EXHIBIT 1-4
_____ CAPITAL SECURITIES
COMED FINANCING III
(A DELAWARE TRUST)
__% CAPITAL SECURITIES (LIQUIDATION AMOUNT
OF $__ PER PREFERRED SECURITY)
FORM OF UNDERWRITING AGREEMENT
_________ __, 200_
To the Representatives named in
Schedule I hereto of the Underwriters
named in Schedule II hereto
Dear Sirs:
1. Introductory. ComEd Financing III (the "TRUST"), a statutory
business trust organized under the Business Trust Act (the "DELAWARE ACT") of
the State of Delaware (Chapter 38, Title 12, of the Delaware Code, 12 Del.
Sections 3801 et seq.), and Commonwealth Edison Company, an Illinois corporation
(the "COMPANY" and, together with the Trust, the "OFFERORS"), propose to issue
and sell from time to time Capital Securities. The Capital Securities will be
issued by the Trust as ___% Capital Securities (liquidation amount of $____ per
security) representing undivided beneficial interests in the assets of the Trust
(the "Capital Securities"). The Capital Securities will be guaranteed by the
Company, to the extent described in the Prospectus (as defined below), with
respect to distributions and payments upon liquidation, redemption and otherwise
pursuant to the Capital Securities Guarantee Agreement (the "Capital Securities
Guarantee") to be dated as of the Closing Time (as defined below) between the
Company and Wilmington Trust Company as Trustee (the "Guarantee Trustee"). The
Company proposes to sell to the underwriters named in Schedule II hereto (the
"Underwriters") for whom you are acting as Representative or Representatives
(the "Representatives") Capital Securities in the aggregate principal amount and
with the terms specified in Schedule I hereto (the "Designated Securities").
The entire proceeds from the sale of the Designated Securities will be
combined with the entire proceeds from the sale by the Trust to the Company of
its common securities (the "COMMON SECURITIES"), as guaranteed by the Company,
to the extent set forth in the Prospectus, with respect to distributions and
payments upon liquidation, redemption and otherwise pursuant to the Common
Securities Guarantee Agreement (the "COMMON SECURITIES GUARANTEE" and, together
with the Capital Securities Guarantee, the "GUARANTEES"), to be dated as of the
Closing Time, made by the Company, and will be used by the Trust to purchase
$______ in aggregate principal amount of ____% Subordinated Deferrable Interest
Debentures due _______, 20__ (the
"SUBORDINATED DEBENTURES") issued by the Company. The Designated Securities and
the Common Securities will be issued pursuant to the Amended and Restated
Declaration of Trust, to be dated as of the Closing Time (the "DECLARATION"),
among the Company, as sponsor, __________ and __________, as administrative
trustees (the "ADMINISTRATIVE TRUSTEES"), Wilmington Trust Company, as property
trustee (the "PROPERTY TRUSTEE") and as Delaware trustee (the "DELAWARE
TRUSTEE," and together with the Property Trustee and the Administrative
Trustees, the "TRUSTEES"). The Subordinated Debentures will be issued pursuant
to an indenture, dated as of September 1, 1995 (the "INDENTURE"), between the
Company and Wilmington Trust Company, as trustee (the "DEBENTURE TRUSTEE"). The
Capital Securities issued in book-entry form will be issued to Cede & Co. as
nominee of The Depository Trust Company ("DTC") pursuant to a letter agreement,
to be dated as of the Closing Time (the "DTC Agreement"), among the Trust, the
Property Trustee and DTC.
The Capital Securities, the Capital Securities Guarantee and
the Subordinated Debentures are hereinafter collectively referred to as the
"PURCHASED SECURITIES."
The Indenture, the Declaration, the DTC Agreement and this Agreement
are hereinafter referred to collectively as the "OPERATIVE DOCUMENTS."
2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the Underwriters that:
(a) The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (Registration
No. 333-_____) relating to its debt securities, first mortgage bonds, trust
preferred securities and cumulative preference stock (the "Securities"), which
include the Designated Securities, and the offering thereof from time to time in
accordance with Rule 415 under the Securities Act of 1933, as amended (the
"Act"), and has filed such amendments thereto as may have been required to the
date hereof. Such registration statement, as so amended, has been declared
effective by the Commission. Such registration statement and the prospectus
relating to the sale of the Securities by the Company constituting a part
thereof, including all documents incorporated therein by reference, as from time
to time amended or supplemented pursuant to the Act or the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), are referred to herein as the
"Registration Statement," and the prospectus relating to the Securities,
including all documents incorporated therein by reference, as from time to time
amended or supplemented pursuant to the Act or the Exchange Act, is referred to
herein as the "Prospectus"; provided, however, that a supplement to the
Prospectus relating to an offering of Securities, other than the Designated
Securities, shall be deemed to have supplemented the Prospectus only with
respect to the offering of the other Securities to which it relates. All
documents filed by the Company with the Commission pursuant to the Exchange Act
and incorporated by reference in the Registration Statement or the Prospectus,
as aforesaid, are hereinafter referred to as the "Incorporated Documents."
(b) The Registration Statement, the Prospectus and the
Indenture, at the time the Registration Statement became effective complied, as
of the date hereof comply and as of the Closing Date (as hereinafter defined)
will comply, in all material respects with the applicable requirements of the
Act, the Exchange Act and the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"), and the rules and regulations of the Commission under
such Acts; the
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Incorporated Documents, as of their respective dates of filing with the
Commission, complied and will comply as to form in all material respects with
the requirements of the Exchange Act and the rules and regulations of the
Commission thereunder; the Registration Statement and any amendment thereof
(including the filing of any annual report on Form 10-K), at the time it became
effective, did not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading; and the Prospectus, at the time the
Registration Statement became effective did not, as of the date hereof does not
and as of the Closing Date will not, contain an untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that the representations and warranties in this
Section 1(b) shall not apply to (i) that part of the Registration Statement
which constitutes the Statements of Eligibility and Qualification (Forms T-1 and
T-2) under the Trust Indenture Act or (ii) statements in or omissions from the
Registration Statement or the Prospectus made in reliance upon and in conformity
with information furnished to the Company in writing by any Underwriter
expressly for use in the Registration Statement or the Prospectus.
(c) PricewaterhouseCoopers LLP, the accountants who certified
certain of the financial statements included or incorporated by reference in the
Prospectus, are independent public accountants as required by the Act and the
rules and regulations of the Commission thereunder.
(d) The financial statements included or incorporated by
reference in the Prospectus present fairly in all material respects the
financial position, results of operations and cash flows of the Company at the
respective dates and for the respective periods specified and, except as
otherwise stated in the Prospectus, such financial statements have been prepared
in conformity with generally accepted accounting principles applied on a
consistent basis during the periods involved. The Company has no material
contingent obligation which is not disclosed in the Prospectus.
(e) Except as set forth in or contemplated by the Prospectus,
no material transaction has been entered into by the Company otherwise than in
the ordinary course of business and no materially adverse change has occurred in
the condition, financial or otherwise, of the Company or the Trust, in each case
since the respective dates as of which information is given in the Prospectus.
(f) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Illinois with corporate power and authority to own its properties and conduct
its business as described in the Prospectus.
(g) Each significant subsidiary of the Company, as defined in
Rule 1-02 of Regulation S-X of the Commission ("Significant Subsidiary"), has
been duly incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation; all of the issued and
outstanding capital stock of each Significant Subsidiary has been duly and
validly issued and is fully paid and non-assessable; and all of the capital
stock of each Significant Subsidiary is owned by the Company free and clear of
any pledge, lien, encumbrance, claim or equity.
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(h) Neither the Company nor any Significant Subsidiary is in
violation of its articles or certificate of incorporation; the Trust is not in
violation of the Declaration or its certificate of trust filed with the State of
Delaware September __, 2002 (the "Certificate of Trust"), none of the Company,
any Significant Subsidiary or the Trust is in default in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any mortgage or any material contract, lease, note or other
instrument to which the Company, any Significant Subsidiary or the Trust is a
party or by which any of them may be bound, nor is any of them materially in
violation of any law, administrative regulation or administrative, arbitration
or court order, except in each case to such extent as may be set forth in the
Prospectus; and the execution and delivery of this Agreement, the incurrence of
the obligations herein set forth and the consummation of the transactions herein
contemplated will not conflict with or constitute a breach of, or default under,
the articles of incorporation or by-laws of the Company, the Declaration of
Trust or Certificate of Trust or any mortgage, contract, lease, note or other
instrument to which the Company, any Significant Subsidiary or the Trust is a
party or by which it, any Significant Subsidiary or the Trust may be bound, or
any law, administrative regulation or administrative, arbitration or court order
to which it is subject or bound.
(i) The Company has filed with the Illinois Commerce
Commission ("ICC") a petition with respect to the issuance and sale of the
Purchased Securities (including the Designated Securities, the Subordinated
Debentures, and the Guarantees) and the purchase of the Common Securities from
the Trust and the Company's participation in the transactions otherwise
contemplated by this Agreement, and the ICC has issued its order authorizing and
approving such issuance and sale. No consent of or approval by any other public
board or body or administrative agency, federal or state, is necessary to
authorize the issuance and sale of the Purchased Securities, except as may be
required under the blue sky laws of any jurisdiction in connection with the
purchase and distribution of the Purchased Securities by the Underwriters in the
manner contemplated herein and in the Prospectus.
(j) There is no pending or threatened suit or proceeding
before any court or governmental agency, authority or body or any arbitration
involving the Company, any of its Significant Subsidiaries or the Trust required
to be disclosed in the Prospectus which is not adequately disclosed in the
Prospectus.
(k) This Agreement has been duly authorized, executed and
delivered by the Company.
(l) The Declaration has been duly authorized by the necessary
corporate action and, at the Closing Time, will have been duly executed and
delivered by the Company and the Trustees, and assuming due authorization,
execution and delivery of the Declaration by the Property Trustee, the
Declaration will, at the Closing Time, constitute a legal, valid, binding
instrument enforceable against the Company and the Administrative Trustees in
accordance with its terms, (subject, as to the enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, fraudulent transfer,
moratorium or other laws affecting creditors' rights generally from time to time
in effect and to general principles of equity).
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(m) The franchise granted to the Company by the City Council
of the City of Chicago under an ordinance effective January 1, 1992, is valid
and subsisting and duly authorizes the Company to engage in the electric utility
business conducted by it in such City. The several franchises of the Company
outside the City of Chicago are valid and subsisting and authorize the Company
to carry on its utility business in the several communities, capable of granting
franchises, located in the territory served by the Company outside the City of
Chicago (with immaterial exceptions).
(n) The Company has good and sufficient title to all property
described or referred to in the Company's Mortgage dated July 1, 1923, as
amended and supplemented (the "Mortgage"), subject only to the lien of the
Mortgage and permitted liens as therein defined (except as to property released
from the lien of the Mortgage in connection with the sale or other disposition
thereof, and certain other exceptions which are not material in the aggregate).
(o) The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Act with the power and
authority to own property and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under this Agreement,
the Purchased Securities, the Common Securities and the Declaration; the Trust
is duly qualified to transact business as a foreign company and is in good
standing in any other jurisdiction in which such qualification is necessary,
except to the extent that the failure to so qualify or be in good standing would
not have a material adverse effect on the Trust; the Trust is not a party to or
otherwise bound by any agreement other than those described in the Prospectus;
the Trust is and will be classified for United States federal income tax
purposes as a grantor trust and not as an association taxable as a corporation;
and the Trust is and will be treated as a consolidated subsidiary of the Company
pursuant to generally accepted accounting principles.
(p) At the Closing Time, the Designated Securities will have
been duly authorized by the Declaration and, when issued and delivered against
payment of the consideration therefor as provided herein, will be validly issued
and (subject to the terms of the Declaration) fully paid and non-assessable
undivided beneficial interests in the Trust, will be entitled to the benefits of
the Declaration; the issuance of the Designated Securities is not subject to
preemptive or other similar rights; and (subject to the terms of the
Declaration) holders of Designated Securities will be entitled to the same
limitation of personal liability under Delaware law as extended to stockholders
of private corporations for profit organized under the Delaware General
Corporation Law; provided, that the holders of the Designated Securities may be
obligated, pursuant to the Declaration, to (i) provide indemnity and/or security
in connection with, and pay taxes or governmental charges arising from,
transfers or exchanges of Designated Securities certificates and the issuance of
replacement Designated Securities certificates and (ii) provide security and
indemnity in connection with requests of or directions to the Property Trustee
to exercise its rights and remedies under the Declaration.
(q) Each of the Guarantees has been duly authorized by the
Company; at the Closing Time, each of the Guarantees will have been duly
executed and delivered by the Company and, assuming due authorization, execution
and delivery of the Capital Securities Guarantee by the Guarantee Trustee, will
constitute a legal, valid binding instrument, enforceable against the Company in
accordance with its terms (subject, as to the enforcement of
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remedies, to applicable bankruptcy, reorganization, insolvency, fraudulent
transfer, moratorium or other laws affecting creditors' rights generally from
time to time in effect and to general principles of equity).
(r) The Common Securities have been duly authorized by the
Declaration and, when issued and delivered by the Trust to the Company against
payment therefor as described in the Prospectus, will be validly issued and
(subject to the terms of the Declaration) fully paid and non-assessable
undivided beneficial interests in the assets of the Trust; the issuance of the
Common Securities is not subject to preemptive or other similar rights; and at
the Closing Time all of the issued and outstanding Common Securities of the
Trust will be directly owned by the Company free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity.
(s) The Indenture has been duly authorized, executed and
delivered by the Company and constitutes a legal, valid binding instrument,
enforceable against the Company in accordance with its terms (subject, as to the
enforcement of remedies, to applicable bankruptcy, reorganization, insolvency,
fraudulent transfer, moratorium or other laws affecting creditors' rights
generally from time to time in effect and to general principles of equity).
(t) The Subordinated Debentures have been duly authorized by
the Company and, at Closing Time, will have been duly executed by the Company
and, when authenticated in the manner provided for in the Indenture and
delivered against payment therefor as described in the Prospectus, will
constitute a legal, valid binding instrument, enforceable against the Company in
accordance with its terms (subject, as to the enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, fraudulent transfer,
moratorium or other laws affecting creditors' rights generally from time to time
in effect and to general principles of equity); and will be in the form
contemplated by, and entitled to the benefits of, the Indenture.
(u) The Company's obligations under the Guarantees are
subordinate and junior in right of payment to all liabilities of the Company
other than [describe], and are pari passu with the most senior preferred stock
issued by the Company.
(v) The Subordinated Debt Securities are subordinated and
junior in right of payment to all "Senior Indebtedness" (as defined in the
Supplemental Indenture) of the Company.
(w) Each of the Administrative Trustees of the Trust is an
employee of the Company and has been duly authorized by the Company to execute
and deliver the Declaration; the Declaration has been duly executed and
delivered by the Administrative Trustees and is a valid and binding obligation
of each Administrative Trustee, enforceable against such Administrative Trustee
in accordance with its terms (subject, as to the enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, fraudulent transfer,
moratorium or other laws affecting creditors' rights generally from time to time
in effect and to general principles of equity).
(x) Except for changes contemplated by the Prospectus, the
authorized and outstanding capital stock of the Company is as set forth in the
Prospectus.
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(y) The descriptions in the Prospectus of this Agreement, the
Declaration, the Capital Securities Guarantee, the Common Securities, the
Indenture and the Subordinated Debentures fairly summarize the matters therein
described.
Any certificate signed by any officer of the Company and
delivered to you or to counsel for the Underwriters in connection with the
offering of the Designated Securities shall be deemed a representation and
warranty by the Company to each Underwriter as to the matters covered thereby.
3. Purchase, Offering and Delivery -- Closing Date. Subject to the
terms and conditions herein set forth, the Trust agrees to sell to each
Underwriter, and each Underwriter agrees, severally and not jointly, to purchase
from the Trust at the purchase price set forth in Schedule I hereto, the number
of Designated Securities set forth opposite each Underwriter's name in Schedule
II hereto. It is understood that the Underwriters propose to offer the
Designated Securities for sale to the public as set forth in the Prospectus
Supplement, as hereinafter defined, relating to the Designated Securities. The
time and date of delivery and payment shall be the time and date specified in
Schedule I hereto; provided, however, that such time or date may be accelerated
or extended by agreement between the Company and the Representatives or as
provided in Section 9 hereof. The time and date of such delivery and payment are
herein sometimes referred to as the "Closing Date." Delivery of the Designated
Securities shall be made to the Representatives for the respective accounts of
the several Underwriters against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order of the
Company by wire transfer payable in same-day funds to the account specified by
the Company. Delivery of the Designated Securities shall be made through the
facilities of The Depository Trust Company.
[(c) As compensation to the Underwriters for their commitments
hereunder and in view of the fact that the proceeds of the sale of the
Designated Securities will be used to purchase Subordinated Debentures of the
Company, the Company hereby agrees to pay at the Closing Time, or the relevant
Date of Delivery, as the case may be, to the Representatives in immediately
available funds, for the accounts of the several Underwriters, $_____ per
Designated Security to be delivered by the Trust hereunder at the Closing Time.]
4. Agreements. The Company agrees with the several Underwriters that:
(a) Promptly following the execution of this Agreement, the
Offerors will cause the Prospectus, including as part thereof a prospectus
supplement relating to the Designated Securities (the "Prospectus Supplement"),
to be filed with the Commission pursuant to Rule 424 under the Act and the
Offerors will promptly advise the Representatives when such filing has been
made. Prior to such filing, the Offerors will cooperate with the Representatives
in the preparation of the Prospectus Supplement to assure that the
Representatives have no reasonable objection to the form or content thereof when
filed.
(b) The Offerors will promptly advise the Representatives (i)
when any amendment to the Registration Statement shall have become effective,
(ii) of any request by the Commission for any amendment of the Registration
Statement or amendment or supplement to the Prospectus or for any additional
information, (iii) of the issuance by the Commission of any
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stop order suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose and (iv) of the
receipt by either the Company or the Trust of any notification with respect to
the suspension of the qualification of the Designated Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose. The Offerors will not file any amendment to the Registration Statement
or amendment or supplement to the Prospectus unless the Offerors have furnished
the Representatives a copy for their review prior to filing and will not file
any such proposed amendment or supplement without the consent of the
Representatives, which consent shall not be unreasonably withheld. The Offerors
will use their best efforts to prevent the issuance of any such stop order and,
if issued, to obtain as soon as possible the withdrawal thereof.
(c) If, at any time when a prospectus relating to the
Designated Securities is required to be delivered under the Act, any event
occurs as a result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it shall be necessary to amend
or supplement the Registration Statement or the Prospectus to comply with the
Act or the Exchange Act or the rules and regulations of the Commission under
such Acts, the Company promptly will prepare and file with the Commission,
subject to paragraph (b) of this Section 4, an amendment or supplement which
will correct such statement or omission or an amendment or supplement which will
effect such compliance.
(d) The Offerors shall take all reasonable action necessary to
enable [Standard & Poor's Ratings Services, a division of McGraw Hill, Inc.
("S&P")], and [▇▇▇▇▇'▇ Investors Service, Inc. ("MOODY'S")] to provide their
respective credit ratings of the Capital Securities.
(e) The Offerors will cooperate with the Initial Purchasers
and use their reasonable commercial efforts to permit the Capital Securities to
be eligible for clearance and settlement through the facilities of DTC.
(f) The Trust will use the net proceeds received by it from
the sale of the Capital Securities and the Common Securities, and the Company
will use the proceeds received by it from the sale of the Subordinated
Debentures, in the manner specified in the Prospectus under ["Use of Proceeds".]
(g) The Offerors will furnish without charge to (i) each of
the Representatives and counsel for the Underwriters a signed copy of the
Registration Statement (but without exhibits incorporated by reference), as
originally filed, all amendments thereto filed prior to the Closing Date, all
Incorporated Documents (including exhibits, other than exhibits incorporated by
reference) and the Statement on Form T-1 of the Trustee under the Indenture,
(ii) each other Underwriter a conformed copy of the Registration Statement (but
without exhibits), as originally filed, all amendments thereto (but without
exhibits) and all Incorporated Documents (but without exhibits other than the
Company's latest Annual Report to shareholders) and (iii) each Underwriter as
many copies of the Prospectus, the Prospectus Supplement thereto and, so long as
delivery of a prospectus or supplement thereto by an Underwriter or dealer may
be required under the Act, any amendments thereof and supplements thereto (but
without Incorporated
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Documents or exhibits), as soon as available and in such quantities as the
Representatives may reasonably request.
(h) The Offerors will arrange, if necessary, for the
qualification of the Designated Securities (and the Guarantee) and the
Subordinated Debt Securities for sale under the laws of such jurisdictions
within the United States as the Representatives may designate, provided, that in
no event shall the Company be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or take any action that would
subject it to service of process in suits (other than those arising out of the
offering or sale of the Designated Securities Notes) in any jurisdiction where
it is not now so subject. The Company will maintain such qualifications in
effect so long as required for the distribution of the Designated Securities.
The Company will promptly advise the Representatives of the receipt by the
Company of any notification with respect to the qualification of the Designated
Securities for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose.
(i) The Company agrees to pay the costs and expenses relating
to the following matters: (i) the preparation of the Prospectus, the issuance of
the Designated Securities and the fees of the Trustee; (ii) the preparation,
printing or reproduction of the Prospectus and each amendment or supplement
thereto; (iii) the printing (or reproduction) and delivery (including postage,
air freight charges and charges for counting and packaging) of such copies of
the Prospectus, and all amendments or supplements to it, as may, be reasonably
requested for use in connection with the offering and sale of the Designated
Securities; (iv) the preparation, printing, authentication, issuance and
delivery of certificates for the Designated Securities, including any stamp or
transfer taxes in connection with the original issuance and sale of the
Designated Securities; (v) the printing (or reproduction) and delivery of this
Agreement, any blue sky memorandum and all other agreements or documents printed
(or reproduced) and delivered in connection with the offering of the Designated
Securities; (vi) any registration or qualification of the Designated Securities
for offer and sale under the securities or blue sky laws of the several states
(including filing fees and the reasonable fees and expenses of counsel for the
Underwriters relating to such registration and qualification); (vii) the
transportation and other expenses incurred by or on behalf of Company
representatives in connection with presentations to prospective purchasers of
the Designated Securities; (viii) the fees and expenses of the Company's
accountants and counsel (including local and special counsel); (ix) the fees and
expenses of any rating agencies rating the Designated Securities and (x) all
other costs and expenses incident to the performance by the Company of its
obligations hereunder.
(j) The Company will, if requested by the Representatives, use
its best efforts to cause the Designated Securities to be listed on the New York
Stock Exchange.
(k) During the period beginning from the date of this
Agreement and continuing to and including the later of (i) the termination of
trading restrictions on the Designated Securities, as notified to the Company by
the Representatives, and (ii) the Closing Date, neither the Company nor the
Trust will offer, sell, contract to sell or otherwise dispose of capital
securities, or the Subordinated Debentures or any debt securities substantially
similar (including provisions with respect to the deferral of interest) to the
Subordinated Debentures or any equity security substantially similar to the
Capital Securities (except for the Securities issued pursuant to this Agreement)
or enter into any swap or any other agreement or any transaction that
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transfers, in whole or in part, directly or indirectly, the economic consequence
of ownership of the Capital Securities or the Subordinated Debentures; provided,
however, that the foregoing restrictions shall not apply to any disposal of the
Subordinated Debentures following any liquidation of the Trust; provided,
however, that in no event shall the foregoing period extend more than fifteen
calendar days from the date of this Agreement.
5. Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase and pay for the Designated
Securities shall be subject to the accuracy of the representations and
warranties on the part of the Company contained herein as of the date hereof and
the Closing Date, to the accuracy of the statements of the Company made in any
certificates pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional conditions:
(a) No stop order suspending the effectiveness of the
Registration Statement shall be in effect and no proceedings for that purpose
shall then be pending before, or threatened by, the Commission.
(b) The Company shall have furnished to the Representatives
the opinion of Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇, counsel for the Company, dated the
Closing Date and addressed to the Representatives, in form and substance
satisfactory to each of the Representatives and their counsel.
(c) The Company shall have furnished to the Representatives
the opinion of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, special counsel to the Offerors, dated
the Closing Date and addressed to the Representatives, in form and substance
satisfactory to each of the Representatives and their counsel.
(d) The Company shall have furnished to the Representatives
the opinion of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, counsel to The Wilmington Trust
Company, as Property Trustee under the Declaration, Guarantee Trustee under the
Guarantee Agreement, dated the Closing Date and addressed to the
Representatives, in form and substance satisfactory to each of the
Representatives and their counsel.
(e) The Representatives shall have received from Winston &
▇▇▇▇▇▇, counsel for the Underwriters, such opinion or opinions, dated the
Closing Date, with respect to the incorporation and legal existence of the
Company; the legal existence of the Trust, the Capital Securities, the
Indenture, the Guarantee Agreement, this Agreement, the Prospectus and other
related matters as the Representatives may reasonably require, and the Company
shall have furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters.
(f) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Treasurer or Assistant Treasurer of
the Company, and the Trust shall have furnished to the Representatives a
certificate of the Trust, signed by a Regular Trustee of the Trust, each dated
the Closing Date, to the effect that the signer of each such certificate has
carefully examined the Prospectus, any amendment or supplement to the Prospectus
and this Agreement and that:
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(i) the representations and warranties of the Company
and the Trust, respectively, in this Agreement are true and correct in
all material respects on and as of the Closing Date with the same
effect as if made on the Closing Date, and the Company and the Trust,
respectively, have complied with all the agreements and satisfied all
the conditions on their respective parts to be performed or satisfied
hereunder at or prior to the Closing Date;
(ii) since the date of the most recent financial
statements included in the Prospectus (exclusive of any amendment or
supplement thereto), there has been no material adverse change in the
financial condition, business or properties of the Trust or of the
Company and its subsidiaries, taken as a whole, whether or not arising
from transactions in the ordinary course of business, except as set
forth in or contemplated by the Prospectus (exclusive of any amendment
or supplement thereto); and
(iii) no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings for that
purpose have been initiated or, to his or her knowledge, threatened by
the Commission.
(g) On the date hereof and on the Closing Date, the Company
shall have requested and caused PricewaterhouseCoopers LLP to furnish to the
Representatives letters, dated respectively the date hereof and the Closing
Date, in form and substance satisfactory to the Representatives.
(h) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, there shall not have
been (i) any change or decrease specified in the letter referred to in paragraph
(e) of this Section 5 or (ii) any change, or any development involving a
prospective change, in or affecting the financial condition, business or
properties of the Trust or the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Prospectus (exclusive of any
amendment or supplement thereto) the effect of which, in any case referred to in
clause (i) or (ii) above, is, in the sole judgment of the Representatives, so
material and adverse as to make it impractical or inadvisable to proceed with
the public offering or delivery of the Designated Securities as contemplated by
the Prospectus (exclusive of any amendment or supplement thereto).
(i) On the Closing Date, (i) the Designated Securities shall
be rated ______ by ▇▇▇▇▇'▇ Investors Service, Inc. and ______ by Standard &
Poor's Rating Services, and the Trust shall have delivered to the
Representatives evidence satisfactory to the Representatives confirming that the
Designated Securities have such ratings, and (ii) subsequent to the date of this
Agreement, there shall not have occurred a downgrading in the rating assigned to
the Designated Securities or any of the Company's first mortgage bonds or
commercial paper by any "nationally recognized statistical rating agency", as
that term is defined by the Commission for purposes of Rule 436(g)(2) under the
Act, and no such securities rating agency shall have publicly announced that it
has under surveillance or review, with possible negative implications, its
rating of the Designated Securities or any of the Company's other debt
securities.
11
(j) Prior to the Closing Date, the Company shall have
furnished to the Representatives such further information, certificates and
documents as the Representatives may reasonably request.
If any of the conditions specified in this Section 5 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions or certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Representatives and their counsel,
this Agreement and all obligations of the Underwriters hereunder may be canceled
at, or at any time prior to, the Closing Date by the Representatives. Notice of
such cancellation shall be given to the Company in writing or by telephone or
facsimile confirmed in writing.
The documents required to be delivered by this Section 5 will
be delivered at the office of counsel for the Company, at Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ &
▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, on the
Closing Date.
6. Conditions of Trust's Obligation. The obligation of the
Trust to deliver the Designated Securities upon payment therefor shall be
subject to the following conditions:
On the Closing Date, the order of the ICC referred to in
subparagraph (i) of Section 2 hereof shall be in full force and effect
substantially in the form in which originally entered; the Indenture shall be
qualified under the Trust Indenture Act as and to the extent required by such an
act, and no stop order suspending the effectiveness of the Registration
Statement shall be in effect and no proceedings for that purpose shall then be
pending before, or threatened by, the Commission.
In case any of the conditions specified above in this Section
6 shall not have been fulfilled, this Agreement may be terminated by the Company
by delivering written notice of termination to the Representatives. Any such
termination shall be without liability of any party to any other party except to
the extent provided in Sections 7 and 8 hereof.
7. Reimbursement of Underwriters' Expenses. If the sale of the
Designated Securities provided for herein is not consummated because any
condition to the obligations of the Underwriters or the Offerors set forth in
Section 5 and Section 6 hereof, respectively, is not satisfied because of any
termination pursuant to Section 10 hereof, or because of any refusal, inability
or failure on the part of the Offerors or either of them to perform any
agreement herein or comply with any provisions hereof other than by reason of a
default by any of the Underwriters, the Company will reimburse the Underwriters
severally upon demand for all out-of-pocket expenses (including reasonable fees
and disbursements of counsel) that shall have been incurred by them in
connection with the proposed purchase and sale of the Designated Securities.
8. Indemnification and Contribution. (a) The Offerors agree
jointly and severally to indemnify and hold harmless each Underwriter, the
directors, officers, employees and agents of each Underwriter and each person
who controls any Underwriter within the meaning of either the Act or the
Exchange Act against any and all losses, claims, damages or liabilities, joint
or several, to which they or any of them may become subject under the Act, the
Exchange Act or other federal or state statutory law or regulation, at common
law or otherwise,
12
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 a material fact contained in the Registration Statement as
originally filed or in any amendment thereof, or in any preliminary prospectus
or the Prospectus, or in any amendment thereof or supplement thereto, 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, in light of the circumstances under which they were made, not
misleading, and agrees to reimburse each such indemnified party, as incurred,
for any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Offerors will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with written
information furnished to either of the Offerors by or on behalf of any
Underwriter through the Representatives specifically for inclusion therein;
provided, further, that the foregoing indemnity with respect to any untrue
statement contained in or omission from any preliminary prospectus shall not
inure to the benefit of any Underwriter (or any of the directors, officers,
employees and agents of such Underwriter or any person controlling such
Underwriter) from whom the person asserting any such loss, claim, damage or
liability purchased any of the Designated Securities which are the subject
thereof if such person did not receive a copy of the Prospectus (or the
Prospectus as then amended or supplemented if either of the Offerors shall have
furnished any amendments or supplements thereto), excluding the Incorporated
Documents, at or prior to the confirmation of the sale of such Designated
Securities to such person in any case where such delivery is required by the Act
and the untrue statement or omission of a material fact contained in such
preliminary prospectus was corrected in the Prospectus (or the Prospectus as so
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto), and it is finally judicially determined that such delivery
was required to be made under the Act and was not so made. This indemnity
agreement will be in addition to any liability which the either of the Offerors
may otherwise have. The Company agrees to indemnify the Trust against all loss,
liability claim, damage and expense whatsoever, as due from the Trust under
Section 8(a) hereunder.
(b) Each Underwriter severally and not jointly agrees to
indemnify and hold harmless the Offerors and each of their respective directors,
officers, employees and agents, and each person who controls the Offerors within
the meaning of either the Act or the Exchange Act, to the same extent as the
foregoing indemnity from the Offerors to each Underwriter, but only with
reference to written information relating to such Underwriter furnished to
either of the Offerors by or on behalf of such Underwriter through the
Representatives specifically for inclusion in the documents referred to in the
foregoing indemnity. This indemnity agreement will be in addition to any
liability which any Underwriter may otherwise have. The Offerors acknowledge
that the statements set forth in ____________________________ constitute the
only information furnished in writing by or on behalf of the Underwriters for
inclusion in the Registration Statement, any preliminary prospectus or the
Prospectus (or in any amendment or supplement thereto).
(c) Promptly after receipt by an indemnified party under this
Section 8 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 this Section 8, notify the
13
indemnifying party in writing of the commencement thereof; but the failure so to
notify the indemnifying party (i) will not relieve it from liability under
paragraph (a) or (b) above unless and to the extent it did not otherwise learn
of such action and such failure results in the forfeiture by the indemnifying
party of substantial rights and defenses; and (ii) will not, in any event,
relieve the indemnifying party from any obligations to any indemnified party
other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); provided, however, that such counsel shall be
satisfactory to the indemnified party. Notwithstanding the indemnifying party's
election to appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel (including
local counsel), and the indemnifying party shall bear the reasonable fees, costs
and expenses of such separate counsel if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such counsel
with a conflict of interest; (ii) the actual or potential defendants in, or
targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party; (iii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of the institution of such action; or (iv) the
indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. An indemnifying party will
not, without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a)
or (b) of this Section 8 is for any reason held to be unenforceable by an
indemnified party although applicable in accordance with its terms, the Offerors
and the Underwriters agree to contribute to the aggregate losses, claims,
damages and liabilities (including legal or other expenses reasonably incurred
in connection with investigating or defending same) (collectively "Losses") to
which the Offerors and one or more of the Underwriters may be subject in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and by the Underwriters on the other from the offering
of the Designated Securities; provided, however, that in no case shall any
Underwriters (except as may be provided in any agreement among the Underwriters
relating to the offering of the Designated Securities) be responsible for any
amount in excess of the purchase discount or commission applicable to the
Designated Securities purchased by such Underwriters hereunder; provided,
further, that each Underwriter's obligation to contribute to Losses hereunder
shall be several and not joint. If the allocation provided by the immediately
preceding sentence is unavailable for any reason, the Offerors and the
Underwriters shall contribute in such proportion as is appropriate to reflect
not only such relative benefits but also the relative fault of the Offerors on
the one hand and of the Underwriters on the other in
14
connection with the statements or omissions which resulted in such Losses, as
well as any other relevant equitable considerations. Benefits received by the
Offerors shall be deemed to be equal to the total net proceeds from the offering
(before deducting expenses) received by them, and benefits received by the
Underwriters shall be deemed to be equal to the total purchase discounts and
commissions in each case set forth on the cover of the Prospectus. Relative
fault shall be determined by reference to, among other things, whether any
untrue or any alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information provided by the
Company on the one hand or the Underwriters on the other, the intent of the
parties and their relative knowledge, information and opportunity to correct or
prevent such untrue statement or omission. The Offerors and the Underwriters
agree that it would not be just and equitable if contribution were determined by
pro rata allocation or any other method of allocation which does not take
account of the equitable considerations referred to above. Notwithstanding the
provisions of this paragraph (d), no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 8, each person who controls an
Underwriter within the meaning of either the Act or the Exchange Act and each
director, officer, employee and agent of an Underwriters shall have the same
rights to contribution as such Underwriter, and each person who controls the
Offerors within the meaning of either the Act or the Exchange Act and each
officer, director, employee or agent of the Company and each Trustee of the
Trust shall have the same rights to contribution as the Offerors, subject in
each case to the applicable terms and conditions of this paragraph (d).
9. Default by an Underwriter. If any one or more Underwriters
shall fail to purchase and pay for any of the Designated Securities agreed to be
purchased by such Underwriter or Underwriters hereunder and such failure to
purchase shall constitute a default in the performance of its or their
obligations under this Agreement, the remaining Underwriters shall be obligated
severally to take up and pay for (in the respective proportions which the amount
of Designated Securities set forth opposite their names in Schedule II hereto
bears to the aggregate amount of Designated Securities set forth opposite the
names of all the remaining Underwriters) the Designated Securities which the
defaulting Underwriter or Underwriters agreed but failed to purchase, provided,
however, that in the event that the aggregate principal amount of Designated
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase shall exceed 10% of the aggregate principal amount of the Designated
Securities set forth in Schedule II hereto, the remaining Underwriters shall
have the right to purchase all, but shall not be under any obligation to
purchase any, of the Designated Securities, and if such nondefaulting
Underwriters do not purchase all the Designated Securities, this Agreement will
terminate without liability to any nondefaulting Underwriter or the Company. In
the event of a default by any Underwriter as set forth in this Section 9, the
Closing Date shall be postponed for such period, not exceeding five business
days, as the Representatives shall determine in order that the required changes
in the Registration Statement and the Prospectus Supplement or in any other
documents or arrangements may be effected. Nothing contained in this Agreement
shall relieve any defaulting Underwriter of its liability, if any, to the
Company or any nondefaulting Underwriter for damages occasioned by its default
hereunder.
10. Termination. This Agreement shall be subject to
termination in the absolute discretion of the Representatives, by notice given
to the Company prior to delivery of
15
and payment for the Designated Securities, if at any time after the date hereof
and prior to the delivery of and payment for the Designated Securities (i)
trading in Exelon Corporation's common stock shall have been suspended by the
Commission or the New York Stock Exchange or trading in securities generally on
the New York Stock Exchange shall have been suspended or limited or minimum
prices shall have been established on such Exchange; (ii) a banking moratorium
shall have been declared either by federal or New York State authorities; or
(iii) there shall have occurred any outbreak or escalation of hostilities,
declaration by the United States of a national emergency or war or other
calamity or crisis the effect of which on financial markets is such as to make
it, in the sole judgment of the Representatives, impracticable or inadvisable to
proceed with the offering or delivery of the Designated Securities as
contemplated by the Prospectus.
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Offerors or their officers or Trustees and of the Underwriters set forth in or
made pursuant to this Agreement will remain in full force and effect, regardless
of any investigation made by or on behalf of the Underwriters or the Offerors or
any of the officers, directors or controlling persons referred to in Section 8
hereof, and will survive delivery of and payment for the Designated Securities.
The provisions of Sections 7 and 8 hereof shall survive the termination or
cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing
and effective only on receipt, and, if sent to the Representatives, will be
mailed, delivered or telefaxed to them at the address specified in Schedule I
hereto, or, if sent to the Trust or the Company, will be mailed, delivered or
telefaxed to Exelon Corporation, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Vice President and Treasurer (fax no.:
(▇▇▇) ▇▇▇-▇▇▇▇) and confirmed to the General Counsel of Exelon Corporation (fax
no.: (▇▇▇) ▇▇▇-▇▇▇▇).
13. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and
assigns and the officers and directors and controlling persons referred to in
Section 8 hereof, and no other person will have any right or obligation
hereunder. The term "successors and assigns" as used in this Agreement shall not
include any purchaser, as such purchaser, of any of the Designated Securities
from any of the Underwriters.
14. Representation of the Underwriters. The Representatives
represent and warrant to the Company that they are authorized to act as the
representatives of the Underwriters in connection with this financing, and the
Representatives' execution and delivery of this Agreement and any action under
this Agreement taken by such Representatives will be binding upon all
Underwriters.
15. Interpretation When No Representatives. In the event no
Underwriters are named in Schedule II hereto, the term "Underwriters" shall be
deemed for all purposes of this Agreement to be the Representative or
Representatives named as such in Schedule I hereto, the principal amount of the
Designated Securities to be purchased by any such Underwriter shall be that set
opposite its name in Schedule I hereto and all references to the "Underwriters"
shall be deemed to be the Representative or Representatives named in Schedule I
hereto.
16
16. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same instrument.
17. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.
17
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this Agreement and your acceptance shall represent a binding agreement
between the Company and each of the several Underwriters.
Very truly yours,
COMMONWEALTH EDISON COMPANY
By:
-------------------------------
Name:
Title:
COMED FINANCING III
By:
-------------------------------
Name:
Title: Administrative Trustee
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
[ ]
--------------------------
By:
------------------------------------
Name:
Title:
For themselves and the other several
Underwriters named in Schedule II
hereto.
18
SCHEDULE I
REPRESENTATIVES:
PURCHASE PRICE AND DESCRIPTION OF DESIGNATED SECURITIES:
PRINCIPAL AMOUNT:
PURCHASE PRICE:
INTEREST RATE:
INITIAL PUBLIC OFFER-
ING PRICE:
DEALER DISCOUNT:
REALLOWANCE TO DEALERS:
MATURITY:
SINKING FUND PROVISIONS:
REDEMPTION PROVISIONS:
19
OTHER PROVISIONS:
TIME AND DATE OF DELIVERY AND PAYMENT:
TIME AND DATE ---
PLACE OF DELIVERY AND PAYMENT:
DELIVERY ---
PAYMENT ---
FUNDS ---
OFFICE FOR EXAMINATION OF DESIGNATED SECURITIES:
------------------------
------------------------
------------------------
SPECIFIED DATE PURSUANT TO SECTION 3 OF UNDERWRITING AGREEMENT:
------------------------
ADDRESS FOR NOTICES TO REPRESENTATIVES PURSUANT TO SECTION 12 OF UNDERWRITING
AGREEMENT:
------------------------
------------------------
------------------------
20
SCHEDULE II
PRINCIPAL AMOUNT
NAME OF UNDERWRITER OF DESIGNATED SECURITIES
------------------- ------------------------
21
