Exhibit 4(e)
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FORM OF FIRST SUPPLEMENTAL INDENTURE
Dated as of __________, 1998
between
BALTIMORE GAS AND ELECTRIC COMPANY
AS ISSUER
and
THE BANK OF NEW YORK
AS TRUSTEE
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TABLE OF CONTENTS
Page
I DEFINITIONS......................................................3
1.1. Definition of Terms.....................................3
II GENERAL TERMS AND CONDITIONS OF THE DEBENTURES...................5
2.1. Designation and Principal Amount........................5
2.2. Maturity................................................5
2.3. Form and Payment........................................5
2.4. Global Debenture........................................5
2.5. Interest................................................7
2.6. Redemption..............................................9
2.7 No Sinking Fund.........................................9
2.8 Depository..............................................9
2.9 Appointment of Agents...................................9
III REDEMPTION OF THE DEBENTURES.....................................9
3.1. Special Event Redemption................................9
3.2. Optional Redemption by Company.........................11
IV EXTENSION OF INTEREST PAYMENT PERIOD............................12
4.1. Extension of Interest Payment Period...................12
4.2. Notice of Extension....................................12
4.3. Limitation of Transactions.............................13
V EXPENSES........................................................14
5.1. Payment of Expenses....................................14
5.2. Payment Upon Resignation or Removal....................15
VI SUBORDINATION...................................................15
6.1. Subordination..........................................15
VII COVENANT TO LIST ON EXCHANGE....................................15
7.1. Listing on an Exchange.................................16
VIII FORM OF DEBENTURE...............................................16
8.1. Form of Debenture......................................16
IX ORIGINAL ISSUE OF DEBENTURES....................................25
9.1. Original Issue of Debentures...........................25
X MISCELLANEOUS...................................................26
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10.1. Ratification of Indenture..............................26
10.2. Trustee Not Responsible for Recitals...................26
10.3. Governing Law..........................................26
10.4. Separability...........................................26
10.5. Counterparts...........................................26
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FIRST SUPPLEMENTAL INDENTURE, dated as of __________, 1998
(the "First Supplemental Indenture"), between Baltimore Gas and Electric
Company, a corporation duly organized and existing under the laws of the State
of Maryland, having its principal office at 39 W. Lexington Street, Baltimore,
Maryland 21201 (the "Company"), and The Bank of New York, a New York banking
corporation, having its principal place of business at 101 Barclay Street, Floor
21 West, New York, New York 10081, as trustee (the "Trustee") under the
Indenture dated as of __________, 1998 (the "Indenture"), between the Company
and the Trustee.
WHEREAS, the Company executed and delivered the Indenture to
the Trustee to provide for the future issuance of the Company's unsecured
debentures, notes or other evidence of indebtedness (the "Securities"), to be
issued from time to time in one or more series as might be determined by the
Company under the Indenture;
WHEREAS, pursuant to the terms of the Indenture, the Company
desires to provide for the establishment of a new series of its Securities to be
known as its ___% Deferrable Interest Subordinated Debentures due _________ (the
"Debentures"), the form and substance of such Debentures and the terms,
provisions and conditions thereof to be set forth as provided in the Indenture
and this First Supplemental Indenture;
WHEREAS, BGE Capital Trust I, a Delaware statutory business
trust (the "Trust"), intends to offer to the public $___ million aggregate
liquidation amount of its ___% Trust Originated Preferred Securities (the
"Preferred Securities"), representing preferred undivided beneficial interests
in the assets of the Trust, and proposes to invest the proceeds from such
offering, together with the proceeds of the issuance and sale by the Trust to
the Company of $___ million aggregate liquidation amount of its ___% Common
Securities, in $____ million aggregate principal amount of the Debentures; and
WHEREAS, the Company has requested that the Trustee execute
and deliver this First Supplemental Indenture, and all requirements necessary to
make this First Supplemental Indenture a valid instrument in accordance with its
terms, and to make the Debentures, when executed by the Company and
authenticated and delivered by the Trustee, the valid obligations of the
Company,
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have been performed, and the execution and delivery of this
First Supplemental Indenture has been duly authorized in all respects.
NOW THEREFORE, in consideration of the purchase and acceptance
of the Debentures by the Holders thereof, and for the purpose of setting forth,
as provided in the Indenture, the form and substance of the Debentures and the
terms, provisions and conditions thereof, the Company covenants and agrees with
the Trustee as follows:
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ARTICLE I
DEFINITIONS
SECTION 1.1. Definition of Terms
Unless the context otherwise requires:
(a) a term defined in the Indenture has the same meaning when
used in this First Supplemental Indenture;
(b) a term defined anywhere in this First Supplemental
Indenture has the same meaning throughout;
(c) the singular includes the plural and vice versa;
(d) headings are for convenience of reference only and do not
affect interpretation;
(e) the following terms have the meanings given to them in the
Declaration: (i) Administrative Trustee; (ii) Business Day; (iii) Clearing
Agency; (iv) Delaware Trustee; (v) Guarantee; (vi) Preferred Securities
Certificate; (vii) Pricing Agreement; (viii) Property Trustee; (ix) Trust
Securities; and (x) Underwriting Agreement; and
(f) the following terms have the meanings given to them in
this Section 1.1(f):
"Additional Interest" shall have the meaning set forth in
Section 2.5(c).
"Change in 1940 Act Law" shall have the meaning set forth in
Section 3.1.
"Compounded Interest" shall have the meaning set forth in
Section 4.1.
"Coupon Rate" shall have the meaning set forth in Section
2.5(a).
"Declaration" means the Amended and Restated Declaration of
Trust of BGE Capital Trust I, a Delaware statutory business trust, dated as of
__________, 1998.
"Deferred Interest" shall have the meaning set forth in
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Section 4.1.
"Dissolution Event" means that the Trust is to be dissolved in
accordance with the Declaration, and the Debentures held by the Property Trustee
are to be distributed to the holders of the Trust Securities issued by the Trust
pro rata in accordance with the Declaration.
"Extended Interest Payment Period" shall have the meaning set
forth in Section 4.1.
"Global Debenture" shall have the meaning set forth in Section
2.4(a).
"Interest Payment Date" shall have the meaning set forth in
Section 2.5(a).
"Investment Company Event" shall have the meaning set forth in
Section 3.1.
"Maturity Date" means the date on which the Debentures mature
and on which the principal shall be due and payable together with all accrued
and unpaid interest thereon including Compounded Interest and Additional
Interest, if any.
"Ministerial Action" shall have the meaning set forth in
Section 3.1.
"90 Day Period" shall have the meaning set forth in Section
3.1.
"Non Book-Entry Preferred Securities" shall have the meaning
set forth in Section 2.4(a).
"Optional Redemption Price" shall have the meaning set forth
in Section 3.2(a).
"Redemption Price" shall have the meaning set forth in Section
3.1.
"Special Event" shall have the meaning set forth in Section
3.1.
"Tax Event" shall have the meaning set forth in Section 3.1.
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ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE DEBENTURES
SECTION 2.1. Designation and Principal Amount.
There is hereby authorized a series of Securities designated
the "___% Deferrable Interest Subordinated Debentures due _____ ", limited in
aggregate principal amount to $___ million, to be substantially in the form set
forth in Article VIII hereof, subject to changes in the form thereof made by the
Company and acceptable to the Trustee.
SECTION 2.2. Maturity.
The Maturity Date of the Debentures is ____________, 20__.
SECTION 2.3. Form and Payment.
Except as provided in Section 2.4, the Debentures shall be
issued in fully registered certificated form without interest coupons in
denominations of $25 or integral multiples of $25. The Place of Payment for the
Debentures issued in certificated form where the transfer of such Debentures
will be registrable and where such Debentures will be exchangeable for
Debentures bearing identical terms and provisions shall be the Corporate Trust
Office of the Trustee; provided, however, that payment of interest may be made
at the option of the Company by check mailed to the Holder at such address as
shall appear in the Security Register. Notwithstanding the foregoing, so long as
the Holder of any Debentures is the Property Trustee, the payment of the
principal of and interest (including Compounded Interest and Additional
Interest, if any) on such Debentures held by the Property Trustee will be made
at such place and to such account as may be designated to the Company in writing
by the Property Trustee.
SECTION 2.4. Global Debenture.
(a) In connection with a Dissolution Event,
(i) the Debentures in certificated form may be
presented to the Trustee by the Property Trustee in exchange for a
global Debenture in an aggregate principal amount
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equal to the aggregate principal amount of all outstanding Debentures
(a "Global Debenture"), to be registered in the name of the Depository,
or its nominee, and delivered by the Trustee to the Depository for
crediting to the accounts of its participants pursuant to the
instructions of the Administrative Trustee. The Company upon any such
presentation shall execute a Global Debenture in such aggregate
principal amount and deliver the same to the Trustee for authentication
and delivery in accordance with the Indenture and this First
Supplemental Indenture. Payments on the Debentures issued as a
Global Debenture will be made to the Depository; and
(ii) if any Preferred Securities are held in non
book-entry certificated form, the Debentures in certificated form may
be presented to the Trustee by the Property Trustee and any Preferred
Security Certificate which represents Preferred Securities other than
Preferred Securities held by the Clearing Agency or its nominee ("Non
Book-Entry Preferred Securities") will be deemed to represent
beneficial interests in Debentures presented to the Trustee by the
Property Trustee having an aggregate principal amount equal to the
aggregate liquidation amount of the Non Book-Entry Preferred Securities
until such Preferred Security Certificates are presented to the
Security Registrar for transfer or reissuance at which time such
Preferred Security Certificates will be cancelled and a Debenture,
registered in the name of the holder of the Preferred Security
Certificate or the transferee of the holder of such Preferred Security
Certificate, as the case may be, with an aggregate principal amount
equal to the aggregate liquidation amount of the Preferred Security
Certificate cancelled, will be executed by the Company and delivered to
the Trustee for authentication and delivery in accordance with the
Indenture and this First Supplemental Indenture. On issue of such
Debentures, Debentures with an equivalent aggregate principal amount
that were presented by the Property Trustee to the Trustee will be
deemed to have been cancelled.
(b) Unless and until it is exchanged for the Debentures in
registered form, a Global Debenture may be transferred, in whole but not in
part, only to another nominee of the Depository, or to a successor Depository
selected or approved by the Company or to a nominee of such successor
Depository.
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(c) If at any time the Depository notifies the Company that it
is unwilling or unable to continue as Depository or if at any time the
Depository for such series shall no longer be registered or in good standing
under the Securities Exchange Act of 1934, as amended, or other applicable
statute or regulation, and a successor Depository for such series is not
appointed by the Company within 90 days after the Company receives such notice
or becomes aware of such condition, as the case may be, the Company will
execute, and, subject to Article Three of the Indenture, the Trustee, upon
written notice from the Company, will authenticate and deliver the Debentures in
definitive registered form without coupons, in authorized denominations, and in
an aggregate principal amount equal to the principal amount of the Global
Debenture in exchange for such Global Debenture. In addition, the Company may at
any time determine that the Debentures shall no longer be represented by the
Global Debenture. In such event the Company will execute, and subject to Section
303 of the Indenture, the Trustee, upon receipt of an Officers' Certificate
evidencing such determination by the Company, will authenticate and deliver the
Debentures in definitive registered form without coupons, in authorized
denominations, and in an aggregate principal amount equal to the principal
amount of the Global Debenture in exchange for such Global Debenture. Upon the
exchange of the Global Debenture for such Debentures in definitive registered
form without coupons, in authorized denominations, the Global Debenture shall be
cancelled by the Trustee. Such Debentures in definitive registered form issued
in exchange for the Global Debenture shall be registered in such names and in
such authorized denominations as the Depository, pursuant to instructions from
its direct or indirect participants or otherwise, shall instruct the Trustee.
The Trustee shall deliver such Debentures to the Depository for delivery to the
Persons in whose names such Debentures are so registered.
SECTION 2.5. Interest.
(a) Each Debenture will bear interest at the rate of ___% per
annum (the "Coupon Rate") from the original date of issuance until the principal
thereof becomes due and payable, and on any overdue principal and (to the extent
that payment of such interest is enforceable under applicable law) on any
overdue installment of interest at the Coupon Rate, compounded quarterly,
payable (subject to the provisions of Article IV) quarterly in
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arrears on March 31, June 30, September 30 and December 31 of each
year (each, an "Interest Payment Date," commencing on _________), to the
Person in whose name such Debenture or any predecessor Debenture is registered,
at the close of business on the regular record date for such interest
installment, which, in respect of (i) Debentures of which the Property Trustee
is the Holder and the Preferred Securities are in book-entry only form or (ii) a
Global Debenture, shall be the close of business on the Business Day next
preceding that Interest Payment Date. Notwithstanding the foregoing sentence, if
(i) the Debentures are held by the Property Trustee and the Preferred Securities
are no longer in book-entry only form or (ii) the Debentures are not represented
by a Global Debenture, the Company may select a regular record date for such
interest installment which shall be any date at least one Business Day but less
than sixty Business Days before an Interest Payment Date.
(b) The amount of interest payable for any period will be
computed on the basis of a 360-day year of twelve 30-day months. Except as
provided in the following sentence, the amount of interest payable for any
period shorter than a full quarterly period for which interest is computed, will
be computed on the basis of the actual number of days elapsed in such a 90-day
period. In the event that any date on which interest is payable on the
Debentures is not a Business Day, then payment of interest payable on such date
will be made on the next succeeding day which is a Business Day (and without any
interest or other payment in respect of any such delay), except that, if such
Business Day is in the next succeeding calendar year, such payment shall be made
on the immediately preceding Business Day, in each case with the same force and
effect as if made on such date.
(c) If, at any time while the Property Trustee is the Holder
of any Debentures, the Trust or the Property Trustee is required to pay any
taxes, duties, assessments or governmental charges of whatever nature (other
than withholding taxes) imposed by the United States, or any other taxing
authority, then, in any case, the Company will pay as additional interest
("Additional Interest") on the Debentures held by the Property Trustee, such
additional amounts as shall be required so that the net amounts received and
retained by the Trust and the Property Trustee after paying such taxes, duties,
assessments or other governmental charges will be equal to the amounts the Trust
and the Property Trustee would have received had no such taxes, duties,
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assessments or other government charges been imposed.
SECTION 2.6. Redemption.
The Debentures are not subject to redemption at the option of
the Holder and are subject to redemption solely at the option of the Company or
otherwise as provided in Article III hereof.
SECTION 2.7 No Sinking Fund.
The Debentures shall not be entitled to the benefit of any
sinking fund or analogous provision.
SECTION 2.8 Depository.
The Depository Trust Company (or its nominee) shall act as the
initial Depository for any Global Debenture which may be issued pursuant to this
First Supplemental Indenture.
SECTION 2.9 Appointment of Agents.
The Company hereby appoints, or confirms the appointment of,
The Bank of New York as the initial Trustee, Securities Registrar and Paying
Agent with respect to the Debentures, subject to the provisions of the Indenture
with respect to resignation, removal and succession, and subject, further, to
the right of the Company to appoint additional agents (including Paying Agents).
ARTICLE III
REDEMPTION OF THE DEBENTURES
SECTION 3.1. Special Event Redemption.
If a Special Event (as defined below) has occurred and is
continuing then, notwithstanding Section 3.2(a) but subject to Section 3.2(b),
the Company shall have the right upon not less than 30 days nor more than 60
days notice to the Holders of the Debentures to redeem the Debentures, in whole
but not in part, for cash within 90 days following the occurrence of such
Special Event (the "90 Day Period") at a redemption price equal to 100% of the
principal amount to be redeemed plus any accrued and unpaid interest thereon,
including Compounded Interest and
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Additional Interest, if any, to the date of such redemption (the
"Redemption Price"); provided, however, that in the case of an occurrence
of a Tax Event, if at the time there is available to the Company the opportunity
to eliminate, within the 90 Day Period, the Tax Event by taking some ministerial
action ("Ministerial Action"), such as filing a form or making an election, or
pursuing some other similar reasonable measure which has no adverse effect on
the Company, the Trust or the Holders of the Trust Securities issued by the
Trust, the Company shall pursue such Ministerial Action in lieu of redemption,
and, provided, further, that the Company shall have no right to redeem the
Debentures while the Trust is pursuing any Ministerial Action pursuant to its
obligations under the Declaration. The Redemption Price shall be paid prior to
12:00 noon, New York time, on the date of such redemption or at such earlier
time as the Company determines, provided that the Company shall deposit with the
Trustee an amount sufficient to pay the Redemption Price by 10:00 a.m., New York
time, on the date such Redemption Price is to be paid.
A "Special Event" shall mean either a Tax Event or an
Investment Company Event. "Tax Event" shall mean that the Company shall have
received an opinion of counsel (which may be regular counsel to the Company or
an Affiliate, but not an employee thereof, which must be acceptable to the
Property Trustee of the Trust) experienced in such matters to the effect that,
as a result of (a) any amendment to, or change (including any announced
prospective change) in, the laws (or any regulations thereunder) of the United
States or any political subdivision or taxing authority thereof or therein
affecting taxation, or (b) any interpretation or application of such laws or
regulations by any court, governmental agency or regulatory authority, in each
case which amendment or change is enacted, promulgated, issued or announced or
which interpretation or application is issued or announced on or after the date
of original issuance of Preferred Securities, there is more than an
insubstantial risk that (i) the Trust is subject to United States Federal income
tax with respect to interest received on the Debentures, (ii) interest payable
by the Company to the Trust on the Debentures will not be deductible for United
States Federal income tax purposes, or (iii) the Trust is subject to more than a
de minimis amount of other taxes, duties, assessments or other governmental
charges. "Investment Company Event" shall mean the occurrence of a change in law
or regulation or a change in interpretation or application of law or regulation
by any
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legislative body, court, governmental agency or regulatory authority
(a "Change in 1940 Act Law") to the effect that the Trust is or will be
considered an "Investment Company" that is required to be registered under
the Investment Company Act of 1940, as amended, which Change in 1940 Act Law
becomes effective on or after the date of original issuance of the Preferred
Securities.
SECTION 3.2. Optional Redemption by Company
(a) Subject to the provisions of Section 3.2(b) and to the
provisions of Article Eleven of the Indenture, except as otherwise may be
specified in this First Supplemental Indenture, the Company shall have the right
to redeem the Debentures, in whole or in part, from time to time, on or after
_________, ____, upon not less than 30 days nor more than 60 days notice to the
Holder of the Debentures at a redemption price equal to 100% of the principal
amount to be redeemed plus any accrued and unpaid interest thereon, including
Compounded Interest and Additional Interest, if any, to the date of such
redemption (the "Optional Redemption Price").
If the Debentures are only partially redeemed pursuant to this
Section 3.2, the Debentures will be redeemed pro rata or by lot or by any other
method utilized by the Trustee; provided, that if at the time of redemption the
Debentures are registered as a Global Debenture, the Depository shall determine,
in accordance with its procedures, the principal amount of such Debentures held
by each Debenture Holder to be redeemed. The Optional Redemption Price shall be
paid prior to 12:00 noon, New York time, on the date of such redemption or at
such earlier time as the Company determines, provided that the Company shall
deposit with the Trustee an amount sufficient to pay the Optional Redemption
Price by 10:00 a.m., New York time, on the date such Optional Redemption Price
is to be paid.
(b) If a partial redemption of the Debentures would result in
the delisting of the Preferred Securities issued by the Trust from any national
securities exchange or other organization on which the Preferred Securities are
then listed, the Company shall not be permitted to effect such partial
redemption and may only redeem the Debentures in whole.
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ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1. Extension of Interest Payment Period.
The Company shall have the right, at any time and from time to
time during the term of the Debentures, so long as no Event of Default with
respect to the Debentures has occurred and is continuing, to defer payments of
interest by extending the interest payment period of such Debentures for a
period not exceeding 20 consecutive quarters (the "Extended Interest Payment
Period"), during which Extended Interest Payment Period no interest shall be due
and payable; provided that no Extended Interest Payment Period may extend beyond
the Maturity Date. To the extent permitted by applicable law, interest, the
payment of which has been deferred because of the extension of the interest
payment period pursuant to this Section 4.1, will bear interest thereon at the
Coupon Rate compounded quarterly for each quarter of the Extended Interest
Payment Period ("Compounded Interest"). At the end of the Extended Interest
Payment Period, the Company shall pay all interest accrued and unpaid on the
Debentures, including any Additional Interest and Compounded Interest (together,
"Deferred Interest") that shall be payable to the Holders of the Debentures in
whose names the Debentures are registered in the Security Register on the first
record date after the end of the Extended Interest Payment Period. Before the
termination of any Extended Interest Payment Period, the Company may further
extend such period, provided that such period together with all such further
extensions thereof shall not exceed 20 consecutive quarters or extend beyond the
Maturity Date. Upon the termination of any Extended Interest Payment Period and
upon the payment of all Deferred Interest then due, the Company may commence a
new Extended Interest Payment Period, subject to the foregoing requirements. No
interest shall be due and payable during an Extended Interest Payment Period,
except (i) at the end thereof and (ii) upon a redemption of the Debentures
during an Extended Interest Payment Period, but the Company may prepay at any
time all or any portion of the interest accrued during an Extended Interest
Payment Period.
SECTION 4.2. Notice of Extension.
(a) If the Property Trustee is the only registered
Holder of the Debentures at the time the Company selects an
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Extended Interest Payment Period, the Company shall give written notice to the
Administrative Trustee, the Property Trustee and the Trustee of its selection of
such Extended Interest Payment Period one Business Day before the earlier of (i)
the next succeeding date on which Distributions on the Preferred Securities
issued by the Trust are payable, or (ii) the date the Trust is required to give
notice of the record date, or the date such Distributions are payable, to the
New York Stock Exchange or other applicable self-regulatory organization or to
holders of the Preferred Securities issued by the Trust, but in any event at
least one Business Day before such record date.
(b) If the Property Trustee is not the only Holder of the
Debentures at the time the Company selects an Extended Interest Payment Period,
the Company shall give the Holders of the Debentures and the Trustee written
notice of its selection of such Extended Interest Payment Period at least ten
Business Days before the earlier of (i) the next succeeding Interest Payment
Date, or (ii) the date the Company is required to give notice of the record or
payment date of such interest payment to the New York Stock Exchange or other
applicable self-regulatory organization or to Holders of the Debentures.
(c) The quarter in which any notice is given pursuant to
paragraphs (a) or (b) of this Section 4.2 shall be counted as one of the 20
quarters permitted in the maximum Extended Interest Payment Period permitted
under Section 4.1.
SECTION 4.3. Limitation of Transactions.
If (i) the Company shall exercise its right to defer payment
of interest as provided in Section 4.1, (ii) there shall have occurred any Event
of Default, as defined in the Indenture, or (iii) the Company shall be in
default with respect to its payment obligations under the Guarantee, then (a)
the Company shall not declare or pay any dividend on, make any distributions
with respect to, or redeem, purchase, acquire or make a liquidation payment with
respect to, any of its capital stock (other than (i) as a result of a
reclassification of its capital stock or the exchange or conversion of one class
or series of its capital stock for another class or series of its capital stock,
(ii) any declaration of a dividend in connection with the implementation of a
shareholder rights plan, or the issuance of stock under any such plan in the
future, or the redemption or
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repurchase of any such rights pursuant thereto, (iii) purchases of its common
stock related to the issuance of such stock under any of the Company's benefit
plans for its directors, officers or employees, (iv) obligations under any
dividend reinvestment plan or stock purchase plan of the Company, or (v) the
purchase of fractional interests in shares of its capital stock pursuant to
the conversion or exchange provisions of such capital stock or security being
converted or exchanged) or make any guarantee payment with respect thereto,
(b) the Company shall not make any payment of interest, principal or premium,
if any, on or repay, repurchase or redeem any debt securities issued by the
Company which rank pari passu with or junior to the Debentures and (c) the
Company shall not make any guarantee payments with respect to the foregoing
(other than pursuant to the Guarantee and any similar guarantee issued by the
Company on behalf of holders of preferred securities issued by an issuer
holding Securities issued under the Indenture).
ARTICLE V
EXPENSES
SECTION 5.1. Payment of Expenses.
In connection with the offering, sale and issuance of the
Debentures to the Property Trustee and in connection with the sale of the Trust
Securities by the Trust, the Company, in its capacity as borrower with respect
to the Debentures, shall:
(a) pay all costs and expenses relating to the offering, sale
and issuance of the Debentures, including commissions to the underwriters
payable pursuant to the Purchase Agreement and compensation of the Trustee under
the Indenture in accordance with the provisions of Section 607 of the Indenture;
(b) pay all costs and expenses of the Trust (including, but
not limited to, costs and expenses relating to the organization of the Trust,
the offering, sale and issuance of the Trust Securities (including commissions
to the underwriters in connection therewith), the fees and expenses of the
Property Trustee and the Delaware Trustee, the costs and expenses relating to
the operation of the Trust, including without limitation, costs and expenses of
accountants, attorneys, statistical or bookkeeping services, expenses for
printing and engraving and computing or accounting equipment, paying agent(s),
registrar(s),
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transfer agent(s), duplicating, travel and telephone and other
telecommunications expenses and costs and expenses incurred in connection with
the acquisition, financing, and disposition of Trust assets);
(c) be primarily liable for any indemnification obligations
arising with respect to the Declaration; and
(d) pay any and all taxes (other than United States
withholding taxes attributable to the Trust or its assets) and all liabilities,
costs and expenses with respect to such taxes of the Trust.
SECTION 5.2. Payment Upon Resignation or Removal
Upon termination of this First Supplemental Indenture or the Indenture
or the removal or resignation of the Trustee pursuant to this Section 5.2, the
Company shall pay to the Trustee all amounts accrued to the date of such
termination, removal or resignation. Upon termination of the Declaration or the
removal or resignation of the Delaware Trustee or the Property Trustee, as the
case may be, pursuant to Section 7.10 of the Declaration, the Company shall pay
to the Delaware Trustee or the Property Trustee, as the case may be, all amounts
accrued to the date of such termination, removal or resignation.
ARTICLE VI
SUBORDINATION
SECTION 6.1. Subordination.
The indebtedness evidenced by the Debentures shall be, to the
extent and in the manner set forth in the Indenture, subordinate and junior in
right of payment to the prior payment in full of all Senior Indebtedness (as
defined in the Indenture) with respect to the Debentures, and the Debentures
shall rank pari passu in right of payment with each other series of Securities
issued under the Indenture, with the exception of any series of Securities which
by its terms provides otherwise.
ARTICLE VII
COVENANT TO LIST ON EXCHANGE
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SECTION 7.1. Listing on an Exchange
If the Debentures are to be distributed to the holders of
Preferred Securities as described in Section 2.4(a), the Company will, if the
Debentures are not already so listed, use its best efforts to list such
Debentures on the New York Stock Exchange, Inc. or on such other exchange as the
Preferred Securities are then listed.
ARTICLE VIII
FORM OF DEBENTURE
SECTION 8.1. Form of Debenture
The Debentures and the Trustee's Certificate of Authentication
to be endorsed thereon are to be substantially in the following forms:
(FORM OF DEBENTURE)
[IF THE DEBENTURE IS TO BE A GLOBAL DEBENTURE, INSERT -- THIS
DEBENTURE IS A GLOBAL DEBENTURE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE OF A
DEPOSITORY. THIS DEBENTURE IS EXCHANGEABLE FOR DEBENTURES REGISTERED IN THE NAME
OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS DEBENTURE
(OTHER THAN A TRANSFER OF THIS DEBENTURE AS A WHOLE BY THE DEPOSITORY TO A
NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR
ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY) MAY BE
REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS DEBENTURE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY DEBENTURE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY AND ANY PAYMENT HEREON 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.]
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No. ____________________
$_______________________
CUSIP No. ______________
BALTIMORE GAS AND ELECTRIC COMPANY
___% DEFERRABLE INTEREST SUBORDINATED DEBENTURE
DUE _______
BALTIMORE GAS AND ELECTRIC COMPANY, a Maryland, a Colorado
corporation (the "Company", which term includes any successor corporation under
the Indenture hereinafter referred to), for value received, hereby promises to
pay to ______________ or registered assigns, the principal sum of _____________
Dollars ($___________) on _________, ____, and to pay interest on said principal
sum from ____________, 199__, or from the most recent interest payment date
(each such date, an "Interest Payment Date") to which interest has been paid or
duly provided for, quarterly (subject to deferral as set forth herein) in
arrears on March 31, June 30, September 30 and December 31 of each year
commencing_________, at the rate of ___% per annum until the principal hereof
shall have become due and payable, and on any overdue principal and premium, if
any, and (without duplication and to the extent that payment of such interest is
enforceable under applicable law) on any overdue installment of interest at the
same rate per annum compounded quarterly. The amount of interest payable on any
Interest Payment Date shall be computed on the basis of a 360-day year of twelve
30-day months. In the event that any date on which interest is payable on this
Debenture is not a Business Day, then payment of interest payable on such date
will be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay), except that, if such
Business Day is in the next succeeding calendar year, such payment shall be made
on the immediately preceding Business Day, in each case with the same force and
effect as if made on such date. The interest installment so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture, be paid to the person in whose name this Debenture
(or one or more Predecessor Securities, as defined in said Indenture) is
registered at the close of business on the regular record date for such interest
installment, which shall be the close of business on the Business Day next
preceding such Interest Payment Date. [IF PURSUANT TO THE PROVISIONS OF THE
INDENTURE THE DEBENTURES ARE NO LONGER REPRESENTED BY A GLOBAL DEBENTURE --
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which shall be the close of business on the day next preceding such Interest
Payment Date.] Any such interest installment not punctually paid or duly
provided for shall forthwith cease to be payable to the registered Holders on
such regular record date and may be paid to the Person in whose name this
Debenture (or one or more Predecessor Securities) is registered at the close of
business on a special record date to be fixed by the Trustee for the payment of
such defaulted interest, notice whereof shall be given to the registered Holders
of this series of Debentures not less than 10 days prior to such special record
date, or may be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the Debentures may be
listed, and upon such notice as may be required by such exchange, all as more
fully provided in the Indenture. The principal of (and premium, if any) and the
interest on this Debenture shall be payable at the office or agency of the
Company maintained for that purpose in any coin or currency of the United States
of America that at the time of payment is legal tender for payment of public and
private debts; provided, however, that payment of interest may be made at the
option of the Company by check mailed to the registered Holder at such address
as shall appear in the Security Register. Notwithstanding the foregoing, so long
as the Holder of this Debenture is the Property Trustee, the payment of the
principal of (and premium, if any) and interest on this Debenture will be made
at such place and to such account as may be designated by the Property Trustee.
The indebtedness evidenced by this Debenture is, to the extent
provided in the Indenture, subordinate and junior in right of payment to the
prior payment in full of all Senior Indebtedness, and this Debenture is issued
subject to the provisions of the Indenture with respect thereto. Each Holder of
this Debenture, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his or her behalf to take
such action as may be necessary or appropriate to acknowledge or effectuate the
subordination so provided and (c) appoints the Trustee his or her
attorney-in-fact for any and all such purposes. Each Holder hereof, by his or
her acceptance hereof, hereby waives all notice of the acceptance of the
subordination provisions contained herein and in the Indenture by each holder of
Senior Indebtedness, whether now outstanding or hereafter incurred, and waives
reliance by each such holder upon said provisions.
This Debenture shall not be entitled to any benefit
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under the Indenture hereinafter referred to, be valid or become obligatory for
any purpose until the Certificate of Authentication hereon shall have been
signed by or on behalf of the Trustee.
IN WITNESS WHEREOF, the Company has caused this instrument to
be executed.
Dated ___________________
BALTIMORE GAS AND ELECTRIC COMPANY
By: ________________________
Name:
Title:
Attest:
By: ______________________
Name:
Title:
(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures of the series of Debentures
described in the within-mentioned Indenture.
Dated ___________________
THE BANK OF NEW YORK, as Trustee
By: _____________________________
Authorized Signatory
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This Debenture is one of a duly authorized series of
Securities of the Company (herein sometimes referred to as the "Securities"),
specified in the Indenture, all issued or to be issued in one or more series
under and pursuant to an Indenture dated as of__________, 1998, duly executed
and delivered between the Company and The Bank of New York, as Trustee (the
"Trustee"), as supplemented by the First Supplemented Indenture dated as of
__________, 1998, between the Company and the Trustee (the Indenture as so
supplemented, the "Indenture"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Company and the Holders of the Securities. By the terms of the
Indenture, the Securities are issuable in series that may vary as to amount,
date of maturity, rate of interest and in other respects as provided in the
Indenture. This series of Securities is limited in aggregate principal amount as
specified in said First Supplemental Indenture.
Except as provided in the next paragraph, the Debentures may
not be redeemed by the Company prior to ______________, ______. The Company
shall have the right to redeem this Debenture at the option of the Company,
without premium or penalty, in whole or in part at any time and from time to
time on or after ___________, ____ (an "Optional Redemption"), at the Optional
Redemption Price (as defined in the Indenture). Any redemption pursuant to this
paragraph will be made upon not less than 30 nor more than 60 days' notice, at
the Optional Redemption Price.
If a Special Event (as defined below) has occurred and is
continuing then the Company shall have the right upon not less than 30 days nor
more than 60 days notice to the Holders of the Debentures to redeem the
Debentures, in whole but not in part, for cash within 90 days following the
occurrence of such Special Event (the "90 Day Period") at a redemption price
equal to 100% of the principal amount to be redeemed plus any accrued and unpaid
interest thereon, including Compounded Interest and Additional Interest, if any,
to the date of such redemption (the "Redemption Price"); provided, however, that
in the case of a Tax Event, if at the time there is available to the Company the
opportunity to eliminate, within the 90 Day Period, the Tax Event by taking
some ministerial action ("Ministerial Action"), such as
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filing a form or making an election, or pursuing some other similar reasonable
measure which has no adverse effect on the Company, the Trust or the Holders of
the Trust Securities issued by the Trust, the Company shall pursue such
Ministerial Action in lieu of redemption, and, provided, further, that the
Company shall have no right to redeem the Debentures while the Trust is pursuing
any Ministerial Action pursuant to its obligations under the Declaration. The
Redemption Price shall be paid prior to 12:00 noon, New York time, on the date
of such redemption or such earlier time as the Company determines, provided that
the Company shall deposit with the Trustee an amount sufficient to pay the
Redemption Price by 10:00 a.m., New York time, on the date such Redemption Price
is to be paid.
A "Special Event" shall mean either a Tax Event or an
Investment Company Event. "Tax Event" shall mean that the Company shall have
received an opinion of counsel (which may be regular counsel to the Company or
an Affiliate, but not an employee thereof, which must be acceptable to the
Property Trustee of the Trust) experienced in such matters to the effect that,
as a result of (a) any amendment to, or change (including any announced
prospective change) in, the laws (or any regulations thereunder) of the United
States or any political subdivision or taxing authority thereof or therein
affecting taxation, or (b) any interpretation or application of such laws or
regulations by any court, governmental agency or regulatory authority, in each
case which amendment or change is enacted, promulgated, issued or announced or
which interpretation or application is issued or announced on or after the date
of original issuance of Preferred Securities, there is more than an
insubstantial risk that (i) the Trust is subject to United States Federal income
tax with respect to interest received on the Debentures, (ii) interest payable
by the Company to the Trust on the Debentures will not be deductible for United
States Federal income tax purposes, or (iii) the Trust is subject to more than a
de minimis amount of other taxes, duties, assessments or other governmental
charges. "Investment Company Event" shall mean the occurrence of a change in law
or regulation or a change in interpretation or application of law or regulation
by any legislative body, court, governmental agency or regulatory authority (a
"Change in 1940 Act Law") to the effect that the Trust is or will be considered
an "Investment Company" that is required to be registered under the Investment
Company Act of 1940, as amended, which Change in 1940 Act Law becomes effective
on or after the date of original issuance of the Preferred Securities.
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Any redemption pursuant to the occurrence of a Special Event
will be made upon not less than 30 days nor more than 60 days notice, at the
Redemption Price. If the Debentures are only partially redeemed by the Company
pursuant to an Optional Redemption, the Debentures will be redeemed pro rata or
by lot or by any other method utilized by the Trustee; provided that if, at the
time of redemption, the Debentures are registered as a Global Debenture, the
Depository shall determine the principal amount of such Debentures held by each
Debenture Holder to be redeemed in accordance with its procedures.
In the event of redemption of this Debenture in part only, a
new Debenture or Debentures of this series for the unredeemed portion hereof
will be issued in the name of the Holder hereof upon the cancellation hereof.
In case an Event of Default, as defined in the Indenture,
shall have occurred and be continuing, the principal of all of the Debentures
may be declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and
the Trustee, with the consent of the Holders of not less than a majority in
aggregate principal amount of the Debentures of each series affected at the time
outstanding, as defined in the Indenture, to execute supplemental indentures for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of the Indenture or of any supplemental indenture or of
modifying in any manner the rights of the Holders of the Debentures; provided,
however, that no such supplemental indenture shall, among other things, (i)
reduce the principal amount thereof, or reduce the rate or extend the time of
payment of interest thereon, or reduce any premium payable upon the redemption
thereof, without the consent of the Holder of each Debenture so affected, or
(ii) reduce the aforesaid percentage of Debentures, the Holders of which are
required to consent to any such supplemental indenture, without the consent of
the Holder of each Debenture then outstanding and affected thereby. The
Indenture also contains provisions permitting the Holders of a majority in
aggregate principal amount of the Securities of any series at the time
outstanding affected thereby, on behalf of all of the Holders of the Debentures
of
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such series, to waive any Default or Event of Default with respect to such
series, and its consequences, except a Default or Event of Default in the
payment of the principal of or premium, if any, or interest on any of the
Securities of such series or in respect of a provision which under the Indenture
cannot be modified or amended without the consent of the Holder of each
Outstanding Security of that series affected. Any such consent or waiver by the
registered Holder of this Debenture (unless revoked as provided in the
Indenture) shall be conclusive and binding upon such Holder and upon all future
Holders and owners of this Debenture and of any Debenture issued in exchange
herefor or in place hereof (whether by registration of transfer or otherwise),
irrespective of whether or not any notation of such consent or waiver is made
upon this Debenture.
No reference herein to the Indenture and no provision of this
Debenture or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
premium, if any, and interest on this Debenture at the time and place and at the
rate and in the money herein prescribed.
So long as no Event of Default with respect to the Debentures
has occurred and is continuing, the Company shall have the right at any time
during the term of the Debentures from time to time to extend the interest
payment period of such Debentures for up to 20 consecutive quarters (an
"Extended Interest Payment Period"), at the end of which period the Company
shall pay all interest then accrued and unpaid (together with the interest
thereon at the rate specified for the Debentures to the extent that payment of
such interest is enforceable under applicable law). In the event that the
Company exercises this right, then (a) the Company shall not declare or pay any
dividend on, make any distributions with respect to, or redeem, purchase or
acquire, or make a liquidation payment with respect to, any of its capital stock
(other than (i) as a result of a reclassification of the Company's capital stock
or the exchange or conversion of one class or series of the Company's capital
stock for another class or series of the Company's capital stock, (ii) any
declaration of a dividend in connection with the implementation of a shareholder
rights plan, or the issuance of stock under any such plan in the future, or the
redemption or repurchase of any such rights pursuant thereto, (iii) purchases of
its common stock related to the issuance of such stock under any of the
Company's benefit plans for its directors, officers or
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employees, (iv) obligations under any dividend reinvestment plan or stock
purchase plan of the Company, or (v) the purchase of fractional interests in
shares of the Company's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged)
or make any guarantee payments with respect to the foregoing), (b) the Company
shall not make any payment of interest, principal or premium, if any, on or
repay, repurchase or redeem any debt securities (including guarantees) issued by
the Company that rank pari passu with or junior to such Debentures, and (c) the
Company shall not make any guarantee payments with respect to the foregoing
(other than pursuant to the Guarantee and any similar guarantee issued by the
Company on behalf of holders of preferred securities issued by an issuer holding
Securities issued under the Indenture). Prior to the termination of any such
Extended Interest Payment Period, the Company may further extend the interest
payment period; provided, that such Extended Interest Payment Period, together
with all such previous and further extensions thereof, may not exceed 20
consecutive quarters or extend beyond the maturity date of the Debenture. At the
termination of any such Extended Interest Payment Period and upon the payment of
all accrued and unpaid interest and any additional amount then due, the Company
may commence a new Extended Interest Payment Period, subject to the above
requirements.
As provided in the Indenture and subject to certain
limitations therein set forth, this Debenture is transferable by the registered
Holder hereof on the Security Register of the Company, upon surrender of this
Debenture for registration of transfer at the office or agency of the Trustee in
the City of New York and State of New York, accompanied by a written instrument
or instruments of transfer in form satisfactory to the Company or the Trustee
duly executed by the registered Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Debentures of authorized denominations
and for the same aggregate principal amount and series will be issued to the
designated transferee or transferees. No service charge will be made for any
such transfer, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this
Debenture, the Company, the Trustee, any paying agent and the Security Registrar
may deem and treat the registered holder hereof as the absolute owner hereof
(whether or not this
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Debenture shall be overdue and notwithstanding any notice of ownership or
writing hereon made by anyone other than the Security Registrar) for the purpose
of receiving payment of or on account of the principal hereof and premium, if
any, and interest due hereon and for all other purposes, and neither the Company
nor the Trustee nor any paying agent nor any Security Registrar shall be
affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of
or the interest on this Debenture, or for any claim based hereon, or otherwise
in respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of 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 issuance hereof, expressly
waived and released.
[This Global Debenture is exchangeable for Debentures in
definitive form only under certain limited circumstances set forth in the
Indenture. The Debentures of this series so issued are issuable only in
registered form without coupons in denominations of $25 and any integral
multiple thereof.] As provided in the Indenture and subject to certain
limitations herein and therein set forth, Debentures of this series so issued
are exchangeable for a like aggregate principal amount of Debentures of this
series of a different authorized denomination, as requested by the Holder
surrendering the same.
All terms used in this Debenture that are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
ARTICLE IX
ORIGINAL ISSUE OF DEBENTURES
SECTION 9.1. Original Issue of Debentures.
Debentures in the aggregate principal amount of $___________
may, upon execution of this First Supplemental Indenture, be executed by the
Company and delivered to the Trustee for authentication, and the Trustee shall
thereupon
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authenticate and deliver said Debentures to or upon the written order of the
Company, signed by its Chairman, its Vice Chairman, its President, or any Vice
President and its Treasurer or an Assistant Treasurer, without any further
action by the Company.
ARTICLE X
MISCELLANEOUS
SECTION 10.1. Ratification of Indenture.
The Indenture, as supplemented by this First Supplemental
Indenture, is in all respects ratified and confirmed, and this First
Supplemental Indenture shall be deemed part of the Indenture in the manner and
to the extent herein and therein provided.
SECTION 10.2. Trustee Not Responsible for Recitals.
The recitals herein contained are made by the Company and not
by the Trustee, and the Trustee assumes no responsibility for the correctness
thereof. The Trustee makes no representation as to the validity or sufficiency
of this First Supplemental Indenture.
SECTION 10.3. Governing Law.
This First Supplemental Indenture and each Debenture shall be
deemed to be a contract made under the internal laws of the State of New York,
and for all purposes shall be construed in accordance with the laws of said
State.
SECTION 10.4. Separability.
In case any one or more of the provisions contained in this
First Supplemental Indenture or in the Debentures shall for any reason be held
to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of this
First Supplemental Indenture or of the Debentures, but this First Supplemental
Indenture and the Debentures shall be construed as if such invalid or illegal or
unenforceable provision had never been contained herein or therein.
SECTION 10.5. Counterparts.
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This First Supplemental 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.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed, and their respective corporate seals
to be hereunto affixed and attested, on the date or dates indicated in the
acknowledgments and as of the day and year first above written.
BALTIMORE GAS AND ELECTRIC COMPANY
By: ___________________________
Name:
Title:
THE BANK OF NEW YORK
as Trustee
By: ____________________________
Name:
Title:
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