellation Energy subsidiaries. All of these assets were transferred subject to the lien of BGE's mortgage. BGE also transferred to Constellation Energy subsidiaries tax-exempt debt related to the transferred assets, of which $270 million currently remains outstanding. If the subsidiaries default on their obligations relating to this debt and the debt were declared due and payable, BGE would be required to pay the debt as it remains primarily liable. For a more detailed discussion of the Maryland law authorizing customer choice and competition, and the Maryland Public Service Commission order that resolved major issues surrounding electric restructuring, please refer to our Annual Report on Form 10-K for the year ended December 31, 2001. See WHERE YOU CAN FIND MORE INFORMATION. GAS BUSINESS Currently, no regulation exists for the wholesale price of natural gas as a commodity, and the regulation of interstate transmission at the federal level has been reduced. All BGE gas customers have the option to purchase gas from other suppliers. However, the delivery of gas continues to be regulated by the Maryland Public Service Commission. Currently, approximately 54% of the gas delivered on our distribution system is for customers purchasing gas from alternative suppliers. We charge these customers fees to recover the fixed costs for the transportation service we provide. These fees are the same as the base rate charged for gas sales. In addition to the delivery service, BGE also provides these customers with meter readings, billing, emergency response, regular maintenance, and balancing. BGE buys all gas that it sells directly from various suppliers and arranges separately for the transportation and storage. BGE has a market based rates incentive mechanism for gas we sell on our system. Under market based rates, our actual cost of gas is compared to a market index (a measure of the market price of gas in a given period). The difference between our actual cost and the market index is shared equally between shareholders and customers except for fixed-price contracts that must be secured for at least 10%, but not more than 20%, of forecasted system supply requirements for the November through March period. These fixed price contracts are not subject to sharing under the market-based rates incentive mechanism. The Maryland Public Service Commission allows us to record a monthly adjustment to our gas revenues to eliminate the effect of abnormal weather patterns on our gas system sales volumes. This means our monthly gas revenues are based on weather that is considered "normal" for the month and, therefore, are not affected by actual weather conditions. BGE also participates in the interstate markets, by releasing pipeline capacity or bundling pipeline capacity with gas for off-system sales. RISK FACTORS BGE MAY NOT BE ABLE TO RECOVER INCREASES IN ITS OPERATING, MAINTENANCE AND CAPITAL COSTS WITH RESPECT TO ITS DELIVERY SERVICE THROUGH A RATE INCREASE DUE TO FROZEN ELECTRIC BASE RATES. BGE is required to offer electricity to its residential customers at frozen rates through June 30, 2006 and certain commercial and industrial customers through June 30, 2004. It is possible that BGE will experience an increase in its operating, maintenance and capital costs with respect to delivery services during this time, particularly in the event of an unforeseen circumstance, such as the occurrence of a catastrophic storm which causes damage to BGE's systems that exceeds the amounts covered by insurance maintained by BGE. Although BGE is allowed, under certain circumstances, to apply for recovery of certain 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. BGE IS REQUIRED TO PROVIDE STANDARD OFFER SERVICE AT FROZEN RATES TO ELECTRIC CUSTOMERS IN MARYLAND AND IF ITS SUPPLIERS FAIL TO PROVIDE SERVICE, BGE MAY NOT BE ABLE TO OBTAIN POWER AT PRICES TO MEET ITS OBLIGATION AT OR BELOW THE AMOUNT IT WILL RECEIVE FROM THE FROZEN RATES. 5 As a result of the 1999 Maryland electric restructuring statute, BGE's electric customers are able to choose their supplier. Electric suppliers compete for retail customers with BGE. BGE transmits and delivers the power to all electric customers. BGE's supply obligations vary by customer type for a transition period ending on June 30, 2006. To the extent customers do not choose a supplier, BGE is required to supply the power at frozen rates through the transition period. BGE refers to this obligation to provide power as "standard offer service". If BGE is required to pay more for power than the amount it can recover in the fixed rates, it could have a materially adverse impact on the results of operations of BGE. BGE has entered into a power supply contract with an affiliate, Constellation Power Source, Inc. to meet its standard offer service obligations through June 30, 2003 and separate supply contracts with Constellation Power Source, Inc. for 90%, and Allegheny Energy Supply Company for 10% of the power necessary to meet its standard offer service obligations from July 1, 2003 to June 30, 2006. Recently, the credit ratings of Allegheny were downgraded to below investment grade. Under the terms of the contract, in certain circumstances, BGE has the right to request additional credit support from Allegheny to secure its performance under the contract. If BGE were to exercise its rights and Allegheny did not meet such requests, BGE could liquidate and terminate the contract. If BGE's suppliers are unable to meet their obligations under their contracts, BGE could be required to obtain power at prices that may be higher than the amount it can charge customers. BGE IS SUBJECT TO EXTENSIVE REGULATION. CHANGES IN REGULATIONS COULD HAVE A MATERIAL ADVERSE IMPACT ON BGE'S RESULTS OF OPERATIONS. BGE is subject to extensive regulation from both the State of Maryland and the federal government, particularly the FERC. Regulation includes rate regulation by the Maryland Public Service Commission and FERC, and state and federal environmental regulation. BGE cannot predict the future development of regulations or the ultimate effect that a changing regulatory environment will have on its business. For example, in July 2002, the FERC issued a proposed rulemaking regarding implementation of a standard market design for wholesale electric markets. This proposal would require BGE to turn over the operation of its transmission facilities to an independent operator that will operate the facilities consistent with the market structure proposed by the FERC. Since this rule is a proposal, only there is no assurance as to the effect the final rule will have on BGE's operations or revenues. Maryland enacted an electric restructuring law in 1999. BGE cannot assure you that this law will not be changed in the future. In addition, BGE is currently involved in settlement proceedings with the Maryland Public Service Commission that address BGE's obligations to provide "standard offer service" to commercial and industrial customers after June 30, 2004 and residential customers after June 30, 2006. Since these proceedings are ongoing, there is no assurance as to the effect the final settlement will have on BGE's operations or revenues. BGE MAY HAVE LIABILITY ASSOCIATED WITH THE GENERATION ASSETS IT TRANSFERRED TO CONSTELLATION ENERGY SUBSIDIARIES As a result of Maryland's 1999 electric restructuring law, on July 1, 2000 BGE transferred all of its generating assets and related liabilities to other Constellation Energy subsidiaries. Those subsidiaries assumed all the liabilities related to those assets and also the obligations under tax-exempt debt relating to the transferred generation assets. Currently, approximatiely $270 million of tax-exempt debt remains outstanding. This debt has varying maturities through 2027. These subsidiaries have agreed to comply with the covenants relating to the debt and to pay the interest and principal on this debt when due. However, BGE has not been released from any of the payment or covenant obligations with respect to the assumed debt, and if any of these subsidiaries default on their payment or covenant obligations relating to the assumed debt, and that debt were declared due and payable, BGE would be liable to pay the amounts owed as a result of the default. In addition, BGE is still a named party in several claims relating to the transferred assets, including numerous asbestos claims. If BGE were determined to have liability in regard to those claims, BGE would look to those subsidiaries to pay those claims on BGE's behalf. Failure by such subsidiaries to pay such claims could expose BGE to liability that could be material. 6 BGE PARTICIPATES IN A CASH POOL SPONSORED BY CONSTELLATION ENERGY FOR THE BENEFIT OF ALL OF ITS SUBSIDIARIES. BGE IS DEPENDENT ON CONSTELLATION ENERGY OR ITS OTHER SUBSIDIARIES TO REPAY ANY CASH CONSTELLATION ENERGY'S OTHER SUBSIDIARIES MAY BORROW THAT BGE MAY HAVE INVESTED INTO THE CASH POOL. Constellation Energy sponsors a cash pool for the benefit of all of its subsidiaries to manage their cash needs. Subsidiaries invest excess cash into the pool or borrow cash deposited into the pool as needed. At times, BGE may invest excess cash into the pool. If that cash is borrowed by other subsidiaries of Constellation Energy, then BGE is dependent on Constellation Energy or the subsidiary that borrowed the cash to repay it. Failure by Constellation Energy or such subsidiary to timely repay any cash borrowed could have a material adverse effect on BGE. UNEXPECTED WEATHER CONDITIONS, SUCH AS WARMER WINTERS AND COOLER SUMMERS THAN FORECASTED, MAY IMPACT BGE'S RESULTS OF OPERATIONS. The demand for electricity by BGE customers is directly affected by weather conditions. Generally, demand for electricity is seasonal, peaking in winter and summer. Typically, when winters are warmer than expected and summers are cooler than expected, demand for electricity is lower, resulting in less electric consumption than forecasted. These and other unexpected weather conditions may impact BGE's revenues and results of operations. USE OF PROCEEDS Except as otherwise provided in a prospectus supplement, the proceeds from the sale of the debt securities will be used for general corporate purposes relating to our utility business. If we do not use the net proceeds immediately, we may temporarily invest them in short-term, interest-bearing obligations. 7 RATIO OF EARNINGS TO FIXED CHARGES The Ratio of Earnings to Fixed Charges for each of the periods indicated is as follows:
NINE MONTHS ENDED TWELVE MONTHS ENDED SEPTEMBER 30, DECEMBER 31, - -------------------------------- ------------------------------------------------------------------------------- 2002 2001 2000 1999 1998 1997 ---- ---- ---- ---- ---- ---- 2.60 1.99 2.27 3.45 2.94 2.78
For current information on the Ratio of Earnings to Fixed Charges, please see our most recent Form 10-Q or Form 10-K. See WHERE YOU CAN FIND MORE INFORMATION. 8 DESCRIPTION OF THE DEBT SECURITIES GENERAL This section summarizes terms of the debt securities that we may offer with this prospectus. Most of the specific terms of a series of debt securities will be described in a prospectus supplement attached to this prospectus and may vary from the terms described herein. For a complete description of the terms of a particular offering of debt securities, you should read both this prospectus and the prospectus supplement relating to that particular offering. We will issue the debt securities under an indenture. The indenture is a contract between us and the trustee, The Bank of New York, dated as of July 1, 1985 as supplemented on October 1, 1987 and January 26, 1993. The trustee has two main roles. First, the trustee can enforce the rights of holders of the debt securities against us if we default. There are some limitations on the extent to which the trustee acts on your behalf, described later under "Event of Default." Second, the trustee performs certain administrative duties for the holders of debt securities, such as sending interest payments and notices and implementing transfers of debt securities. A copy of the indenture has been filed with the SEC and is an exhibit to the registration statement which contains this prospectus. See "Where You Can Find More Information" to find out how to locate our filings with the SEC. The indenture is summarized below. Because it is a summary, it does not contain all of the information that may be important to you. You should read the indenture to get a complete understanding of your rights and our obligations under the provisions described in EVENT OF DEFAULT, SUPPLEMENTAL INDENTURES, AND CONSOLIDATION, MERGER OR SALE.. This summary is subject to, and qualified in its entirety by, reference to all the provisions of the indenture. We include references in parentheses to certain sections of the indenture. This summary also is subject to, and qualified by, reference to the description of the particular terms of each series of debt securities described in the applicable prospectus supplement. The indenture does not limit the amount of debt securities that may be issued. There are existing series of debt securities outstanding under the indenture and we may issue additional multiple and distinct series of debt securities. For current information on our debt outstanding see our most recent Form 10-K and 10-Q. See WHERE YOU CAN FIND MORE INFORMATION. The debt securities are unsecured and will rank equally with all our unsecured indebtedness, unless expressly subordinated. The debt securities will be subordinated to all of our secured indebtedness. The debt securities will be denominated in U.S. dollars and we will pay principal and interest in U.S. dollars. The applicable prospectus supplement will describe whether the debt securities will be subject to any conversion, amortization, or sinking or similar fund. It is anticipated that the debt securities will be "book-entry," represented by a permanent global debt security registered in the name of The Depository Trust Company, or its nominee. However, we reserve the right to issue debt securities in certificated form registered in the name of the debt security holders. Unless the applicable prospectus supplement states otherwise, we may from time to time, without consent of the applicable existing note holders, create and issue further notes of each series ranking equally with the other notes of the series having the same terms and conditions as the notes of such series being offered hereby in all respects, except for issue date, issue price and if applicable, the first payment of interest therein. Additional notes issued in this manner will form a single series with the previously outstanding notes of that series. In the discussion that follows, whenever we talk about paying principal on the debt securities, we mean at maturity, redemption or repurchase. Also, in discussing the time for notices and how 9 the different interest rates are calculated, all times are New York City time, unless otherwise noted. The applicable prospectus supplement will describe the terms for the debt securities including: o maturity date, o interest rate or rates (or the method to calculate such rate) o remarketing provisions, o redemption or repurchase provisions, and o any other provisions. (SECTION 3.01) OWNERSHIP OF THE DEBT SECURITIES DIRECT SECURITYHOLDERS Only registered holders of debt securities will have rights under the indenture. As noted below, we do not have obligations to you if you hold in "street name" or other indirect means, either because you choose to hold debt securities in that manner or because the debt securities are issued in the form of global debt securities as described below. For example, once we make payment to the registered securityholder, we have no further responsibility for the payment even if that securityholder is legally required to pass the payment along to you as a "street name" customer but does not do so. "STREET NAME" AND OTHER INDIRECT HOLDERS Investors who hold debt securities in accounts at banks or brokers will generally not be recognized by us as legal securityholders. This is called holding in "street name." Instead, we recognize only the bank or broker, or the financial institution the bank or broker uses to hold its debt securities. These intermediary banks, brokers and other financial institutions pass along principal, interest and other payments on the debt securities to their customers. If you hold debt securities in "street name," you should check with your own institution to find out: o how it handles securities payments and notices, o whether it imposes fees or charges, o how it would handle voting if ever required, o whether and how you can instruct it to send you debt securities registered in your own name so you can be a direct securityholder as described below, to the extent permitted, and o how it would pursue rights under the debt securities if there were a default or other event triggering the need for securityholders to act to protect their interests. GLOBAL SECURITIES A global security is a special type of indirectly held security. This means that we will not issue certificates to each beneficial owner. If we choose to issue debt securities in the form of global debt securities, the ultimate beneficial owners can only be indirect holders. We do this by requiring that the global debt security be registered in the name of a financial institution which we select and by requiring that the debt securities included in the global debt security not be transferred to the name of any other direct securityholder unless the special circumstances described below occur. The financial institution that acts as the sole direct securityholder of the global debt securities is called the "depositary." Any person wishing to own a debt security must do so indirectly by virtue of an account with a broker, bank or other financial institution that in turn is a participant with the depositary. The applicable prospectus supplement will indicate whether your series of debt securities will be issued only in the form of global debt securities. An indirect holder's rights relating to a global debt security will be governed by the account rules of the investor's financial institution and the depositary, as well as general laws relating to securities transfers. We do not recognize this type of investor as a securityholder and instead deal only with the depositary. 10 An investor should be aware that if debt securities are issued only in the form of global debt securities: o the investor cannot get debt securities registered in his or her own name, and o the investor cannot receive physical certificates for his or her interest in the debt securities. This means these securities may not be pledged as security under the laws of some jurisdictions. DTC has provided us the following information: DTC is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the United States Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code and a "clearing agency" registered under the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds securities that its participants ("Direct Participants") deposit with DTC. DTC also records the settlement among Direct Participants of securities transactions, such as transfers and pledges, in deposited securities through computerized records for Direct Participant's accounts. This eliminates the need to exchange certificates. Direct Participants include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. DTC's book-entry system is also used by other organizations such as securities brokers and dealers, banks and trust companies that work through a Direct Participant. The rules that apply to DTC and its participants are on file with the SEC. DTC is owned by a number of its Direct Participants and by the New York Stock Exchange, Inc., The American Stock Exchange, Inc. and the National Association of Securities Dealers, Inc. When applicable, we will wire principal and interest payments to DTC's nominee. We and the trustee will treat DTC's nominee as the owner of the global securities for all purposes. Accordingly, we, the trustee and any paying agent will have no direct responsibility or liability to pay amounts due on the global securities to owners of beneficial interests in the global securities. It is DTC's current practice, upon receipt of any payment of principal or interest, to credit Direct Participants' accounts on the payment date according to their respective holdings of beneficial interests in the global securities as shown on DTC's records. In addition, it is DTC's current practice to assign any consenting or voting rights to Direct Participants whose accounts are credited with debt securities on a record date, by using an omnibus proxy. Payments by participants to owners of beneficial interests in the global securities, and voting by participants, will be governed by the customary practices between the participants and owners of beneficial interests, as is the case with debt securities held for the account of customers registered in "street name." However, payments will be the responsibility of the participants and not of DTC, the trustee or us. Global securities will be exchangeable for certificated debt securities with the same terms in authorized denominations only if: o the depositary notifies us that it is unwilling or unable to continue as depositary or if it ceases to be a clearing agency registered under applicable law and a successor depositary is not appointed by us within 90 days; o an event of default with respect to the debt securities of that series has occurred and has not been cured (see "Event of Default"); or o we determine not to have the debt securities of a series to be represented by a global debt security and notify the trustee of our decision. (SECTION 3.04) The applicable prospectus supplement may also list additional situations for requiring a global debt security to be exchanged for a certificated security that would apply only to the particular series of debt securities covered by that prospectus supplement. When a global debt security terminates, the depositary (and not we or the trustee) is responsible for deciding the 11 names of the institutions that will be the initial direct securityholders. (SECTION 3.04) IN THE REMAINDER OF THIS DESCRIPTION "YOU" MEANS DIRECT SECURITYHOLDERS AND NOT "STREET NAME" OR OTHER INDIRECT HOLDERS. ADDITIONAL MECHANICS FORM, EXCHANGE AND TRANSFER In the absence of any contrary provision described in the prospectus supplement for any specific series of debt securities, the debt securities will be issued: o in registered form; o without interest coupons; and o in denominations that are multiples of $1,000. (SECTION 3.02) You may have your debt securities exchanged into more debt securities of smaller denominations, with a minimum of $1,000, or combined into fewer debt securities of larger denominations, as long as the total principal amount is not changed. (SECTION 3.04) This is called an "exchange." You may exchange or transfer debt securities at the office of the trustee or at an agency to be maintained by us for such purpose. The trustee acts as our agent for registering debt securities in the names of securityholders and transferring debt securities. We may change this appointment to another entity or perform it ourselves. The entity performing the role of maintaining the list of registered holders is called the "security registrar." It will also perform transfers. (SECTION 3.04) You will not be required to pay a service charge to transfer or exchange debt securities, but you may be required to pay for any tax or other governmental charge associated with the exchange or transfer. The transfer or exchange will only be made if we and the security registrar are satisfied with your proof of ownership. (SECTION 3.04) PAYMENT AND PAYING AGENTS We will pay interest to you if you are a securityholder listed in the trustee's records at the close of business on a particular day in advance of each due date for interest, even if you no longer own the debt security on the interest due date. That particular day, usually about two weeks in advance of the interest due date, is called the "record date" and is stated in the prospectus supplement. (SECTIONS 3.02 AND 5.01) Securityholders buying and selling debt securities must work out between them how to compensate for the fact that we will pay all the interest for an interest period to the one who is the registered securityholder on the regular record date. The most common manner is to adjust the sales price of the debt securities to pro rate interest fairly between buyer and seller. We will pay interest, principal and any other money due on the debt securities at the principal office of the trustee in New York City. That office is currently located at 101 Barclay Street, Floor 8 West, New York, New York 10286; Attention: Corporate Trust Administration. We may also have additional payment offices or change them, or act as our own paying agent. (SECTION 5.02) Holders of over $5 million in principal amount of debt securities can request that payment of principal and interest be wired to them by contacting the paying agent at the address set forth above at least three (3) business day prior to the payment date. Otherwise, payments will be made by check. (SECTION 3.02) "STREET NAME" AND OTHER INDIRECT HOLDERS SHOULD CONSULT THEIR BANKS OR BROKERS FOR INFORMATION ON HOW THEY WILL RECEIVE PAYMENTS. REMARKETING We may issue debt securities with remarketing features that allow securityholders the option to sell their debt securities back to us. In turn, we may have the option to retire those debt securities or remarket and sell them to new holders. REDEMPTION We may have the right to redeem or otherwise repurchase debt securities at our option. If the 12 debt securities are redeemable, except as otherwise set forth in the note for such series, we may partially redeem the debt securities only in multiples of $1,000. (SECTION 4.01) Notice of redemption will be provided at least 30, but no more than 60 days prior to the redemption. (SECTION 4.04) If we do not redeem all debt securities in a series at one time, the trustee will select the debt securities to be redeemed in a manner it determines to be appropriate and fair. (SECTION 4.03) If a debt security is only partially redeemed, we will issue a new debt security of the same series in an amount equal to the unredeemed portion of the debt security. (SECTION 4.06) REPURCHASE If the debt securities are subject to a repurchase option, the debt securityholder may have the right to cause us to repurchase the debt securities. For global debt securities, unless otherwise provided in the applicable prospectus supplement, participants, on behalf of the owners of beneficial interests in the global debt securities, may exercise the repurchase option by delivering written notice to our paying agent, The Bank of New York, at least 30, but no more than 60, days prior to the date of repurchase (101 Barclay Street, Floor 8 West, New York, New York 10286, Attention: Corporate Trust Administration). The paying agent must receive notice by 5:00 p.m. on the last day for giving notice. Procedures for the owners of beneficial interests in global debt securities to notify their participants of their desire to have their debt security repurchased will be governed by the customary practices of the participant. The written notice to the paying agent must state the principal amount to be repurchased. It is irrevocable, and a duly authorized officer of the participant (with signatures guaranteed) must sign it. Debt security holders who hold their securities directly desiring to exercise their repurchase option must notify the paying agent at least 30 but not more than 45 days prior to the repayment date by providing the paying agent: o the certificated debt security, with the section entitled "Option to Elect Repayment" on the reverse of the debt security completed; or o a fax or letter (first class, postage prepaid) from a member of a national securities exchange, the National Association of Securities Dealers, or a bank or trust company in the United States which states the following: o the name of the holder; o the principal amount of the debt security and the amount to be repurchased; o the certificate number or the maturity and a description of the terms of the security; o a statement that you wish to sell all or a portion of your note; and o A guaranty that the debt security with the section entitled "Option to Elect Repayment" on the reverse of the debt security completed, will be received by the paying agent within 5 business days. The debt security and form must be received by the paying agent by such 5th business day. Your notice of repurchase is irrevocable. If you sell a portion of a debt security, the old debt security will be canceled and a new debt security for the remaining principal amount will be issued to you. INTEREST RATE The interest rate on the debt securities will either be fixed or floating as indicated in the applicable prospectus supplement. The interest paid will include interest accrued to, but excluding, the date of maturity, redemption or repurchase. Interest is generally payable to the person in whose name the debt security is registered at the close of business on the record date applicable to each interest payment date. Interest payable at maturity, redemption, or repurchase, however, will be payable to the person to whom principal is payable. The interest payment on any debt security originally issued between a record date and interest payment date or on an interest payment date will be made on the interest payment date 13 after the next record date. Interest payments, other than those payable at maturity, redemption or repurchase will be paid, at our option, by check or wire transfer. EVENT OF DEFAULT An "Event of Default" with respect to a series of securities means any of the following: o failure to pay the principal of (or premium, if any, on) any debt security of that series when due and payable; o failure to pay interest on any debt security of that series for 30 days after such is due; o failure to perform any other requirements in the debt securities of that series, or in the indenture in regard to such debt securities, for 60 days after notice; o certain events of bankruptcy or insolvency; or o any other event of default described in the prospectus supplement. An Event of Default for a particular series of debt securities does not necessarily mean that an Event of Default has occurred for any other series of debt securities issued under the indenture. If an Event of Default has occurred and has not been cured, the trustee or the holders of at least 25% of the principal amount of the debt securities of the affected series may declare the entire principal of the debt securities of such series due and payable immediately. Subject to certain conditions, if we deposit with the trustee enough money to remedy the default and there is no default continuing, this acceleration of payment may be rescinded by the holders of at least a majority in aggregate principal amount of the debt securities of the series. (SECTION 7.01) The trustee must within 90 days after a default occurs, notify the holders of the debt securities 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 debt securities 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. (SECTION 7.08) We are required to file an annual certificate with the trustee, signed by an officer, stating any default by us under any provisions of the indenture. (SECTION 5.06) Prior to any declaration of acceleration of maturity, the holders holding a majority of the principal amount of the debt securities of the particular series affected, on behalf of the holders of all debt securities of that series, may waive any past default or Event of Default. We cannot, however, obtain a waiver of a payment default. (SECTION 7.07) Except in cases of default, where the trustee has some special duties, the trustee is not required to take any action under the indenture at the request of any holders unless such holders offer the trustee reasonable indemnity. (SECTION 8.02(d)) Subject to the provisions for indemnification and certain other limitations, the holders of a majority in principal amount of the debt securities of any series may direct the time, method and place of conducting any proceedings for any remedy available to the trustee with respect to such debt securities. (SECTION 7.07) In order to bypass the trustee and take steps to enforce your rights or protect your interests relating to the debt securities, the following must occur: o you must give the trustee written notice that an Event of Default has occurred and remains uncured; o the holders of 25% of the principal amount of all outstanding debt securities of the relevant series must make a written request that the trustee take action because of the default, and must offer reasonable indemnity to the trustee against the cost and other liabilities of taking that action; and o the trustee must have not taken action for 60 days after receipt of the above notice and offer of indemnity. However, you are entitled at any time to bring a lawsuit for the payment of money due on your debt security on or after its due date. (SECTION 7.04) 14 "STREET NAME" AND OTHER INDIRECT HOLDERS SHOULD CONSULT THEIR BANKS OR BROKERS FOR INFORMATION ON HOW TO GIVE NOTICE OR DIRECTION TO, OR MAKE A REQUEST OF, THE TRUSTEE AND TO MAKE OR CANCEL A DECLARATION OF ACCELERATION. SUPPLEMENTAL INDENTURES There are three types of changes we can make to the indenture and the debt securities. CHANGES REQUIRING EACH HOLDER'S APPROVAL. The following changes require the approval of each holder of debt securities' approval: o extend the fixed maturity of any debt security; o reduce the interest rate (or change the method used to establish the interest rate) or extend the time of payment of interest; o reduce any premium payable upon redemption; o reduce the principal amount; o reduce the amount of principal payable upon acceleration of the maturity of a discounted debt security following default; o change the currency of payment on a debt security; or o reduce the percentage of securityholders whose consent is required to modify or amend the indenture (SECTION 11.02) CHANGES NOT REQUIRING HOLDER APPROVAL. These types of changes are limited to changes specified in the indenture, including those which are of an administrative nature or are changes that would not adversely affect holders of the debt securities. (SECTION 11.01) CHANGES REQUIRING 66 2/3% OF ALL HOLDERS TO APPROVE. A vote in favor by securityholders owning not less than 66 2/3% of the principal amount of the debt securities of the particular series affected is required for any other matter listed in the indenture or in a particular security. (SECTION 11.02) "STREET NAME" AND OTHER INDIRECT HOLDERS SHOULD CONSULT THEIR BANKS OR BROKERS FOR INFORMATION ON HOW APPROVAL MAY BE GRANTED OR DENIED IF WE SEEK TO CHANGE THE INDENTURE OR THE DEBT SECURITIES OR REQUEST A WAIVER. 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 debt securities and the performance and observance of all the covenants and conditions of the indenture binding on us (SECTION 12.01); 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. (SECTION 12.02) DISCHARGE The indenture provides that we can discharge and satisfy all of our obligations under any series of notes that are payable within one year, or under any series of notes that we deliver to the trustee (and that have not already been cancelled), by depositing with the trustee or any paying agent, enough funds to pay the principal and interest due or to become due on the notes until their maturity date. (SECTION 13.01) PLAN OF DISTRIBUTION We may sell the debt securities (a) through agents; (b) by underwriters or dealers; or (c) directly to one or more purchasers. BY AGENTS Debt securities may be sold on a continuing basis by agents designated by us. The agents agree to use their reasonable efforts to solicit purchases for the period of their appointment under the terms of an agency agreement between the agents and us. BY UNDERWRITERS 15 If underwriters are used in the sale, the underwriters may be designated by us or selected through a bidding process. The debt securities will be acquired by the underwriters for their own account. The underwriters may resell the debt securities in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale. The obligations of the underwriters to purchase the debt securities will be subject to certain conditions. The underwriters will be obligated to purchase all the debt securities of the series offered if any of the debt securities are purchased. Any initial public offering price and any discounts or concessions allowed or re-allowed or paid to dealers may be changed from time to time. Only underwriters named in the applicable prospectus supplement are deemed to be underwriters in connection with the debt securities offered hereby. DIRECT SALES We may also sell debt securities directly. In this case, no underwriters or agents would be involved. GENERAL INFORMATION We may authorize agents, underwriters or dealers to solicit offers by certain institutions to purchase debt securities from us at the public offering price pursuant to delayed delivery contracts providing for payment and delivery on a later date or dates, all as described in the applicable prospectus supplement. Each delayed delivery contract will be for an amount not less than, and the aggregate amount of the debt securities shall be not less nor more than, the respective amounts stated in the prospectus supplement. Institutions with whom the delayed delivery contracts, when authorized, may be made include commercial and savings banks, insurance companies, pension funds, investment companies, educational and charitable institutions, and other institutions, but will in all cases be subject to our approval. The delayed delivery contracts will not be subject to any conditions except: o the purchase by an institution of the debt securities covered by its delayed delivery contract shall not, at any time of delivery, be prohibited under the laws of any jurisdiction in the United States to which such jurisdiction is subject; and o if the debt securities are being sold to underwriters, we shall have sold to those underwriters the total amount of the debt securities less the amount thereof covered by the delayed delivery contracts. The underwriters will not have any responsibility in respect of the validity or performance of the delayed delivery contracts. We have not determined whether the debt securities will be listed on a securities exchange. Underwriters will not be obligated to make a market in any of the securities. We cannot predict the activity of trading in, or liquidity of, our debt securities. In connection with sales by an agent or an under written offering, the SEC rules permit the underwriters or agents to engage in transactions that stabilize the price of the debt securities. These transactions may include purchases for the purpose of fixing or maintaining the price of the debt securities. Underwriters, dealers, and agents that participate in the distribution of the debt securities may be underwriters as defined in the Securities Act of 1933 (the "Act"), and any discounts or commissions received by them from us and any profit on the resale of the debt securities by them may be treated as underwriting discounts and commissions under the Act. We may have agreements with the underwriters, dealers and agents to indemnify them against certain civil liabilities, including liabilities under the Act, or to contribute with respect to payments which the underwriters, dealers or agents may be required to make. 16 Underwriters, dealers and agents may engage in transactions with, or perform services for, us or our affiliates in the ordinary course of their businesses. LEGAL MATTERS One of our lawyers will issue an opinion regarding certain legal matters in connection with the debt securities offered pursuant to this prospectus. Cahill Gordon & Reindel, New York, NY will issue an opinion regarding certain legal matters for any underwriters, dealers or agents. Cahill Gordon & Reindel represents Constellation Energy and BGE from time to time. Cahill Gordon & Reindel will rely on the opinion of our lawyers as to matters of Maryland law and the applicability of the Public Utility Holding Company Act of 1935. EXPERTS The 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, 2001 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. WHERE YOU CAN FIND MORE INFORMATION Baltimore Gas and Electric Company files annual, quarterly and current reports, and other information with the SEC. You may read and copy any document filed by BGE at the SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C., 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. The SEC maintains an internet site at http://www.sec.gov that contains reports, proxy and information statements, and other information, regarding companies (including BGE) that file documents with the SEC electronically. BGE's SEC filings may also be obtained from our web site at http://www.bge.com. The addresses for both the SEC's and BGE's website are inactive textual references only and the contents of those sites (other than the documents incorporated by reference as set forth below) are not a part of this prospectus. This prospectus is part of a registration statement we filed with the SEC. In addition, the SEC allows us to "incorporate by reference" the information we file with them, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be part of this prospectus, and later information that we file with the SEC will automatically update and supersede this information. We incorporate by reference the documents listed below and any future filings made with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 from now until the time the registration becomes effective and thereafter until we sell all the debt securities. o BGE's Annual Report on Form 10-K for the year ended December 31, 2001. o BGE's Quarterly Reports on Form 10-Q for the quarters ended March 31, 2002 June 30, 2002 and September 30, 2002. o BGE's Current Reports on Form 8-K filed on January 30, 2002, January 31, 2002, March 19, 2002 and August 14, 2002. Any person, including any beneficial owner, may request a copy of these filings, at no cost, by writing or telephoning us at the following address: Shareholder Services Baltimore Gas and Electric Company 39 W. Lexington Street Baltimore, Maryland 21201 1-800-258-0499 You should rely only on the information incorporated by reference or provided in this prospectus or any prospectus supplement. We have not authorized anyone else to provide you with different information. We are not making an offer of these debt securities in any state where the offer is not permitted. You should not assume that the information in this prospectus or any prospectus supplement is accurate as of any date other than the date on the front of those documents. 17 ================================================================================ [BGE LOGO] $400,000,000 Unsecured Debt Securities - -------------------------------------------------------------------------------- P R O S P E C T U S (Once the registration statement is effective, the date of the Prospectus will be inserted here) - -------------------------------------------------------------------------------- ================================================================================ PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. Securities and Exchange Commission Registration Fee......................................... $ 36,800 Services of Independent Accountants......................................................... 45,000* Trustee Fees and Expenses................................................................... 15,000* Legal Fees and Expenses..................................................................... 100,000* Debt Securities Rating Fees................................................................. 120,000* Printing and Delivery Expenses.............................................................. 60,000* Miscellaneous Expenses...................................................................... 23,200* ----------- Total $400,000* ===========
-------------- * Estimated ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. The following description of indemnification allowed under Maryland statutory law is a summary rather than a complete description. Reference is made to Section 2-418 of the Corporation and Associations Article of the Maryland Annotated Code, which is incorporated by reference herein, and the following summary is qualified in its entirely 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. 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 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 reasonable 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." Also, see indemnification provisions in the Form of Purchase Agreement, included in Exhibit 1(a) to this Registration Statement. ITEM 16. EXHIBITS. Reference is made to the Exhibit Index filed as a part of this Registration Statement. II-2 ITEM 17. UNDERTAKINGS. (a) The undersigned Registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the Registration Statement is on Form S-3, Form S-8, or Form F-3 and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Registration Statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the Registration Statement shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the provisions described under Item 15 above, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the II-3 Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the 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. II-4 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, Baltimore Gas and Electric Company, the Registrant, certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Baltimore, State of Maryland on the 9th day of January, 2003. BALTIMORE GAS AND ELECTRIC COMPANY (Registrant) By: /s/ E. Follin Smith ----------------------------- E. Follin Smith Senior Vice President and 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: *F. O. Heintz Director, Chief Executive January 9, 2003 Officer and President Principal financial and accounting officer: /s/ E. FOLLIN SMITH Director, Senior Vice President January 9, 2003 - ------------------------- Chief Financial Officer E. Follin Smith * Mayo A. Shattuck III Director January 9, 2003 * By: /s/ E. Follin Smith -------------------------------------------- E. Follin Smith, Attorney-in-Fact
II-5 EXHIBIT INDEX
Exhibit Number - --------- 1(a) - Form of Purchase Agreement, including Standard Purchase Provisions. 1(b) - Form of Interest Calculation Agency Agreement. 4(a) - Indenture dated as of July 1, 1985 between the Company and The Bank of New York (successor to Mercantile-Safe Deposit and Trust Company), Trustee as supplemented by the Supplemental Indentures dated as of October 1, 1987 and January 26, 1993. 4(b) - Form of Unsecured Debt Security (Fixed Rate). 4(c) - Form of Unsecured Debt Security (Floating Rate) 5 - Opinion of Company Counsel. 12(a)* - Computation of Ratio of Earnings to Fixed Charges for the twelve months ended December 31, 2001, 2000, 1999, 1998, and 1997, and for the nine months ended September 30, 2002 (Designated as Exhibit 12(b) in Form 10-Q for the quarter ended September 30, 2002, filed November 14, 2002, File No. 1-1910). 23(a) - Consent of Company 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. II-6 EX-1.A 3 a2097345zex-1_a.txt EXHIBIT 1(A) Exhibit _1(a) BALTIMORE GAS AND ELECTRIC COMPANY UNSECURED DEBT SECURITIES FORM OF PURCHASE AGREEMENT INCLUDING STANDARD PURCHASE PROVISIONS BALTIMORE GAS AND ELECTRIC COMPANY Unsecured Debt Securities PURCHASE AGREEMENT [Date] Baltimore Gas and Electric Company 750 E. Pratt Street, 17th Floor Baltimore, Maryland 21202 Dear Sirs: Referring to the Unsecured Debt Securities of Baltimore Gas and Electric Company (the "Company") covered by the registration statement on Form S-3 (No. 333-________), (such registration statement, including (i) the prospectus included therein, dated _________________, as supplemented by a prospectus supplement dated ____________ in the form first filed under Rule 424(b) (such prospectus as so supplemented, including each document incorporated by reference therein is hereinafter called the "Prospectus") and (ii) all documents filed as part thereof or incorporated by reference therein, together with any registration statement, increasing the size of the offering (a "Rule 462(b) Registration Statement"), filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended, are hereinafter collectively called the "Registration Statement") on the basis of the representations, warranties and agreements contained in this Agreement, but subject to the terms and conditions herein set forth, the purchaser or purchasers named in Schedule A hereto (the "Purchasers") agree to purchase, severally, and the Company agrees to sell to the Purchasers, severally, the respective principal amounts of the Company's ___________ Series, due ____________having the terms described below (the "Purchased Notes") set forth opposite the name of each Purchaser on Schedule A hereto. The price at which the Purchased Notes shall be purchased from the Company by the Purchasers shall be ______% of the principal amount plus accrued interest, if any, from _____________. The initial public offering price shall be _____% of the principal amount plus accrued interest, if any, from ____________________. The Purchased Notes will be offered by the 2 Purchasers as set forth in the Prospectus Supplement relating to such Purchased Notes. The Purchased Notes will have the following terms: Fixed Interest rate (if applicable): _______% per annum (accruing from ____) Floating Interest Rate (if applicable): Interest Rate Basis: ___________________ Spread: ___________________ Spread Multiplier: ___________________ Index Maturity: ___________________ Initial Interest Rate: ___________________ Maximum Interest Rate: ___________________ Minimum Interest Rate: ___________________ Interest Reset Dates: ___________________ Interest Determination Dates: ___________________ Calculation Agent: ___________________ Interest Payment Dates: ___________________ Stated Maturity: ___________________ Redeemable by the Redemption Prices Company on or after: (% of Principal Amount): --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- 3 Subject to Repurchase by the Company at the option of Repurchase Prices the holder on: (% of Principal Amount): --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- The "Closing Date" shall be: _____________________ The place to which the Purchased Notes may be checked, packaged and delivered shall be: _____________________ Notices to the Purchasers shall be sent to the following address(es) or telecopier number(s): If we are acting as Representative(s) for the several Purchasers named in Schedule A hereto, we represent that we are authorized to act for such several Purchasers in connection with the transactions contemplated in this Agreement, and that, if there are more than one of us, any action under this Agreement taken by any of us will be binding upon all the Purchasers. All of the provisions contained in the document entitled "Baltimore Gas and Electric Company Standard Purchase Provisions", a copy of which has been previously furnished to us, are hereby incorporated by reference in their entirety and shall be deemed to be a part of this Agreement to the same extent as if such provisions had been set forth in full herein. 4 If the foregoing is in accordance with your understanding of our agreement, kindly sign and return to us the enclosed duplicate hereof, whereupon it will become a binding agreement between the Company and the several Purchasers in accordance with its terms. Very truly yours, [Firm Name] By ________________________ Title: _______________________ Acting on behalf of and as Representative(s) of the several Purchasers named in Schedule A hereto.* The foregoing Purchase Agreement is hereby confirmed as of the date first above written BALTIMORE GAS AND ELECTRIC COMPANY By ____________________ Title: _____________________ * To be deleted if the Purchase Agreement is not executed by one or more Purchasers acting as Representative(s) of the Purchasers for purposes of this Agreement. 5 SCHEDULE A
Name of Purchaser Amount - ----------------- ------ Total ----------- $ ===========
6 BALTIMORE GAS AND ELECTRIC COMPANY STANDARD PURCHASE PROVISIONS From time to time, Baltimore Gas and Electric Company, a Maryland corporation ("Company") may enter into purchase agreements that provide for the sale of designated securities to the purchaser or purchasers named therein. The standard provisions set forth herein may be incorporated by reference in any such purchase agreement ("Purchase Agreement"). The Purchase Agreement, including the provisions incorporated therein by reference, is herein sometimes referred to as "this Agreement." Unless otherwise defined herein, terms defined in the Purchase Agreement are used herein as therein defined. 1. INTRODUCTORY. The Company proposes to issue and sell from time to time its Unsecured Debt Securities ("Notes") registered under the registration statement referred to in Section 2(a). The Notes will be issued under an Indenture, dated as of July 1, 1985, between the Company and The Bank of New York (successor to Mercantile-Safe Deposit and Trust Company), as Trustee as supplemented by the Supplemental Indentures dated as of October 1, 1987 and January 26, 1993, respectively (the "Indenture"). The Notes will be sold to the Purchasers for resale in accordance with the terms of the offering determined at the time of the sale. The Notes involved in any such offering are hereinafter referred to as the "Purchased Notes," and the firm or firms, as the case may be, which agree to purchase the same are hereinafter referred to as the "Purchasers" of such Purchased Notes. The terms "you" and "your" refer to those Purchasers who sign the Purchase Agreement either on behalf of themselves only or on behalf of themselves and as representatives of the several Purchasers named in Schedule A thereto, as the case may be. 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and warrants to and agrees with each Purchaser that: (a) A registration statement on Form S-3 (No. 333-________) covering $400 million principal amount of the Notes, including a prospectus has been filed with the Securities and Exchange Commission ("Commission") and has become effective. The terms Registration Statement and Prospectus shall have the meanings ascribed to them in the Purchase Agreement. (b) The Registration Statement conforms in all respects to the requirements of the Securities Act of 1933, as amended ("Act"), and the pertinent published rules and regulations of the Commission thereunder ("33 Act Rules and Regulations") and the Trust Indenture Act of 1939, as amended ("Trust Indenture Act"), and does not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, except that the foregoing does not 7 apply to statements or omissions in such document based upon written information furnished to the Company by any Purchaser specifically for use therein. The documents incorporated by reference in the Registration Statement or the Prospectus pursuant to Item 12 of Form S-3 of the Act, at the time they were filed with the Commission, complied in all material respects with the requirements of the Securities Exchange Act of 1934, as amended ("Exchange Act"), and the pertinent published rules and regulations thereunder ("Exchange Act Rules and Regulations"). Any additional documents deemed to be incorporated by reference in the Prospectus will, when they are filed with the Commission, comply in all material respects with the requirements of the Exchange Act and the Exchange Act Rules and Regulations and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. 3. DELIVERY AND PAYMENT. The Company will deliver the Purchased Notes to you for the accounts of the Purchasers, at the offices of the Trustee (at the place specified in the Purchase Agreement) against payment of the purchase price by certified or official bank check or checks in same day or New York or Baltimore Clearing House funds drawn to the order of the Company, at the office of the Company, 750 E. Pratt Street, 17th Floor, Baltimore, Maryland, at the time set forth in this Agreement or at such other time not later than seven full business days thereafter as you and the Company determine, such time being herein referred to as the "Closing Date." The Purchased Notes to be delivered will be in definitive fully registered form registered in such denominations, of $1,000 or multiples thereof, and in such names as you request in writing not later than 3:00 p.m., New York Time, on the third full business day prior to the Closing Date, or, if no such request is received, in the names of the respective Purchasers in the amounts agreed to be purchased by them pursuant to this Agreement. The Company shall make the Purchased Notes available for checking and packaging at the offices of the Trustee (at the place specified in the Purchase Agreement) prior to the Closing Date and, unless prevented from doing so by circumstances beyond its control, not later than 2:00 p.m., New York Time, on the business day next preceding the Closing Date. If you request that any Purchased Notes be issued in a name or names other than that of the Purchaser agreeing to purchase such Purchased Notes hereunder, the Company shall not be obligated to pay any transfer taxes resulting therefrom. The Notes may also be represented by a permanent global Note or Notes, registered in the name of The Depository Trust Company, as depositary (the "Depositary"), or a nominee of the Depositary (each such Note represented by a permanent global Note being referred to herein as a "Book-Entry Note"). Beneficial interests in Book-Entry Notes will only be evidenced by, and transfers thereof will only be effected through, records maintained by the Depositary's participants. 8 4. OFFERING BY THE PURCHASERS. The several Purchasers propose to offer the Purchased Notes for sale to the public as set forth in the Prospectus. 5. COVENANTS OF THE COMPANY. The Company covenants and agrees with the several Purchasers that: (a) It will promptly cause the Prospectus to be filed with the Commission as required by Rule 424. (b) For as long as a prospectus relating to the Purchased Notes is required to be delivered under the Act, if any event relating to or affecting the Company or of which the Company shall be advised in writing by the Purchasers shall occur which, in the Company's opinion, should be set forth in a supplement or amendment to the Prospectus in order either to make the Prospectus comply with the requirements of the Act or which would require the making of any change in the Prospectus so that as thereafter delivered to purchasers such Prospectus will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, the Company will promptly amend or supplement the Prospectus by either (i) preparing and filing with the Commission supplement(s) or amendment(s) to the Prospectus, or (ii) making an appropriate filing pursuant to the Exchange Act, which will supplement or amend the Prospectus so that, as supplemented or amended, the Prospectus when the Prospectus is delivered to a purchaser will comply with the Act and will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. Prior to any such filing, the Company shall give oral notice to the Purchasers. (c) The Company will make generally available to its security holders as soon as practicable, but in any event not later than eighteen months after the effective date of the Registration Statement (as defined in Rule 158(c) under the Act), an earnings statement of the Company and its subsidiaries (which need not be audited) complying with Section 11(a) of the Act and the rules and regulations of the Commission thereunder (including at the option of the Company Rule 158). (d) The Company will furnish to you copies of the following documents, in each case as soon as available after filing and in such quantities as you reasonably request (i) the Registration Statement relating to the Notes as originally filed and all pre-effective amendments thereto (at least one of which will be signed and will include all exhibits except those incorporated by reference to previous 9 filings with the Commission); (ii) each prospectus relating to the Purchased Notes; and (iii) during the time when a prospectus relating to the Purchased Notes is required to be delivered under the Act, all post-effective amendments and supplements to the Registration Statement or Prospectus, respectively (except supplements relating to securities that are not Purchased Notes). (e) The Company will take such action as the Purchasers may reasonably request to obtain the qualification of the Purchased Notes for sale and the determination of their eligibility for investment under the laws of such jurisdictions as you designate and will continue such qualifications in effect so long as required for the distribution, provided, however, that the Company shall not be required to qualify as a foreign corporation or to file any consent to service of process under the laws of any jurisdiction or to comply with any other requirements deemed by the Company to be unduly burdensome. (f) During the period of five years after the Closing Date, the Company will furnish to you, and upon request, to each of the other Purchasers: (i) as soon as practicable after the end of each fiscal year, a copy of its annual report to shareholders for such year, (ii) as soon as available, a copy of each report or definitive proxy statement of the Company filed with the Commission under the Exchange Act or mailed to shareholders, and (iii) from time to time, such other information concerning the Company as you may reasonably request. (g) The Company will pay all expenses incident to the performance of its obligations under this Agreement, and will reimburse the Purchasers for any expenses (including Blue Sky fees not exceeding $7,500 and disbursements of counsel) incurred by them in connection with qualification of the Purchased Notes for sale and determination of their eligibility for investment under the laws of such jurisdictions as you designate and the printing of memoranda relating thereto, for any filing fees charged by investment rating agencies for the rating of the Purchased Notes, for any expenses incurred in connection with listing the Purchased Notes on a national securities exchange and for expenses incurred in distributing prospectuses to the Purchasers, except that if this Agreement is terminated by the Purchasers under Section 6(c) hereof, the Company shall not be obligated to reimburse the Purchasers for any of the foregoing expenses. (h) The Company will not offer or sell any of its other debt securities which are substantially similar to the Purchased Notes prior to ten business days after 10 the Closing Date, without the consent of the Purchasers. (i) If the Company elects to rely upon Rule 462(b), the Company shall file a Rule 462(b) Registration Statement with the Commission in compliance with Rule 462(b) and the Company shall at the time of filing either pay to the Commission the filing fee for the Rule 462(b) Registration Statement or give irrevocable instructions for the payment of such fee pursuant to Rule 111(b) under the Act. 6. CONDITIONS OF THE OBLIGATIONS OF THE PURCHASERS. The obligations of the several Purchasers to purchase and pay for the Purchased Notes will be subject to the accuracy of the representations and warranties on the part of the Company herein, to the accuracy of the statements of Company officers made pursuant to the provisions hereof, to the performance by the Company of its obligations hereunder and to the following additional conditions precedent: (a) Subsequent to the signing of this Agreement, you shall have received a letter of PricewaterhouseCoopers LLP, dated the Closing Date, confirming that they are independent public accountants within the meaning of the Act and the 33 Act Rules and Regulations, and stating in effect that: (i) In their opinion, the consolidated financial statements and supporting schedules audited by them which are included in the Company's Form 10-K ("Form 10-K"), which is incorporated by reference in the Registration Statement comply in form in all material respects with the applicable accounting requirements of the Act and the 33 Act Rules and Regulations and the Exchange Act and the Exchange Act Rules and Regulations; (ii) On the basis of procedures specified in such letter (but not an audit in accordance with generally accepted auditing standards), including reading the minutes of meetings of the shareholders, the Board of Directors and the Executive Committee of the Company since the end of the year covered by the Form 10-K as set forth in the minute books through a specified date not more than five days prior to the Closing Date, performing procedures specified in Statement on Auditing Standards No. 71, Interim Financial Information, on the unaudited interim consolidated financial statements of the Company incorporated by reference in the Registration Statement, if any, and reading the latest available unaudited interim consolidated financial statements of the Company, and making inquiries of certain officials of the Company who have responsibility for financial and accounting matters as to whether the latest available financial statements not incorporated by reference in the 11 Registration Statement are prepared on a basis substantially consistent with that of the audited consolidated financial statements incorporated in the Registration Statement, nothing has come to their attention that has caused them to believe that (1) any unaudited consolidated financial statements incorporated by reference in the Registration Statement do not comply in form in all material respects with the applicable requirements of the Act and the 33 Act Rules and Regulations and the Exchange Act and the Exchange Act Rules and Regulations or any material modifications should be made to those unaudited consolidated financial statements for them to be in conformity with generally accepted accounting principles; (2) at the date of the latest available balance sheet not incorporated by reference in the Registration Statement there was any change in the capital stock, change in long-term debt or decrease in consolidated net assets or common shareholders' equity as compared with the amounts shown in the latest balance sheet incorporated by reference in the Registration Statement or for the period from the closing date of the latest income statement incorporated by reference in the Registration Statement to the closing date of the latest available income statement read by them there were any decreases, as compared with the corresponding period of the previous year, in operating revenues, operating income, net income, or in earnings per share of common stock except in all instances of changes or decreases that the Registration Statement discloses have occurred or may occur, or which are described in such letter; or (3) at a specified date not more than five days prior to the Closing Date, there was any change in the capital stock or long-term debt of the Company or, at such date, there was any decrease in net assets of the Company as compared with amounts shown in the latest balance sheet incorporated by reference in the Registration Statement, or for the period from the closing date of the latest income statement incorporated by reference in the Registration Statement to a specified date not more than five days prior to the Closing Date, there were any decreases as compared with the corresponding period of the previous year, in operating revenues, operating income, net income or in earnings applicable to common stock, except in all cases for changes or decreases which the Registration Statement discloses have occurred or may occur, or which are described in such letter; and (iii) Certain specified procedures have been applied to certain financial or other statistical information (to the extent such information was obtained from the general accounting records of the Company) set forth or incorporated by reference in the Registration Statement and that such procedures have not revealed any 12 disagreement between the financial and statistical information so set forth or incorporated and the underlying general accounting records of the Company, except as described in such letter. (b) Prior to the Closing Date, no stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose shall have been instituted, or to the knowledge of the Company or you, shall be contemplated by the Commission, and if the Company has elected to rely upon Rule 462(b), the Rule 462(b) Registration Statement shall have been filed and shall have become effective in accordance with Rule 462(b). (c) Subsequent to the date of this Agreement, (i) there shall not have occurred any change or any development involving a prospective change not contemplated by the Prospectus as of the date of this Agreement in or affecting particularly the business or properties of the Company which, in the judgment of a majority in interest of the Purchasers including you, materially impairs the investment quality of the Purchased Notes, (ii) no rating of any of the Company's debt securities shall have been lowered by any "nationally recognized statistical rating organization," as that term is defined by the Commission for purposes of Rule 436(g) and (iii) trading in securities generally on the New York Stock Exchange shall not have been suspended nor limited, other than a temporary suspension in trading to provide for an orderly market, nor shall minimum prices have been established on such Exchange, a banking moratorium shall not have been declared either by New York State or Federal authorities and there shall not have occurred an outbreak or escalation of major hostilities in which the United States is involved or other substantial national or international calamity or crisis (including one caused by a terrorist act), the effect of which on the financial markets of the United States is such as to make it, in your judgment, impracticable to market the Purchased Notes. (d) There shall not be in effect on the Closing Date any order of the Public Service Commission of Maryland or Federal Energy Regulatory Commission which would prevent the issuance, sale and delivery of the Purchased Notes in accordance with the terms contemplated by this Agreement. (e) You shall have received an opinion, dated the Closing Date, of a counsel for the Company to the effect that: (i) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Maryland, with power and authority (corporate and other) to own its properties and 13 conduct its business as described in the Prospectus; and the Company is duly qualified to do business as a foreign corporation in good standing in all other jurisdictions in which the conduct of its business or the ownership of its properties requires such qualification and the failure to do so would have a material and adverse impact on its financial condition; (ii) The Indenture has been duly authorized, executed and delivered by the Company and is a valid instrument, legally binding on the Company and enforceable in accordance with its terms, except as limited by bankruptcy, insolvency, or other laws affecting the enforcement of creditors' rights and by general principles of equity; (iii) The issuance and sale of the Purchased Notes have been duly authorized by all necessary corporate action of the Company. The Purchased Notes (assuming that they have been duly authenticated by the Trustee or a duly designated Authentication Agent under the Indenture, which fact counsel need not verify by an inspection of the Purchased Notes), have been duly issued and constitute legal, valid, and binding obligations of the Company enforceable in accordance with their terms, and are entitled to the benefits provided by the Indenture except as such enforceability or entitlement may be limited by bankruptcy, insolvency, or other laws affecting the enforcement of creditors' rights and by general principles of equity; (iv) The Registration Statement has become effective under the Act and, (a) to the best of such counsel's knowledge, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or are pending or contemplated under the Act; (b) the Registration Statement (as of its effective date) and the Prospectus (as of the date of the Closing Date) and any amendments or supplements thereto, as of their respective dates, appeared to comply as to form in all material respects with the requirements of Form S-3 under the Act and the 33 Act Rules and Regulations and the Trust Indenture Act; (c) such counsel has no reason to believe that either the Registration Statement or the Prospectus, or any such amendment or supplement, as of such respective dates or as of the Closing Date, contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statement therein not misleading; (d) the descriptions in the Registration Statement and Prospectus of statutes, legal and governmental proceedings and contracts and other documents are accurate and fairly present the information required to 14 be shown; (e) and such counsel does not know of any legal or governmental proceedings required to be described in the Prospectus which are not described as required, or of any contracts or documents of a character required to be described in the Registration Statement or Prospectus or to be filed as exhibits to the Registration Statement which are not described or filed as required; it being understood that such counsel, in addressing the matters covered in this paragraph (iv) need express no opinion as to the financial statements or other financial and statistical information contained in the Registration Statement or the Prospectus or incorporated therein or attached as an exhibit thereto or as to the Statement of Eligibility and Qualification on Form T-l of the Trustee under the Indenture. (v) The approval of the Public Service Commission of Maryland necessary for the valid issuance by the Company of the Purchased Notes pursuant to this Agreement has been obtained and continues in full force and effect. The Company has received the approval of FERC for the issuance of Purchased Notes on or before December 31, 2004 with maturities of not more than 12 months after the date of issuance and the approval of FERC will be required for the issuance of any Purchased Notes after December 31, 2004 and such counsel knows of no other approval of any other regulatory authority which is legally required for the valid offering, issuance, sale and delivery of the Purchased Notes by the Company under this Agreement (except that such opinion need not pass upon the requirements of state securities acts); (vi) To the best of such counsel's knowledge and belief, the consummation of the transactions contemplated in this Agreement and the compliance by the Company with all the terms of the Indenture did not and will not result in a breach of any of the terms and provisions of, or constitute a default under, the Company's Charter or By-Laws or any indenture, mortgage or deed of trust or other agreement or instrument to which the Company is a party; (vii) Each of this Agreement and the Interest Calculation Agency Agreement has been duly authorized, executed and delivered by the Company; (viii) The Indenture is duly qualified under the Trust Indenture Act; (ix) The issuance, sale and delivery of the Purchased Notes as contemplated by this Agreement are not subject to the approval of the Securities and Exchange Commission under the provisions of the Public Utility Holding Company Act of 1935 (the "1935 Act"); and 15 (x) The statements set forth in the Prospectus under the caption "Description of the Debt Securities," and on the cover page of the Prospectus insofar as they purport to constitute a summary of the terms of the Indenture and the Purchased Notes, are accurate and fair summaries of the matters set forth therein. (f) The Purchasers shall have received from Cahill Gordon & Reindel, counsel for the Purchasers, an opinion dated the Closing Date, with respect to the matters referred to in paragraph 6(e) subheadings (ii), (iii), (iv)b, (v), (vii), (viii) and (x) and such other matters as the Purchasers shall reasonably request and the Company shall have furnished to such counsel such documents as they request for the purpose of enabling them to pass on such matters. In rendering such opinion, Cahill Gordon & Reindel may rely, as to the incorporation of the Company, the approval of the Public Service Commission of Maryland required for the issuance, sale and delivery of the Purchased Notes and all other matters governed by the laws of the State of Maryland, the applicability of the 1935 Act, and FERC approval for the issuance, sale and delivery of the Purchased Notes, upon the opinion of Counsel for the Company referred to above. In addition, such counsel shall state that such counsel has participated in conferences with officers, counsel and other representatives of the Company, representatives of the independent public accountants for the Company and representatives of the Purchasers at which the contents of the Registration Statement and the Prospectus and related matters were discussed; and, although such counsel is not passing upon and does not assume responsibility for the accuracy, completeness or fairness of the statements contained in the Registration Statement and Prospectus (except as to the matters referred to in their opinion rendered pursuant to subheading (x) above), on the basis of the foregoing (relying as to materiality to a large extent upon the opinions of officers, counsel and other representatives of the Company), no facts have come to the attention of such counsel which lead such counsel to believe that either the Registration Statement (as of its effective date) or the Prospectus (as of the date of this Agreement), and any subsequent amendments or supplements thereto, as of their respective dates, and as of the Closing Date, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make such statements therein not misleading (it being understood that such counsel need make no comment with respect to the financial statements and other financial and statistical data included in the Registration Statement or Prospectus or incorporated therein or as to the Statement of Eligibility and Qualification on Form T-l of the Trustee under the Indenture). 16 (g) You shall have received a certificate of the Chairman of the Board, President or any Vice President and a principal financial or accounting officer of the Company, dated the Closing Date, in which such officers shall state, to the best of their knowledge after reasonable investigation, and relying on opinions of counsel to the extent that legal matters are involved, that the representations and warranties of the Company in this Agreement are true and correct in all material respects, that the Company has complied with all agreements and satisfied all conditions on its part to be performed or satisfied at or prior to the Closing Date, that no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or are contemplated by the Commission, and that, subsequent to the date of the most recent financial statements set forth or incorporated by reference in the Prospectus, there has been no material adverse change in the financial position or in the financial results of operation of the Company except as set forth or contemplated in the Prospectus. (h) The Company will furnish you with such conformed copies of such opinions, certificates, letters and documents as you reasonably request. In case any such condition shall not have been satisfied, this Agreement may be terminated by you upon notice in writing or by telecopy to the Company without liability or obligation on the part of the Company or any Purchaser, except as set forth in Section 10 hereof. 7. CONDITIONS OF THE OBLIGATIONS OF THE COMPANY. The obligations of the Company to sell and deliver the Purchased Notes are subject to the following conditions precedent: (a) Prior to the Closing Date, no stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose shall have been instituted or, to the knowledge of the Company or you, shall be contemplated by the Commission. (b) There shall not be in effect on the Closing Date any order of the Maryland Public Service Commission or Federal Energy Regulatory Commission which would prevent the issuance, sale and delivery of the Purchased Notes or which contains conditions or provisions with respect thereto which are not acceptable to the Company, it being understood that no order in effect at the date of this Agreement contains any such unacceptable conditions or provisions. If any such condition shall not have been satisfied, then the Company shall be entitled, by notice in writing or by telecopy to you, to terminate this Agreement without any 17 liability on the part of the Company or any Purchaser, except as set forth in Section 10 hereof. 8. INDEMNIFICATION. (a) The Company will indemnify and hold harmless each Purchaser and each person, if any, who controls any Purchaser within the meaning of the Act or Exchange Act against any losses, claims, damages or liabilities, joint or several, to which such Purchaser or such controlling person may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement or the Prospectus (or any amendment or supplement thereto), or any related preliminary prospectus or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; and will reimburse each Purchaser and each such controlling person for any legal or other expenses reasonably incurred by such Purchaser or such controlling person in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the Company will not be liable to such Purchaser or controlling person in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in any such documents in reliance upon and in conformity with written information furnished to the Company by such Purchaser or such controlling person specifically for use therein; and provided, further, that the Company shall not be liable to any Purchaser under the indemnity agreement in this subsection (a) with respect to any preliminary prospectus to the extent that any such loss, claim, damage or liability of such Purchaser results from the fact such Purchaser sold debt securities to a person to whom there was not sent or given, at or prior to the written confirmation of such sale, a copy of the Prospectus (excluding documents incorporated by reference) or of the Prospectus as then amended or supplemented (excluding documents incorporated by reference) in any case where such delivery is required by the Act if the Company has previously furnished copies thereof to such Purchaser and the loss, claim, damage or liability of such Purchaser results from an untrue statement or omission of a material fact contained in the preliminary prospectus which was corrected in the Prospectus (or the Prospectus as amended or supplemented). This indemnity agreement will be in addition to any liability which the Company may otherwise have. (b) Each Purchaser will indemnify and hold harmless the Company, each of its directors and officers and each person, 18 if any, who controls the Company within the meaning of the Act or the Exchange Act, against any losses, claims, damages or liabilities to which the Company or any such director, officer or controlling person may become subject, under the Act, or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement or the Prospectus (or any amendment or supplement thereto), or any related preliminary prospectus or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company by such Purchaser specifically for use therein; and will reimburse any legal or other expenses reasonably incurred by the Company or any such director, officer or controlling person in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred. This indemnity agreement will be in addition to any liability which such Purchaser may otherwise have. (c) Promptly after receipt by an indemnified party under this Section of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under (a) and (b) above, notify the indemnifying party of the commencement thereof; but the omission so to notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party otherwise than under this Section, except to the extent the indemnifying party has been materially prejudiced by such omission. In case any such action is brought against any indemnified party, and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party (who may, with the consent of the indemnified party, be counsel to the indemnifying party) and who shall not be counsel to any other indemnified party who may have interests conflicting with those of such indemnified party, and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party will not be liable to such indemnified party under this Section for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation. 19 (d) If recovery is not available under the foregoing indemnification provisions of this Section, for any reason other than as specified therein, the parties entitled to indemnification by the terms thereof shall be entitled to contribution to liabilities and expenses, except to the extent that contribution is not permitted under Section 11(f) of the Act. In determining the amount of contribution to which the respective parties are entitled, there shall be considered the relative benefits received by each party from the offering of the Purchased Notes (taking into account the portion of the proceeds of the offering realized by each), the parties' relative knowledge and access to information concerning the matter with respect to which the claim was asserted, the opportunity to correct and prevent any statement or omission, and any other equitable considerations appropriate under the circumstances. The Company and the Purchasers and such controlling persons agree that it would not be equitable if the amount of such contribution were determined by pro rata or per capita allocation (even if the Purchasers and such controlling persons were treated as one entity for such purpose). Notwithstanding the provisions of this subsection (d), no Purchaser or controlling person shall be required to make contribution hereunder which in the aggregate exceeds the total public offering price of the Purchased Notes, purchased by the Purchaser under this Agreement, less the aggregate amount of any damages which such Purchaser or such controlling person has otherwise been required to pay in respect of the same claim or any substantially similar claim. The Purchasers' obligations to contribute are several in proportion to their respective underwriting obligations and not joint. 9. DEFAULT OF PURCHASERS. If any Purchaser or Purchasers default in their obligations to purchase Purchased Notes hereunder and the aggregate principal amount of Purchased Notes which such defaulting Purchaser or Purchasers agreed but failed to purchase is 10% of the principal amount of Purchased Notes or less, the non-defaulting Purchasers may make arrangements satisfactory to the Company for the purchase of such Purchased Notes by other persons, including any of the Purchasers, but if no such arrangements are made by the Closing Date the non-defaulting Purchasers shall be obligated severally, in proportion to their respective commitments hereunder, to purchase the Purchased Notes which such defaulting Purchasers agreed but failed to purchase. If any Purchaser or Purchasers so default and the aggregate principal amount of Purchased Notes with respect to which such default or defaults occur is more than the above percentage 20 and arrangements reasonably satisfactory to you and the Company for the purchase of such Purchased Notes by other persons are not made within seventy-two hours after such default, this Agreement will terminate without liability on the part of any non-defaulting Purchaser or the Company, except as provided in Section 10. In the event that any Purchaser or Purchasers default in their obligation to purchase Purchased Notes hereunder, the Company may, by prompt written notice to the non-defaulting Purchasers, postpone the Closing Date for a period of not more than seven full business days in order to effect whatever changes may thereby be made necessary in the Registration Statement or the Prospectus or in any other documents, and the Company will promptly file any amendments to the Registration Statement or supplements to the Prospectus which may thereby be made necessary. As used in this Agreement, the term "Purchaser" includes any person substituted for a Purchaser under this Section. Nothing herein will relieve a defaulting Purchaser from liability for its default. 10. SURVIVAL OF CERTAIN REPRESENTATIONS AND OBLIGATIONS. The respective indemnities, agreements, representations, warranties, and other statements of the Company or its officers and of the several Purchasers set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation, or statement as to the results thereof, made by or on behalf of any Purchaser or the Company or any of its officers or directors or any controlling person, and will survive delivery of and payment for the Purchased Notes. If this Agreement is terminated pursuant to Section 6, 7 or 9 or if for any reason the purchase of the Purchased Notes by the Purchasers is not consummated, the Company shall remain responsible for the expenses to be paid or reimbursed by it pursuant to Section 5(g). In addition, in such event the respective obligations of the Company and the Purchasers pursuant to Section 8 shall remain in effect; provided, however, that each Purchaser will use its best efforts to promptly notify each other Purchaser and each dealer and prospective customer to whom such Purchaser has delivered a Prospectus for the Purchased Notes by telephone or telegraph, confirmed by letter in either case, of such termination or failure to consummate, including in such notice instructions regarding the continued use of the Registration Statement, the Prospectus, or any amendment or supplement thereto, or any related preliminary prospectus. 11. NOTICES. All communications hereunder will be in writing, and, if sent to the Purchasers will be delivered or telecopied and confirmed to the address furnished in writing for the purpose of such communications hereunder, or, if sent to the Company, will be delivered or telecopied and confirmed to it, attention of Treasurer at 750 E. Pratt Street, 17th Floor, Baltimore, Maryland 21202, telecopier (410) 783-3619. 21 12. SUCCESSORS. This Purchase Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the officers and directors and controlling persons referred to in Section 8, and no other person will have any right or obligation hereunder. 13. CONSTRUCTION. This Purchase Agreement shall be governed by and construed in accordance with the laws of the State of Maryland. 14. COUNTERPARTS. This Agreement may be executed in one or more counterparts and it is not necessary that the signatures of all parties appear on the same counterpart, but such counterparts together shall constitute but one and the same agreement. 22 EX-1.B 4 a2097345zex-1_b.txt EXHIBIT 1(B) Exhibit 1(b) UNSECURED DEBT SECURITIES DUE FROM NINE MONTHS TO THIRTY YEARS FROM DATE OF ISSUE FORM OF INTEREST CALCULATION AGENCY AGREEMENT THIS AGREEMENT dated as of _____, 2002 between Baltimore Gas and Electric Company (hereinafter called the "Issuer"), having its principal office at 750 E. Pratt Street, 17th Floor, Baltimore, Maryland 21202, and The Bank of New York, a New York banking corporation (hereinafter sometimes called the "Calculation Agent or Paying Agent" which terms shall, unless the context shall otherwise require, include its successors and assigns), having its principal corporate trust office at 5 Penn Plaza, 13th Floor, New York NY 10001, Attn: Corporate Trust Administration. RECITALS OF THE ISSUER The Issuer proposes to issue from time to time up to $_____________ aggregate principal amount of Unsecured Debt Securities (the "Debt Securities") under an indenture dated as of July 1, 1985 , between the Issuer and The Bank of New York, successor to Mercantile-Safe Deposit and Trust Company,(the "Trustee"), as Trustee as supplemented by the Supplemental Indenture dated as of October 4, 1987 and January 26, 1993 (the "Indenture"). Capitalized terms used in this Agreement and not otherwise defined herein are used as defined in the Indenture. Certain of the Debt Securities may bear interest at a floating rate determined by reference to an interest rate formula (the "Floating Rate Debt Securities") and the Issuer desires to engage the Calculation Agent to perform certain services in connection therewith. NOW IT IS HEREBY AGREED THAT: 1. The Issuer hereby appoints The Bank of New York as Calculation Agent for the Floating Rate Debt Securities, upon the terms and subject to the conditions herein mentioned, and The Bank of New York hereby accepts such appointment. The Calculation Agent shall act as an agent of the Issuer for the purpose of determining the interest rate or rates of the Floating Rate Debt Securities. 2. The Issuer agrees to deliver to the Calculation Agent, prior to the issuance of any Floating Rate Debt Securities, copies of the proposed forms of such Debt Securities, including copies of all terms and conditions relating to the determination of the interest rate thereunder. The Issuer shall not issue any Floating Rate Note prior to the receipt of confirmation from the Calculation Agent of its acceptance of the proposed form of such Note. The Calculation Agent hereby 2 acknowledges its acceptance of the proposed form of Floating Rate Note previously delivered to it. 3. The Issuer shall notify the Calculation Agent of the issuance of any Floating Rate Debt Securities prior to the issuance thereof and, at the time of such issuance, shall deliver to the Calculation Agent the information required to be provided by the Company for the calculation of the applicable interest rates thereunder. The Calculation Agent shall calculate the applicable interest rates for Floating Rate Debt Securities in accordance with the terms of such Debt Securities, the Indenture and the provisions of this Agreement. 4. Promptly following the determination of each change to the interest rate applicable to any Floating Rate Note, the Calculation Agent will cause to be forwarded to the Issuer, the Trustee and the principal Paying Agent information regarding the interest rate then in effect for such Floating Rate Note. 5. The Issuer will pay such compensation as shall be agreed upon with the Calculation Agent and the expenses, including reasonable counsel fees and expenses, incurred by the Calculation Agent in connection with its duties hereunder, upon receipt of such invoices as the Issuer shall reasonably require. 6. Notwithstanding any satisfaction or discharge of the Debt Securities or the Indenture, the Issuer will indemnify 3 the Calculation Agent against any losses, liabilities, costs, claims, actions or demands which it may incur or sustain or which may be made against it in connection with its appointment or the exercise of its powers and duties hereunder as well as the reasonable costs, including the expenses and fees of counsel in defending any claim, action or demand, except such as may result from the negligence or willful misconduct of the Calculation Agent or any of its employees. The Calculation Agent shall incur no liability and shall be indemnified and held harmless by the Issuer for, or in respect of, any actions taken or suffered to be taken in good faith by the Calculation Agent in reliance upon written instructions from the Issuer. In case any action is brought against the Calculation Agent with respect to which the Calculation Agent intends to seek indemnification from the Issuer pursuant to this paragraph 6, the Calculation Agent will notify the Issuer in writing of the commencement thereof, and the Issuer will be entitled to participate therein and to assume the defense thereof, with counsel satisfactory to the Calculation Agent; PROVIDED, HOWEVER, that if the defendants in any such action include both the Issuer and the Calculation Agent and the Calculation Agent shall have reasonably concluded, after consultation with legal counsel of its choosing, that there may be legal defenses available to it which are different from or additional to those available to the Issuer, the Calculation Agent shall have the right to select separate counsel to assert such legal defenses and otherwise to participate in the defense of such action on behalf of the Calculation Agent, and in such 4 event the Issuer will indemnify the Calculation Agent against the reasonable compensation and expenses and disbursements of such separate counsel. 7. The Calculation Agent may consult with counsel of its own selection (and notify the Issuer of such consultation) and the advice of such counsel or any opinion of counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon. 8. The Calculation Agent accepts its obligations herein set forth upon the terms and conditions hereof, including the following, to all of which the Issuer agrees: (i) in acting under this Agreement and in connection with the Debt Securities, the Calculation Agent, acting as agent for the Issuer, does not assume any obligation towards, or any relationship of agency or trust for or with, any of the holders of the Debt Securities; (ii) unless herein otherwise specifically provided, any order, certificate, notice, request or communication from the Issuer made or given under any provision of this Agreement shall be sufficient if signed by any person whom the Calculation Agent reasonably believes to be a duly authorized officer or attorney-in-fact of the Issuer; 5 (iii) the Calculation Agent shall be obligated to perform only such duties as are set forth specifically herein and any duties necessarily incidental thereto; (iv) the Calculation Agent shall be protected and shall incur no liability for or in respect of any action taken or omitted to be taken or anything suffered in good faith by it in reliance upon anything contained in a Floating Rate Note, the Indenture or any information supplied to it by the Issuer pursuant to this Agreement, including the information to be supplied pursuant to paragraph 3 above; (v) the Calculation Agent, whether acting for itself or in any other capacity, may become the owner or pledgee of Debt Securities with the same rights as it would have had if it were not acting hereunder as Calculation Agent; and (vi) the Calculation Agent shall incur no liability hereunder except for loss sustained by reason of its negligence or willful misconduct or bad faith. 9. (a) The Issuer agrees to notify the Calculation Agent at least 3 business days prior to the issuance of any Floating Rate Note with an interest rate to be determined by reference to London interbank offered rates (LIBOR) or any other formula that would require the Calculation Agent to select banks or other financial institutions (the "Reference Banks") for purposes of quoting rates. The Calculation Agent shall not be 6 responsible to the Issuer or any third party for any failure of the Reference Banks to fulfill their duties or meet their obligations as Reference Banks or as a result of the Calculation Agent having acted (except in the event of negligence or willful misconduct) on any quotation or other information given by any Reference Bank which subsequently may be found to be incorrect. (b) Except as provided below, the Calculation Agent may at any time resign as Calculation Agent by giving written notice to the Issuer and the Trustee of such intention on its part, specifying the date on which its desired resignation shall become effective, provided that such notice shall be given not less than 60 days prior to the said effective date unless the Issuer and the Trustee otherwise agree in writing. Except as provided below, the Calculation Agent may be removed by the filing with it and the Trustee of an instrument in writing signed by the Issuer specifying such removal and the date when it shall become effective (such effective date being at least 15 days after said filing). Any such resignation or removal shall take effect upon: (i) the appointment by the Issuer as hereinafter provided of a successor Calculation Agent; and (ii) the acceptance of such appointment by such successor Calculation Agent; PROVIDED, HOWEVER, that in the event the Calculation Agent has given not less than 60 days' prior notice of its desired resignation, and during such 60 days there has not been acceptance by a successor Calculation Agent of its appointment as 7 successor Calculation Agent (which successor shall be reasonably satisfactory to the Trustee and shall not be an Affiliate (as such term is defined in Rule 12b-2 of the rules and regulations promulgated under the Exchange Act of 1934) of the Issuer), the Calculation Agent so resigning may petition any court of competent jurisdiction for the appointment of a successor Calculation Agent. The Issuer covenants that it shall appoint a successor Calculation Agent as soon as practicable after receipt of any notice of resignation hereunder. Upon its resignation or removal becoming effective, the retiring Calculation Agent shall be entitled to the payment of its compensation and the reimbursement of all reasonable expenses (including reasonable counsel fees and expenses) incurred by such retiring Calculation Agent pursuant to paragraph 5 hereof. (c) If at any time the Calculation Agent shall resign or be removed, or shall become incapable of acting or shall be adjudged bankrupt or insolvent, or liquidated or dissolved, or an order is made or an effective resolution is passed to wind up the Calculation Agent, or if the Calculation Agent shall file a voluntary petition in bankruptcy or make an assignment for the benefit of its creditors, or shall consent to the appointment of a receiver, administrator or other similar official of all or any substantial part of its property, or shall admit in writing its inability to pay or meet its debts as they mature, or if a receiver, administrator or other similar official of the Calculation Agent or of all or any substantial part of its property shall be appointed, or if any order of any court shall 8 be entered approving any petition filed by or against the Calculation Agent under the provisions of any applicable bankruptcy or insolvency law, or if any public officer shall take charge or control of the Calculation Agent or its property or affairs for the purpose of rehabilitation, conservation or liquidation, then a successor Calculation Agent shall be appointed by the Issuer by an instrument in writing filed with the successor Calculation Agent and the Trustee. Upon the appointment as aforesaid of a successor Calculation Agent and acceptance by the latter of such appointment the former Calculation Agent shall cease to be Calculation Agent hereunder. (d) Any successor Calculation Agent appointed hereunder shall execute and deliver to its predecessor, the Issuer and the Trustee and instrument accepting such appointment hereunder, and thereupon such successor Calculation Agent, without any further act, deed or conveyance, shall become vested with all the authority, rights, powers, immunities, duties and obligations of such predecessor with like effect as if originally named as the Calculation Agent hereunder, and such predecessor, upon payment of its reasonable compensation, charges and disbursements then unpaid, shall thereupon become obliged to transfer and deliver, and such successor Calculation Agent shall be entitled to receive, copies of any relevant records maintained by such predecessor Calculation Agent. (e) Any corporation into which the Calculation Agent may be merged or converted or any corporation with which the Calculation Agent may be consolidated or any corporation 9 resulting from any merger, conversion or consolidation to which the Calculation Agent shall be a party shall, to the extent permitted by applicable law, be the successor Calculation Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto. Notice of any such merger, conversion or consolidation shall forthwith be given to the Issuer and the Trustee. (f) The provisions of paragraph 6 hereof shall survive any resignation or removal hereunder. 10. Any notice required to be given hereunder shall be delivered in person, by overnight mail or sent by facsimile or communicated by telephone (subject, in the case of communication by telephone, to confirmation dispatched within two business days by letter or facsimile), in the case of the Issuer, to it at the address set forth in the heading of this Agreement, Attention: Treasurer; in the case of the Trustee or the Calculation Agent, to it at the address set forth in the heading of this Agreement; or, in any case, to any other address of which the party receiving notice shall have notified the party giving such notice in writing. 11. This Agreement may be amended only by a writing duly executed and delivered by each of the parties signing below. 10 12. The provisions of this Agreement shall be governed by, and construed in accordance with, the laws of the State of New York. 13. This Agreement may be executed in counterparts and the executed counterparts shall together constitute a single instrument. IN WITNESS WHEREOF, this Agreement has been executed and delivered as of the day and year first above written. BALTIMORE GAS AND ELECTRIC COMPANY By: --------------------------------------- Title: ------------------------------------ THE BANK OF NEW YORK By: --------------------------------------- Title: ------------------------------------ 11 EX-4.A 5 a2097345zex-4_a.txt EXHIBIT 4(A) EXHIBIT 4(a) ================================================================================ BALTIMORE GAS AND ELECTRIC COMPANY AND MERCANTILE-SAFE DEPOSIT AND TRUST COMPANY TRUSTEE ---------- INDENTURE DATED AS OF JULY 1, 1985 ---------- ================================================================================ i TABLE OF CONTENTS*
PAGE ---- PARTIES........................................................................ 1 RECITALS....................................................................... 1 Purpose of Indenture......................................................... 1 Compliance with Legal Requirements........................................... 1 ARTICLE ONE DEFINITIONS SECTION 1.01. Definitions..................................................... 1 Board of Directors.............................................. 2 Board Resolution................................................ 2 Business Day.................................................... 2 Corporation..................................................... 2 Discounted Security............................................. 2 Event of Default................................................ 2 Federal Bankruptcy Code......................................... 2 Indenture....................................................... 3 Officers' Certificate........................................... 3 Opinion of Counsel.............................................. 3 Outstanding..................................................... 3 Principal Office of the Trustee................................. 4 Prospectus Supplement........................................... 4 Responsible Officer............................................. 4 Security or Securities.......................................... 4 Securityholder.................................................. 4 Series.......................................................... 4 Trustee......................................................... 4 Trust Indenture Act of 1939..................................... 5 Yield to Maturity............................................... 5 ARTICLE TWO THE SECURITIES SECTION 2.01. Forms of Securities............................................. 5 SECTION 2.02. Form of Trustee's Certificate of Authentication................. 6
- ---------- * This table of contents shall not, for any purpose, be deemed to be a part of the Indenture. ii
PAGE ---- ARTICLE THREE ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF SECURITIES SECTION 3.01. Title, Amount and Terms of Securities........................... 6 SECTION 3.02. Denominations, Dates, Interest Payment and Record Dates, and Place of Payment................................... 7 SECTION 3.03. Execution of Securities......................................... 8 SECTION 3.04. Exchange and Registration of Transfer of Securities............. 9 SECTION 3.05. Mutilated, Destroyed, Lost or Stolen Securities................. 10 SECTION 3.06. Temporary Securities............................................ 11 SECTION 3.07. Cancellation of Securities Paid, etc............................ 11 ARTICLE FOUR REDEMPTION OF SECURITIES SECTION 4.01. Applicability of This Article................................... 12 SECTION 4.02. Election to Redeem; Notice to Trustee........................... 12 SECTION 4.03. Selection of Securities to be Redeemed.......................... 12 SECTION 4.04. Notice of Redemption............................................ 12 SECTION 4.05. Deposit of Redemption Price..................................... 13 SECTION 4.06. Payment of Securities Called for Redemption..................... 13 ARTICLE FIVE PARTICULAR COVENANTS OF THE CORPORATION SECTION 5.01. To Pay Principal (and Premium, if any) and Interest............. 14 SECTION 5.02. To Maintain Office or Agency.................................... 14 SECTION 5.03. To Fill a Vacancy in the Office of Trustee...................... 15 SECTION 5.04. Appointment of Paying Agents; Money for Security Payments to Be Set Aside in Trust; Transfer of Moneys Held by Paying Agents................................................. 15 SECTION 5.05. Maintenance of Corporate Existence, Rights and Franchises....... 16 SECTION 5.06. Certificate as to No Default.................................... 16 ARTICLE SIX SECURITYHOLDERS LISTS AND REPORTS BY THE CORPORATION AND THE TRUSTEE SECTION 6.01. Securityholders Lists........................................... 16 SECTION 6.02. Preservation and Disclosure of Lists............................ 17 SECTION 6.03. Reports by the Corporation...................................... 18 SECTION 6.04. Reports by the Trustee.......................................... 19
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PAGE ---- ARTICLE SEVEN EVENTS OF DEFAULT: REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS SECTION 7.01. Events of Default; Remedies..................................... 20 SECTION 7.02. Payment of Securities on Default; Suit Therefor................. 22 SECTION 7.03. Application of Moneys Collected by Trustee...................... 24 SECTION 7.04. Proceedings by Securityholders.................................. 25 SECTION 7.05. Proceedings by Trustee.......................................... 25 SECTION 7.06. Remedies Cumulative and Continuing.............................. 26 SECTION 7.07. Direction of Proceedings and Waiver of Defaults by Majority of Securityholders................................... 26 SECTION 7.08. Notice of Defaults.............................................. 27 SECTION 7.09. Undertaking to Pay Costs........................................ 27 ARTICLE EIGHT CONCERNING THE TRUSTEE SECTION 8.01. Duties and Responsibilities of Trustee.......................... 27 SECTION 8.02. Reliance on Documents, Opinions, etc............................ 29 SECTION 8.03. No Responsibility for Recitals, etc............................. 30 SECTION 8.04. Trustee, Paying Agent or Registrar May Own Securities........... 30 SECTION 8.05. Moneys to Be Held in Trust...................................... 30 SECTION 8.06. Compensation and Expenses of Trustee............................ 30 SECTION 8.07. Officers' Certificate as Evidence............................... 31 SECTION 8.08. Conflicting Interest of Trustee................................. 31 SECTION 8.09. Eligibility of Trustee.......................................... 37 SECTION 8.10. Resignation or Removal of Trustee............................... 37 SECTION 8.11. Acceptance by Successor Trustee................................. 38 SECTION 8.12. Succession by Merger, etc....................................... 40 SECTION 8.13. Limitation on Rights of Trustee as a Creditor................... 40 ARTICLE NINE CONCERNING THE SECURITYHOLDERS SECTION 9.01. Action by Securityholders....................................... 44 SECTION 9.02. Proof of Execution by Securityholders........................... 44 SECTION 9.03. Who Are Deemed Absolute Owners.................................. 45 SECTION 9.04. Corporation-Owned Securities Disregarded........................ 45 SECTION 9.05. Revocation of Consents; Future Holders Bound.................... 45
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PAGE ---- ARTICLE TEN SECURITYHOLDERS' MEETINGS SECTION 10.01. Purposes of Meetings............................................ 46 SECTION 10.02. Call of Meetings by Trustee..................................... 46 SECTION 10.03. Call of Meetings by Corporation or Securityholders ............. 46 SECTION 10.04. Qualifications for Voting....................................... 47 SECTION 10.05. Regulations..................................................... 47 SECTION 10.06. Voting.......................................................... 48 SECTION 10.07. Written Consent in Lieu of Meeting.............................. 48 ARTICLE ELEVEN SUPPLEMENTAL INDENTURES SECTION 11.01. Supplemental Indentures Without Consent of Securityholders...... 48 SECTION 11.02. Supplemental Indentures with Consent of Securityholders......... 50 SECTION 11.03. Compliance with Trust Indenture Act; Effect of Supplemental Indenture..................................................... 51 SECTION 11.04. Notation on Securities.......................................... 51 SECTION 11.05. Evidence of Compliance of Supplemental Indenture to Be Furnished Trustee.......................................... 51 ARTICLE TWELVE CONSOLIDATION, MERGER AND SALE SECTION 12.01. Corporation May Consolidate, etc., on Certain Terms............. 51 SECTION 12.02. Successor Corporation to Be Substituted......................... 52 SECTION 12.03. Opinion of Counsel to Be Given Trustee.......................... 52 ARTICLE THIRTEEN SATISFACTION AND DISCHARGE OF INDENTURE SECTION 13.01. Discharge of Indenture.......................................... 53 SECTION 13.02. Deposited Moneys to Be Held in Trust by Trustee................. 53 SECTION 13.03. Paying Agent to Repay Moneys Held............................... 53 SECTION 13.04. Return of Unclaimed Moneys...................................... 54
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PAGE ---- ARTICLE FOURTEEN IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS SECTION 14.01. Indenture and Securities Solely Corporate Obligations........... 54 ARTICLE FIFTEEN SINKING FUNDS SECTION 15.01. General......................................................... 54 SECTION 15.02. Satisfaction of Sinking Fund Payments with Securities........... 55 SECTION 15.03. Redemption of Securities for Sinking Fund....................... 55 ARTICLE SIXTEEN MISCELLANEOUS PROVISIONS SECTION 16.01. Provisions Binding on Corporation's Successors.................. 55 SECTION 16.02. Official Acts by Successor Corporation.......................... 55 SECTION 16.03. Addresses for Notices, etc...................................... 56 SECTION 16.04. Maryland Contract............................................... 56 SECTION 16.05. Evidence of Compliance with Conditions Precedent................ 56 SECTION 16.06. Legal Holidays.................................................. 56 SECTION 16.07. Trust Indenture Act to Control.................................. 57 SECTION 16.08. Table of Contents, Headings, etc................................ 57 SECTION 16.09. Execution in Counterparts....................................... 57 TESTIMONIUM.................................................................... 58 SIGNATURES AND SEALS........................................................... 58 ACKNOWLEDGMENTS................................................................ 59
THIS INDENTURE, dated as of July 1, 1985, between BALTIMORE GAS AND ELECTRIC COMPANY, a corporation duly organized and existing under the laws of the State of Maryland (hereinafter sometimes called the "Corporation"), and MERCANTILE-SAFE DEPOSIT AND TRUST COMPANY, as Trustee, a corporation duly organized and existing under the laws of the State of Maryland (hereinafter sometimes called the "Trustee") WITNESSETH: WHEREAS, for its lawful corporate purposes, the Corporation has duly authorized the issue of its unsecured debt securities from time to time in series (all such series of debt securities are herein collectively called the "Securities"), unlimited as to principal amount and, to provide the terms and conditions upon which the Securities are to be authenticated, issued and delivered, the Corporation has duly authorized the execution and delivery of this Indenture; and WHEREAS, all acts and things necessary to constitute these presents a valid agreement according to its terms have been done and performed, and the execution and delivery of this Indenture have in all respects been duly authorized, and the Corporation proposes to do all acts and things necessary to make the Securities, when executed by the Corporation and authenticated and delivered by the Trustee, as in this Indenture provided, and issued, the valid, binding and legal obligations of the Corporation; NOW, THEREFORE, THIS INDENTURE WITNESSETH: That in order to declare the terms and conditions upon which the Securities are, and are to be, authenticated, issued and delivered, and in consideration of the premises and of the purchase and acceptance of the Securities by the holders thereof, the Corporation covenants and agrees with the Trustee for the equal and proportionate benefit, except as otherwise expressly provided in this Indenture, of the respective holders from time to time of the Securities as follows: ARTICLE ONE DEFINITIONS SECTION 1.01. DEFINITIONS. The terms defined in this Section 1.01 (except as herein otherwise expressly provided or unless the context otherwise requires) for all purposes of this Indenture and of any indenture supplemental hereto shall have the respective meanings specified in this Section 1.01. All other terms used in this Indenture which are defined in the Trust Indenture Act of 1939 or which are by reference therein defined in the Securities Act of 1933, as amended (except as herein otherwise expressly provided or unless the context otherwise requires), shall have the meanings assigned to such terms in said Trust Indenture Act and in said Securities Act as in force at the date of this Indenture as originally executed. 2 BOARD OF DIRECTORS: The term "Board of Directors" shall mean the Board of Directors of the Corporation or any duly authorized committee of such Board of Directors or any directors or officers of the Corporation to whom such Board of Directors or such committee shall have duly delegated its authority to act hereunder. BOARD RESOLUTION: The term "Board Resolution" shall mean a resolution of the Board of Directors or of any duly authorized committee of the Board of Directors or the written declaration of any director or officer of the Corporation to whom the Board of Directors or such committee shall have duly delegated its authority to act with respect to the matter covered by such declaration, a copy of which has been certified by the Secretary or an Assistant Secretary of the Corporation to have been duly adopted by the Board of Directors, such committee, or such director or officer, as the case may be, and to be in full force and effect on the date of such certification, which certification shall, in the case of any action taken by any such duly authorized committee, director or officer, include a copy of the resolution or resolutions of the Board of Directors, and/or committee thereof, establishing the authority of the committee, director or officer with respect to the action taken. BUSINESS DAY: The term "business day" shall mean any day which is not a Saturday or Sunday or a day on which banking institutions in the City of New York or the City of Baltimore are authorized or required by law or executive order to be closed. CORPORATION: The term "Corporation" shall mean BALTIMORE GAS AND ELECTRIC COMPANY, a Maryland corporation, and subject to the provisions of Article Twelve shall include its successors and assigns. DISCOUNTED SECURITY: The term "Discounted Security" shall mean any Security which provides for an amount (excluding any amounts attributable to accrued but unpaid interest thereon) less than the principal amount thereof to be due and payable upon a declaration of acceleration of the maturity thereof pursuant to Section 7.01. EVENT OF DEFAULT: The term "Event of Default" shall mean any event specified in Section 7.01. continued for the period of time, if any, and after the giving of the notice, if any, therein designated. FEDERAL BANKRUPTCY CODE: The term "Federal Bankruptcy Code" shall mean Title 11 of the United States Code. 3 INDENTURE: The term "Indenture" shall mean this instrument as originally executed or, if amended or supplemented, as so amended or supplemented, and shall include the form of each particular series of Securities established as provided in Section 2.01. OFFICERS' CERTIFICATE: The term "Officers' Certificate", when used with respect to the Corporation, shall mean a certificate signed by the Chairman of the Board, the President or a Vice President of the Corporation and the Secretary, an Assistant Secretary, the Treasurer or an Assistant Treasurer of the Corporation. Each such certificate shall include the statements provided for in Section 16.05 if and to the extent required by the provisions of such Section. OPINION OF COUNSEL: The term "Opinion of Counsel" shall mean an opinion in writing signed by legal counsel who may be an employee of the Corporation or other counsel satisfactory to the Trustee. Each such opinion shall include the statements provided for in Section 16.05 if and to the extent required by the provisions of such Section. OUTSTANDING: The term "outstanding", when used with reference to Securities, shall, subject to the provisions of Section 9.04. mean, as of any particular time, all Securities authenticated and delivered by the Trustee under this Indenture, except: (a) Securities theretofore cancelled by the Trustee or delivered to the Trustee for cancellation; (b) Securities or portions thereof, for the payment of which moneys in the necessary amount shall have been deposited in trust with the Trustee or with any paying agent (other than the Corporation) or shall have been set aside and segregated in trust by the Corporation (if the Corporation shall act as its own paying agent); and (c) Securities in lieu of or in substitution for which other Securities shall have been authenticated and delivered pursuant to the terms of Section 3.05, or which shall have been paid, unless proof satisfactory to the Trustee is presented that any such Securities are held by any person in whose hands any of such Securities is a legal, valid and binding obligation of the Corporation. In determining whether the holders of the requisite principal amount of outstanding Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder, the principal amount of a Discounted Secu- 4 rity shall be the amount of the principal thereof that would be due and payable as of the date of such determination upon a declaration of acceleration of the maturity thereof pursuant to Section 7.01. PRINCIPAL OFFICE OF THE TRUSTEE: The terms "Principal Office of the Trustee" or any other similar term shall mean the principal office of the Trustee at which at any particular time its corporate trust business shall be administered, which office at the date of the execution of this Indenture is located at 2 Hopkins Plaza, Baltimore, Maryland 21201. PROSPECTUS: The term "Prospectus" shall mean a prospectus, filed by the Corporation with the Securities and Exchange Commission pursuant to Rule 424(b) or (c) promulgated under the Securities Act of 1933, as amended, which sets forth the terms of the Securities described therein. RESPONSIBLE OFFICER: The term "Responsible Officer", when used with respect to the Trustee, shall mean the chairman of the board of directors, the president, the secretary, and the treasurer, or any other officer of the Trustee in its corporate trust department. SECURITY OR SECURITIES: The term "Security" or "Securities" shall mean any debt security or debt securities, as the case may be, authenticated and delivered under this Indenture. SECURITYHOLDER: The term "Securityholder" or "holder of Securities" or other similar terms, shall mean any person in whose name at the time a particular Security is registered on the books of the Corporation kept for that purpose in accordance with the terms hereof. SERIES: The term "series" when used with respect to the Securities shall mean all Securities described in a Board Resolution as being part of any particular series. TRUSTEE: The term "Trustee" shall mean MERCANTILE-SAFE DEPOSIT AND TRUST COMPANY until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Trustee" shall mean or include each Trustee which is then a Trustee hereunder, and if at any time there is more than one such Trustee. "Trustee" as used with respect to the Securities of any series shall mean the Trustee with respect to Securities of that series. 5 TRUST INDENTURE ACT OF 1939: The term "Trust Indenture Act of 1939" shall mean the Trust Indenture Act of 1939 as it was in force at the date of execution of this Indenture, except as provided in Section 11.03. YIELD TO MATURITY: The term "Yield to Maturity", when used with respect to any Discounted Security shall mean the yield to maturity, if any, set forth in the Prospectus relating thereto, which shall be equal to the yield to maturity, if any, set forth on the face of such Security. ARTICLE TWO THE SECURITIES SECTION 2.01. FORMS OF SECURITIES. The Securities shall be in such form or forms as shall be established by or pursuant to a Board Resolution, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture or any indenture supplemental hereto and may have such letters, numbers or other marks of identification and such legends or endorsements imprinted thereon as the officers executing the same may approve (execution thereof to be conclusive evidence of such approval). Prior to the delivery of a Security in any such form to the Trustee for authentication, the Corporation shall deliver to the Trustee the following: (1) a written order of the Corporation requesting the Trustee's authentication and delivery of the securities; (2) the Board Resolution by or pursuant to which such form of Security has been approved, and, if a form of security is to be approved by officer action pursuant to a Board Resolution, an Officers' Certificate describing the action taken; (3) an Officers' Certificate dated the date such certificate is delivered to the Trustee, stating that all conditions precedent provided for in this Indenture relating to the authentication and delivery of Securities in such form have been complied with; and (4) an Opinion of Counsel stating that Securities in such form when completed by appropriate insertions and executed and delivered by the Corporation to the Trustee for authentication in accordance with this Indenture, authenticated and delivered by the Trustee in accordance with this Indenture within the authorization as to aggregate principal amount established from time to time by the Board of Directors, and sold in the manner 6 specified in such Opinion of Counsel, will be the legal, valid and binding obligations of the Corporation entitled to the benefits of this Indenture, subject to applicable bankruptcy, reorganization, insolvency and other similar laws generally affecting creditors' rights, to general equitable principles and to such other qualifications as such counsel shall conclude do not materially affect the rights of holders of such Securities. The definitive Securities shall be printed, lithographed or engraved or produced by any combination of these methods or otherwise in any manner as determined by the officers executing the same (execution thereof to be conclusive evidence of such approval). SECTION 2.02. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION. This is one of the Securities of the series designated herein issued under the Indenture described herein. MERCANTILE-SAFE DEPOSIT AND TRUST COMPANY, as Trustee By --------------------------------------- Authorized Signator ARTICLE THREE ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF SECURITIES SECTION 3.01. TITLE, AMOUNT AND TERMS OF SECURITIES. The aggregate principal amount of Securities which may be authenticated and delivered and Outstanding under this Indenture is not limited. The Securities may be issued in an aggregate principal amount up to the aggregate principal amount of Securities from time to time authorized by or pursuant to a Board Resolution. The Securities may be issued in one or more series, the terms of each of which shall be determined in or pursuant to a Board Resolution. With respect to each series of Securities, the following terms shall be specified in the Board Resolution relating thereto, or in an Officers' Certificate detailing any actions taken pursuant to the Board Resolutions relating thereto: (1) the title of the Securities of that series (which shall distinguish the Securities of that series from Securities of all other series); 7 (2) any limit upon the aggregate principal amount of the Securities of that series which may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of that series pursuant to Section 3.04, 3.05, 3.06, 4.06 or 11.04); (3) the date or dates on which the principal of the Securities of that series is payable; (4) the rate or rates, or the method to be used in establishing the rate or rates, at which the Securities of that series shall bear interest (if any), the date or dates from which such interest shall accrue, the interest payment dates on which such interest shall be payable, the record date for the interest payable on any interest payment date and any other terms of payment of interest on the Securities of that series; (5) if other than as provided in this Indenture, the place or places where the principal of (and premium, if any) and interest, if any, on Securities of that series shall be payable; (6) the period or periods within which, the price or prices at which and the terms and conditions upon which Securities of that series may be redeemed, in whole or in part, at the option of the Corporation, if such Securities are to be subject to redemption; (7) the obligation, if any, of the Corporation to redeem or purchase Securities of that series pursuant to any sinking fund or analogous provisions or at the option of a holder thereof and the period or periods within which, the price or prices at which and the terms and conditions upon which Securities of that series shall be redeemed or purchased, in whole or in part, pursuant to such obligation; (8) if other than denominations of $1,000 and any integral multiple thereof are to be authorized, the denominations in which Securities of that series shall be issuable; (9) if other than the principal amount thereof, the portion of the principal amount of Securities of that series which shall be payable upon a declaration of acceleration of the maturity thereof pursuant to Section 7.01; and (10) any other terms of that series. SECTION 3.02. DENOMINATIONS, DATES, INTEREST PAYMENT AND RECORD DATES, AND PLACE OF PAYMENT. In the absence of any provision to the contrary with respect to the Securities of any particular series, the Securities shall be issuable as registered Securities without coupons in the denominations of $1,000 and any 8 multiple of $1,000. Every Security shall be dated the date of its authentication and shall bear interest, if any, from the date specified in the Board Resolution authorizing the issuance thereof. The person in whose name any Security is registered at the close of business on any record date (as hereinafter in this Section 3.02 defined) with respect to any interest payment date shall be entitled to receive the interest payable on such interest payment date notwithstanding the cancellation of such Security upon any registration of transfer or exchange subsequent to the record date and prior to such interest payment date; PROVIDED, HOWEVER, that if and to the extent the Corporation shall default in the payment of the interest due on such interest payment date, such defaulted interest shall be paid to the persons in whose names outstanding Securities are registered at the close of business on a subsequent record date established by notice given by mail by or on behalf of the Corporation to the holders of Securities not less than 15 days preceding such subsequent record date, such record date to be not less than five days preceding the date of payment of such defaulted interest. As used in this Section 3.02, the term "record date" for the interest payable on any Security on any interest payment date (except a date for payment of defaulted interest) shall mean the date, if any, specified in such Security as the "record date" for the interest payable on such Security on any interest payment date for such Security (except a date for payment of defaulted interest on such Security). In the absence of any provision to the contrary with respect to the Securities of any particular series, payment of principal of (and premium, if any) and interest, if any, on the Securities of all series shall be made at the Principal Office of the Trustee, or at any agency to be maintained by the Corporation for such purpose; provided, however, that payments of installments of interest, if any, on such Securities may be made at the option of the Corporation by check mailed to the addresses of the persons entitled thereto as such addresses appear in the Security register provided for in Section 3.04. SECTION 3.03. EXECUTION OF SECURITIES. The Securities shall be signed in facsimile in the name and on behalf of the Corporation by the President or any Vice President of the Corporation, under its corporate seal (which may be printed, engraved or otherwise reproduced thereon, by facsimile or otherwise), attested by its Secretary or an Assistant Secretary. Only such Securities as shall bear thereon a certificate of authentication substantially in the form set forth in Section 2.02, executed by the Trustee, shall be entitled to the benefits of this Indenture or be valid or obligatory for any purpose. Such certificate by the Trustee upon any Security executed by the Corporation shall be conclusive evidence that the Security so authenticated has been duly authenticated and delivered hereunder and that the holder is entitled to the benefits of this Indenture. 9 In case any officer of the Corporation who shall have signed any of the Securities, shall cease to be such officer before the Securities so signed shall have been authenticated and delivered by the Trustee, or disposed of by the Corporation, such Securities nevertheless may be authenticated and delivered or disposed of as though the person who signed such Securities had not ceased to be such officer of the Corporation; and any Security may be signed on behalf of the Corporation by such persons as, at the actual date of the execution of such Security shall be the proper officers of the Corporation, although at the date of the execution of this Indenture any such person was not such an officer. SECTION 3.04. EXCHANGE AND REGISTRATION OF TRANSFER OF SECURITIES. Securities of any series may be exchanged for an equal aggregate principal amount of Securities of other authorized denominations of the same series. Securities to be exchanged shall be surrendered at the Principal Office of the Trustee or at any agency to be maintained by the Corporation for such purpose, as provided in Section 5.02, and the Corporation shall execute and register and the Trustee shall authenticate and deliver in exchange therefor the Security or Securities which the Securityholder making the exchange shall be entitled to receive. The Corporation shall keep at the Principal Office of the Trustee a register in which, subject to such reasonable regulations as it may prescribe, the Corporation shall provide for registration of Securities and registration of transfers of Securities as in this Article Three provided. Such register shall be in written form or in any other form capable of being converted into written form within a reasonable time. At all reasonable times such register shall be open for inspection by the Trustee and the Corporation. The Trustee is hereby appointed Security registrar for the purpose of registering Securities and registering the transfers of Securities as herein provided. Upon due presentment for registration of transfer of any Security of a particular series at such office or agency and compliance in full with the conditions of this Section 3.04, the Corporation shall execute, the Security registrar shall register, and the Trustee shall authenticate and deliver in the name of the transferee or transferees a new Security or Securities of the same series for an equal aggregate principal amount. All Securities presented for registration of transfer or for exchange or payment shall (if so required by the Corporation or the Security registrar) be duly endorsed by, or be accompanied by a written instrument or instruments of transfer in form satisfactory to the Corporation and the Security registrar duly executed by the holder or his attorney duly authorized in writing. 10 No service charge shall be made for any exchange or registration of transfer of Securities, but the Corporation may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith. SECTION 3.05. MUTILATED, DESTROYED, LOST OR STOLEN SECURITIES. In case any temporary or definitive Security shall become mutilated or be destroyed, lost or stolen, the Corporation in its discretion may execute, and upon its request the Trustee shall authenticate and deliver, a new Security of the same series, bearing a number not contemporaneously outstanding, in exchange and substitution for the mutilated Security, or in lieu of and in substitution for the Security so destroyed, lost or stolen. In every case the applicant for a substituted Security shall furnish to the Corporation, to the Security registrar, any paying agent and to the Trustee such security or indemnity as may be required by them to save each of them harmless, and, in every case of destruction, loss or theft, the applicant shall also furnish to the Corporation, to the Security registrar, to any paying agent and to the Trustee evidence to their satisfaction of the destruction, loss or theft of such Security and of the ownership thereof. The Trustee may authenticate any substituted Security and deliver the same upon the written request or authorization of any officer of the Corporation. Upon the issuance of any substituted Security, the Corporation may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses, including counsel fees of the Corporation, the Trustee, any paying agent or Security registrar connected therewith. In case any Security which has matured or is about to mature shall become mutilated or be destroyed, lost or stolen, the Corporation may, instead of issuing a substitute Security, pay or authorize the payment of the same (without surrender thereof except in the case of a mutilated Security) if the applicant for such payment shall furnish to the Corporation, to the Security registrar, any paying agent and to the Trustee such security or indemnity as may be required by them to save each of them harmless and, in case of destruction, loss or theft, evidence satisfactory to the Corporation, the Security registrar and the Trustee of the destruction, loss or theft of such Security and of the ownership thereof. Every substituted Security issued pursuant to the provisions of this Section 3.05 by virtue of the fact that any Security is destroyed, lost or stolen shall constitute an additional contractual obligation of the Corporation, whether or not the destroyed, lost or stolen Security shall be enforceable at any time, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities duly issued hereunder. All Securities shall be held and owned upon the express condition that the foregoing provisions are exclusive with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities and shall preclude to the extent permitted by law any and all 11 other rights or remedies notwithstanding any law or statute existing or hereafter enacted to the contrary with respect to the replacement or payment of negotiable instruments or other securities without their surrender. SECTION 3.06. TEMPORARY SECURITIES. Pending the preparation of definitive Securities of any series, the Corporation may execute and the Trustee shall authenticate and deliver temporary Securities (printed or lithographed) of such series. Temporary Securities of any series shall be issuable in any authorized denomination, and substantially in the form of the definitive Securities of such series but with such omissions, insertions and variations as may be appropriate for temporary Securities of such series, all as may be determined by the Corporation. Every such temporary Security shall be authenticated by the Trustee upon the same conditions and in substantially the same manner, and with the same effect, as the definitive Securities of such series. Without unreasonable delay the Corporation will execute and deliver to the Trustee definitive Securities of such series and thereupon any or all temporary Securities of such series may be surrendered in exchange therefor at the Principal Office of the Trustee or at any agency to be maintained by the Corporation for such purpose as provided in Section 5.02, and the Trustee shall authenticate and deliver in exchange for such temporary Securities an equal aggregate principal amount of definitive Securities of such series. Such exchange shall be made by the Corporation at its own expense and without any charge therefor except that the Corporation may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto. Until so exchanged, the temporary Securities of any series shall in all respects be entitled to the same benefits under, and be subject to the terms and conditions of, this Indenture as definitive Securities of the same series authenticated and delivered hereunder. SECTION 3.07. CANCELLATION OF SECURITIES PAID, ETC. All Securities surrendered for the purpose of payment, exchange or registration of transfer shall, if surrendered to the Corporation or any agent for exchange and registration of transfer, be surrendered to the Trustee for cancellation and promptly cancelled by it, or, if surrendered to the Trustee, shall be promptly cancelled by it, and no Securities shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Indenture. The Trustee shall destroy cancelled Securities and deliver a certificate of such destruction to the Corporation. If the Corporation shall acquire any of the Securities, however, such acquisition shall not operate as a satisfaction of the indebtedness represented by such Securities unless and until the same are surrendered to the Trustee for cancellation. 12 ARTICLE FOUR REDEMPTION OF SECURITIES SECTION 4.01. APPLICABILITY OF THIS ARTICLE. Redemption of Securities (whether by operation of a sinking fund or otherwise) as permitted or required by any form of Security issued pursuant to this Indenture shall be made in accordance with such form of Security and this Article; PROVIDED, HOWEVER, that if any provision of any such form of Security shall conflict with any provision of this Article, the provision of such form of Security shall govern. Except as otherwise set forth in the form of Security for such series, each Security shall be subject to partial redemption only in the amount of $1,000 or integral multiples of $1,000. SECTION 4.02. ELECTION TO REDEEM; NOTICE TO TRUSTEE. The election of the Corporation to redeem any Securities shall be evidenced by or pursuant to a Board Resolution. In case of any redemption at the election of the Corporation of less than all of the Securities of any particular series, the Corporation shall at least 60 days prior to the date fixed for redemption (unless a shorter notice shall be satisfactory to the Trustee) notify the Trustee of such date and of the principal amount of Securities of that series to be redeemed. SECTION 4.03. SELECTION OF SECURITIES TO BE REDEEMED. If less than all the Securities of a particular series are to be redeemed, the Trustee shall select, in such manner as in its sole discretion it shall deem appropriate and fair, the Securities or portions thereof of such series to be redeemed. The Trustee shall promptly notify the Corporation in writing of the Securities selected for redemption and, in the case of any Securities selected for partial redemption, the principal amount thereof to be redeemed. For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities shall relate, in the case of any Security redeemed or to be redeemed only in part, to the portion of the principal amount of such Security which has been or is to be redeemed. SECTION 4.04. NOTICE OF REDEMPTION. Notice of redemption shall be given by first-class mail, postage prepaid, mailed not later than the thirtieth day, and not earlier than the sixtieth day, prior to the date fixed for redemption, to each holder of Securities to be redeemed, at his address as it appears on the registry books of the Corporation. With respect to Securities of each series to be redeemed, each notice of redemption shall state: (1) the date fixed for redemption for Securities of such series; 13 (2) the redemption price at which Securities of such series are to be redeemed; (3) if less than all outstanding Securities of such particular series are to be redeemed, the identification (and, in the case of partial redemption, the respective principal amounts) of the particular Securities to be redeemed; (4) that on the date fixed for redemption, the redemption price at which such Securities are to be redeemed will become due and payable upon each such Security or portion thereof, and that interest thereon, if any, shall cease to accrue on and after said date; (5) the place or places where such Securities are to be surrendered for payment of the redemption price at which such Securities are to be redeemed; and (6) that the redemption is for a sinking fund, if such is the case. Notice of redemption of Securities to be redeemed at the election of the Corporation shall be given by the Corporation or, at the Corporation's request, by the Trustee in the name and at the expense of the Corporation. The notice if mailed in the manner herein provided shall be conclusively presumed to have been duly given, whether or not the holder receives such notice. In any case, a failure to give such notice by mail or any defect in the notice to the holder of any Security designated for redemption as a whole or in part shall not affect the validity of the proceedings for the redemption of any other Security. SECTION 4.05. DEPOSIT OF REDEMPTION PRICE. Prior to the redemption date specified in the notice of redemption given as provided in Section 4.04, the Corporation will deposit with the Trustee or with one or more paying agents an amount of money sufficient to redeem on the redemption date all the Securities so called for redemption at the applicable redemption price. SECTION 4.06. PAYMENT OF SECURITIES CALLED FOR REDEMPTION. If any notice of redemption has been given as provided in Section 4.04, the Securities or portions of Securities with respect to which such notice has been given shall become due and payable on the date and at the place or places stated in such notice at the applicable redemption price. On presentation and surrender of such Securities at a place of payment in said notice specified, the said Securities or the specified portions thereof shall be paid and redeemed by the Corporation at the applicable redemption price. Upon presentation of any Security redeemed in part only, the Corporation shall execute and the Trustee shall authenticate and deliver to the holder thereof, at the expense of the Corporation, a new Security or Securities of the 14 same series; of authorized denominations, in aggregate principal amount equal to the unredeemed portion of the Security so presented. ARTICLE FIVE PARTICULAR COVENANTS OF THE CORPORATION SECTION 5.01. TO PAY PRINCIPAL (AND PREMIUM, IF ANY) AND INTEREST. The Corporation will duly and punctually pay, or cause to be paid, the principal of (and premium, if any) and interest, if any, on each and every Security at the times and place and in the manner provided herein and in such Securities. Interest upon Securities shall be payable without presentment of such Securities, and only to or upon the written order of the registered holders thereof determined as provided in Section 3.02. The Corporation shall have the right to require a Securityholder, in connection with the payment of the principal of (and premium, if any) or interest, if any, on a Security, to present at the office or agency of the Corporation at which such payment is made a certificate, in such form as the Corporation may from time to time prescribe, to enable the Corporation to determine its duties and liabilities with respect to any taxes, assessments or governmental charges which it may be required to deduct or withhold therefrom under any present or future law of the United States of America or of any state, county, municipality or taxing or withholding authority therein, and the Corporation shall be entitled to determine its duties and liabilities with respect to such deduction or withholding on the basis of information contained in such certificate or, if no such certificate shall be so presented, on the basis of any presumption created by any such law, and shall be entitled to act in accordance with such determination. SECTION 5.02. TO MAINTAIN OFFICE OR AGENCY. So long as any Securities remain outstanding, the Corporation will maintain an office or agency where the Securities may be presented for payment, where the Securities may be presented for registration of transfer and exchange as in this Indenture provided and where notices or demands to or upon the Corporation in respect of the Securities or of this Indenture may be served. The Corporation hereby initially appoints the Trustee as its agent for all such purposes until otherwise designated by the Corporation in a written notice to the Trustee, the office or agency for all such purposes shall be the Principal Office of the Trustee. In case the Corporation shall at any time designate a different office or agency for such purposes, but shall fail to maintain such office or agency or shall fail to give notice to the Trustee of any change in the location thereof, presentation and demand may be made and notices may be served, in respect of the Securities or of this Indenture at the Principal Office of the Trustee, and the Corporation hereby appoints the Trustee its agent to receive all such presentations, surrenders, notices and demands. 15 In addition to any such office or agency the Corporation may from time to time constitute and appoint one or more paying agents for the payment of such Securities, in one or more other cities, and may from time to time rescind such appointments, as the Corporation may deem desirable or expedient. SECTION 5.03. TO FILL A VACANCY IN THE OFFICE OF TRUSTEE. The Corporation, whenever necessary to avoid or fill a vacancy in the office of Trustee, will appoint, in the manner provided in Article Eight, a Trustee, so that there shall at all times be a Trustee hereunder. SECTION 5.04. APPOINTMENT OF PAYING AGENTS; MONEY FOR SECURITY PAYMENTS TO BE SET ASIDE IN TRUST; TRANSFER OF MONEYS HELD BY PAYING AGENTS. (a) If, as to any series of Securities, the Corporation shall appoint a paying agent other than the Trustee, it will cause such paying agent to execute and deliver to the Trustee an instrument in which such paying agent shall agree with the Trustee, subject to the provisions of this Section 5.04: (1) that it will hold all sums held by it as such paying agent for the payment of the principal of (and premium, if any) or interest, if any, on such Securities in trust for the benefit of the holders of the Securities entitled thereto, or for the benefit of the Trustee, as the case may be, until such sums shall be paid out to such holders or otherwise as herein provided; (2) that it will give the Trustee notice of any failure by the Corporation in the making of any deposit with such paying agent for the payment of principal of (and premium, if any) or interest, if any, on such Securities which shall have become payable and of any default by the Corporation in making any payment of the principal of (and premium, if any) or interest on such Securities when the same shall be due and payable; and (3) that it will at any time during the continuance of any such default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such paying agent. (b) If the Corporation shall act as its own paying agent as to any series of Securities, it will, on or before each due date of the principal of (and premium, if any) or interest, if any, on such Securities, set aside and hold in trust for the benefit of the holders of such Securities entitled thereto a sum sufficient (together with any sums deposited with any other paying agent for such purpose) to pay such principal (and premium, if any) or interest, if any, so becoming due and will notify the Trustee of any failure by it to take such action. Whenever the 16 Corporation shall have one or more paying agents with respect to any particular series of Securities, it will, on or before each due date of the principal of (and premium, if any) or interest, if any, on the Securities, deposit with a paying agent a sum sufficient to pay such principal (and premium, if any) or interest so becoming due, such sums to be held in trust for the benefit of the holders of such Securities entitled thereto, and (unless the paying agent is the Trustee) the Corporation will notify the Trustee of failure by it to take such action. (c) Anything in this Section 5.04 to the contrary notwithstanding, the Corporation may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture, or for any other purpose, pay or cause to be paid to the Trustee all sums held in trust by the Corporation or any paying agent as required by this Section 5.04, such sums to be held by the Trustee upon the trusts herein contained. (d) Anything in this Section 5.04 to the contrary notwithstanding, the agreement to hold sums in trust as provided in this Section 5.04 is subject to the provisions of Sections 13.03 and 13.04. SECTION 5.05. MAINTENANCE OF CORPORATE EXISTENCE, RIGHTS AND FRANCHISES. So long as any of the Securities shall be outstanding, the Corporation will do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence, rights and franchises to carry on its business; provided that nothing in this Section 5.05 shall prevent (i) any consolidation or merger of the Corporation, or any sale or conveyance of all or substantially all its property and assets, permitted by Article Twelve, or (ii) the liquidation or dissolution of the Corporation after a sale or conveyance of all or substantially all its property and assets permitted by Article Twelve. SECTION 5.06. CERTIFICATE AS TO NO DEFAULT. The Corporation hereby agrees to deliver to the Trustee, within 120 days after the end of each fiscal year of the Corporation, commencing with the fiscal year ending December 31, 1985, an Officers' Certificate, which need not comply with the provisions of Section 16.05, to the effect that, to the knowledge of the signers thereof, the Corporation is not in default under any provision of this Indenture or, if such signers have knowledge of any such default, stating the same and the nature and status thereof. ARTICLE SIX SECURITYHOLDERS LISTS AND REPORTS BY THE CORPORATION AND THE TRUSTEE SECTION 6.01. SECURITYHOLDERS LISTS. The Corporation covenants and agrees that, with respect to each series of Securities, it will furnish or cause to be furnished to the Trustee, (a) semiannually, not less than 45 days nor more than 17 60 days after (i) each record date for the payment of interest on any interest payment date (except a date for payment of defaulted interest) in the case of interest-bearing Securities or (ii) the last business day of each June and December in the case of non-interest-bearing Securities, and (b) at such other times as the Trustee may request in writing, within 30 days after receipt by the Corporation of any such request, a list in such form as the Trustee may reasonably require of the names and addresses of the holders of Securities of such series as of a date not more than 15 days prior to the time such information is furnished; PROVIDED, HOWEVER, that if the Trustee shall be the Security registrar, such list shall not be required to be furnished. SECTION 6.02. PRESERVATION AND DISCLOSURE OF LISTS. (a) The Trustee shall preserve, in as current a form as is reasonably practicable, all information as to the names and addresses of the holders of Securities contained in the most recent list furnished to it as provided in Section 6.01 and received by the Trustee in its capacity as Security registrar or paying agent if so acting. The Trustee may destroy any list furnished to it as provided in Section 6.01 upon receipt of a new list so furnished. (b) In case three or more holders of Securities of any series (hereinafter referred to as "applicants") apply in writing to the Trustee and furnish to the Trustee reasonable proof that each such applicant has owned a Security of such series for a period of at least six months preceding the date of such application, and such application states that the applicants desire to communicate with other holders of Securities of such series with respect to their rights under this Indenture or under the Securities of such series and is accompanied by a copy of the form of proxy or other communication which such applicants propose to transmit, then the Trustee shall, within five business days after the receipt of such application, at its election, either (1) afford such applicants access to the information preserved at the time by the Trustee in accordance with the provisions of subsection (a) of this Section 6.02, or (2) inform such applicants as to the approximate number of holders of Securities of such series whose names and addresses appear in the information preserved at the time by the Trustee in accordance with the provisions of subsection (a) of this Section 6.02, and as to the approximate cost of mailing to such Securityholders the form of proxy or other communication, if any, specified in such application. If the Trustee shall elect not to afford such applicants access to such information, the Trustee shall, upon the written request of such applicants, mail to each holder of Securities of such series whose name and address appears in the information preserved at the time by the Trustee in accordance with the provi- 18 sions of subsection (a) of this Section 6.02 a copy of the form of proxy or other communication which is specified in such request, with reasonable promptness after a tender to the Trustee of the material to be mailed and of payment, or provision for the payment, of the reasonable expenses of mailing, unless within five days after such tender, the Trustee shall mail to such applicants and file with the Securities and Exchange Commission, together with a copy of the material to be mailed, a written statement to the effect that, in the opinion of the Trustee, such mailing would be contrary to the best interests of the holders of Securities of such series or would be in violation of applicable law. Such written statement shall specify the basis of such opinion. If said Commission, after opportunity for a hearing upon the objections specified in the written statement so filed, shall enter an order refusing to sustain any of such objections or if after the entry of an order sustaining one or more of such objections, said Commission shall find, after notice and opportunity for hearing, that all the objections so sustained have been met and shall enter an order so declaring, the Trustee shall mail copies of such material to all such Securityholders with reasonable promptness after the entry of such order and the renewal of such tender; otherwise the Trustee shall be relieved of any obligation or duty to such applicants respecting their application. (c) Each and every holder of the Securities, by receiving and holding the same, agrees with the Corporation and the Trustee that neither the Corporation nor the Trustee nor any paying agent nor any Security registrar shall be held accountable by reason of the disclosure of any such information as to the names and addresses of the holders of Securities in accordance with the provisions of subsection (b) of this Section 6.02, regardless of the source from which such information was derived, and that the Trustee shall not be held accountable by reason of mailing any material pursuant to a request made under said subsection (b). SECTION 6.03. REPORTS BY THE CORPORATION. (a) The Corporation covenants and agrees to file with the Trustee within 30 days after the Corporation is required to file the same with the Securities and Exchange Commission, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as said Commission may from time to time by rules and regulations prescribe) which the Corporation may be required to file with said Commission pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934, as amended; or, if the Corporation is not required to file information, documents or reports pursuant to either of such sections, then to file with the Trustee and said Commission, in accordance with rules and regulations prescribed from time to time by said Commission, such of the supplementary and periodic information, documents and reports which may be required pursuant to section 13 of the Securities Exchange Act of 1934, as amended, in respect of a security listed and registered on a national securities exchange as may be prescribed from time to time in such rules and regulations. 19 (b) The Corporation covenants and agrees to file with the Trustee and the Securities and Exchange Commission, in accordance with the rules and regulations prescribed from time to time by said Commission, such additional information, documents and reports with respect to compliance by the Corporation with the conditions and covenants provided for in this Indenture as may be required from time to time by such rules and regulations. (c) The Corporation covenants and agrees to transmit by mail to all holders of Securities, as the names and addresses of such holders appear upon the registry books of the Corporation, within 30 days after the filing thereof with the Trustee, such summaries of any information, documents and reports required to be filed by the Corporation pursuant to subsection (a) or (b) of this Section 6.03 as may be required by rules and regulations prescribed from time to time by the Securities and Exchange Commission. SECTION 6.04. REPORTS BY THE TRUSTEE. (a) On or before October 1, 1985, and on or before October 1 in every year thereafter, so long as any Securities are outstanding hereunder, the Trustee shall transmit to the Securityholders for which it is acting as Trustee, as hereinafter in this Section 6.04 provided, a brief report dated as of the preceding September 1 with respect to: (1) its eligibility under Section 8.09, and its qualification under Section 8.08, or in lieu thereof, if to the best of its knowledge it has continued to be eligible and qualified under such Sections, a written statement to such effect; (2) the character and amount of any advances (and if the Trustee elects so to state, the circumstances surrounding the making thereof) made by the Trustee (as such) which remain unpaid on the date of such report, and for the reimbursement of which it claims or may claim a lien or charge, prior to that of the Securities with respect to which it is acting as Trustee, on any property or funds held or collected by it as Trustee, except that the Trustee shall not be required (but may elect) to state such advances if such advances so remaining unpaid aggregate not more than one-half of one percent of the principal amount of such Securities outstanding on the date of such report; (3) the amount, interest rate, and the maturity date of all other indebtedness owing by the Corporation (or by any other obligor on such Securities) to the Trustee in its individual capacity, on the date of such report, with a brief description of any property held as collateral security therefor, except an indebtedness based upon a creditor relationship arising in any manner described in paragraph (2), (3), (4) or (6) of subsection (b) of Section 8.13; (4) the property and funds, if any, physically in the possession of the Trustee, as such, at the date of such report; 20 (5) any additional issue of Securities with respect to which it is acting as Trustee which it has not previously reported; and (6) any action taken by the Trustee in the performance of its duties under this Indenture which it has not previously reported and which in its opinion materially affects such Securities, except action in respect of a default, notice of which has been or is to be withheld by it in accordance with the provisions of Section 7.08. (b) The Trustee shall transmit to the Securityholders with respect to which it is acting as Trustee, as hereinafter provided, a brief report with respect to the character and amount of any advances (and if the Trustee elects so to state, the circumstances surrounding the making thereof) made by the Trustee (as such), since the date of the last report transmitted pursuant to the provisions of subsection (a) of this Section 6.04 (or, if no such report has yet been so transmitted, since the date of execution of this Indenture), for the reimbursement of which it claims or may claim a lien or charge prior to that of the Securities with respect to which it is acting as Trustee on property or funds held or collected by it as Trustee, and which it has not previously reported pursuant to this subsection, except that the Trustee shall not be required (but may elect) to report such advances if such advances remaining unpaid at any time aggregate ten percent or less of the principal amount of such Securities outstanding at such time, such report to be transmitted within ninety days after such time. (c) Reports pursuant to this Section 6.04 shall be transmitted by first class mail, postage prepaid to all holders of Securities as the names and address of such holders appear upon the registry books of the Corporation. (d) A copy of each such report shall, at the time of such transmission to Securityholders, be filed by the Trustee with each stock exchange upon which the Securities with respect to which it is acting as Trustee are listed and also with the Securities and Exchange Commission. The Corporation will notify the Trustee when and as such Securities become listed on any stock exchange. ARTICLE SEVEN EVENTS OF DEFAULT: REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS SECTION 7.01. EVENTS OF DEFAULT; REMEDIES. The occurrence of any of the following events shall constitute an Event of Default hereunder with respect to any particular series of Securities: (a) default in the due and punctual payment of any installment of interest upon any of the Securities of that series as and when the same shall become due and payable and continuance of such default for a period of 30 days; or 21 (b) default in the due and punctual payment of the principal of (or premium, if any, on) any of the Securities of that series as and when the same shall become due and payable either at maturity, by declaration as authorized by this Indenture, or otherwise; or (c) failure on the part of the Corporation duly to observe or perform any other of the covenants or agreements on the part of the Corporation set forth in the Securities of that series or in this Indenture (other than those set forth exclusively in the terms of Securities of any series other than that series) continued for a period of sixty days after there has been given, by registered or certified mail, to the Corporation by the Trustee, or to the Corporation and the Trustee by the holders of at least twenty-five percent in principal amount of the Securities of that series at the time outstanding, a written notice specifying such failure and requiring the same to be remedied and stating that such notice is a "Notice of Default" hereunder; or (d) the entry of a decree or order by a court having jurisdiction in the premises granting relief in respect of the Corporation in an involuntary case under the Federal Bankruptcy Code adjudging the Corporation a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Corporation under the Federal Bankruptcy Code or any other applicable Federal or State law, or appointing a receiver, liquidator, custodian, assignee, trustee, sequestrator (or other similar official) of the Corporation, or of any substantial part of the respective properties of either, or ordering the winding up or liquidation of the affairs of either, and the continuance of any such decree or order unstayed and in effect for a period of 120 days; or (e) the institution by the Corporation of proceedings to be adjudicated a bankrupt or insolvent, or the consent by the Corporation to the institution of bankruptcy or insolvency proceedings against it, or the filing by the Corporation of a petition or answer or consent seeking reorganization or relief under the Federal Bankruptcy Code or any other applicable Federal or State law, or the consent by the Corporation to the filing of any such petition or to the appointment of a receiver, liquidator, custodian, assignee, trustee, sequestrator (or other similar official) of the Corporation, or of any substantial part of the respective properties of either, or the making by the Corporation of an assignment for the benefit of creditors, or the admission by the Corporation in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by the Corporation in furtherance of any such action. In case one or more of the Events of Default specified above shall have occurred and be continuing with respect to any particular series of Securities, then and in each and every such case, unless the principal of all of the Securities of that 22 series shall have already become due and payable, either the Trustee or the holders of not less than twenty-five percent in aggregate principal amount of the Securities of that series then outstanding hereunder, by notice in writing to the Corporation (and to the Trustee if given by Securityholders), may declare the principal or, in the case of Discounted Securities, such amount of principal as may be provided for in such Securities, of all the Securities of that series to be due and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable, anything in this Indenture or in the Securities of that series contained to the contrary notwithstanding. This provision, however, is subject to the condition that if, at any time after such principal or such amount of principal, as the case may be, shall have been so declared due and payable, and before any judgment or decree for the payment of the moneys due shall have been obtained or entered as hereinafter provided, the Corporation shall pay or shall deposit with the Trustee a sum sufficient to pay all matured installments of interest upon all Securities of that series and the principal of (and premium, if any, on) any and all Securities of that series which shall have become due otherwise than by acceleration (with interest on overdue installments of interest (to the extent that payment of such interest is enforceable under applicable law) and on such principal (and premium, if any) at the rate of interest (or, in the case of Discounted Securities at the Yield to Maturity) borne by such Securities, to the date of such payment or deposit) and the expenses of the Trustee, and any and all defaults under this Indenture with respect to the Securities of the series, other than the nonpayment of principal of (and premium, if any) and accrued interest on the Securities of that series which shall have become due by acceleration shall have been remedied-then and in every such case the holders of a majority in aggregate principal amount of the Securities of that series then outstanding, by written notice to the Corporation and to the Trustee, may waive all defaults and rescind and annul such declaration and its consequences; but no such waiver or rescission and annulment shall extend to or shall affect any subsequent default, or shall impair any right consequent thereon. In case the Trustee shall have proceeded to enforce any right under this Indenture and such proceedings shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Trustee, then and in every such case the Corporation and the Trustee shall be restored respectively to their several positions and rights hereunder, and all rights, remedies and powers of the Corporation and the Trustee shall continue as though no such proceeding had been taken. SECTION 7.02. PAYMENT OF SECURITIES ON DEFAULT; SUIT THEREFOR. The Corporation covenants that (a) in case default shall be made in the payment of any installment of interest upon any of the Securities of any series as and when the same shall become due and payable, and such default shall have continued for a period of thirty days, or (b) in case default shall be made in the payment of the principal of (or premium, if any, on) any of the Securities of any series as and 23 when the same shall have become due and payable, whether at maturity of the Securities of that series or by declaration or otherwise, then, upon demand of the Trustee, the Corporation will pay to the Trustee, for the benefit of the holders of such Securities, the whole amount that then shall have become due and payable on all such Securities for principal (and premium, if any) or interest, if any, with interest upon the overdue principal (and premium, if any) and (to the extent that payment of such interest is enforceable under applicable law) upon the overdue installments of interest at the rate of interest (or the Yield to Maturity in the case of Discounted Securities) borne by the Securities of that series; and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including reasonable compensation to the Trustee, its agents, attorneys and counsel, and any expenses or liabilities incurred, and all advances made, by the Trustee hereunder other than through its negligence or bad faith. In case the Corporation shall fail forthwith to pay such amounts upon such demand, the Trustee, in its own name and as trustee of an express trust, shall be entitled and empowered to institute any actions or proceedings at law or in equity for the collection of the sums so due and unpaid, and may prosecute any such action or proceeding to judgment or final decree, and may enforce any such judgment or final decree against the Corporation or any other obligor on such Securities and collect in the manner provided by law out of the property of the Corporation or any other obligor on such Securities wherever situated the moneys adjudged or decreed to be payable. In case there shall be pending proceedings for the bankruptcy or for the reorganization of the Corporation or any other obligor on the Securities of any series under the Federal Bankruptcy Code or any other applicable law, or in case a receiver, custodian or trustee shall have been appointed for the property of the Corporation or such other obligor, or in the case of any similar judicial proceedings relative to the Corporation or other obligor upon such Securities, or to the creditors or property of the Corporation or such other obligor, the Trustee, irrespective of whether the principal of such Securities shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand pursuant to the provisions of this Section 7.02, shall be entitled and empowered, by intervention in such proceedings or otherwise, to file and prove a claim or claims, for the whole amount of principal (and premium, if any) and interest, if any owing and unpaid in respect of such Securities, and in case of any judicial proceedings, to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee and of the holders of such Securities allowed in such judicial proceedings relative to the Corporation or any other obligor on such Securities, its or their creditors, or its or their property, and to collect and receive any moneys or other property payable or deliverable on any such claims, and to distribute the same after the deduction of its charges and 24 expenses; and any receiver, custodian, assignee or trustee in bankruptcy or reorganization is hereby authorized by each of the Securityholders to make such payments to the Trustee, and, in the event that the Trustee shall consent to the making of such payments directly to the Securityholders, to pay to the Trustee any amount due it for compensation and expenses, including counsel fees incurred by it up to the date of such distribution. All rights of action and of asserting claims under this Indenture, or under any of the Securities, may be enforced by the Trustee without the possession of any of the Securities, or the production thereof in any trial or other proceeding relative thereto, and any suit or proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall be for the ratable benefit of the holders of the Securities in respect of which such judgment has been recovered. SECTION 7.03. APPLICATION OF MONEYS COLLECTED BY TRUSTEE. Any moneys collected by the Trustee shall be applied in the order following, at the date or dates fixed by the Trustee for the distribution of such moneys, upon presentation of the Securities in respect of which moneys have been collected, and stamping thereon the payment, if only partially paid, and upon surrender thereof if fully paid: FIRST: To the payment of costs and expenses of collection and reasonable compensation to the Trustee, its agents, attorneys and counsel, and of all other expenses and liabilities incurred, and all advances made, by the Trustee except as a result of its negligence or bad faith; SECOND: In case the principal of the outstanding Securities in respect of which moneys have been collected shall not have become due and be unpaid, to the payment of interest, if any, on such Securities, in the order of the maturity of the instalments of such interest, with interest (to the extent that such interest has been collected by the Trustee) upon the overdue instalments of interest at the rate of interest (or the Yield to Maturity in the case of Discounted Securities) borne by such Securities, such payments to be made ratably to the persons entitled thereto; THIRD: In case the principal of the outstanding Securities in respect of which moneys have been collected shall have become due, by declaration or otherwise, to the payment of the whole amount then owing and unpaid upon such Securities for principal (and premium, if any) and interest, if any, with interest on the overdue principal (and premium, if any) and (to the extent that such interest has been collected by the Trustee) upon overdue instalments of interest at the rate of interest (or the Yield to Maturity in the case of Discounted Securities) borne by such Securities; and in case such moneys shall be insufficient to pay in full the whole amounts so due and unpaid upon such Securities, then to the payment of such principal (and premium, if any) 25 and interest without preference or priority of principal (and premium, if any) over interest, or of interest over principal (and premium, if any) or of any instalment of interest over any other instalment of interest, or of any such Security over any other such Security, ratably to the aggregate of such principal (and premium, if any) and accrued and unpaid interest; and, FOURTH: To the payment of the remainder, if any, to the Company, its successors or assigns, or to whomsoever may be lawfully entitled to receive the same, or as a court of competent jurisdiction may direct. SECTION 7.04. PROCEEDINGS BY SECURITYHOLDERS. No holder of any Security of any series shall have any right by virtue of or by availing of any provision of this Indenture to institute any suit, action or proceeding in equity or at law upon or under or with respect to this Indenture or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless such holder previously shall have given to the Trustee written notice of default and of the continuance thereof, as hereinbefore provided, and unless also the holders of not less than twenty-five percent in aggregate principal amount of the Securities of that series then outstanding shall have made written request upon the Trustee to institute such action, suit or proceeding in its own name as Trustee hereunder and shall have offered to the Trustee such reasonable indemnity as it may require against the costs, expenses and liabilities to be incurred therein or thereby, and the Trustee for sixty days after its receipt of such notice, request and offer of indemnity, shall have neglected or refused to institute any such action, suit or proceeding, it being understood and intended, and being expressly covenanted by the taker and holder of every Security with every other taker and holder and the Trustee, that no one or more holders of Securities of that series shall have any right in any manner whatever by virtue of or by availing of any provision of this Indenture to affect, disturb or prejudice the right of any other holder of such Securities, or to obtain or seek to obtain priority over or preference to any such holder, or to enforce any right under this Indenture, except in the manner herein provided and for the equal, ratable and common benefit of all holders of Securities of that series. Notwithstanding any other provisions in this Indenture, the right of any holder of any Security to receive payment of the principal of (and premium, if any) and interest, if any, on such Security, on or after the respective due dates expressed in such Security, or to institute suit for the enforcement of any such payment on or after such respective dates shall not be impaired or affected without the consent of such holder. SECTION 7.05. PROCEEDINGS BY TRUSTEE. In case of an Event of Default hereunder the Trustee may in its discretion proceed to protect and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any of such rights, 26 either by suit in equity or by action at law or by proceeding in bankruptcy or otherwise, whether for the specific enforcement of any covenant or agreement contained in this Indenture or in aid of the exercise of any power granted in this Indenture, or to enforce any other legal or equitable right vested in the Trustee by this Indenture or by law. SECTION 7.06. REMEDIES CUMULATIVE AND CONTINUING. All powers and remedies given by this Article Seven to the Trustee or to the Securityholders shall, to the extent permitted by law be deemed cumulative and not exclusive of any thereof or of any other powers and remedies available to the Trustee or the holders of the Securities, by judicial proceedings or otherwise, to enforce the performance or observance of the covenants and agreements contained in this Indenture, and no delay or omission of the Trustee or of any holder of any of the Securities to exercise any right or power accruing upon any default occurring and continuing as aforesaid shall impair any such right or power, or shall be construed to be a waiver of any such default or an acquiescence therein; and, subject to the provisions of Section 7.04, every power and remedy given by this Article Seven or by law to the Trustee or to the Securityholders may be exercised from time to time and as often as shall be deemed expedient by the Trustee or by the Securityholders. SECTION 7.07. DIRECTION OF PROCEEDINGS AND WAIVER OF DEFAULTS BY MAJORITY OF SECURITYHOLDERS. The holders of a majority in aggregate principal amount of the Securities of any series at the time outstanding determined in accordance with Section 9.04 shall have the right to direct the time, method, and place of conducting any proceedings for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with respect to the Securities of that series; PROVIDED, HOWEVER, that (subject to the provisions of Section 8.01) the Trustee shall have the right to decline to follow any such direction if the Trustee being advised by counsel determines that the action or proceeding so directed may not lawfully be taken or if the Trustee in good faith by its board of directors or trustees, executive committee, or a trust committee of directors or trustees and/or Responsible Officers shall determine that the action or proceedings so directed would involve the Trustee in personal liability. Prior to any declaration accelerating the maturity of the Securities of any series, the holders of a majority in aggregate principal amount of the Securities determined in accordance with Section 9.04 of that series at the time outstanding may on behalf of the holders of all Securities of that series waive any past default or Event of Default hereunder and its consequences except a default in the payment of the principal of (or premium, if any) or interest on the Securities of that series. Upon any such waiver the Corporation, the Trustee and the holders of such Securities shall be restored to their former positions and rights hereunder, respectively; but no such waiver shall extend to any subsequent or other default or Event of Default or impair any right consequent thereon. Whenever any default or Event of Default hereunder shall have been waived as permitted by this Section 7.07, said default 27 or Event of Default shall for all purposes of the Securities of such series and this Indenture with respect to such Securities be deemed to have been cured and to be not continuing. SECTION 7.08. NOTICE OF DEFAULTS. The Trustee shall, within ninety days after the occurrence of a default with respect to the Securities of any series, mail to all holders of such Securities, as the names and addresses of such holders appear upon the registry books of the Corporation, notice of all defaults known to the Trustee, unless such defaults shall have been cured before the giving of such notice (the term "defaults" for the purpose of this Section 7.08 being hereby defined to be the events specified in clauses (a), (b), (c), (d) and (e) of Section 7.01, not including periods of grace, if any, provided for therein and irrespective of the giving of the notice specified in clause (c) of Section 7.01); PROVIDED that, except in the case of default in the payment of the principal of (or premium, if any) or interest, if any, on any such Securities, the Trustee shall be protected in withholding such notice if and so long as the board of directors or trustees, the executive committee, or a trust committee of directors and/or Responsible Officers of the Trustee in good faith determines that the withholding of such notice is in the interests of the holders of such Securities. SECTION 7.09. UNDERTAKING TO PAY COSTS. All parties to this Indenture agree, and each holder of any Security by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section 7.09 shall not apply to any suit instituted by the Trustee, to any suit instituted by any Securityholder, or group of Securityholders, holding in the aggregate more than ten percent in principal amount of the Securities outstanding of any series, or to any suit instituted by any Securityholder for the enforcement of the payment of the principal of (or premium, if any) or interest, if any, on any Security against the Corporation on or after the due date expressed in such Security. ARTICLE EIGHT CONCERNING THE TRUSTEE SECTION 8.01. DUTIES AND RESPONSIBILITIES OF TRUSTEE. With respect to the Securities of any particular series the Trustee, prior to the occurrence of an Event of Default and after the curing of all Events of Default which may have occurred, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture. In case an Event of Default has occurred (which 28 has not been cured or waived) with respect to the Securities of any particular series the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act or its own wilful misconduct expect that (a) prior to the occurrence of an Event of Default with respect to the Securities of any particular series and after the curing or waiving of all Events of Default with respect to the Securities of any particular series which may have occurred: (1) the duties and obligations of the Trustee with respect to the Securities of such series shall be determined solely by the express provisions of this Indenture, and the Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (2) in the absence of bad faith on the part of the Trustee, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but, in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture; (b) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer or Officers of the Trustee, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts; and (c) the Trustee shall not be liable with respect to any action taken, suffered or omitted to be taken by it in good faith in accordance with the direction of the holders of not less than a majority in principal amount of the Securities of any particular series at the time outstanding determined as provided in Section 9.04 relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture. 29 SECTION 8.02. RELIANCE ON DOCUMENTS, OPINIONS, ETC. Subject to the provisions of Section 8.01 (a) the Trustee may rely and shall be protected in acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond, debenture, coupon or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties; (b) any request, direction, order or demand of the Corporation mentioned herein shall be sufficiently evidenced by an Officers' Certificate (unless other evidence in respect thereof be herein specifically prescribed); and any resolution of the Board of Directors may be evidenced to the Trustee by a Board Resolution; (c) the Trustee may consult with counsel and any advice or Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in accordance with such advice or Opinion of Counsel; (d) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request, order or direction of any of the Securityholders, pursuant to the provisions of this Indenture, unless such Securityholders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which may be incurred therein or thereby; (e) the Trustee shall not be liable for any action taken, suffered or omitted by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture; (f) prior to the occurrence of an Event of Default with respect to the Securities of any particular series hereunder and after the curing or waiving of all Events of Default with respect to the Securities of such series, the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond, debenture, coupon or other paper or document, unless requested in writing to do so by the holders of not less than a majority in principal amount of the Securities of such series then outstanding; PROVIDED, HOWEVER, that if the payment within a reasonable time to the Trustee of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation is, in the opinion of the Trustee, not reasonably assured to the Trustee by the security afforded to it by the terms of this Indenture, the Trustee may require reasonable indemnity against such expense or liability as a condition to so proceeding; and 30 (g) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys, and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed by it with due care hereunder. SECTION 8.03. NO RESPONSIBILITY FOR RECITALS, ETC. The recitals contained herein and in the Securities (except in the Trustee's certificate of authentication) shall be taken as the statements of the Corporation, and the Trustee assumes no responsibility for the correctness of the same. The Trustee makes no representations as to the validity or sufficiency of this Indenture or the Securities. The Trustee shall not be accountable for the use or application by the Corporation of any Securities or the proceeds of any Securities authenticated and delivered by the Trustee in conformity with the provisions of this Indenture. SECTION 8.04. TRUSTEE, PAYING AGENT OR REGISTRAR MAY OWN SECURITIES. The Trustee or any paying agent or Security registrar, in its individual or any other capacity, may become the owner or pledgee of Securities with the same rights it would have if it were not Trustee, paying agent or Security registrar. SECTION 8.05. MONEYS TO BE HELD IN TRUST. Subject to the provisions of Section 13.04, all moneys received by the Trustee or any paying agent shall, until used or applied as herein provided, be held in trust for the purposes for which they were received. Neither the Trustee nor any paying agent shall be under any liability for interest on any moneys received by it hereunder except such as it may agree with the Corporation to pay thereon. So long as no Event of Default shall have occurred and be continuing, all interest allowed on any such moneys shall be paid from time to time upon the written order of the Corporation, signed by any one of the Chairman of the Board, the President, a Vice President, the Secretary, an Assistant Secretary, the Treasurer or an Assistant Treasurer of the Corporation. SECTION 8.06. COMPENSATION AND EXPENSES OF TRUSTEE. The Corporation covenants and agrees to pay to the Trustee from time to time, and the Trustee shall be entitled to, reasonable compensation (which shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust), and the Corporation will pay or reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any of the provisions of this Indenture (including the reasonable compensation and the expenses and disbursements of its counsel and of all persons not regularly in its employ) except any such expense, disbursement or advance as may arise from its negligence or bad faith. The Corporation also covenants to indemnify the Trustee for, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on the part of the Trustee and arising out of or in connection with the acceptance or adminis- 31 tration of this trust or the performance of its duties hereunder, including the reasonable costs and expenses of defending itself against any claim of liability in the premises. The obligations of the Corporation under this Section 8.06 to compensate the Trustee and to pay or reimburse the Trustee for expenses, disbursements and advances shall constitute additional indebtedness hereunder. Such additional indebtedness shall have a prior claim to that of the Securities upon all property and funds held or collected by the Trustee as such, except funds held in trust for the benefit of the holders of particular Securities. SECTION 8.07. OFFICERS' CERTIFICATE AS EVIDENCE. Subject to the provisions of Section 8.01, whenever in the administration of the provisions of this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of negligence or bad faith on the part of the Trustee, be deemed to be conclusively proved and established by an Officers' Certificate delivered to the Trustee, and such Certificate, in the absence of negligence or bad faith on the part of the Trustee, shall be full warrant to the Trustee for any action taken, suffered or omitted by it under the provisions of this Indenture upon the faith thereof. SECTION 8.08. CONFLICTING INTEREST OF TRUSTEE. (a) If the Trustee has or shall acquire any conflicting interest with respect to the Securities of any series, as defined in this Section 8.08, it shall, within 90 days after ascertaining that it has such conflicting interest, either eliminate such conflicting interest or resign with respect to the Securities of that series in the manner and with the effect specified in Section 8.10. (b) In the event that the Trustee shall fail to comply with the provisions of subsection (a) of this Section 8.08 with respect to the Securities of any particular series, the Trustee shall, within ten days after the expiration of such 90-day period, mail notice of such failure to all holders of Securities of that series, as the names and addresses of such holders appear upon the registry books of the Corporation. (c) For the purposes of this Section 8.08 the Trustee shall be deemed to have a conflicting interest with respect to the Securities of any particular series if: (1) the Trustee is trustee under this Indenture with respect to the outstanding Securities of any other series or is trustee under another indenture under which any other securities, or certificates of interest or participation in any other securities, of the Corporation, are outstanding, unless such other indenture is a collateral trust indenture under which the only collateral consists of Securities of that series; PROVIDED that there shall be excluded from the operation of this paragraph this Indenture with respect to the 32 Securities of any other series other than that series or any other indenture or indentures under which other securities, or certificates of interest or participation in other securities, of the Corporation, are outstanding if (i) this Indenture and such other indenture or indentures are wholly unsecured and such other indenture or indentures are hereafter qualified under the Trust Indenture Act of 1939, unless the Securities and Exchange Commission shall have found and declared by order pursuant to subsection (b) of Section 305 or subsection (c) of Section 307 of the Trust Indenture Act of 1939 that differences exist between the provisions of this Indenture with respect to the Securities of that series and such other series or the provisions of such other indenture or indentures which are so likely to involve a material conflict of interest as to make it necessary in the public interest or for the protection of investors to disqualify the Trustee from acting as such under this Indenture with respect to the Securities of that series and such other series or such other indenture or indentures, or (ii) the Corporation shall have sustained the burden of proving, on application to the Securities and Exchange Commission and after opportunity for hearing thereon, that the trusteeship under this Indenture with respect to the Securities of that series and such other series or such other indenture is not so likely to involve a material conflict of interest as to make it necessary in the public interest or for the protection of investors to disqualify the Trustee from acting as such under this Indenture with respect to Securities of one or more series or under one of such indentures; (2) the Trustee or any of its directors or executive officers is an obligor upon the Securities of any series issued under this Indenture or an underwriter for the Corporation; (3) the Trustee directly or indirectly controls or is directly or indirectly controlled by or is under direct or indirect common control with the Corporation or an underwriter for the Corporation; (4) the Trustee or any of its directors or executive officers is a director, officer, partner, employee, appointee, or representative of the Corporation, or of an underwriter (other than the Trustee itself) for the Corporation who is currently engaged in the business of underwriting, except that (A) one individual may be a director and/or an executive officer of the Trustee and a director and/or an executive officer of the Corporation, but may not be at the same time an executive officer of both the Trustee and the Corporation; (B) if and so long as the number of directors of the Trustee in office is more than nine, one additional individual may be a director and/or an executive officer of the Trustee and a director of the Corporation; and (C) the Trustee may be designated by the Corporation or by an underwriter for the Corporation to act in the capacity of transfer agent, registrar, custodian, paying agent, fiscal agent, escrow agent, or depositary, or in any other similar capacity, or, 33 subject to the provisions of paragraph (1) of this subsection (c), to act as trustee whether under an indenture or otherwise; (5) ten percent or more of the voting securities of the Trustee is beneficially owned either by the Corporation or by any director, partner, or executive officer thereof, or twenty percent or more of such voting securities is beneficially owned, collectively, by any two or more such persons; or ten percent or more of the voting securities of the Trustee is beneficially owned either by an underwriter for the Corporation or by any director, partner, or executive officer thereof, or is beneficially owned, collectively, by any two or more such persons; (6) the Trustee is the beneficial owner of, or holds as collateral security for an obligation which is in default, (A) five percent or more of the voting securities, or ten percent or more of any other class of security, of the Corporation, not including the Securities of any series with respect to which the Trustee is acting as such and securities issued under any other indenture under which the Trustee is also trustee, or (B) ten percent or more of any class of security of an underwriter for the Corporation; (7) the Trustee is the beneficial owner of, or holds as collateral security for an obligation which is in default, five percent or more of the voting securities of any person who, to the knowledge of the Trustee, owns ten percent or more of the voting securities of, or controls directly or indirectly or is under direct or indirect common control with the Corporation; (8) the Trustee is the beneficial owner of, or holds as collateral security for an obligation which is in default, ten percent or more of any class of security of any person who, to the knowledge of the Trustee, owns fifty percent or more of the voting securities of the Corporation; or (9) the Trustee owns on May 15 in any calendar year, in the capacity of executor, administrator, testamentary or inter vivos trustee, guardian, committee or conservator, or in any other similar capacity, an aggregate of twenty-five percent or more of the voting securities, or of any class of security, of any person, the beneficial ownership of a specified percentage of which would have constituted a conflicting interest under paragraphs (6), (7), or (8) of this subsection (c). As to any such securities of which the Trustee acquired ownership through becoming executor, administrator or testamentary trustee of an estate which included them, the provisions of the preceding sentence shall not apply, for a period of two years from the date of such acquisition, to the extent that such securities included in such estate do not exceed twenty-five percent of such voting securities or twenty-five percent of any such class of security. Promptly after May 15, in each calendar year, the Trustee shall make a check of its holdings of such securities in any of the 34 above-mentioned capacities as of such May 15. If the Corporation fails to make payment in full of principal of (or premium, if any) or interest on any of the Securities when and as the same become due and payable, and such failure continues for thirty days thereafter, the Trustee shall make a prompt check of its holdings of such securities in any of the above-mentioned capacities as of the date of the expiration of such 30-day period and, after such date, notwithstanding the foregoing provisions of this paragraph (9), all such securities so held by the Trustee, with sole or joint control over such securities vested in it, shall, but only so long such failure shall continue, be considered as though beneficially owned by the Trustee for the purposes of paragraphs (6), (7) and (8) of this subsection (c). The specifications of percentages in paragraphs (5) to (9), inclusive, of this subsection (c) shall not be construed as indicating that the ownership of such percentages of the securities of a person is or is not necessary or sufficient to constitute direct or indirect control for the purposes of paragraph (3) or (7) of this subsection (c). For the purposes of paragraphs (6), (7), (8) and (9) of this subsection (c) only, (A) the terms "security" and "securities" shall include only such securities as are generally known as corporate securities, but shall not include any note or other evidence of indebtedness issued to evidence an obligation to repay moneys lent to a person by one or more banks, trust companies or banking firms, or any certificate of interest or participation in any such note or evidence of indebtedness; (B) an obligation shall be deemed to be in default when a default in payment of principal shall have continued for thirty days or more and shall not have been cured; and (C) the Trustee shall not be deemed to be the owner or holder of (i) any security which it holds as collateral security (as trustee or otherwise) for an obligation which is not in default as defined in class (B) above, or (ii) any security which it holds as collateral security under this Indenture, irrespective of any default hereunder, or (iii) any security which it holds as agent for collection, or as custodian, escrow agent, or depositary, or in any similar representative capacity. Except as provided in the immediately preceding paragraph, the word "security" or "securities" as used in this Indenture shall mean any note, stock, treasury stock, bond, debentures, evidence of indebtedness, certificate of interest or participation in any profit sharing agreement, collateral-trust certificate, pre-organization certificate or subscription, transferable share, investment contract voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas or other mineral rights, or, in general, any interest or instrument commonly known as a "security" or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing. 35 (d) For the purpose of this Section 8.08: (1) The term "underwriter" when used with reference to the Corporation shall mean every person who, within three years prior to the time as of which the determination is made, has purchased from the Corporation with a view to, or has offered or sold for the Corporation in connection with, the distribution of any security of the Corporation outstanding at such time, or has participated or has had a direct or indirect participation in any such undertaking, or has participated or has had a participation in the direct or indirect underwriting of any such undertaking, but such term shall not include a person whose interest was limited to a commission from an underwriter or dealer not in excess of the usual and customary distributors' or sellers' commission. (2) The term "director" shall mean any director of a corporation or any individual performing similar functions with respect to any organization whether incorporated or unincorporated. (3) The term "person" shall mean an individual, a corporation, a partnership, an association, a joint-stock company, a trust, an unincorporated organization, or a government or political subdivision thereof. As used in this paragraph, the term "trust" shall include only a trust where the interest or interests of the beneficiary or beneficiaries are evidenced by a security. (4) The term "voting security" shall mean any security presently entitling the owner or holder thereof to vote in the direction or management of the affairs of a person, or any security issued under or pursuant to any trust, agreement or arrangement whereby a trustee or trustees or agent or agents for the owner or holder of such security are presently entitled to vote in the direction or management of the affairs of a person. (5) The term "Corporation" shall mean any obligor upon the Securities. (6) The term "executive officer" shall mean the president, every vice president, every trust officer, the cashier, the secretary, and the treasurer of a corporation, and any individual customarily performing similar functions with respect to any organization whether incorporated or unincorporated, but shall not include the chairman of the board of directors. The percentages of voting securities and other securities specified in this Section 8.08 shall be calculated in accordance with the following provisions: (A) A specified percentage of the voting securities of the Trustee, the Corporation or any other person referred to in this Section 8.08 (each of whom is referred to as a "person" in this paragraph) means such amount of 36 the outstanding voting securities of such person as entitles the holder or holders thereof to cast such specified percentage of the aggregate votes which the holders of all the outstanding voting securities of such person are entitled to cast in the direction or management of the affairs of such person. (B) A specified percentage of a class of securities of a person means such percentage of the aggregate amount of securities of the class outstanding. (C) The term "amount", when used in regard to securities, means the principal amount if relating to evidences of indebtedness, the number of shares if relating to capital shares, and the number of units if relating to any other kind of security. (D) The term "outstanding" means issued and not held by or for the account of the issuer. The following securities shall not be deemed outstanding within the meaning of this definition: (i) Securities of an issuer held in a sinking fund relating to securities of the issuer of the same class; (ii) Securities of an issuer held in a sinking fund relating to another class of securities of the issuer, if the obligation evidenced by such other class of securities is not in default as to principal or interest or otherwise; (iii) Securities pledged by the issuer thereof as security for an obligation of the issuer not in default as to principal or interest or otherwise; (iv) Securities held in escrow if placed in escrow by the issuer thereof; PROVIDED, HOWEVER, that any voting securities of an issuer shall be deemed outstanding if any person other than the issuer is entitled to exercise the voting rights thereof. (E) A security shall be deemed to be of the same class as another security if both securities confer upon the holder or holders thereof substantially the same rights and privileges; PROVIDED, HOWEVER, that, in the case of secured evidences of indebtedness, all of which are issued under a single indenture, differences in the interest rates or maturity dates of various series thereof shall not be deemed sufficient to constitute such series different class, and PROVIDED, FURTHER, that, in the case of unsecured evidences of indebtedness, differences in the interest rates or maturity dates thereof shall not be deemed sufficient to constitute them securities of different classes, whether or not they are issued under a single indenture. 37 SECTION 8.09. ELIGIBILITY OF TRUSTEE. The Trustee hereunder shall at all times be a corporation organized and doing business under the laws of the United States or any State or Territory thereof or of the District of Columbia authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least five million dollars and subject to supervision or examination by Federal, State, Territorial, or District of Columbia authority. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purposes of this Section 8.09, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. In case at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section 8.09, the Trustee shall resign immediately in the manner and with the effect specified in Section 8.10. SECTION 8.10. RESIGNATION OR REMOVAL OF TRUSTEE. (a) The Trustee may at any time resign with respect to the Securities of one or more series by giving written notice of such resignation to the Corporation and by mailing notice thereof to the holders of Securities of such series at their addresses as they shall appear on the registry books of the Corporation. Upon receiving such notice of resignation, the Corporation shall promptly appoint a successor trustee or trustees with respect to the Securities of such series by written instrument, in duplicate, executed by order of the Board of Directors, one copy of which instrument shall be delivered to the resigning Trustee and one copy to each successor trustee. If no successor trustee shall have been so appointed and have accepted appointment within sixty days after the mailing of such notice of resignation to the Securityholders of such series, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor trustee, or any Securityholder who has been a bona fide holder of a Security or Securities of such series for at least six months may, subject to the provisions of Section 7.09, on behalf of himself and all others similarly situated, petition any such court for the appointment of a successor trustee. Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, appoint a successor trustee. (b) In case at any time any of the following shall occur- (1) the Trustee shall fail to comply with the provisions of subsection (a) of Section 8.08 after written request therefor by the Corporation or by any Securityholder who has been a bona fide holder of a Security or Securities for at least six months, or (2) the Trustee shall cease to be eligible in accordance with the provisions of Section 8.09 and shall fail to resign after written request therefor by the Corporation or by any such Securityholder, or 38 (3) the Trustee shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, in any such case, the Corporation may remove the Trustee with respect to all Securities and appoint a successor trustee or trustees by written instrument, in duplicate, executed by order of the Board of Directors, one copy of which instrument shall be delivered to the Trustee so removed and one copy to each successor trustee, or, subject to the provisions of Section 7.09, any Securityholder who has been a bona fide holder of a Security or Securities for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor trustee or trustees. Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, remove the Trustee and appoint a successor trustee or trustees. (c) The holders of a majority in aggregate principal amount of the Securities of any series at the time outstanding may at any time remove the Trustee with respect to such series and nominate a successor trustee. (d) Any resignation or removal of the Trustee and any appointment of a successor trustee pursuant to any of the provisions of this Section 8.10 shall become effective upon acceptance of appointment by the successor trustee as provided in Section 8.11. SECTION 8.11. ACCEPTANCE BY SUCCESSOR TRUSTEE. In the case of the appointment hereunder of a successor trustee with respect to all Securities, any successor trustee so appointed as provided in Section 8.10 shall execute, acknowledge and deliver to the Corporation and to its predecessor trustee an instrument accepting such appointment hereunder, and thereupon the resignation or removal of the predecessor trustee shall become effective and such successor trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, duties and obligations of its predecessor hereunder, with like effect as if originally named as trustee herein; nevertheless, on the written request of the Corporation or of the successor trustee, the trustee ceasing to act shall, upon payment of any amounts then due it pursuant to the provisions of Section 8.06, execute and deliver an instrument transferring to such successor trustee all the rights and powers of the trustee so ceasing to act. In case of the appointment hereunder of a successor trustee with respect to the Securities of one or more (but not all) series, the Corporation, the predecessor trustee and each successor trustee with respect to the Securities of one or more series shall execute and deliver an indenture supplemental hereto wherein each successor trustee shall accept such appointment and which (1) shall contain such provisions 39 as shall be necessary or desirable to vest in, or confirm to, each successor trustee all the rights, powers, duties and obligations of the predecessor trustee with respect to the Securities of that or those series to which the appointment of such successor trustee relates, (2) if the predecessor trustee is not retiring with respect to all Securities, shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, duties and obligations of the predecessor trustee with respect to the Securities of that or those series as to which the predecessor trustee is not retiring shall continue to be vested in the predecessor trustee, and (3) shall add to or change any of the provisions of the Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such trustees co-trustees of the same trust and that each such trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such trustee; and upon the execution and delivery of such supplemental indenture the resignation or removal of the predecessor trustee shall become effective to the extent provided therein and each such successor trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, duties and obligations of the predecessor trustee with respect to the Securities of that or those series to which the appointment of such successor trustee relates; but, nevertheless, on the written request of the Corporation or any successor trustee, such predecessor trustee shall, upon payment of any amounts then due to it pursuant to Section 8.06 hereof, duly assign, transfer and deliver to such successor trustee all property and money held by such predecessor trustee hereunder with respect to the Securities of that or those series to which the appointment of such successor trustee relates. Upon request of any such successor trustee, the Corporation shall execute any and all instruments in writing in order more fully and certainly to vest in and confirm to such successor trustee all such rights, powers and trusts referred to in the two preceding sentences. Any trustee ceasing to act shall, nevertheless, retain a prior claim upon all property or funds held or collected by such trustee to secure any amounts then due it pursuant to the provisions of Section 8.06. No successor trustee shall accept appointment as provided in this Section 8.11 unless at the time of such acceptance such successor trustee shall be qualified under the provisions of Section 8.08 and eligible under the provisions of Section 8.09. Upon acceptance of appointment by a successor trustee as provided in this Section 8.11, the Corporation shall mail notice of the succession of such trustee hereunder to all holders of Securities of the series affected as the names and addresses of such holders appear on the registry books of the Corporation. If the Corporation fails to mail such notice in the prescribed manner within 30 days after the acceptance of appointment by the successor trustee, the successor trustee shall cause such notice to be mailed at the expense of the Corporation. 40 SECTION 8.12 SUCCESSION BY MERGER, ETC. Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case at the time such successor to the Trustee shall succeed to the trusts created by this Indenture any of the Securities shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Securities so authenticated; and in case at that time any of the Securities shall not have been authenticated, any successor to the Trustee may authenticate such Securities either in the name of any predecessor hereunder or in the name of the successor trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Securities or in this Indenture provided that the certificate of the Trustee shall have; PROVIDED, HOWEVER, that the right to adopt the certificate of authentication of any predecessor Trustee or authenticate Securities in the name of any predecessor Trustee shall apply only to its successor or successors by merger, conversion or consolidation. SECTION 8.13 LIMITATION ON RIGHTS OF TRUSTEE AS A CREDITOR. (a) Subject to the provisions of subsection (b) of this Section 8.13, if the Trustee shall be or shall become a creditor, directly or indirectly, secured or unsecured, of the Corporation or of any other obligor on the Securities within four months prior to a default, as defined in subsection (c) of this Section 8.13, or subsequent to such a default, then, unless and until such default shall be cured, the Trustee shall set apart and hold in a special account for the benefit of the Trustee individually, the holders of the Securities with respect to which the Trustee is acting as such, and the holders of other indenture securities (as defined in paragraph (2) of subsection (c) of this Section 8.13) (1) an amount equal to any and all reductions in the amount due and owing upon any claim as such creditor in respect of principal (or premium, if any) or interest, effected after the beginning of such four-month period and valid as against the Corporation and its other creditors, expect any such reduction resulting from the receipt or disposition of any property described in paragraph (2) of this subsection, or from the exercise of any right of set-off which the Trustee could have exercised if a petition in bankruptcy had been filed by or against the Corporation upon the date of such default; and (2) all property received by the Trustee in respect of any claim as such creditor, either as security therefor, or in satisfaction or composition thereof, or otherwise, after the beginning of such four-month period, or an amount 41 equal to the proceeds of any such property, if disposed of, SUBJECT, HOWEVER, to the rights, if any, of the Corporation and its other creditors in such property or such proceeds. Nothing herein contained, however, shall affect the right of the Trustee (A) to retain for its own account (i) payments made on account of any such claim by any person (other than the Corporation) who is liable thereon, and (ii) the proceeds of the bona fide sale of any such claim by the Trustee to a third person, and (iii) distributions made in cash, securities, or other property in respect of claims filed against the Corporation in bankruptcy or receivership or in proceedings for reorganization pursuant to the Federal Bankruptcy Code or applicable State law; (B) to realize, for its own account, upon any property held by it as security for any such claim, if such property was so held prior to the beginning of such four-month period; (C) to realize, for its own account, but only to the extent of the claim hereinafter mentioned, upon any property held by it as security for any such claim, if such claim was created after the beginning of such four-month period and such property was received as security therefor simultaneously with the creation thereof, and if the Trustee shall sustain the burden of proving that at the time such property was so received the Trustee had no reasonable cause to believe that a default, as defined in subsection (c) of this Section 8.13, would occur within four months; or (D) to receive payment on any claim referred to in paragraph (B) or (C), against the release of any property held as security for such claim as provided in such paragraph (B) or (C), as the case may be, to the extent of the fair value of such property. For the purposes of paragraphs (B), (C) and (D), property substituted after the beginning of such four-month period for property held as security at the time of such substitution shall, to the extent of the fair value of the property released, have the same status as the property released and, to the extent that any claim referred to in any of such paragraphs is created in renewal of or in substitution for or for the purpose of repaying or refunding any pre-existing claim of the Trustee as such creditor, such claim shall have the same status as such pre-existing claim. If the Trustee shall be required to account, the funds and property held in such special account and the proceeds thereof shall be apportioned between the Trustee, the Securityholders and the holders of other indenture securities in such manner that the Trustee, the Securityholders and the holders of other indenture 42 securities realize, as a result of payments from such special account and payments of dividends on claims filed against the Corporation in bankruptcy or receivership or in proceedings for reorganization pursuant to the Federal Bankruptcy Code or applicable State law, the same percentage of their respective claims, figured before crediting to the claim of the Trustee anything on account of the receipt by it from the Corporation of the funds and property in such special account and before crediting to the respective claims of the Trustee, the Securityholders, and the holders of other indenture securities, dividends on claims filed against the Corporation in bankruptcy or receivership or in proceedings for reorganization pursuant to the Federal Bankruptcy Code or applicable State Law, but after crediting thereon receipts on account of the indebtedness represented by their respective claims from all sources other than from such dividends and from the funds and property so held in such special account. As used in this paragraph, with respect to any claim, the term "dividends" shall include any distribution with respect to such claim, in bankruptcy or receivership or in proceedings for reorganization pursuant to the Federal Bankruptcy Code or applicable State law, whether such distribution is made in cash, securities, or other property, but shall not include any such distribution with respect to the secured portion, if any, of such claim. The court in which such bankruptcy, receivership, or proceeding for reorganization is pending shall have jurisdiction (i) to apportion between the Trustee, the Securityholders and the holders of other indenture securities, in accordance with the provisions of this paragraph, the funds and property held in such special account and the proceeds thereof, or (ii) in lieu of such apportionment, in whole or in part, to give to the provisions of this paragraph due consideration in determining the fairness of the distribution to be made to the Trustee, the Securityholders and the holders of other indenture securities with respect to their respective claims, in which event it shall not be necessary to liquidate or to appraise the value of any securities or other property held in such special account or as security for any such claim or to make a specific allocation of such distributions as between the secured and unsecured portions of such claims, or otherwise to apply the provisions of this paragraph as a mathematical formula. Any Trustee who has resigned or been removed after the beginning of such four-month period shall be subject to the provisions of this subsection (a) as though such resignation or removal had not occurred. If any Trustee has resigned or been removed prior to the beginning of such four-month period, it shall be subject to the provisions of this subsection (a) if and only if the following conditions exist: (i) the receipt of property or reduction of claim which would have given rise to the obligation to account. If such Trustee had continued as trustee occurred after the beginning of such four-month period; and 43 (ii) such receipt of property or reduction of claim occurred within four months after such resignation or removal. (b) There shall be excluded from the operation of subsection (a) of this Section 8.13 a creditor relationship arising from: (1) the ownership or acquisition of securities issued under any indenture, or any security or securities having a maturity of one year or more at the time of acquisition by the Trustee; (2) advances authorized by a receivership or bankruptcy court of competent jurisdiction, or by this Indenture, for the purpose of preserving any property which shall at any time be subject to the lien of this Indenture or of discharging tax liens or other prior liens or encumbrances thereon, if notice of such advance and of the circumstances surrounding the making thereof is given to the Securityholders at the time and in the manner provided in Section 6.04 with respect to reports pursuant to subsections (a) and (b) thereof, respectively; (3) disbursements made in the ordinary course of business in the capacity of trustee under an indenture, transfer agent, registrar, custodian, paying agent, fiscal agent or depositary, or other similar capacity; (4) an indebtedness created as a result of services rendered or premises rented; or an indebtedness created as a result of goods or securities sold in a cash transaction as defined in subsection (c) of this Section 8.13; (5) the ownership of stock or of other securities of a corporation organized under the provisions of Section 25(a) of the Federal Reserve Act, as amended, which is directly or indirectly a creditor of the Corporation; or (6) the acquisition, ownership, acceptance or negotiation of any drafts, bills of exchange, acceptances or obligations which fall within the classification of self-liquidating paper as defined in subsection (c) of this Section 8.13. (c) As used in this Section 8.13: (1) the term "default" shall mean any failure to make payment in full of the principal of or interest upon any of the Securities or upon the other indenture securities when and as such principal or interest becomes due and payable; (2) the term "other indenture securities" shall mean securities upon which the Corporation is an obligor (as defined in the Trust Indenture Act of 1939) outstanding under any other indenture (A) under which the Trustee is 44 also trustee, (B) which contains provisions substantially similar to the provisions of subsection (a) of this Section 8.13, and (C) under which a default exists at the time of the apportionment of the funds and property held in said special account; (3) the term "cash transaction" shall mean any transaction in which full payment for goods or securities sold is made within seven days after delivery of the goods or securities in currency or in checks or other orders drawn upon banks or bankers and payable upon demand; (4) the term "self-liquidating paper" shall mean any draft, bill of exchange, acceptance or obligation which is made, drawn, negotiated or incurred by the Corporation for the purpose of financing the purchase, processing, manufacture, shipment, storage or sale of goods, wares or merchandise and which is secured by documents evidencing title to, possession of, or a lien upon, the goods, wares or merchandise or the receivables or proceeds arising from the sale of the goods, wares or merchandise previously constituting the security; PROVIDED that the security is received by the Trustee simultaneously with the creation of the creditor relationship with the Corporation arising from the making, drawing, negotiating or incurring of the draft, bill of exchange, acceptance or obligation; and (5) the term "Corporation" shall mean any obligor upon the Securities. ARTICLE NINE CONCERNING THE SECURITYHOLDERS SECTION 9.01. ACTION BY SECURITYHOLDERS. Whenever in this Indenture it is provided that the holders of a specified percentage in aggregate principal amount of the Securities of any or all series may take any action (including the making of any demand or request, the giving of any notice, consent or waiver or the taking of any other action) the fact that at the time of taking any such action the holders of such specified percentage have joined therein may be evidenced, subject to Section 10.07, (a) by any instrument or any number of instruments of similar tenor executed by holders of such Securities in person or by agent or proxy appointed in writing, or (b) by the record of the holders of such Securities voting in favor thereof at any meeting of holders of such Securities duly called and held in accordance with the provisions of Article Ten, or (c) by a combination of such instrument or instruments and any such record of such a meeting of holders of such Securities. SECTION 9.02. PROOF OF EXECUTION BY SECURITYHOLDERS. Subject to the provisions of Sections 8.01, 8.02 and 10.05, proof of the execution of any instruments by a Securityholder or his agent or proxy shall be sufficient if made in accordance with such reasonable rules and regulations as may be prescribed by the 45 Trustee or in such manner as shall be satisfactory to the Trustee. The ownership of Securities shall be proved by the registry books of the Corporation or by a certificate of the Security registrar. The record of any Securityholders' meeting shall be proved in the manner provided in Section 10.06. SECTION 9.03. WHO ARE DEEMED ABSOLUTE OWNERS. The Corporation, the Trustee, any paying agent and any Security registrar may deem the person in whose name any Securities shall be registered upon the registry books of the Corporation to be, and may treat such person as the absolute owner of such Security (whether or not such Security shall be overdue) for the purpose of receiving payment of or on account of the principal of (and premium, if any) and interest, if any, on such Security and for all other purposes; and neither the Corporation nor the Trustee nor any paying agent nor any Security registrar shall be affected by any notice to the contrary. All such payments so made to any holder for the time being, or upon his order shall be valid, and, to the extent of the sum or sums so paid, effective to satisfy and discharge the liability for moneys payable upon any such Security. SECTION 9.04. CORPORATION-OWNED SECURITIES DISREGARDED. In determining whether the holders of the requisite aggregate principal amount of Securities have concurred in any direction, consent or waiver under this Indenture, Securities which are owned by the Corporation or any other obligor on the Securities or by any person directly or indirectly controlling or controlled by or under direct or indirect common control with the Corporation or any other obligor on the Securities shall be disregarded and deemed not to be outstanding for the purpose of any such determination; PROVIDED that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, consent or waiver only Securities which the Trustee knows are so owned shall be so disregarded. Securities so owned which have been pledged in good faith may be regarded as outstanding for the purposes of this Section 9.04 if the pledgee shall establish to the satisfaction of the Trustee the pledgee's right to vote such Securities and that the pledgee is not a person directly or indirectly controlling or controlled by or under direct or indirect common control with the Corporation or any such other obligor. In the case of a dispute as to such right, any decision by the Trustee taken upon the advice of counsel shall be full protection to the Trustee. SECTION 9.05. REVOCATION OF CONSENTS; FUTURE HOLDERS BOUND. At any time prior to (but not after) the evidencing to the Trustee, as provided in Section 9.01. of the taking of any action by the holders of the percentage in aggregate principal amount of the Securities specified in this Indenture in connection with such action, any holder of a Security the serial number of which is shown by the evidence to be included in the Securities the holders of which have consented to such action may, by filing written notice with the Trustee at its principal office 46 and upon proof of holding as provided in Section 9.02, revoke such action so far as concerns such Security. Except as aforesaid any such action taken by the holder of any Security shall be conclusive and binding upon such holder and upon all future holders and owners of such Security and of any Security issued in exchange or substitution therefore, irrespective of whether or not any notation in regard thereto is made upon such Security. ARTICLE TEN SECURITYHOLDERS' MEETINGS SECTION 10.01. PURPOSES OF MEETINGS. A meeting of holders of Securities of one or more series may be called at any time and from time to time pursuant to the provisions of this Article Ten for any of the following purposes: (1) to give any notice to the Corporation or to the Trustee, or to give any directions to the Trustee, or to consent to the waiving of any default hereunder and its consequences, or to take any other action authorized to be taken by such Securityholders pursuant to any of the provisions of Article Seven; (2) to remove the Trustee and nominate a successor trustee pursuant to the provisions of Article Eight; (3) to consent to the execution of an indenture or indentures supplemental hereto pursuant to the provisions of Section 11.02; or (4) to take any other action authorized to be taken by or on behalf of the holders of any specified aggregate principal amount of the Securities of one or more series under any other provision of this Indenture or under applicable law. SECTION 10.02. CALL OF MEETINGS BY TRUSTEE. The Trustee may at any time call a meeting of holders of Securities of one or more series to take any action specified in Section 10.01, to be held at such time and at such place in the City of Baltimore, State of Maryland, as the Trustee shall determine. Notice of every such meeting of the Securityholders, setting forth the time and place of such meeting and in general terms the action proposed to be taken at such meeting, shall be mailed to holders of Securities of each series affected at their addresses as they shall appear on the registry books of the Corporation. Such notice shall be mailed not less than 20 nor more than 90 days prior to the date fixed for the meeting. SECTION 10.03. CALL OF MEETINGS BY CORPORATION OR SECURITYHOLDERS. In case at any time the Corporation, pursuant to a Board Resolution, or the holders of at least ten percent in aggregate principal amount of the Securities of one or more series then outstanding, shall have requested the Trustee to call a meeting of 47 Securityholders of Securities of such series, by written request setting forth in reasonable detail the action proposed to be taken at the meeting, and the Trustee shall not have mailed the notice of such meeting within 20 days after receipt of such request, then the Corporation or such Securityholders may determine the time and the place in said City of Baltimore for such meeting and may call such meeting to take any action authorized in Section 10.01, by mailing notice thereof as provided in Section 10.02. SECTION 10.04. QUALIFICATIONS FOR VOTING. To be entitled to vote at any meeting of holders of Securities of any series a person shall (a) be a holder of one or more Securities of such series or (b) be a person appointed by an instrument in writing as proxy by a holder of one or more Securities of such series. The only persons who shall be entitled to be present or to speak at any meeting of Securityholders shall be the persons entitled to vote at such meeting and their counsel and any representatives of the Trustee and its counsel and any representatives of the Corporation and its counsel. SECTION 10.05. REGULATIONS. Notwithstanding any other provisions of this Indenture, the Trustee may make such reasonable regulations as it may deem advisable for any meeting of Securityholders, in regard to proof of the holding of Securities and of the appointment of proxies, and in regard to the appointment and duties of inspectors of votes, the submission and examination of proxies, certificates and other evidence of the right to vote, and such other matters concerning the conduct of the meeting as it shall think fit. The Trustee shall, by an instrument in writing, appoint a temporary chairman of the meeting, unless the meeting shall have been called by the Corporation or by the Securityholders as provided in Section 10.03, in which case the Corporation or the Securityholders calling the meeting, as the case may be, shall in like manner appoint a temporary chairman. A permanent chairman and a permanent secretary of the meeting shall be elected by majority vote of the meeting. Subject to the provisions of Section 9.04, at any meeting each Securityholder or proxy shall be entitled to one vote for each $1,000 principal amount (in the case of Discounted Securities, such principal amount to be determined as provided in the definition of the term "outstanding") of Securities held or represented by such Securityholder; PROVIDED, HOWEVER, that no vote shall be cast or counted at any meeting in respect of any Security challenged as not outstanding and ruled by the chairman of the meeting to be not outstanding. The chairman of the meeting shall have no right to vote other than by virtue of Securities held by him or instruments in writing as aforesaid duly designating him as the person to vote on behalf of other Securityholders. Any meeting of Securityholders duly called pursuant to the provisions of Section 10.02 or 10.03 may be adjourned from time to time by a majority of those present, whether or not constituting a quorum, and the meeting may be held as so adjourned without further notice. 48 SECTION 10.06. VOTING. The vote upon any resolution submitted to any meeting of Securityholders shall be by written ballots on which shall be subscribed the signatures of the holders of Securities or of their representatives by proxy and the principal amount of the Securities held or represented by them. The permanent chairman of the meeting shall appoint two inspectors of votes who shall count all votes cast at the meeting for or against any resolution and who shall make and file with the secretary of the meeting their verified written reports in duplicate of all votes cast at the meeting. A record in duplicate of the proceedings of each meeting of Securityholders shall be prepared by the secretary of the meeting and there shall be attached to said record the original reports of the inspectors of votes on any vote by ballot taken thereat and affidavits by one or more persons having knowledge of the facts setting forth a copy of the notice of the meeting and showing that said notice was mailed as provided in Section 10.02. The record shall show the principal amount of the Securities voting in favor of or against any resolution. The record shall be signed and verified by the affidavits of the permanent chairman and secretary of the meeting and one of the duplicates shall be delivered to the Corporation and the other to the Trustee to be preserved by the Trustee. Any record so signed and verified shall be conclusive evidence of the matters therein stated. SECTION 10.07. WRITTEN CONSENT IN LIEU OF MEETING. The written authorization or consent of the requisite percentage of Securityholders herein provided, entitled to vote at any such meeting, evidenced as provided in Article Nine and filed with the Trustee shall be effective in lieu of a meeting of Securityholders, with respect to any matter provided for in this Article Ten. ARTICLE ELEVEN SUPPLEMENTAL INDENTURES SECTION 11.01. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF SECURITYHOLDERS. The Corporation, when authorized by a resolution of the Board of Directors, and the Trustee may from time to time and at any time enter into an indenture or indentures supplemental hereto for one or more of the following purposes: (a) to evidence the succession of another corporation to the Corporation, or successive successions, and the assumption by the successor corporation of the covenants, agreements and obligations of the Corporation pursuant to Article Twelve hereof; (b) to add to the covenants of the Corporation such further covenants, restrictions or conditions for the protection of the holders of the Securities as the Board of Directors and the Trustee shall consider to be for the protection 49 of the holders of Securities, and to make the occurrence, or the occurrence and continuance, of a default in any of such additional covenants, restrictions or conditions a default or an Event of Default permitting the enforcement of all or any of the several remedies provided in this Indenture as herein set forth; PROVIDED, HOWEVER, that in respect of any such additional covenant, restriction or condition such supplemental indenture may provide for a particular period of grace after default (which period may be shorter or longer than that allowed in the case of other defaults) or may provide for an immediate enforcement upon such default or may limit the remedies available to the Trustee upon such default; (c) to provide for the issuance under this Indenture of Securities in coupon form (including, Securities registrable as to principal only) and to provide for exchangeability of such Securities with the Securities of the same series issued hereunder in fully registered form and to make all appropriate changes for such purpose; (d) to cure any ambiguity or to correct or supplement any provision contained herein or in any supplemental indenture which may be defective or inconsistent with any other provision contained herein or in any supplemental indenture or to make such other provisions in regard to matters or questions arising under this Indenture which shall not adversely affect the interest of the holders of the Securities; (e) to add to the conditions, limitations and restrictions on the authorized amount, terms or purposes of issue, authentication and delivery of Securities, as herein set forth, other conditions, limitations and restrictions thereafter to be observed; or (f) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the Trusts hereunder by more than one Trustee, pursuant to the requirements of Section 8.11 hereof. The Trustee is hereby authorized to join with the Corporation in the execution of any such supplemental indenture, to make any further appropriate agreements and stipulations which may be therein contained and to accept the conveyance, transfer and assignment of any property thereunder, but the Trustee shall not be obligated to, but may in its discretion, enter into any such supplemental indenture which affects the Trustee's own rights, duties or immunities under this Indenture or otherwise. Any supplemental indenture authorized by the provisions of this Section 11.01 50 may be executed by the Corporation and the Trustee without the consent of the holders of any of the Securities at the time outstanding, notwithstanding any of the provisions of Section 11.02. SECTION 11.02. SUPPLEMENTAL INDENTURES WITH CONSENT OF SECURITYHOLDERS. With the consent (evidenced as provided in Section 9.01) of the holders of not less than 66 2/3% in aggregate principal amount of the Securities of all series affected by such supplemental indenture (voting as one class) at the time outstanding, the Corporation, when authorized by a resolution of the Board of Directors, and the Trustee may from time to time and at any time enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of any supplemental indenture or of modifying in any manner the rights of the holders of the Securities of each such series; PROVIDED, HOWEVER, that no such supplemental indenture shall (i) extent the fixed maturity of any Security, or reduce the rate or change the method to be used in establishing the rate or extend the time of payment of interest thereon, or reduce the principal amount thereof, or reduce any premium payable upon the redemption thereof, or reduce the amount of the principal of a Discounted Security that would be due and payable upon a declaration of acceleration of the maturity thereof pursuant to Section 7.01, or make the principal thereof or premium or interest thereon payable in any coin or currency other than that provided in such Securities, without the consent of the holder of each Security so affected, or (ii) reduce the aforesaid percentage of Securities, the holders of which are required to consent to any such supplemental indenture, without the consent of the holders of all Securities of the series affected then outstanding. A supplemental indenture which changes or eliminates any covenant or other provision of this Indenture which has expressly been included solely for the benefit of one or more particular series of Securities, or which modifies the rights of the holders of Securities of such series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the holders of Securities of any other series. Upon the request of the Corporation, accompanied by a Board Resolution authorizing the execution of any such supplemental indenture, and upon the filing with the Trustee of evidence of the consent of Securityholders as aforesaid, the Trustee shall join with the Corporation in the execution of such supplemental indenture unless such supplemental indenture affects the Trustee's own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such supplemental indenture. It shall not be necessary for the consent of the Securityholders under this Section 11.02 to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such consent shall approve the substance thereof. 51 SECTION 11.03. COMPLIANCE WITH TRUST INDENTURE ACT; EFFECT OF SUPPLEMENTAL INDENTURE. Any supplemental indenture executed pursuant to the provisions of this Article Eleven shall comply with the Trust Indenture Act of 1939, as then in effect. Upon the execution of any supplemental indenture pursuant to the provisions of this Article Eleven, this Indenture shall be and be deemed to be modified and amended in accordance therewith and the respective rights; limitations of rights, obligations, duties and immunities under this Indenture of the Trustee, the Corporation and the holders of Securities of the series affected shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments and all the terms and conditions of any such supplemental indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes. SECTION 11.04. NOTATION ON SECURITIES. Securities authenticated and delivered after the execution of any supplemental indenture pursuant to the provisions of this Article Eleven may bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Corporation shall so determine, new Securities so modified as to conform, in the opinion of the Trustee and the Board of Directors, to any modification of this Indenture contained in any such supplemental indenture, may be prepared and executed by the Corporation, authenticated by the Trustee and delivered in exchange for the Securities then outstanding. SECTION 11.05. EVIDENCE OF COMPLIANCE OF SUPPLEMENTAL INDENTURE TO BE FURNISHED TRUSTEE. The Trustee, subject to the provisions of Sections 8.01 and 8.02, may receive an Officers' Certificate and an Opinion of Counsel as conclusive evidence that any supplemental indenture executed pursuant hereto complies with the requirements of this Article Eleven. ARTICLE TWELVE CONSOLIDATION, MERGER AND SALE SECTION 12.01. CORPORATION MAY CONSOLIDATE, ETC., ON CERTAIN TERMS. Nothing contained in this Indenture or in any of the Securities shall prevent any consolidation or merger of the Corporation with or into any other corporation or corporations (whether or not affiliated with the Corporation), or successive consolidations or mergers in which the Corporation or its successor or successors shall be a party or parties, or shall prevent any sale or conveyance of all or substantially all the property of the Corporation to any other corporation (whether or not affiliated with the Corporation) authorized to acquire and operate the same; PROVIDED, HOWEVER, and the Corporation hereby covenants and agrees, that upon any such consolidation, merger, sale or conveyance, the due and punctual payment of the principal of (and premium, if any) and interest, if any, on all of the Securities, according to their tenor, and the due and punctual performance and observance of all of the covenants and conditions of this Inden- 52 ture to be performed by the Corporation, shall be expressly assumed by supplemental indenture satisfactory in form to the Trustee executed and delivered to the Trustee, by the corporation (if other than the Corporation) formed by such consolidation, or into which the Corporation shall have been merged, or by the corporation which shall have acquired such property. SECTION 12.02. SUCCESSOR CORPORATION TO BE SUBSTITUTED. In case of any such consolidation, merger, sale or conveyance and upon the assumption by the successor corporation, by supplemental indenture, executed and delivered to the Trustee and satisfactory in form to the Trustee, of the due and punctual payment of the principal of (and premium, if any) and interest, if any, on all of the Securities and the due and punctual performance of all of the covenants and conditions of this Indenture to be performed by the Corporation, such successor corporation shall succeed to and be substituted for the Corporation, with the same effect as if it had been named herein as the Corporation. Such successor corporation thereupon may cause to be signed, and may issue either in its own name or in the name of Baltimore Gas and Electric Company any or all of the Securities issuable hereunder which theretofore shall not have been signed by the Corporation and delivered to the Trustee; and, upon the order of such successor corporation instead of the Corporation and subject to all the terms, conditions and limitations in this Indenture prescribed, the Trustee shall authenticate and shall deliver any Securities which previously shall have been signed and delivered by the officers of the Corporation to the Trustee for authentication, and any Securities which such successor corporation thereafter shall cause to be signed and delivered to the Trustee for that purpose. All the Securities of a particular series so issued shall in all respects have the same legal rank and benefit under this Indenture as the Securities of such series theretofore or thereafter issued in accordance with the terms of this Indenture as though all of such Securities had been issued at the date of the execution hereof. Nothing contained in this Indenture or in any of the Securities shall prevent the Corporation from merging into itself any other corporation (whether or not affiliated with the Corporation) or acquiring by purchase or otherwise all or any part of the property of any other corporation (whether or not affiliated with the Corporation), provided that, immediately after such merger or acquisition, the Corporation shall not be in default in the performance or observance of any of the terms, covenants and conditions of this Indenture to be kept or performed by it. SECTION 12.03. OPINION OF COUNSEL TO BE GIVEN TRUSTEE. The Trustee, subject to Sections 8.01 and 8.02, may receive an Opinion of Counsel as conclusive evidence that any such consolidation, merger, sale or conveyance and any such assumption complies with the provisions of this Article. 53 ARTICLE THIRTEEN SATISFACTION AND DISCHARGE OF INDENTURE SECTION 13.01. DISCHARGE OF INDENTURE. When (a) the Corporation shall deliver to the Trustee for cancellation all Securities theretofore authenticated (other than any Securities which shall have been destroyed, lost or stolen and which shall have been replaced or paid as provided in Section 3.05) and not theretofore cancelled, or (b) all the Securities not theretofore delivered to the Trustee for cancellation shall have become due and payable, or are by their terms to become due and payable within one year, and the Corporation shall deposit with the Trustee or any paying agent, in trust, funds sufficient to pay at maturity all of the Securities (other than any Securities which shall have been mutilated, destroyed, lost or stolen and which shall have been replaced or paid as provided in Section 3.05) not theretofore delivered to the Trustee for cancellation, including principal (and premium, if any) and interest, if any, due or to become due to such date of maturity, but excluding, however, the amount of any moneys for the payment of the principal of (and premium, if any) or interest, if any, on the Securities (1) theretofore deposited with the Trustee or any paying agent and repaid by the Trustee or any paying agent to the Corporation in accordance with the provisions of Section 13.04, or (2) paid to any State or to the District of Columbia pursuant to its unclaimed property or similar laws, and if in either case the Corporation shall also pay or cause to be paid all other sums payable hereunder by the Corporation, then this Indenture shall cease to be of further effect, and the Trustee, on demand of the Corporation accompanied by an Officers' Certificate and an Opinion of Counsel as required by Section 16.05 and at the cost and expense of the Corporation, shall execute proper instruments acknowledging satisfaction of and discharging this Indenture. The Corporation, however, hereby agrees to reimburse the Trustee for any costs or expenses thereafter reasonably and properly incurred by the Trustee in connection with this Indenture or the Securities. SECTION 13.02. DEPOSITED MONEYS TO BE HELD IN TRUST BY TRUSTEE. All moneys deposited with the Trustee or any paying agent pursuant to Section 13.01 shall be held in trust and applied by it to the payment, either directly or through any paying agent (including the Corporation if acting as its own paying agent), to the holders of the particular Securities for the payment of which such moneys have been deposited with the Trustee, or any paying agent, of all sums due and to become due thereon for principal (and premium, if any) and interest. SECTION 13.03. PAYING AGENT TO REPAY MONEYS HELD. Upon the satisfaction and discharge of this Indenture all moneys then held by any paying agent of the Securities (other than the Trustee) shall, upon demand of the Corporation, be repaid to it or paid to the Trustee, and thereupon such paying agent shall be released from all further liability with respect to such moneys. 54 SECTION 13.04. RETURN OF UNCLAIMED MONEYS. Any moneys deposited with or paid to the Trustee for payment of the principal of (or premium, if any) or interest on Securities of any series and not applied but remaining unclaimed by the holders of such Securities for two years after the date upon which the principal of (or premium, if any) or interest on such Securities, as the case may be, shall have become due and payable, shall on demand of the Corporation be repaid to the Corporation by the Trustee; and the holder of any of such Securities shall thereafter look only to the Corporation for any payment which such holder may be entitled to collect. ARTICLE FOURTEEN IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS SECTION 14.01. INDENTURE AND SECURITIES SOLELY CORPORATE OBLIGATIONS. No recourse for the payment of the principal of (or premium, if any) or interest on any Security, or for any claim based thereon or otherwise in respect thereof, and no recourse under or upon any obligation, covenant or agreement of the Corporation in this Indenture or in any supplemental indenture, or in any Security, or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, officer or director, as such, past, present or future, of the Corporation or of any successor corporation, either directly or through the Corporation or any successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that all such liability is hereby expressly waived and released as a condition of, and as a consideration for, the execution of this Indenture and the issue of the Securities. ARTICLE FIFTEEN SINKING FUNDS SECTION 15.01. GENERAL. Any redemption of Securities of any series under any sinking fund as required or permitted by the terms of any Securities duly issued pursuant to this Indenture shall be made in accordance with such terms and this Article Fifteen. The Securities of any series may be subject to redemption pursuant to a sinking fund, in whole or in part, as set forth in the form of Security for such series. The minimum amount of any sinking fund payment provided for by the terms of Securities of any series is herein referred to as a "mandatory sinking fund payment", and any payment in excess of such minimum amount provided for by the terms of Securities of any series is herein referred to as an "optional sinking fund payment". If provided for by the terms of Securities of any series, the cash amount of any sinking fund payment may be subject to reduction as 55 provided in Section 15.02 hereof. Each sinking fund payment shall be applied to the redemption of Securities of any series as provided for by the terms of Securities of such series. SECTION 15.02. SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES. The Corporation (1) may deliver to the Trustee for cancellation outstanding Securities of a series (other than any previously called for redemption) and (2) may apply as a credit Securities as a series which have been redeemed either at the election of the Corporation pursuant to the terms of such Securities or through the application of permitted optional sinking fund payments pursuant to the terms of such Securities, in each case in satisfaction of all or any part of any sinking fund payment with respect to the Securities of such series required to be made pursuant to the terms of such Securities as provided for by the terms of such series; provided that such Securities have not been previously so credited. Such Securities shall be received and credited for such purpose by the Trustee at the redemption price specified in such Securities for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly. SECTION 15.03. REDEMPTION OF SECURITIES FOR SINKING FUND. Not less than sixty days prior to each sinking fund payment date for any series of Securities, the Corporation will deliver to the Trustee an Officers' Certificate specifying the amount of the next ensuing sinking fund payment for that series pursuant to the terms of that series, the portion thereof, if any, which is to be by payment of cash and the portion thereof, if any, which is to be satisfied by delivering and crediting Securities of that series as permitted by Section 15.02 and will also deliver to the Trustee any Securities to be so delivered if not theretofore delivered. The Trustee shall select the Securities to be redeemed upon such sinking fund payment date in the manner specified in Section 4.03 and cause notice of the redemption thereof to be given in the manner provided in Section 4.04. Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Sections 4.05 and 4.06. ARTICLE SIXTEEN MISCELLANEOUS PROVISIONS SECTION 16.01. PROVISIONS BINDING ON CORPORATION'S SUCCESSORS. All the covenants, stipulations, promises and agreements in this Indenture contained by the Corporation shall bind its successors and assigns whether so expressed or not. SECTION 16.02. OFFICIAL ACTS BY SUCCESSOR CORPORATION. Any act or proceeding by any provision of this Indenture authorized or required to be done or performed by any board, committee or officer of the Corporation shall and may be done and performed with like force and effect by the like board, committee or officer of any corporation that shall at the time be the lawful sole successor of the Corporation. 56 SECTION 16.03. ADDRESSES FOR NOTICES, ETC. Any notice or demand which by any provision of this Indenture is required or permitted to be given or served by the Trustee or by the holders of Securities on the Corporation may be given or served by being deposited postage prepaid in a post office letter box addressed (until another address is filed by the Corporation with the Trustee) to Baltimore Gas and Electric Company. P.O. Box 1475, Baltimore, Maryland 21203. ATTENTION: SECRETARY. Deliveries by hand may be made by being brought to the Corporation at the Gas and Electric Building, Charles Center, Baltimore, Maryland 21201, ATTENTION: SECRETARY. Any notice, direction, request or demand by any Securityholder to or upon the Trustee shall be deemed to have been sufficiently given or made, for all purposes, if given or made in writing at the Principal Office of the Trustee, addressed to the attention of its Corporate Trust Department. SECTION 16.04. MARYLAND CONTRACT. This Indenture and each Security shall be deemed to be a contract made under the laws of the State of Maryland, and for all purposes shall be governed by and construed in accordance with the laws of said State. SECTION 16.05. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT. Upon any application or demand by the Corporation to the Trustee to take any action under any of the provisions of this Indenture, the Corporation shall furnish to the Trustee an Officers' Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that, in the opinion of such counsel all such conditions precedent have been complied with. Each certificate or opinion provided for in this Indenture and delivered to the Trustee with respect to compliance with a condition or covenant provided for in this Indenture shall include (1) a statement that the person making such certificate or opinion has read such covenant or condition; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinion contained in such certificate or opinion are based; (3) a statement that in the opinion of such person, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (4) a statement as to whether or not, in the opinion of such person, such condition or covenant has been complied with. SECTION 16.06. LEGAL HOLIDAYS. In any case where the date of maturity of interest on or premium, if any on, or principal of the Securities is not a business day, then payment of such interest on or premium, if any on, or principal of the Securities need not be made on such date but may be made on the next succeeding business day with the same force and effect as if made on the date of maturity and no interest shall accrue for the period from and after such date of maturity. 57 SECTION 16.07. TRUST INDENTURE ACT TO CONTROL. If and to the extent that any provision of this Indenture limits, qualifies or conflicts with another provision included in this Indenture which is required to be included in this Indenture by any of Sections 310 to 317, inclusive, of the Trust Indenture Act of 1939, such required provision shall control. SECTION 16.08. TABLE OF CONTENTS, HEADINGS, ETC. The table of contents and the titles and headings of the articles and sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part hereof, and shall in no way modify or restrict any of the terms or provisions hereof. SECTION 16.09. EXECUTION IN COUNTERPARTS. This Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument. Mercantile-Safe Deposit and Trust Company, as Trustee, hereby accepts the trusts in this Indenture declared and provided, upon the terms and conditions hereinabove set forth. 58 IN WITNESS WHEREOF, Baltimore Gas and Electric Company has caused this Indenture to be signed in its corporate name and acknowledged by its Chairman of the Board, its President or one of its Vice Presidents, and its corporate seal to be affixed hereunto or impressed hereon, and the same to be attested by its Secretary or an Assistant Secretary, and Mercantile-Safe Deposit and Trust Company, Trustee, has caused this Indenture to be signed and acknowledged by one of its Assistant Vice Presidents, has caused its corporate seal to be affixed hereunto or impressed hereon, and the same to be attested by one of its Corporate Trust Officers, as of the day and year first written above. BALTIMORE GAS AND ELECTRIC COMPANY By E.A. CROOKE ------------------------------- E.A. Crooke VICE PRESIDENT [CORPORATE SEAL] Attest: A.H. INNERS - ------------------------------- A.H. Inners ASSISTANT SECRETARY MERCANTILE-SAFE DEPOSIT AND TRUST COMPANY [CORPORATE SEAL] Attest: By SANDRA L. SPIRO ------------------------------- ASSISTANT VICE PRESIDENT L. SANDRA DESPEAUK - ------------------------------- CORPORATE TRUST OFFICER 59 STATE OF MARYLAND ) CITY OF BALTIMORE ) ss.: On this 3rd day of July, 1985, before me personally appeared E.A. Crooke to me known to be the Vice President of BALTIMORE GAS AND ELECTRIC COMPANY, the corporation that executed the written and foregoing instrument and acknowledged said instrument to be the voluntary act and deed of said corporation for the use and purposes therein mentioned, and an oath stated that he is authorized to execute said instrument and that the seal affixed is the corporate seal of said corporation. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year first above written. [NOTARIAL SEAL] MINNIE L. ROBINSON ------------------------------- Notary Public STATE OF MARYLAND ) CITY OF BALTIMORE ) ss.: On this 3rd day of July, 1985, before me personally came Sandra L. Spiro to me known, who, being by me duly sworn, did depose and say that she is an Assistant Vice President of MERCANTILE-SAFE DEPOSIT AND TRUST COMPANY, one of the corporations described in and which executed the above instrument; that she knows the corporate seal of said corporation; that the seal affixed to the said instrument is such corporate seal; that it was so affixed by the authority of the Board of Directors of said corporation; and that she signed her name thereto by like authority. [NOTARIAL SEAL] MINNIE L. ROBINSON ------------------------------- Notary Public =============================================================================== BALTIMORE GAS AND ELECTRIC COMPANY and MERCANTILE-SAFE DEPOSIT AND TRUST COMPANY Trustee -------------------------- SUPPLEMENTAL INDENTURE Dated as of October 1, 1987 To Indenture dated as of July 1, 1985 -------------------------- =============================================================================== THIS SUPPLEMENTAL INDENTURE, dated as of October 1, 1987, between BALTIMORE GAS AND ELECTRIC COMPANY, a Maryland corporation ("Corporation"), and MERCANTILE-SAFE DEPOSIT AND TRUST COMPANY, Trustee, a Maryland corporation ("Trustee"), WITNESSETH: WHEREAS the Corporation and the Trustee are parties to the Indenture dated as of July 1, 1985 ("Indenture"), providing for the issuance from time to time of one or more series of the Securities; WHEREAS the Corporation desires and has requested the Trustee to join with it in the execution and delivery of this Supplemental Indenture in order to supplement the Indenture as set forth herein; WHEREAS all things necessary to make this Supplemental Indenture a valid supplement to the Indenture have been done; NOW THEREFORE, the Corporation and the Trustee agree as follows: 1. Section 2.02 of the Indenture is hereby amended to read in its entirety as follows: Section 2.02. AUTHENTICATION AGENT AND FORM OF CERTIFICATE OF AUTHENTICATION. The Corporation hereby appoints the Trustee as an authentication agent for the Securities. The Corporation may designate one or more additional authentication agent(s) for all of the Securities or for one or more series of the Securities; provided that the Trustee must consent in writing to such designation. The following shall be the form of Certificate of Authentication provided by the Trustee or any authentication agent. This is one of the Securities of the series designated herein issued under the Indenture described herein. [NAME OF TRUSTEE OR AUTHENTICATION AGENT] By: _________________________________________ Authorized Signator 2 Any reference in this Indenture to the Trustee with respect to authentication of the Securities (including without limitation execution by the Trustee of certificates of authentication) shall be deemed also to include a reference to any authentication agent duly designated pursuant to this Section 2.02. 2. Section 4.05 of the Indenture is hereby amended to add "or on" after the word "to" and before the word "the" in the first line of the Section so that the Section shall read as follows: Prior to or on the redemption date specified in the notice of redemption of any Security issued on or after the date of this Supplemental Indenture given as provided in Section 4.04, the Corporation will deposit with the Trustee or with one or more paying agents an amount of money sufficient to redeem on the redemption date all of the Securities so called for redemption at the applicable redemption price. 3. Article Four of the Indenture is hereby amended to add a new Section 4.07 to read as follows: Section 4.07. DELEGATION OF DUTIES BY TRUSTEE. Except in regard to Section 4.03, any reference in this Article to the Trustee with respect to its duties in regard to the redemption of any Securities issued on or after the date of this Supplemental Indenture shall be deemed to also include any entity designated by the Company with the consent of the Trustee to act as its agent for the performance of all or any of its duties under this Article. 4. Section 13.04 of the Indenture is hereby amended to add a new sentence at the end of the Section as follows: Any reference to the Trustee in this Section 13.04 shall be deemed to also include any entity designated by the Company with the consent of the Trustee to act as its agent, regarding any Securities issued on or after the date of this Supplemental Indenture, for the performance of all or any of its duties under this Section. 5. All words beginning with a capital letter and not otherwise defined herein shall have the meaning ascribed in the Indenture. IN WITNESS WHEREOF, Baltimore Gas and Electric Company has caused this Supplemental Indenture to be signed in its corporate name and acknowledged by its Chairman of the Board, President or one of its Vice Presidents, and its corporate seal to be affixed hereunto duly attested by its 3 Secretary or an Assistant Secretary; and Mercantile-Safe Deposit and Trust Company, Trustee, has caused this Supplemental Indenture to be signed and acknowledged by one of its Vice Presidents or Assistant Vice Presidents, has caused its corporate seal to be affixed hereunto or impressed hereon, and the same to be attested by one of its Corporate Trust Officers, as of the day and year first written above. BALTIMORE GAS AND ELECTRIC COMPANY [Corporate Seal] By: E.A. CROOKE ------------------------------------- Title: Vice President Attest: C.W. SHIVERY - ------------------------------- Title: Assistant Secretary MERCANTILE-SAFE DEPOSIT AND TRUST COMPANY, as Trustee, [Corporate Seal] By: SANDRA L. SPIRO ------------------------------------- Title: Vice President Attest: M.L. SIGLER - ------------------------------- Title: Corporate Trust Officer STATE OF MARYLAND: : SS: CITY OF BALTIMORE: On this 27th day of October, 1987, before me personally appeared E.A. CROOKE to me known to be the Vice President of BALTIMORE GAS AND ELECTRIC COMPANY, the corporation that executed the written and foregoing instrument and acknowledged said instrument to be the voluntary act and deed of said corporation for the use and purposes therein mentioned, and an oath stated that he is authorized to execute said instrument and that the seal affixed is the corporate seal of said corporation. 4 IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year first above written. [Notarial Seal] [ILLEGIBLE] ----------------------------- Notary Public My Commission Expires __________________ STATE OF MARYLAND: : SS: CITY OF BALTIMORE: On this 27th day of October, 1987, before me personally came SANDRA L. SPIRO to me known, who, being by me duly sworn, did depose and say she is Vice President of MERCANTILE-SAFE DEPOSIT AND TRUST COMPANY, one of the corporations described in and which executed the above instrument; that she knows the corporate seal of said corporation; that the seal affixed to the said instrument is such corporate seal; that it was so affixed by the authority of the Board of Directors of said corporation; and that she signed her name thereto by like authority. [Notarial Seal] [ILLEGIBLE] ----------------------------- Notary Public 5 =============================================================================== BALTIMORE GAS AND ELECTRIC COMPANY and MERCANTILE-SAFE DEPOSIT AND TRUST COMPANY Trustee -------------------------- SUPPLEMENTAL INDENTURE Dated as of January 26, 1993 To Indenture dated as of July 1, 1985, as supplemented by a Supplemental Indenture dated as of October 1, 1987 -------------------------- =============================================================================== THIS SUPPLEMENTAL INDENTURE, dated as of January __, 1993, between BALTIMORE GAS AND ELECTRIC COMPANY, a Maryland corporation ("Corporation"), and MERCANTILE-SAFE DEPOSIT AND TRUST COMPANY, as Trustee, a Maryland corporation ("Trustee"), WITNESSETH: WHEREAS, the Corporation and the Trustee are parties to the Indenture dated as of July 1, 1985 as supplemented by a Supplemental Indenture dated as of October 1, 1987 ("Indenture"), providing for the issuance from time to time of one or more series of the Securities; WHEREAS, the Corporation desires and has requested the Trustee to join with it in the execution and delivery of this Supplemental Indenture in order to supplement the Indenture as set forth herein; WHEREAS, all things necessary to make this Supplemental Indenture a valid supplement to the Indenture have been done; NOW THEREFORE, the Corporation and the Trustee agree as follows: 1. Section 1.01 of the Indenture is hereby amended to add the following definition immediately after definition of the term CORPORATION as follows: DEPOSITARY The term "Depositary" shall mean, with respect to the Securities of any series issuable or issued in global form, the person designated pursuant to Section 3.01(10) as the Depositary with respect thereto any successor appointed pursuant to Section 3.04 of the Indenture. 2. Section 1.01 of the Indenture is hereby amended to delete the definition "Security or Securities" and to insert, in lieu thereof the following definition: SECURITY OR SECURITIES The term "Security" or "Securities" shall mean any debt security or debt securities, as the case may be, authenticated and delivered under this Indenture in temporary or permanent form and global or definitive form. 1 3. Article Two of the Indenture is hereby amended by adding a new Section 2.03 as follows: Section 2.03 GLOBAL SECURITIES If the Corporation shall establish pursuant to Section 3.01(10) that the Securities of all or part of a series are to be issued in whole or in part in the form of a global Security, such global Security shall be registered in the name of the Depositary for such global Security or the nominee of such Depositary and shall be delivered by the Trustee to such Depositary or pursuant to such Depositary's instructions. 4. Section 3.01 of the Indenture is hereby amended to delete the word "and" in the last line of subparagraph (9) thereof; to renumber current subparagraph (10) to be subparagraph (11); and to insert as a new subparagraph (10) the following: (10) If any of such Securities are to be issuable in global form, (i) when any of such Securities are to be issuable in global form; (ii) whether beneficial owners of interests in any such global Security may exchange such interests for Securities of the same series and of like tenor and of any authorized form and denomination, and the circumstances under which any such exchange may occur, if other than in the manner specified in Section 3.04 hereof, and (iii) the name of the Depositary with respect to any global Security, provided that a Depositary must, at the time of its designation and at all times while it serves as Depositary, be a clearing agency registered under the Securities Exchange Act of 1934, as amended, and any other applicable statute of regulation; and 5. Section 3.04 of the Indenture shall be further amended to add the following paragraphs immediately following the fourth paragraph thereof: Unless otherwise specified with respect to the Securities of a specific series as contemplated by Section 3.01(10), if at any time a Depositary for any Securities of a series issued in global form notifies the 2 Corporation that it is unwilling or unable to continue as Depositary for such Securities or if at any time a Depositary for any Securities of such series issued in global form shall no longer be eligible under the last clause of Section 3.01(10), the Corporation shall appoint a successor Depositary with respect to the Securities of such series. If a successor Depositary for such Securities is not appointed by the Corporation within 90 calendar days after the Corporation receives such notice or becomes aware of such ineligibility, or if an Event of Default with respect to such Securities has occurred and is continuing, such Securities shall, notwithstanding the terms of the Securities of such series established pursuant to Section 3.01(10), no longer be issued in global form and the Corporation will execute, and the Trustee, upon receipt of the Corporation's written order for the authentication and delivery of definitive Securities of such series, will authenticate and deliver, in exchange for such global Security from the Depositary, Securities of such series in definitive form in authorized denominations, in an aggregate principal amount equal to the principal amount of each global Security previously delivered to such Depositary and having like terms and conditions. The Corporation may at any time and in its sole discretion determine that the Securities of any series issued in the form of a global Security shall no longer be represented by such global Security. In such event the Corporation will execute, and the Trustee, upon receipt of the Corporation's written order for the authentication and delivery of definitive Securities of such series, will authenticate and deliver, in exchange for such global Security, Securities of such series in definitive form in authorized denominations, in an aggregate principal amount equal to the principal amount of the Securities no longer to be represented by such global Security and having like terms and conditions. 3 If specified by the Corporation with respect to a series of Securities pursuant to Section 3.01(10), the Depositary for any Securities of such series represented by a global Security may surrender such global Security in exchange in whole or in part for definitive Securities of such series having like terms and conditions and in definitive form on such terms as are acceptable to the Corporation and such Depositary. At such Depositary's request the Corporation shall thereupon execute, and the Trustee shall authenticate and deliver, (i) to each person specified by such Depositary a new definitive Security or Securities of the same series, having like terms and conditions and in any authorized denomination as requested by such person in aggregate principal amount equal to and in exchange for such person's beneficial interest in the global Security so surrendered and (ii) to such Depositary a new global Security which is of like terms and conditions and in a denomination equal to the difference, if any, between the principal amount of the surrendered global Security and the aggregate principal amount of definitive Securities delivered to each such person as provided in clause (i). Such Securities in definitive form issued pursuant to the preceding paragraphs of this Section 3.04 shall be registered in such names and in such authorized denominations as the Depositary, pursuant to instructions from its direct or indirect participants, or otherwise, shall instruct the Corporation. After authentication, the Trustee shall deliver such definitive Securities to the persons in whose names such Securities are so registered. 6. Sections 3.05 and 3.06 of the Indenture are hereby amended by deleting the word "definitive" each time it appears in such Sections and replacing it with the word "permanent." 7. Section 9.03 of the Indenture is hereby amended to add a second paragraph as follows: No holder of any beneficial interest in any global Security held on its behalf by a 4 Depositary shall have any rights under this Indenture with respect to such global Security, and such Depositary may be treated by the Corporation, the Trustee, any paying agent and any agent of the Corporation or the Trustee as the owner of such global Security for all purposes whatsoever. None of the Corporation, the Trustee, any paying agent or any Security registrar will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of a global Security or for maintaining, supervising or reviewing any records related to such beneficial ownership interests. 8. All words beginning with a capital letter and not otherwise defined herein shall have the meaning ascribed in the Indenture. IN WITNESS WHEREOF, Baltimore Gas and Electric Company has caused this Supplemental Indenture to be signed in its corporate name and acknowledged by its Chairman of the Board, President or one of its Vice Presidents, and its corporate seal to be affixed hereunto duly attested by its Secretary or an Assistant Secretary; and Mercantile-Safe Deposit and Trust Company, as Trustee, has caused this Supplemental Indenture to be signed and acknowledged by one of its Vice Presidents or Assistant Vice Presidents, its corporate seal to be affixed hereunto or impressed hereon, and the same to be attested by one of its Corporate Trust Officers, as of the day and year first written above. BALTIMORE GAS AND ELECTRIC COMPANY [Corporate Seal] By: C.W. SHIVERY --------------------------------- Title: Vice President Attest: JEFFREY DAVIS - ----------------------------- Title: Assistant Secretary 5 MERCANTILE-SAFE DEPOSIT AND TRUST COMPANY as Trustee, [Corporate Seal] By: JOHN M. MITCHELL --------------------------------- Title: Vice President Attest: ROBERT D. BROWN - ------------------------------ Title: Corporate Trust Officer 6 STATE OF MARYLAND: : SS: CITY OF BALTIMORE: On this 27th day of January, 1993, before me personally appeared C.W. SHIVERY, known to me to be the Vice President of BALTIMORE GAS AND ELECTRIC COMPANY, the corporation that executed the written and foregoing instrument and acknowledged said instrument to be the voluntary act and deed of said corporation for the use and purposes therein mentioned, and under oath stated that he is authorized to execute said instrument and that the seal affixed is the corporate seal of said corporation. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year first above written. [Notarial Seal] Cathy Lynn Powell (SEAL) --------------------- Notary Public My Commission Expires 10/17/94 7 STATE OF MARYLAND: : SS: CITY OF BALTIMORE: On this 26th day of January, 1993, before me personally appeared John M. Mitchell, known to me to be the Vice President of MERCANTILE-SAFE DEPOSIT AND TRUST COMPANY, one of the corporations described in and which executed the above instrument; that he knows the corporate seal of said corporation; that the seal affixed to the said instrument is such corporate seal; that it was so affixed by the authority of the Board of Directors of said corporation; and that he signed his name thereto by like authority. [Notarial Seal] [ILLEGIBLE] (SEAL) ---------------------- Notary Public My Commission Expires 9/25/94 8 EX-4.B 6 a2097345zex-4_b.txt EXHIBIT 4(B) Exhibit 4(b) FORM OF FIXED-RATE UNSECURED DEBT SECURITIES FRONT REGISTERED REGISTERED No. FXR ___ CUSIP BALTIMORE GAS AND ELECTRIC COMPANY INCORPORATED UNDER THE LAWS OF THE STATE OF MARYLAND UNSECURED DEBT SECURITIES [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.] - ----------------------------------------------------------------- PRINCIPAL AMOUNT: _____________________ INTEREST RATE: ______________________ STATED MATURITY: ______________________ ORIGINAL ISSUE DATE: ______________________
ISSUE PRICE: ______________________
REDEEMABLE AT THE OPTION OF THE REDEMPTION PRICES COMPANY ON OR AFTER (% OF PRINCIPAL AMOUNT) ------------------- ----------------------- - ------------------------------------- ------------------------------------- - ------------------------------------- ------------------------------------- - ------------------------------------- ------------------------------------- - ------------------------------------- -------------------------------------
[IF FLOATING RATE, BASIS TO BE PRINTED HERE] --------------------------------------------
SUBJECT TO REPURCHASE AT THE OPTION REPURCHASE PRICES OF THE HOLDER ON (% OF PRINCIPAL AMOUNT) ---------------- ----------------------- - ------------------------------------- ------------------------------------- - ------------------------------------- ------------------------------------- - ------------------------------------- ------------------------------------- - ------------------------------------- -------------------------------------
[Remarketing provisions, if any, to be included here] - ----------------------------------------------------------------- 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 _________________________________________________________ DOLLARS on the Stated Maturity shown above and to pay interest on said principal sum from the Original Issue Date shown above 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, at the fixed rate per annum shown above, semi-annually on ___ and ___ (the "Interest Payment Date(s)") of each year until the Stated Maturity or upon redemption or repurchase of this Note. Each payment of interest payable on each Interest Payment Date and at Stated Maturity or, if applicable, upon redemption or repurchase shall include interest to, but excluding the relevant Interest Payment Date and the date of Stated Maturity or redemption, respectively. Said interest shall be computed on the basis of a 360-day year of twelve 30-day months. In the event this Note is issued between a Record Date (the ___ and ___ next preceding the ___ and ___ Interest Payment Dates) 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, as supplemented by the Supplemental Indentures dated as of October 1, 1987, and January 26, 1993, respectively (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). 2 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 the Notes 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 any ___ or ___ 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, which shall be the ___ and ___ next preceding the ___ and ___ Interest Payment Dates; provided, however, that interest payable at Stated Maturity or, if applicable, upon redemption or repurchase, 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 or repurchase) 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, premium, if any, and interest payable at Stated Maturity, or, if applicable, upon redemption or repurchase, 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 or a Vice 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] Secretary 3 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 4 FORM OF FIXED-RATE UNSECURED DEBT SECURITIES (REVERSE) BALTIMORE GAS AND ELECTRIC COMPANY UNSECURED DEBT SECURITIES This Note is one of a duly authorized issue of debt securities (the "Securities") of the Company, of a series designated as its unsecured debt securities (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 Securityholders and the terms upon which the Notes are, and are to be, authenticated and delivered. 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. [This Note may not be redeemed by the Company prior to Stated Maturity unless otherwise set forth on the face hereof. Notwithstanding Section 4.03 of the Indenture, pursuant to Section 4.01 thereof, and if so indicated on the face of this Note, this Note may be redeemed at the option of the Company on any date on or after the date set forth on the face hereof in whole or in part in increments of $1,000, at a redemption price or prices designated on the face hereof to be redeemed together with interest thereon payable to the date fixed for redemption. This Note may be so redeemed in whole or in part whether or not other Notes of the same series are redeemed.]* To be modified as appropriate [Notice of redemption by the Company will be given by the Company by mail to holders of the Notes to be redeemed, not less than 30 nor more than 60 days prior to the date fixed for redemption, all as provided in the Indenture. The Bank may carry out the responsibilities to be performed by the Trustee required by Article Four of the Indenture.] * To be modified as appropriate [The Company is not required to repurchase Notes from holders prior to Stated Maturity unless otherwise set forth on the face hereof. If so indicated on the face hereof, this Note may be repurchased by the Company at the option of the holder on the dates and at the prices designated thereon, in whole or in part in increments of $1,000, together with interest payable to the repurchase date. For book-entry notes, unless otherwise specified on the face of this Note, holders must deliver written notice to the Bank at least 30, but no more than 60, days prior to the date of repurchase, but no later than 5:00 p.m. New York 5 City time on the last day for giving notice. The written notice must specify the principal amount to be repurchased and must be signed by a duly authorized officer of the Depositary participant (signature guaranteed). For definitive notes, unless otherwise specified on the face of this Note, holders must complete the "Option to Elect Repayment" on the reverse of this Note and then deliver this Note to the Bank at least 30, but no more than 45, days prior to the date of repurchase, but no later than 5:00 p.m. New York City time on the last day for giving notice. All notices are irrevocable.]* To be modified as appropriate [In the event of redemption or repurchase of this Note in part only, a new Note or Notes of this series, having the same Stated Maturity, optional redemption or repurchase provisions, Interest Rate and other terms and provisions of this Note, in authorized denominations in an aggregate principal amount equal to the unredeemed portion hereof will be issued in the name of the holder hereof upon the surrender hereof.]* To be modified as appropriate. [Remarketing provisions, if any, to be included here] [The Notes will not be subject to conversion, amortization or any sinking fund.]* To be modified as appropriate 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 Original 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 6 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, 7 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: _______________ 8 [HOLDER'S OPTION TO ELECT REPURCHASE] [IN THE CASE OF CERTIFICATED NOTES ONLY] The undersigned hereby irrevocably requests and instructs the Company to repurchase the within or attached Note (or portion thereof specified below) pursuant to its terms at a price equal to ____ % of the principal amount thereof, together with accrued interest, if any, to the repurchase date, to the undersigned, at - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Print or type name, address and phone number of the undersigned) For the within or attached Note to be repurchased on the repurchase date, the Bank must receive at least 30, but not more than 45, days prior to the date of repurchase, but no later than 5:00 p.m. New York City time on the last day for giving notice, (i) this Note with the "Option to Elect Repayment" form duly completed or (ii) a telegram, telex, facsimile transmission or letter from a member of a national securities exchange or the National Association of Securities Dealers, Inc. or a commercial bank or a trust company in the United States of America setting forth the name, address and telephone number of the holder of such Note, the principal amount of such Note, the amount of the Note to be repurchased, a statement that the option to elect repayment is being made thereby and a guarantee that the Note to be repaid with the form entitled "Option to Elect Repurchase" on the reverse of such Note duly completed will be received by the Bank not later than five Business Days after the date of such telegram, telex, facsimile transmission or letter, and such Note and form are received by the Bank by such fifth Business Day. If less than the entire principal amount of the within or attached Note is to be repurchased, specify the portion to be repurchased: $ ______________ and specify the denomination or denominations of the Note or Notes to be issued to the holder for the portion of the Note not being repurchased (in the absence of specific instruction, one such Note will be issued): $ _____________. NOTICE: The signature to this Option to Elect Repayment must correspond with the names as written upon the face of the within instrument in every particular, without alteration or enlargement or any change whatever. ------------------------- Signature of Holder (Sign exactly as name appears on the face of the Note) Dated: _______________ 9 EX-4.C 7 a2097345zex-4_c.txt EXHIBIT 4(C) Exhibit 4(c) Conforming Changes [FRONT] REGISTERED REGISTERED No. FLR ____ [CUSIP] BALTIMORE GAS AND ELECTRIC COMPANY INCORPORATED UNDER THE LAWS OF THE STATE OF MARYLAND FORM OF FLOATING RATE DEBT SECURITIES [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.] - ----------------------------------------------------------------- PRINCIPAL AMOUNT: _____________________ INITIAL INTEREST RATE: ______________________ STATED MATURITY: ______________________ INDEX MATURITY: ______________________ SPREAD: ______________________ ORIGINAL ISSUE DATE: ______________________ SPREAD MULTIPLIER: ______________________ % ISSUE PRICE: ______________________ MAXIMUM INTEREST RATE: ______________________ % MINIMUM INTEREST RATE: ______________________ % CALCULATION AGENT: ______________________
INTEREST PAYMENT DATES: (Monthly, Quarterly, Semi-Annually or Annually) ______________________ INTEREST RESET DATES: (Daily, Weekly, Monthly, Quarterly, Semi-Annually or Annually) ______________________ INTEREST DETERMINATION DATES: ______________________ CALCULATION DATES: ______________________
INTEREST RATE BASIS (Check One): _____ CD Rate _____ Commercial Paper Rate _____ LIBOR ( _____ Reuters _____ Telerate) _____ Treasury Rate _____ Federal Funds Effective Rate _____ Prime Rate _____ CMT Rate ( _____ Telerate 7055) ( _____ Telerate 7052)
REDEEMABLE AT THE OPTION OF THE REDEMPTION PRICES COMPANY ON OR AFTER (% OF PRINCIPAL AMOUNT) ------------------- ----------------------- - ------------------------------------ ----------------------------------- - ------------------------------------ ----------------------------------- - ------------------------------------ ----------------------------------- - ------------------------------------ -----------------------------------
SUBJECT TO REPURCHASE AT THE OPTION REPURCHASE PRICES OF THE HOLDER ON (% OF PRINCIPAL AMOUNT) ---------------- ----------------------- - ------------------------------------ ----------------------------------- - ------------------------------------ ----------------------------------- - ------------------------------------ ----------------------------------- - ------------------------------------ -----------------------------------
[Remarketing provisions, if any, to be included here] - -------------------------------------------------------------------------------- 2 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 _________________________________________________________ DOLLARS on the Stated Maturity shown above and to pay interest on said principal sum from the Original Issue Date shown above 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 or repurchase at the rate per annum determined in accordance with the provisions on the reverse hereof, depending on the Interest Rate Basis and the Spread and/or Spread Multiplier, as the case may be, specified above. Interest will be payable on each Interest Payment Date and at Stated Maturity or upon redemption or repurchase. Each payment of interest payable at Stated Maturity or, if applicable, upon redemption or repurchase shall include interest to, but excluding the date of Stated Maturity or redemption or repurchase. In the event this Note is issued between a Record Date (the date 15 calendar days prior to each Interest Payment Date 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, as supplemented by the Supplemental Indentures dated as of October 1, 1987, and January 26, 1993, respectively (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 the Notes 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, which shall be the date 15 calendar days prior to each Interest Payment Date whether or not such day shall be a Business Day; provided, however, that interest payable at Stated Maturity or, if applicable, upon redemption or repurchase, 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 or repurchase) 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 3 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, premium, if any, and interest payable at Stated Maturity, or, if applicable, upon redemption or repurchase, 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 or a Vice 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] Secretary CERTIFICATE OF AUTHENTICATION This is one of the Securities of the series designated herein issued under the Indenture described herein. -------------------- By: ____________________ Authorized Signatory 4 (REVERSE) BALTIMORE GAS AND ELECTRIC COMPANY SERIES _____, due _____________ (FLOATING RATE NOTE) This Note is one of a duly authorized issue of debt securities (the "Securities") of the Company, of a series designated as its Series ___, due ___________ (herein called the "Notes"), limited (except as otherwise provided in the Indenture) in aggregate principal amount to $_____________, 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. 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. Commencing with the applicable Interest Reset Date first following the Original Issue Date specified on the face hereof, the rate at which interest on this Note is payable shall be reset daily, weekly, monthly, quarterly, semi-annually or annually as shown on the face hereof. The interest rate per annum for each interest reset period shall be calculated on the applicable Interest Determination Date specified on the face hereof and shall be the Interest Rate Basis specified on the face hereof, determined in accordance with the provisions of the applicable heading below, adjusted by adding or subtracting a Spread and/or multiplying by a Spread Multiplier, as the case may be, specified on the face hereof; PROVIDED, HOWEVER, that (i) the interest rate in effect from the Original Issue Date to the first Interest Reset Date with respect to this Note will be the Initial Interest Rate specified on the face hereof and (ii) the interest rate in effect for the ten days immediately prior to the Stated Maturity or redemption or repurchase will be that in effect on the tenth day preceding such Stated Maturity or redemption or repurchase. Each such adjusted rate shall be applicable on and after the Interest Reset Date to which it relates, to, but not including, the next succeeding Interest Reset Date or until the Stated Maturity, or the date of redemption or repurchase, as the case may be. If any Interest Reset Date would otherwise be a day that is not a Business Day, such Interest Reset Date shall be postponed to the next succeeding day that is a Business Day (as defined below), except that if the Interest Rate Basis specified on the face hereof is LIBOR, and if such Business Day is in the next succeeding calendar month, such Interest Reset Date shall be the immediately preceding Business Day. Subject to provisions of applicable law and except as specified herein, on each Interest Reset Date the rate of interest on this Note shall be the rate determined in accordance with the provisions of the applicable heading below. 5 All percentages resulting from any calculation on this Note will be rounded, if necessary, to the nearest one hundred-thousandth of a percentage point, with five one-millionths of a percentage point rounded upward (E.G., 9.876545% (or .09876545) would be rounded to 9.87655% (or .0987655)), and all dollar amounts used in or resulting from such calculation will be rounded to the nearest cent with one-half cent being rounded upward. DETERMINATION OF CD RATE. If the Interest Rate Basis on this Note is the CD Rate, the CD Rate with respect to this Note shall equal the rate on each Interest Determination Date designated on the face hereof for negotiable certificates of deposit having the Index Maturity designated on the face hereof as published in H.15(519) under the heading "CDs (Secondary Market)." In the event that such rate is not published prior to 9:00 A.M., New York City time, on the Calculation Date designated on the face hereof pertaining to such Interest Determination Date, then the CD Rate will be the rate on such Interest Determination Date for negotiable certificates of deposit having the Index Maturity as published in Composite Quotations under the heading "Certificates of Deposit." If such rate was neither published in H.15(519) by 9:00 A.M., New York City time, on such Calculation Date nor in Composite Quotations by 3:00 P.M., New York City time, on such date, the CD Rate for that CD Interest Determination Date shall be calculated by the Calculation Agent and shall be the arithmetic mean of the secondary market offered rates, as of 10:00 A.M., New York City time, on that Interest Determination Date, of three leading nonbank dealers of negotiable U.S. dollar certificates of deposit in The City of New York selected by the Calculation Agent for negotiable certificates of deposit of major United States money market banks with a remaining maturity closest to the Index Maturity in a denomination of $5,000,000; PROVIDED, HOWEVER, that if fewer than three dealers selected as aforesaid by the Calculation Agent are quoting as mentioned in this sentence, the rate of interest in effect for the applicable period will be the same as the CD Rate as adjusted for the Spread and/or Spread Multiplier, as the case may be, for the immediately preceding interest reset period. The CD Rate determined with respect to any Interest Determination Date will become effective on and as of the applicable Interest Reset Date specified on the face hereof; PROVIDED, HOWEVER, that (i) the interest rate in effect for the period from the Original Issue Date to first Interest Reset Date will be the Initial Interest Rate specified on the face hereof, and (ii) the interest rate in effect for the ten days immediately preceding the Stated Maturity or redemption will be that in effect on the tenth day preceding such Stated Maturity or redemption. DETERMINATION OF COMMERCIAL PAPER RATE. If the Interest Rate Basis on this Note is the Commercial Paper Rate, the Commercial Paper Rate with respect to this Note shall equal the Money Market Yield (calculated as described below) of the rate on each Interest Determination Date designated on the face hereof for commercial paper having the Index Maturity designated on the face hereof as published in H.15(519) under the 6 heading "Commercial Paper." In the event that such rate is not published prior to 9:00 A.M., New York City time, on the Calculation Date designated on the face hereof pertaining to such Interest Determination Date, then the Commercial Paper Rate will be the Money Market Yield of the rate on such Interest Determination Date for commercial paper having the Index Maturity as published in Composite Quotations under the heading "Commercial Paper." If such rate was neither published in H.15(519) by 9:00 A.M., New York City time, on such Calculation Date nor in Composite Quotations by 3:00 P.M., New York City time, on such date, the Commercial Paper Rate for that Interest Determination Date will be calculated by the Calculation Agent and will be the Money Market Yield of the arithmetic mean of the offered rates, as of 11:00 A.M., New York City time, on that Interest Determination Date, of three leading dealers of commercial paper in The City of New York selected by the Calculation Agent for commercial paper having the Index Maturity designated on the face hereof placed for an industrial issuer whose bond rating is "AA," or the equivalent, from a nationally recognized rating agency; PROVIDED, HOWEVER, that if fewer than three dealers selected as aforesaid by the Calculation Agent are quoting as mentioned in this sentence, the rate of interest in effect for the applicable period will be the same as the Commercial Paper Rate as adjusted for the Spread and/or Spread Multiplier, as the case may be, for the immediately preceding interest reset period. "Money Market Yield" shall be a yield (expressed as a percentage rounded upwards, if necessary, to the next higher one-hundred thousandth of a percentage point) calculated in accordance with the following formula: Money Market Yield = D x 360 -------------- x 100 360 - (D x M) where "D" refers to the per annum rate for commercial paper quoted on a bank discount basis and expressed as a decimal; and "M" refers to the actual number of days in the period for which interest is being calculated. The Commercial Paper Rate determined with respect to any Interest Determination Date will become effective on and as of the applicable Interest Reset Date specified on the face hereof; PROVIDED, HOWEVER, that (i) the interest rate in effect for the period from the Original Issue Date to the first Interest Reset Date will be the Initial Interest Rate specified on the face hereof; and (ii) the interest rate in effect for the ten days immediately preceding the Stated Maturity or redemption will be that in effect on the tenth day preceding such Stated Maturity or redemption. DETERMINATION OF LIBOR. If the Interest Rate Basis on this Note is LIBOR, LIBOR with respect to this Note will be determined by the Calculation Agent in accordance with the following provisions: (a) With respect to any Interest Determination Date, LIBOR will be determined by either (i) the arithmetic mean of the 7 offered rates for deposits in U.S. dollars having the Index Maturity designated on the face hereof, commencing on the second Business Day immediately following such Interest Determination Date, which appear on the Reuters Screen LIBO Page as of 11:00 A.M., London time, on that Interest Determination Date, if at least two such offered rates appear on the Reuters Screen LIBO Page, or (ii) the rate for deposits in U.S. dollars having the Index Maturity designated on the face hereof, commencing on the second Business Day immediately following such Interest Determination Date, that appears on the Telerate Page 3750 as of 11:00 a.m., London time, on such Interest Determination Date. If neither Reuters Screen LIBO Page nor Telerate Page 3750 is specified on the face hereof, LIBOR will be determined as if Telerate Page 3750 had been specified. (b) With respect to an Interest Determination Date on which fewer than two offered rates appear on the Reuters Screen LIBO Page or no rate appears on Telerate Page 3750 for the applicable Index Maturity as described in (a) above, LIBOR will be determined on the basis of the rates at approximately 11:00 A.M., London time, on such Interest Determination Date at which deposits in U.S. dollars having the Index Maturity designated on the face hereof are offered to prime banks in the London interbank market by four major banks in the London interbank market selected by the Calculation Agent commencing on the second Business Day immediately following such Interest Determination Date and in a principal amount not less than $1,000,000 that in the Calculation Agent's judgment is representative for a single transaction in such market at such time (a "Representative Amount"). The Calculation Agent will request the principal London office of each of such banks to provide a quotation of its rate. If at least two such quotations are provided, LIBOR for such Interest Determination Date will be the arithmetic mean of such quotations. If fewer than two quotations are provided, LIBOR for such Interest Determination Date will be the arithmetic mean of the rates quoted at approximately 11:00 A.M., New York City time, on such Interest Determination Date by three major banks in The City of New York, selected by the Calculation Agent, for loans in U.S. dollars to leading European banks having the specified Index Maturity commencing on the second Business Day immediately following such Interest Determination Date and in a Representative Amount; PROVIDED, HOWEVER, that if fewer than three banks selected as aforesaid by the Calculation Agent are quoting as mentioned in this sentence, the rate of interest in effect for the applicable period will be the same as LIBOR as adjusted for the Spread and/or Spread Multiplier, as the case may be, for the immediately preceding interest reset period. LIBOR determined with respect to any Interest Determination Date will become effective on and as of the applicable Interest Reset Date specified on the face hereof; PROVIDED, HOWEVER, that (i) the interest rate in effect for the period from the Original Issue Date to the first Interest Reset Date will be the Initial Interest Rate specified on the face hereof and (ii) the interest rate in effect for the ten days immediately preceding the Stated Maturity or redemption will be that in effect on the tenth day preceding such Stated Maturity or redemption. DETERMINATION OF FEDERAL FUNDS EFFECTIVE RATE. If the Interest Rate Basis on this Note is the Federal Funds Effective Rate, the Federal Funds Effective Rate with respect to 8 this Note shall equal with respect to each Interest Determination Date designated on the face hereof the rate on such date for Federal Funds as published in H.15(519) under the heading "Federal Funds (Effective)" or, if not so published prior to 11:00 A.M., New York City time, on the Calculation Date designated on the face hereof pertaining to such Interest Determination Date, then the Federal Funds Effective Rate will be the rate on such Interest Determination Date as published in Composite Quotations under the heading "Federal Funds/Effective Rate." If such rate was neither published in H.15(519) by 11:00 A.M., New York City time, on such Calculation Date nor in Composite Quotations by 3:00 P.M., New York City time, on such date, the Federal Funds Effective Rate for such Interest Determination Date will be calculated by the Calculation Agent and will be the arithmetic mean of the rates, as of 11:00 A.M., New York City time, on that Interest Determination Date, for the last transaction in overnight Federal Funds arranged by three leading brokers of Federal Funds transactions in The City of New York selected by the Calculation Agent; PROVIDED, HOWEVER, that if fewer than three brokers selected as aforesaid by the Calculation Agent are quoting as mentioned in this sentence, the rate of interest in effect for the applicable period will be the same as the Federal Funds Effective Rate as adjusted for the Spread and/or Spread Multiplier, as the case may be, for the immediately preceding interest reset period. The Federal Funds Effective Rate determined with respect to any Interest Determination Date will become effective on and as of the applicable Interest Reset Date specified on the face hereof; PROVIDED, HOWEVER, that (i) the interest rate in effect for the period from the Original Issue Date to the first Interest Reset Date will be the Initial Interest Rate specified on the face hereof; and (ii) the interest rate in effect for the ten days immediately preceding the Stated Maturity or redemption will be that in effect on the tenth day preceding such Stated Maturity or redemption. DETERMINATION OF PRIME RATE. If the Interest Rate Basis on this Note is the Prime Rate, the Prime Rate with respect to the Note shall equal with respect to each Interest Determination Date designated on the face hereof the rate set forth on such date in H.15(519) under the heading "Bank Prime Loan." In the event that such rate is not published prior to 9:00 A.M., New York City time, on the Calculation Date designated on the face hereof pertaining to such Interest Determination Date, then the Prime Rate will be the arithmetic mean (rounded upwards, if necessary, to the next higher one-hundred thousandth of a percentage point) of the rates of interest publicly announced by each bank that appear on the Reuters Screen USPRIMEONE Page as such bank's prime rate or base lending rate as in effect for that Interest Determination Date. If fewer than four such rates but more than one such rate appear on the Reuters Screen USPRIMEONE Page for the Interest Determination Date, the Prime Rate will be the arithmetic mean of the prime rates (quoted on the basis of the actual number of days in the year divided by a 360-day year) as of the close of business on such Interest Determination Date by four major money center banks in The City of New York selected by the Calculation Agent. If fewer than two quotations are provided, the Prime Rate shall be determined on the basis of the rates furnished in The City of New York by the appropriate number of substitute banks or trust companies organized and doing business under the laws of 9 the United States, or any State thereof, having total equity capital of at least $500 million and being subject to supervision or examination by a Federal or State authority, selected by the Calculation Agent to provide such rate or rates; PROVIDED, HOWEVER, that if the banks selected as aforesaid by the Calculation Agent are not quoting as mentioned in this sentence, the rate of interest in effect for the applicable period will be the same as the Prime Rate as adjusted for the Spread and/or Spread Multiplier, as the case may be, for the immediately preceding interest reset period. The Prime Rate determined with respect to any Interest Determination Date will become effective on and as of the applicable Interest Reset Date specified on the face hereof; PROVIDED, HOWEVER, that (i) the interest rate in effect for the period from the Original Issue Date to the first Interest Reset Date will be the Initial Interest Rate specified on the face hereof; and (ii) the interest rate in effect for the ten days immediately preceding the Stated Maturity or redemption will be that in effect on the tenth day preceding such Stated Maturity or redemption. DETERMINATION OF TREASURY RATE. If the Interest Rate Basis on this Note is the Treasury Rate, the Treasury Rate with respect to this Note shall equal with respect to each Interest Determination Date designated on the face hereof the rate for the most recent auction of direct obligations of the United States ("Treasury bills") having the Index Maturity designated on the face hereof as published in H.15(519) under the heading, "U.S. Government Securities/Treasury Bills/Auction Average (Investment)" or, if not so published by 9:00 A.M., New York City time, on the Calculation Date designated on the face hereof pertaining to such Interest Determination Date, the auction average rate (expressed as a bond equivalent, on the basis of a year of 365 or 366 days, as applicable, and applied on a daily basis) for such auction as otherwise announced by the United States Department of the Treasury. In the event that the results of the auction of Treasury bills having the Index Maturity designated on the face hereof are neither published in H.15(519) by 9:00 A.M., New York City time, on such Calculation Date, nor otherwise published or reported as provided above by 3:00 P.M., New York City time on such date, or if no such auction is held in a particular week, then the Treasury Rate shall be calculated by the Calculation Agent and shall be a yield to maturity (expressed as a bond equivalent, on the basis of a year of 365 or 366 days, as applicable, and applied on a daily basis) of the arithmetic mean of the secondary market bid rates as of approximately 3:30 P.M., New York City time, on such Interest Determination Date, of three leading primary United States government securities dealers in The City of New York selected by the Calculation Agent, for the issue of Treasury bills with a remaining maturity closest to the specified Index Maturity; PROVIDED, HOWEVER, that if fewer than three dealers selected as aforesaid by the Calculation Agent are quoting as mentioned in this sentence, the rate of interest in effect for the applicable period will be the same as the Treasury Rate as adjusted for the Spread and/or Spread Multiplier, as the case may be, for the immediately preceding interest reset period. The Treasury Rate determined with respect to any Interest Determination Date will become effective on and as of the 10 applicable Interest Reset Date specified on the face hereof; PROVIDED, HOWEVER, that (i) the interest rate in effect for the period from the Original Issue Date to the first Interest Reset Date will be the Initial Interest Rate specified on the face hereof; and (ii) the interest rate in effect for the ten days immediately preceding the Stated Maturity or redemption will be that in effect on the tenth day preceding such Stated Maturity or redemption. DETERMINATION OF CMT RATE If the Interest Rate Basis on this Note is the CMT Rate, the CMT Rate with respect to this Note shall equal with respect to each Interest Determination Date designated on the face hereof the rate displayed on the Designated CMT Telerate Page under the caption "...Treasury Constant Maturities.. Federal Reserve Board Release H.15... Mondays Approximately 3:45 P.M.," under the column for the Index Maturity designated on the face hereof (i) if the Designated CMT Telerate Page is 7055, the rate for the applicable Interest Determination Date and (ii) if the Designated CMT Telerate Page is 7052, the week, or the month, as applicable, ended immediately preceding the week in which the Interest Determination Date occurs. If no page is specified on the face hereof, the Designated CMT Telerate Page shall be 7052, for the most recent week. If such rate is no longer displayed on the relevant page, or if not displayed by 3:00 P.M., New York City time, on the related Calculation Date, then the CMT Rate for such Interest Determination Date will be such Treasury Constant Maturity rate for the Index Maturity designated on the face hereof as published in the relevant H.15 (519). If such rate is no longer published, or if not published by 3:00 P.M., New York City time, on the related Calculation Date, then the CMT Rate for such Interest Determination Date will be such Treasury Constant Maturity rate for the Index Maturity on the face hereof (or other United States Treasury rate for such Index Maturity for that Interest Determination Date with respect to such Interest Reset Date) as may then be published by either the Federal Reserve Board or the United States Department of the Treasury that the Calculation Agent determines to be comparable to the rate formerly displayed on the Designated CMT Telerate Page and published in the relevant H.15(519). If such information is not provided by 3:00 P.M., New York City time, on the related Calculation Date, then the CMT Rate for that Interest Determination Date will be calculated by the Calculation Agent and will be a yield to maturity, based on the arithmetic mean of the secondary market closing offer side prices as of approximately 3:30 P.M. (New York City time) on that Interest Determination Date reported, according to their written records, by three leading primary United States government securities dealers (each, a "Reference Dealer") in The City of New York selected by the Calculation Agent (from five such Reference Dealers selected by the Calculation Agent and eliminating the highest quotation (or, in the event of equality, one of the highest) and the lowest quotation (or, in the event of equality, one of the lowest)), for the most recently issued direct noncallable fixed rate obligations of the United States ("Treasury Note") with an original maturity of approximately the Index Maturity designated on the face hereof and a remaining term to maturity of not less than such Index Maturity minus one year. If two Treasury Notes with an original maturity as described in the preceding sentence have remaining terms to maturity equally close to the Index Maturity designated on the face hereof, the quotes for the Treasury Note with the shorter remaining term to 11 maturity will be used. If the Calculation Agent cannot obtain three such Treasury Note quotations, the CMT Rate for that Interest Determination Date will be calculated by the Calculation Agent and will be a yield to maturity based on the arithmetic mean of the secondary market offer side prices as of approximately 3:30 P.M. (New York City time) on that Interest Determination Date of three Reference Dealers in The City of New York (from five such Reference Dealers selected by the Calculation Agent and eliminating the highest quotation (or, in the event of equality, one of the highest) and the lowest quotation (or, in the event of equality, one of the lowest)), for Treasury Notes with an original maturity of the number of years that is the next highest to the Index Maturity designated on the face hereof and a remaining term to maturity closest to such Index Maturity and in an amount of at least $100 million. If three or four (and not five) of such Reference Dealers are quoting as described above, then the CMT Rate will be based on the arithmetic mean of the offer prices obtained and neither the highest nor the lowest of such quotes will be eliminated; PROVIDED, HOWEVER, that if fewer than three Reference Dealers selected by the Calculation Agent are quoting as described herein, the rate of interest in effect for the applicable period will be the same as the CMT Rate as adjusted for the Spread and/or Spread Multiplier, as the case may be, for the immediately preceding Interest Reset Period. The CMT Rate determined with respect to any Interest Determination Date will become effective on and as of the applicable Interest Reset Date specified on the face hereof; PROVIDED, HOWEVER, that (i) the interest rate in effect for the period from the Original Issue Date to the first Interest Reset Date will be the Initial Interest Rate specified on the face hereof; and (ii) the interest rate, in effect for the ten days immediately preceding the Stated Maturity or redemption will be that in effect on the tenth day preceding such Stated Maturity or redemption. Notwithstanding the foregoing, the interest rate hereon shall not be greater than the Maximum Interest Rate, if any, or less than the Minimum Interest Rate, if any, shown on the face hereof. The Calculation Agent shall calculate the interest rate on this Note in accordance with the foregoing on each Interest Determination Date. The Interest Rate on this Note will in no event be higher than the maximum rate permitted by Maryland law as the same may be modified by the United States law of general applicability. The Calculation Agent will, upon the request of the Holder of this Note provide to such Holder the interest rate hereon then in effect and, if different, the interest rate which will become effective as of the next applicable Interest Reset Date. 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 (i) the rate of interest on this Note shall be determined in accordance with the provisions of the heading "Determination of LIBOR" above, and (ii) such Business Day is in the next succeeding calendar month, such Interest Payment Date shall be the immediately preceding Business Day. "Business Day" means any day other than a Saturday or Sunday that 12 (a) is not a day on which banking institutions in the State of Maryland, or in New York, New York, are authorized or obligated by law or executive order to be closed, and (b) with respect to LIBOR Notes only, is a day on which dealings in deposits in U.S. dollars are transacted in the London interbank market. Interest payments for this Note will include interest accrued to but excluding the Interest Payment Dates; PROVIDED, HOWEVER, that if the Interest Reset Dates with respect to this Note are daily or weekly, interest payable on any Interest Payment Date, other than interest payable on any date on which principal hereof is payable, will include interest accrued to and including the Record Date next preceding such Interest Payment Date. Accrued interest hereon from the Original Issue Date or from the last date to which interest hereon has been paid, as the case may be, shall be an amount calculated by multiplying the face amount hereof by an accrued interest factor. Such accrued interest factor shall be computed by adding the interest factor calculated for each day from the Original Issue Date or from the last date to which interest shall have been paid, as the case may be, to the date for which accrued interest is being calculated. The interest factor (expressed as a decimal rounded upwards, if necessary, to the next higher one hundred-thousandth of a percentage point) for each such day shall be computed by dividing the interest rate (expressed as a decimal, rounded upwards, if necessary, to the next higher one hundred-thousandth of a percentage point) applicable to each such day by 360, in the case of the Commercial Paper Rate, CD Rate, LIBOR, Federal Funds Effective Rate or Prime Rate, or by the actual number of days in the year in the case of the Treasury Rate or the CMT Rate. This Note may not be redeemed by the Company prior to Stated Maturity unless otherwise set forth on the face hereof. Notwithstanding Section 4.03 of the Indenture, pursuant to Section 4.01 thereof, and if so indicated on the face of this Note, this Note may be redeemed at the option of the Company, on any date on or after the date set forth on the face hereof in whole or in part in increments of $1,000, at a redemption price or prices designated on the face hereof to be redeemed together with interest thereon payable to the date fixed for redemption. This Note may be so redeemed in whole or in part whether or not other Notes of the same series are redeemed. Notice of redemption or repurchase will be given by the Company by mail to holders of the Notes to be redeemed, not less than 30 nor more than 60 days prior to the date fixed for redemption, all as provided in the Indenture. The Bank may carry out the responsibilities to be performed by the Trustee required by Article Four of the Indenture. The Company is not required to repurchase Notes from holders prior to Stated Maturity unless otherwise set forth on the face hereof. If so indicated on the face hereof, this Note may be repurchased by the Company at the option of the holder on the dates and at the prices designated thereon, in whole or in part in increments of $1,000, together with interest payable to the repurchase date. For book-entry notes, unless otherwise specified on the face of this Note, holders must deliver written notice to 13 the Bank at least 30, but no more than 60, days prior to the date of repurchase, but no later than 5:00 p.m. New York City time on the last day for giving notice. The written notice must specify the principal amount to be repurchased and must be signed by a duly authorized officer of the Depositary participant (signature guaranteed). For definitive notes, unless otherwise specified on the face of this Note, holders must complete the "Option to Elect Repayment" on the reverse of this Note and then deliver this Note to the Bank at least 30, but no more than 45, days prior to the date of repurchase, but no later than 5:00 p.m. New York City time on the last day for giving notice. All notices are irrevocable. In the event of redemption or repurchase of this Note in part only, a new Note or Notes of this series, having the same Stated Maturity, optional redemption or repurchase provisions, Interest Rate and other terms and provisions of this Note, in authorized denominations in an aggregate principal amount equal to the unredeemed portion hereof will be issued in the name of the holder hereof upon the surrender hereof. [Remarketing provisions, if any, to be included here] The Notes will not be subject to conversion, 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 Original 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 14 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 15 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. 16 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: _______________ 17 [HOLDER'S OPTION TO ELECT REPURCHASE] [IN THE CASE OF CERTIFICATED NOTES ONLY] The undersigned hereby irrevocably requests and instructs the Company to repurchase the within or attached Note (or portion thereof specified below) pursuant to its terms at a price equal to ___ % of the principal amount thereof, together with accrued interest, if any, to the repurchase date, to the undersigned, at - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Print or type name, address and phone number of the undersigned) For the within or attached Note to be repurchased on the repurchase date, the Bank must receive at least 30, but not more than 45, days prior to the date of repurchase, but no later than 5:00 p.m. New York City time on the last day for giving notice, (i) this Note with the "Option to Elect Repayment" form duly completed or (ii) a telegram, telex, facsimile transmission or letter from a member of a national securities exchange or the National Association of Securities Dealers, Inc. or a commercial bank or a trust company in the United States of America setting forth the name, address and telephone number of the holder of such Note, the principal amount of such Note, the amount of the Note to be repurchased, a statement that the option to elect repayment is being made thereby and a guarantee that the Note to be repaid with the form entitled "Option to Elect Repurchase" on the reverse of such Note duly completed will be received by the Bank not later than five Business Days after the date of such telegram, telex, facsimile transmission or letter, and such Note and form are received by the Bank by such fifth Business Day. If less than the entire principal amount of the within or attached Note is to be repurchased, specify the portion to be repurchased: $ ______________ and specify the denomination or denominations of the Note or Notes to be issued to the holder for the portion of the Note not being repurchased (in the absence of specific instruction, one such Note will be issued): $ _____________. NOTICE: The signature to this Option to Elect Repayment must correspond with the names as written upon the face of the within instrument in every particular, without alteration or enlargement or any change whatever. ------------------------- Signature of Holder (Sign exactly as name appears on the face of the Note) Dated: _______________ 18 EX-5 8 a2097345zex-5.txt EXHIBIT 5 Exhibit 5 January 9, 2003 Baltimore Gas and Electric Company 39 W. Lexington Street Baltimore, Maryland 21201 Gentlemen: 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 ("Commission") under the Securities Act of 1933 regarding the proposed issuance of up to $400,000,000 principal amount of unsecured debt ("Debt"). I am a Senior Counsel in the corporate unit of the legal department of Constellation Energy Group, Inc., parent of BGE. I am representing BGE, a Maryland corporation, in regard to the matters set forth herein. I am generally familiar with BGE's corporate history, properties, operations, Charter (including amendments, supplements, and restatements thereto), the issuance of its securities outstanding, and the indenture under which its debt is issued. In connection with this opinion, I have considered, among other things (1) the Charter of BGE; (2) the By-Laws of BGE; (3) the Indenture dated as of July 1, 1985 as supplemented on October 1, 1987 and January 26, 1993, from BGE to The Bank of New York (the "Indenture") under which the Debt will be issued; (4) the corporate proceedings for the approval of the issuance and sale of the Debt; (5) the Registration Statement; (6) the purchase agreement (including the standard purchase provisions) filed as an exhibit to the Registration Statement (the "Purchase Agreement"); and (7) 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 proper execution, authentication, and delivery of the Debt upon receipt of the purchase price pursuant to the Purchase Agreement; (2) the qualification of the Indenture under the Trust Indenture Act of 1939; (3) the Registration Statement becoming effective under the Securities Act of 1933; and (4) receipt of all necessary regulatory approvals for the issuance of the debt by BGE. Based on the foregoing, I am of the opinion that the Debt, when issued and delivered pursuant to the Purchase Agreement, will constitute legally issued and binding obligations of BGE. Baltimore Gas and Electric Company January 9, 2003 Page 2 I express no opinion as to the law of any jurisdiction other than the law of the State of Maryland and the law of the United States of America. The opinion expressed herein concerns only the effect of the law (excluding the principles of conflicts of law) of the State of Maryland and the United States of America as currently in effect. This opinion is provided 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 and to the references to me in the Registration Statement (and any amendments thereto) or the prospectus constituting a part of the Registration Statement (and any amendments or supplements thereto). Very truly yours, Donna M. Levy EX-23.B 9 a2097345zex-23_b.txt EXHIBIT 23(B) Exhibit 23(b) CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in this Registration Statement on Form S-3 of our report dated January 21, 2002 relating to the financial statements and financial statement schedule, which appears in Constellation Energy Group's Annual Report on Form 10-K for the year ended December 31, 2001. We also consent to the references to us under the headings "Experts" in such Registration Statement. PricewaterhouseCoopers LLP Baltimore, Maryland January 8, 2003 EX-24 10 a2097345zex-24.txt EXHIBIT 24 Exhibit 24 BALTIMORE GAS AND ELECTRIC COMPANY POWER OF ATTORNEY KNOW ALL THOSE BY THESE PRESENTS, that the undersigned directors and officers of Baltimore Gas and Electric Company hereby constitute and appoint E. Follin Smith as their true and lawful attorney and agent to do any and all acts and things and to execute, in their name any and all instruments which said attorney and agent 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 not exceeding $400,000,000 principal amount of unsecured debt securities of said Company, maturing not more than thirty years after the date as of which they are issued, all as authorized by Resolutions adopted by the Board of Directors of Baltimore Gas and Electric Company effective December 20, 2002 including specifically, but without limiting the generality of the foregoing, power and authority to sign the names of the undersigned directors and officers in the capacities indicated below, to any registration statement to be filed with the Securities and Exchange Commission in respect of said unsecured debt securities to any and all amendments to any registration statement in respect to said unsecured debt securities, 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 attorney and agent 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 21st day of December, 2002. Signature Principal Executive Officer and Director: /s/ FRANK O. HEINTZ ------------------------- Frank O. Heintz President, Chief Executive Officer and Director Director: /s/ MAYO A. SHATTUCK, III ------------------------- Mayo A. Shattuck, III Dated: December 21, 2002 EX-25 11 a2097345zex-25.txt EXHIBIT 25 Exhibit 25 (PART 1) ================================================================================ 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.) 39 W. Lexington Street Baltimore, Maryland 21201 (Address of principal executive offices) (Zip code) --------------------------- Debt Securities (Title of the indenture securities) ================================================================================ 1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE: (a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT.
- ---------------------------------------------------------------- -------------------------------------------- Name Address - ---------------------------------------------------------------- -------------------------------------------- Superintendent of Banks of the State of New York 2 Rector Street, 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. 2 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 20th day of December, 2002. THE BANK OF NEW YORK By: /s/ ROBERT A. MASSIMILLO ------------------------------- Name: ROBERT A. MASSIMILLO Title: VICE PRESIDENT 3 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, 2002, 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 In Thousands ASSETS Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin........................... $3,735,469 Interest-bearing balances.................................................... 3,791,026 Securities: Held-to-maturity securities.................................................. 1,140,688 Available-for-sale securities................................................ 15,232,384 Federal funds sold in domestic offices.......................................... 1,286,657 Securities purchased under agreements to resell....................................................................... 1,035,718 Loans and lease financing receivables: Loans and leases held for sale............................................... 869,285 Loans and leases, net of unearned income..................................................................... 34,695,130 LESS: Allowance for loan and lease losses............................................................... 645,382 Loans and leases, net of unearned income and allowance....................................................... 34,049,748 Trading Assets.................................................................. 9,044,881 Premises and fixed assets (including capitalized leases)...................................................................... 823,722 Other real estate owned......................................................... 778 Investments in unconsolidated subsidiaries and associated companies......................................................... 226,274 Customers' liability to this bank on acceptances outstanding.................................................................. 249,803 Intangible assets............................................................... Goodwill..................................................................... 1,852,232 Other intangible assets...................................................... 54,714 Other assets.................................................................... 4,961,572 ----------- Total assets.................................................................... $78,354,951 ===========
LIABILITIES Deposits: In domestic offices.......................................................... $32,962,289 Noninterest-bearing.......................................................... 12,792,415 Interest-bearing............................................................. 20,169,874 In foreign offices, Edge and Agreement subsidiaries, and IBFs..................................................... 24,148,516 Noninterest-bearing.......................................................... 445,725 Interest-bearing............................................................. 23,702,791 Federal funds purchased in domestic offices....................................................................... 959,287 Securities sold under agreements to repurchase.................................. 491,806 Trading liabilities............................................................. 2,916,377 Other borrowed money: (includes mortgage indebtedness and obligations under capitalized leases).................................................... 1,691,634 Bank's liability on acceptances executed and outstanding.................................................................. 251,701 Subordinated notes and debentures............................................... 2,090,000 Other liabilities............................................................... 5,815,688 ----------- Total liabilities............................................................... $71,327,298 =========== Minority interest in consolidated subsidiaries................................................................. 500,019 EQUITY CAPITAL Perpetual preferred stock and related surplus...................................................................... 0 Common stock.................................................................... 1,135,284 Surplus......................................................................... 1,056,724 Retained earnings............................................................... 4,218,003 Accumulated other comprehensive income.......................................... (117,623) Other equity capital components................................................. 0 - ------------------------------------------------------------------------------------------------------------ Total equity capital............................................................ 6,527,634 ----------- Total liabilities minority interest and equity capital.......................... $78,354,951 ===========
I, Thomas J. Mastro, Senior Vice President and Comptroller of the above-named bank do hereby declare that this Report of Condition is true and correct 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 statement of resources and liabilities. We 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 and is true and correct. Thomas A. Renyi -- Gerald L. Hassell Directors Alan R. Griffith -- - -------------------------------------------------------------------------------- -----END PRIVACY-ENHANCED MESSAGE-----