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POTOMAC ELECTRIC POWER COMPANY |
(a District of Columbia and Virginia corporation) |
5.40% Senior Notes due June 1, 2035 |
PURCHASE AGREEMENT |
Dated: May 24, 2005 |
__________________________________________________________
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Table of Contents |
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Page |
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SECTION 1. |
Representations and Warranties |
2 |
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(a) |
Representations and Warranties by the Company |
2 |
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(i) |
Compliance with Registration Requirements |
2 |
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(ii) |
Incorporated Documents |
3 |
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(iii) |
Independent Accountants |
3 |
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(iv) |
Financial Statements |
3 |
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(v) |
No Material Adverse Change in Business |
4 |
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(vi) |
Good Standing of the Company |
4 |
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(vii) |
No Significant Subsidiaries |
4 |
|
(viii) |
Capitalization |
4 |
|
(ix) |
Authorization of Agreement |
4 |
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(x) |
Authorization of the Indenture |
4 |
|
(xi) |
Authorization of the Securities |
4 |
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(xii) |
Authorization of the Mortgage |
4 |
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(xii) |
Authorization of the Collateral Bonds |
5 |
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(xiv) |
Description of the Securities, the Indenture, the Collateral Bonds and the Mortgage |
5 |
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(xv) |
Absence of Defaults and Conflicts |
5 |
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(xvi) |
Absence of Labor Dispute |
6 |
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(xvii) |
Absence of Proceedings |
6 |
|
(xviii) |
Accuracy of Exhibits |
6 |
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(xix) |
Absence of Further Requirements |
6 |
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(xx) |
Possession of Licenses and Permits |
6 |
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(xxi) |
Title to Property and Mortgaged Property |
7 |
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(xxii) |
Lien of Mortgage |
7 |
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(xxiii) |
Leases |
7 |
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(xxiv) |
Investment Company Act |
7 |
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(xxv) |
Environmental Laws |
8 |
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(xxvi) |
Internal Controls |
8 |
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(xxvii) |
Compliance with Sarbanes Oxley |
9 |
|
(b) |
Officer's Certificates |
9 |
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SECTION 2. |
Sale and Delivery to Underwriters; Closing |
9 |
|
(a) |
Securities |
9 |
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(b) |
Payment |
9 |
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(c) |
Denominations; Registration |
9 |
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(d) |
Delivery of Global Securities |
9 |
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SECTION 3. |
Covenants of the Company |
10 |
|
(a) |
Compliance with Securities Regulations and Commission Requests |
10 |
|
(b) |
Delivery of Registration Statements |
10 |
|
(c) |
Delivery of Prospectuses |
10 |
|
(d) |
Continued Compliance with Securities Laws |
10 |
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(e) |
Review of Amendments and Supplements |
11 |
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(f) |
Blue Sky Qualifications |
11 |
|
(g) |
Rule 158 |
11 |
|
(h) |
Use of Proceeds |
11 |
|
(i) |
Restriction on Sale of Securities |
12 |
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(j) |
Reporting Requirements |
12 |
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i
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SECTION 4. |
Payment of Expenses |
12 |
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(a) |
Expenses |
12 |
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(b) |
Termination of Agreement |
12 |
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SECTION 5. |
Conditions of Underwriters' Obligations |
12 |
|
(a) |
Effectiveness of Registration Statement |
12 |
|
(b) |
Opinions of Counsel for Company |
13 |
|
(c) |
Opinion of Counsel for Underwriters |
13 |
|
(d) |
Officers' Certificate |
13 |
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(e) |
Accountant's Comfort Letter |
13 |
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(f) |
Maintenance of Rating |
13 |
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(g) |
Additional Documents |
13 |
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(h) |
Termination of Agreement |
13 |
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SECTION 6. |
Indemnification |
14 |
|
(a) |
Indemnification of Underwriters |
14 |
|
(b) |
Indemnification of Company, Directors and Officers |
14 |
|
(c) |
Actions against Parties; Notification |
15 |
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SECTION 7. |
Contribution |
15 |
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SECTION 8. |
Representations, Warranties and Agreements to Survive |
16 |
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SECTION 9. |
Termination of Agreement |
16 |
|
(a) |
Termination; General |
16 |
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(b) |
Liabilities |
17 |
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SECTION 10. |
Default by One or More of the Underwriters |
17 |
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SECTION 11. |
Notices |
17 |
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SECTION 12. |
Parties |
18 |
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SECTION 13. |
Governing Law and Time |
18 |
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SECTION 14. |
Counterparts |
18 |
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SECTION 15. |
Effect of Headings |
18 |
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SCHEDULES |
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Schedule A - List of Underwriters |
Sch A-1 |
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Schedule B - Pricing Information |
Sch B-1 |
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EXHIBITS |
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Exhibit A - Form of Opinion of Kirk J. Emge, Esq. |
A-1 |
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Exhibit B - Form of Opinion of Covington & Burling |
B-1 |
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POTOMAC ELECTRIC POWER COMPANY |
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(a District of Columbia and Virginia corporation) |
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$175,000,000 |
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5.40% Senior Notes due June 1, 2035 |
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PURCHASE AGREEMENT |
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May 24, 2005 |
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CREDIT SUISSE FIRST BOSTON LLC
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MERRILL LYNCH & CO.
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As Representatives of the Several Underwriters |
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Ladies and Gentlemen: |
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Potomac Electric Power Company, a District of Columbia and Virginia corporation (the " Company "), confirms its agreement with Credit Suisse First Boston LLC (" CSFB ") and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated (" Merrill Lynch ") and each of the other Underwriters named in Schedule A hereto (collectively, the " Underwriters ", which term shall also include any underwriter substituted as hereinafter provided in Section 10 hereof), for whom CSFB and Merrill Lynch are acting as representatives (in such capacity, the " Representatives "), with respect to the issue and sale by the Company and the purchase by the Underwriters, acting severally and not jointly, of the respective principal amounts set forth in Schedule A hereto of $175,000,000 in aggregate principal amount of the Company's 5.40% Senior Notes due June 1, 2035 (the " Securities "). |
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The Securities are to be issued under an indenture, dated as of November 17, 2003, between the Company and The Bank of New York, trustee (the " Trustee "), as supplemented by an officer's certificate, to be dated the Closing Time (as hereinafter defined in Section 2(b)), establishing the terms of the Securities, such indenture, as so supplemented, being hereinafter called the "Indenture". |
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Simultaneously with the issue and sale by the Company of the Securities, and as a condition to the purchase thereof by the Underwriters, the Company will issue and deliver to the Trustee $175,000,000 in aggregate principal amount of its First Mortgage Bonds, 5.40% Collateral Series due 2035 (the " Collateral Bonds "). The Collateral Bonds are to be issued under the Mortgage and Deed of Trust, dated as of July 1, 1936, from the Company to The Bank of New York (successor in trust to The Riggs National Bank of Washington, D.C.), trustee (the " Mortgage Trustee "), as amended and supplemented by various instruments including the supplemental indenture, dated as of May 24, 2005 (the " Supplemental Indenture "), establishing the terms of the Collateral Bonds, such Mortgage and Deed of Trust, as so amended and supplemented, being hereinafter called the "Mortgage". |
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_____________________________________________________________________________________ |
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The Company understands that the Underwriters propose to make a public offering of the Securities promptly after this Agreement has been executed and delivered. |
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The Company has filed with the Securities and Exchange Commission (the " Commission ") on June 18, 2003 a registration statement on Form S-3 (No. 333-106209), for the registration of various securities, including the Securities, under the Securities Act of 1933, as amended (the " 1933 Act "), and the offer and sale thereof from time to time in accordance with Rule 415 of the rules and regulations of the Commission under the 1933 Act (the " 1933 Act Regulations "), and for the qualification of the Indenture and the Mortgage under the Trust Indenture Act of 1939, as amended (the " 1939 Act "). Such registration statement has been declared effective by the Commission. Such registration statement, including the exhibits and schedules thereto, at the time it became effective, is referred to herein as the " Registration Statement "; and the final prospectus and the final prospectus supplement relating to the offering of the Securities, in the forms first furnished to the Underwriters by the Company for use in connection with the offering of the Securities, are collectively referred to herein as the " Prospectus "; provided , however , that all references to the "Registration Statement" and the "Prospectus" shall also be deemed to include all documents filed pursuant to the Securities Exchange Act of 1934 (the " 1934 Act ") prior to the execution and delivery hereof which are incorporated therein by reference pursuant to Item 12 of Form S-3 under the 1933 Act. A " preliminary prospectus " shall be deemed to refer to (i) any prospectus used before the Registration Statement became effective and (ii) any prospectus that omitted information to be included upon pricing in a form of prospectus filed with the Commission pursuant to Rule 424(b) of the 1933 Act Regulations and was used after the Registration Statement became effective and prior to the initial delivery of the Prospectus to the Underwriters by the Company. For purposes of this Agreement, all references to the Registration Statement, Prospectus or preliminary prospectus or to any amendment or supplement to any of the foregoing shall be deemed to include the copy of such document filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval system (" EDGAR "). |
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All references in this Agreement to financial statements and schedules and other information which is "described", "disclosed", "referred to", "contained", "included" or "stated" in the Registration Statement, any preliminary prospectus or the Prospectus (or other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information which is incorporated by reference in the Registration Statement, any preliminary prospectus or the Prospectus, as the case may be; and all references in this Agreement to amendments or supplements to the Registration Statement, any preliminary prospectus or the Prospectus shall be deemed to mean and include the filing of any document under the 1934 Act which is incorporated by reference in the Registration Statement, such preliminary prospectus or the Prospectus, as the case may be. |
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SECTION 1. Representations and Warranties . |
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2
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At the time the Registration Statement became effective and at the Closing Time, the Registration Statement and any amendments and supplements thereto complied and will comply in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations and the 1939 Act and the rules and regulations of the Commission under the 1939 Act (the " 1939 Act Regulations "), and did not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. Neither the Prospectus nor any amendments or supplements thereto, at the time the Prospectus or any such amendment or supplement was issued and at the Closing Time, included or will include an untrue statement of a material fact or omitted or will 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. The representations and warranties in this subsection shall not apply to statements in or omissions from the Registration Statement or 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 Prospectus. |
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Each preliminary prospectus and the prospectus filed as part of the Registration Statement as originally filed or as part of any amendment thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so filed in all material respects with the 1933 Act Regulations and each preliminary prospectus and the Prospectus delivered to the Underwriters for use in connection with this offering was identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T. |
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3
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(xii) Authorization of the Mortgage . At the date hereof, the Mortgage has been duly authorized, and the Mortgage (excluding the Supplemental Indenture) has been duly executed and |
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4
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(xv) Absence of Defaults and Conflicts . The Company is not in violation of its articles of incorporation or by-laws or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease or other agreement or instrument to which the Company is a party or by which it may be bound, or to which any of the property or assets of the Company is subject (collectively, " Agreements and Instruments ") except for such defaults as have not resulted, and are not reasonably expected to result, in a Material Adverse Effect; and the execution, delivery and performance of this Agreement, the Indenture and the Securities, and the Mortgage and the Collateral Bonds, and the consummation of the transactions contemplated herein (including the issuance and sale of the Securities, the use of the proceeds from the sale of the Securities as described in the Prospectus under the caption "Use of Proceeds" and the issuance and delivery of the Collateral Bonds) and compliance by the Company with its obligations hereunder, under the Indenture, on the Securities, under the Mortgage and on the Collateral Bonds have been duly authorized by all necessary corporate action and do not and will not, whether with or without the giving of notice or passage of time or both, conflict with or constitute a breach of, or default or Repayment Event (as defined below) under, or result in the creation or imposition of any Lien (as hereinafter defined) (other than the Lien of the Mortgage and the Lien of the Indenture) upon any property or assets of the Company pursuant to, the Agreements and Instruments (except for such conflicts, breaches, defaults or Liens as would not result in a Material Adverse Effect), nor will such action result in any violation of the provisions of the articles of incorporation or by-laws of the Company or any applicable law, statute, rule, regulation, judgment, order, writ or decree of any government, government instrumentality or |
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5
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(xx) Possession of Licenses and Permits . The Company possesses such permits, licenses, approvals, consents and other authorizations (collectively, " Governmental Licenses ") issued by the appropriate federal, state, local or foreign regulatory agencies or bodies necessary to conduct the business now operated by it and is in compliance with the terms and conditions of all such Governmental Licenses, except where the failure so to possess any such Governmental License or to comply therewith would not, singly or in the aggregate, have a Material Adverse Effect; all of the Governmental Licenses are valid and in full force and effect, except where the invalidity of such Governmental Licenses or the failure of such Governmental Licenses to be in full force and effect would not have a Material Adverse Effect; and the Company has not received |
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6
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(xiv) Investment Company Act . The Company is not and upon the issuance and sale of the Securities as herein contemplated and the application of the net proceeds therefrom as described in the Prospectus will not be, an "investment company" or an entity "controlled" by an |
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7
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(xxvi) Internal Controls . (i) The Company has established and maintains the following, among other, internal controls (without duplication), |
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(A) The Company has devised and maintains in effect a system of "internal accounting controls" as contemplated in Section 13(b)(2)(B) of the 1934 Act (" Accounting Controls "). To the best knowledge of the Company, the Accounting Controls are effective in all material respects to perform the functions for which they were designed. |
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(B) The Company has established and maintains "disclosure controls and procedures" as such term is defined in Rule 13a-15(e) under the 1934 Act (" Disclosure Controls "). The effectiveness of such Disclosure Controls is evaluated by the Company's senior management on a quarterly basis, and, to the best knowledge of the Company, the Disclosure Controls are effective in all material respects to perform the functions for which they were established. |
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(ii) Based on the most recent evaluation of the Company's internal controls described above, all significant deficiencies in the design or operation of such internal controls which could adversely affect the Company's ability to record, process, summarize and report financial data required to be disclosed by the Company in its reports filed under Section 13(a) of the 1934 Act within the time periods specified in the 1934 Act Regulations, any material weaknesses in such internal controls and any fraud, whether or not material, that involves management or other employees who have a significant role in such internal controls have been identified and reported to the Company's auditors and the audit committee of the board of directors. |
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8
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SECTION 2. Sale and Delivery to Underwriters; Closing . |
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Payment shall be made to the Company by wire transfer of immediately available funds to a bank account designated by the Company, against delivery to the Representatives for the respective accounts of the Underwriters of certificates for the Securities to be purchased by them. It is understood that each Underwriter has authorized the Representatives, for its account, to accept delivery of, receipt for, and to make payment of the purchase price for, the Securities which it has agreed to purchase. CSFB and/or Merrill Lynch, individually and not as representatives of the Underwriters, may (but shall not be obligated to) make payment of the purchase price for the Securities to be purchased by any Underwriter whose funds have not been received by the Closing Time, but such payment shall not relieve such Underwriter from its obligations hereunder. |
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9
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SECTION 3. Covenants of the Company . |
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(d) Continued Compliance with Securities Laws . (i) The Company will comply with the 1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934 Act Regulations so as to permit the completion of the distribution of the Securities as contemplated in this Agreement and in the Prospectus. |
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(ii) The Company will immediately notify the Representatives, and confirm such notice in writing, of (x) any filing made by the Company of information relating to the offering of the Securities with any securities exchange or any other regulatory body in the United States or any other jurisdiction and (y) prior to the completion of the distribution of the Securities by the Underwriters as evidenced by a notice in writing from CSFB on behalf of the Underwriters to the Company (the " Notice of Completion "), any material changes in or affecting the business, condition (financial or otherwise) or results of operations of the Company and its subsidiaries considered as one enterprise which (i) make any |
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10
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statement in the Registration Statement or the Prospectus false or misleading or (ii) are not disclosed in the Registration Statement or the Prospectus. |
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(iii) Upon any notification pursuant to clause (ii) above or if prior to delivery of the Notice of Completion any event shall occur as a result of which it is necessary, in the reasonable opinion of the Company or of the Underwriters (A) to amend the Registration Statement or amend or supplement the Prospectus in order that the Prospectus not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading in the light of the circumstances existing at the time it is delivered to a purchaser, or (B) to amend the Registration Statement or amend or supplement the Prospectus in order to comply with the requirements of the 1933 Act or the 1933 Act Regulations, the Company will promptly prepare and file with the Commission, subject to Section 3(e), such amendment or supplement as may be necessary to correct such statement or omission or to make the Registration Statement or the Prospectus comply with such requirements, and the Company will furnish to the Underwriters such number of copies of such amendment or supplement as the Underwriters may reasonably request. |
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(e) Review of Amendments and Supplements. (i) In the case of amendments or supplements to the Registration Statement or the Prospectus which are not to be effected by means of a filing with the Commission of a document to be incorporated by reference therein, and are to be made prior to the delivery of the Notice of Completion, the Company will not effect any such amendment or supplement without the consent of the Representatives on behalf of the Underwriters, such consent not to be unreasonably withheld or delayed. Neither the consent of the Representatives, nor the delivery of any such amendment or supplement by any Underwriter, shall constitute a waiver of any of the conditions set forth in Section 5 hereof. |
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(ii) In the case of amendments or supplements to the Registration Statement or the Prospectus which are to be effected by means of a filing with the Commission of a document to be incorporated by reference therein and are to be made prior to the delivery of the Notice of Completion, the Company will furnish to the Representatives on behalf of the Underwriters, at least 24 hours, or such shorter period as is reasonably required by the circumstances, prior to the filing thereof with the Commission, a draft of each such document. |
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(iii) CSFB on behalf of the Underwriters shall deliver to the Company a Notice of Completion promptly after the completion of the distribution of the Securities by the Underwriters. |
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11
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SECTION 4. Payment of Expenses . |
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SECTION 5. Conditions of Underwriters' Obligations . |
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The obligations of the several Underwriters hereunder are subject to the accuracy of the representations and warranties of the Company contained in Section 1 hereof or in certificates of any officer of the Company delivered pursuant to the provisions hereof, to the performance by the Company of its covenants and other obligations hereunder, and to the following further conditions: |
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12
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13
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liability of any party to any other party except as provided in Section 4 and except that Sections 1, 6, 7 and 8 shall survive any such termination and remain in full force and effect. |
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SECTION 6. Indemnification . |
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(i) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus or the Prospectus (or any amendment or supplement thereto), or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; |
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(ii) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any untrue statement or omission, or any alleged untrue statement or omission in either case of the nature described in clause (i) above; provided that any such settlement is effected with the written consent of the Company; and |
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(iiii) against any and all expense whatsoever, as incurred (including the fees and disbursements of counsel chosen by the Representatives), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under (i) or (ii) above; |
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provided , however , that this indemnity agreement shall not apply to any loss, liability, claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to the Company by any Underwriter through the Representatives expressly for use in the Registration Statement (or any amendment thereto), or any preliminary prospectus or the Prospectus (or any amendment or supplement thereto). |
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SECTION 7. Contribution . |
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If the indemnification provided for in Section 6 hereof is for any reason unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying party shall contribute to the aggregate amount of such losses, liabilities, claims, damages and expenses incurred by such indemnified party, (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other hand from the offering of the Securities pursuant to this Agreement or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and of the Underwriters on the other hand in connection with the statements or omissions which resulted in such losses, liabilities, claims, damages or expenses, as well as any other relevant equitable considerations. |
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The relative benefits received by the Company on the one hand and the Underwriters on the other hand in connection with the offering of the Securities pursuant to this Agreement shall be deemed to be in the same respective proportions as the total net proceeds from the offering of the Securities pursuant to this Agreement (before deducting expenses) received by the Company and the total underwriting discount received by the Underwriters, in each case as set forth on the cover of the Prospectus bear to the aggregate initial public offering price of the Securities as set forth on such cover. |
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The relative fault of the Company on the one hand and the Underwriters on the other hand shall be determined by reference to, among other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or by the Underwriters and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. |
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15
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The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section 7. The aggregate amount of losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred to above in this Section 7 shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue statement or omission or alleged omission. |
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Notwithstanding the provisions of this Section 7, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of any such untrue or alleged untrue statement or omission or alleged omission. |
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No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. |
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For purposes of this Section 7, each person, if any, who controls an Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as such Underwriter, and each director of the Company, each officer of the Company, and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as the Company. The Underwriters' respective obligations to contribute pursuant to this Section 7 are several in proportion to the principal amount of Securities set forth opposite their respective names in Schedule A hereto and not joint. |
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SECTION 8. Representations, Warranties and Agreements to Survive . |
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All representations, warranties and agreements contained in this Agreement or in certificates of officers of the Company submitted pursuant hereto, shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of any Underwriter or controlling person, or by or on behalf of the Company, and shall survive delivery of the Securities to the Underwriters. |
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SECTION 9. Termination of Agreement . |
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said exchanges or by such system or by order of the Commission, the National Association of Securities Dealers, Inc. or any other governmental authority, or (iv) a material disruption has occurred in commercial banking or securities settlement or clearance services in the United States, or (v) if a banking moratorium has been declared by either Federal or New York authorities. |
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SECTION 10. Default by One or More of the Underwriters . |
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If one or more of the Underwriters shall fail at Closing Time to purchase the Securities which it or they are obligated to purchase under this Agreement (the " Defaulted Securities "), the non-defaulting Underwriters shall have the right, within 24 hours thereafter, to make arrangements for one or more of the non-defaulting Underwriters, or any other underwriters, to purchase all, but not less than all, of the Defaulted Securities in such amounts as may be agreed upon and upon the terms herein set forth; if, however, the non-defaulting Underwriters shall not have completed such arrangements within such 24-hour period, then: |
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(a) if the amount of Defaulted Securities does not exceed 10% of the aggregate principal amount of the Securities to be purchased hereunder, each of the non-defaulting Underwriters shall be obligated, severally and not jointly, to purchase the full amount thereof in the proportions that their respective underwriting obligations hereunder bear to the underwriting obligations of all non-defaulting Underwriters, or |
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(b) if the amount of Defaulted Securities exceeds 10% of the aggregate principal amount of the Securities to be purchased hereunder, this Agreement shall terminate without liability on the part of any non-defaulting Underwriter. |
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No action taken pursuant to this Section shall relieve any defaulting Underwriter from liability in respect of its default. |
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In the event of any such default which does not result in a termination of this Agreement, either the Representatives or the Company shall have the right to postpone Closing Time for a period not exceeding seven days in order to effect any required changes in the Registration Statement or Prospectus or in any other documents or arrangements. As used herein, the term "Underwriter" includes any person substituted for an Underwriter under this Section 10. |
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SECTION 11. Notices . |
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All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if received by mail or transmitted by any standard form of telecommunication. Notices to the Underwriters shall be directed to the Representatives at Credit Suisse First Boston LLC, Eleven Madison Avenue, New York, New York 10010-3629, attention of Transactions Advisory Group and at Merrill Lynch & Co. Equity Capital Markets, 4 World Financial Center, New York, New York 10080, attention of Mr. Jeffrey Kulik; and notices to the Company shall be directed to it at 701 Ninth Street, N.W., Washington, D.C. 20068, attention of Treasurer. |
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SECTION 12. Parties . |
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This Agreement shall inure to the benefit of and be binding upon the Underwriters and the Company and their respective successors. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm or corporation, other than the Underwriters and the Company and their respective successors and the controlling persons and officers and directors referred to in Sections 6 and 7 and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained. This Agreement and all conditions and provisions hereof are intended to be for the sole and exclusive benefit of the Underwriters and the Company and their respective successors, and said controlling persons and officers and directors and their heirs and legal representatives, and for the benefit of no other person, firm or corporation. No purchaser of Securities from any Underwriter shall be deemed to be a successor by reason merely of such purchase. |
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SECTION 13. Governing Law and Time . |
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This agreement shall be governed by and construed in accordance with the laws of the State of New York. Specified times of day refer to New York City time. |
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SECTION 14. Counterparts . |
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This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same agreement. |
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SECTION 15. Effect of Headings . |
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`The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof. |
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[signatures follow on next page] |
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18
|
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If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company a counterpart hereof, whereupon this instrument, along with all counterparts, will become a binding agreement between the Underwriters and the Company in accordance with its terms. |
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Very truly yours, |
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POTOMAC ELECTRIC POWER COMPANY |
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By:
A. J. KAMERICK
|
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CONFIRMED AND ACCEPTED,
|
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CREDIT SUISSE FIRST BOSTON LLC |
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MERRILL LYNCH & CO.
|
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By: CREDIT SUISSE FIRST BOSTON LLC |
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By:
JONATHAN BALITT
|
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For themselves and as Representatives of the other Underwriters named in Schedule A hereto. |
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19
|
Exhibit A |
||
Form of Opinion of Kirk J. Emge, Esq.
|
||
[LETTERHEAD OF PEPCO] |
||
June 1, 2005 |
||
Credit Suisse First Boston LLC
|
||
Merrill Lynch, Pierce, Fenner & Smith Incorporated
|
||
as Representatives of the Several Underwriters |
||
Ladies and Gentlemen: |
||
I am General Counsel of Potomac Electric Power Company, a District of Columbia and Virginia corporation (the "Company"), and have acted as counsel to the Company in connection with the issuance and sale of $175,000,000 in aggregate principal amount of 5.40% Senior Notes due June 1, 2035 (the "Securities") pursuant to the Purchase Agreement, dated May 24, 2004, among the Company and Credit Suisse First Boston LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, on their own behalf and on behalf of Citigroup Global Markets Inc., Wachovia Capital Markets, LLC, BNY Capital Markets, Inc., Morgan Stanley & Co. Incorporated, Lazard Capital Markets LLC, Key Banc Capital Markets (a division of McDonald Investments Inc.), Sun Trust Capital Markets, Inc., J.P. Morgan Securities Inc., Scotia Capital (USA) Inc. and Greenwich Capital Markets, Inc. (the "Purchase Agreement"). The Securities will be issued under an indenture, dated as of November 17, 2003, between the Company and The Bank of New York, as Trustee (the "Indenture"). In connection with the issuance and sale by the Company of the Securities, the Company will issue and deliver to the Trustee $175,000,000 in aggregate principal amount of its First Mortgage Bonds, 5.40% Collateral Series due June 1, 2035 (the "Collateral Bonds"). The Collateral Bonds will be issued under the Mortgage and Deed of Trust, dated as of July 1, 1936, from the Company to The Bank of New York (as successor trustee to The Riggs National Bank of Washington, D.C.), as trustee (the "Mortgage Trustee"), as amended and supplemented by various supplemental indentures including the supplemental indenture, dated as of May 24, 2005 (the "Supplemental Indenture"), establishing the terms of the Collateral Bonds (such Mortgage and Deed of Trust, as so amended and supplemented, the "Mortgage"). This opinion is being delivered to you in accordance with Section 5(b) of the Purchase Agreement. Capitalized terms not defined herein have the respective meanings set forth in the Purchase Agreement. |
||
In connection with rendering the opinions set forth herein, I, or my representatives, have reviewed an executed copy of the Purchase Agreement and the Registration Statement on Form S-3, Registration No. 333-106209 (the "Registration Statement"). In addition, I, or my representatives, have reviewed the final prospectus, dated May 24, 2005 (the "Prospectus"), filed with the Securities and |
||
A-1
|
||
Exchange Commission (the "Commission") pursuant to Rule 424(b)(5) under the Securities Act of 1933, as amended (the "1933 Act"), the Indenture, the Mortgage, the Supplemental Indenture, a facsimile copy of the Securities furnished by the Trustee, and a facsimile copy of the Collateral Bonds furnished by the Mortgage Trustee. I, or my representatives, also have examined or caused to be examined originals, or copies that have been certified or otherwise identified to my or their satisfaction as being true copies, of such other instruments, certificates and other documents or records as I or they have deemed necessary or appropriate to enable me to render the opinions set forth below. In my or my representatives' review and examination, I or they have assumed the genuineness of all signatures, the authenticity of all documents submitted to me or them as originals, and the conformity to original documents of all documents submitted to me or them as copies. |
||
Based upon the foregoing, and subject to the reservations and exceptions set forth herein, I am of the opinion that: |
||
1. The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of each of the District of Columbia and the Commonwealth of Virginia. |
||
2. The Company has corporate power and authority to own or lease and operate its properties and to conduct its business as described in the Prospectus and to enter into and perform its obligations under the Purchase Agreement. |
||
3. The Company is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not result in a Material Adverse Effect. |
||
4. All of the shares of issued and outstanding capital stock of the Company have been duly authorized and validly issued and are fully paid and non-assessable and, except for shares of issued and outstanding preferred stock, are owned by Pepco Holdings, Inc. None of the outstanding shares of capital stock of the Company was issued in violation of the preemptive or other similar rights of any securityholder of the Company. |
||
5. The Purchase Agreement has been duly authorized, executed and delivered by the Company. |
||
6. The Indenture has been duly authorized, executed and delivered by the Company. |
||
7. The Securities have been duly authorized and executed by the Company and when the Securities have been (A) authenticated and delivered by the Trustee under the Indenture and (B) issued and delivered by the Company against payment of the purchase price therefor as provided in the Purchase Agreement, the Securities will constitute valid securities within the meaning of Section 28:8-110(a)(1) of the District of Columbia Uniform Commercial Code and Section 8.8A-110(a)(1) of the Virginia Uniform Commercial Code. |
||
8. The Mortgage has been duly authorized, executed and delivered by the Company and constitutes a valid and binding instrument of the Company, enforceable against the Company in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws of general applicability relating to or affecting mortgagees' and other creditors' rights and to general equity principles and except to the extent that the law of the jurisdictions in which the mortgaged property is located may limit or deny certain remedial provisions of the Mortgage. |
||
A-2
|
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9. The Collateral Bonds are in the form contemplated by the Mortgage, have been duly authorized and executed by the Company, and when (A) the Collateral Bonds have been (w) authenticated and delivered by the Mortgage Trustee under the Mortgage and (x) issued and delivered by the Company to the Trustee as provided in the Indenture and (B) the Securities have been (y) authenticated and delivered by the Trustee under the Indenture and (z) issued and delivered by the Company against payment of the purchase price therefor as provided in the Purchase Agreement, the Collateral Bonds will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws of general applicability relating to or affecting creditors' rights and to general equity principles, and will be entitled to the benefits of the Mortgage. |
||
10. The Registration Statement has been declared effective under the 1933 Act; and, to the best of my knowledge, no stop order suspending the effectiveness of the Registration Statement has been issued under Section 8(d) of the 1933 Act and no proceedings for that purpose have been instituted by the Commission or are pending or threatened by the Commission. The Prospectus has been filed in the manner and within the time period required by Rule 424(b) under the 1933 Act. |
||
11. The documents incorporated by reference in the Prospectus (other than the financial statements, including the notes thereto, the financial schedules and the other financial data included or incorporated by reference therein, as to which I express no opinion), when they were filed with the Commission, complied as to form in all material respects with the requirements of the 1934 Act and the 1934 Act Regulations. |
||
12. The execution, delivery and performance of the Indenture, the Mortgage and the Purchase Agreement and the issuance and sale of the Securities and the issuance and delivery of the Collateral Bonds and compliance with the terms thereof will not result in a breach or violation of any of the terms and provisions of, or constitute a default or Repayment Event under, or result in the creation or imposition of any Lien (other than the Lien of the Mortgage and the Lien of the Indenture) upon any property or assets of the Company under, (i) any statute, any rule, regulation or order of any governmental agency or body or any court having jurisdiction over the Company or any subsidiary of the Company or any of their properties that in my experience customarily applies to transactions of the type contemplated by the Purchase Agreement, the Indenture and the Securities, (ii) any agreement or instrument to which the Company or any such subsidiary is a party or by which the Company or any such subsidiary is bound or to which any of the properties of the Company or any such subsidiary is subject, or (iii) the articles of incorporation or by-laws of the Company or any such subsidiary, except, in the cases of clauses (i) and (ii) above, for any such breach, violation, or default that would not result in a Material Adverse Effect; and the Company has full corporate power and authority to authorize, issue and sell the Securities as contemplated by the Purchase Agreement. |
||
13. Except as disclosed in the Prospectus, there is not pending or, to the best of my knowledge, threatened any action, suit, proceeding, inquiry or investigation, to which the Company or any of its subsidiaries is a party, or to which the property of the Company or any of its subsidiaries is subject, before or brought by any court or governmental agency or body, domestic or foreign, which could reasonably be expected to result in a Material Adverse Effect, or which could reasonably be expected to materially and adversely affect the consummation of the transactions contemplated in the Purchase Agreement or the performance by the Company of its obligations thereunder. |
||
14. No consent, approval, authorization or order of, or filing with, any governmental agency or body or any court is required for the consummation of the transactions contemplated by the Purchase Agreement in connection with the offering, issuance, sale or delivery of the Securities and the Collateral Bonds by the Company, except such as have already been obtained or such as may be required |
||
A-3
|
||
under state securities laws, and the Company has complied, in all material respects, with all terms and conditions contained in all such consents, approvals, authorizations and orders as have been obtained. |
||
15. The Company has good and marketable title to all real property owned by the Company and described in the Mortgage as subject to the lien thereof, subject only to such exceptions, defects and qualifications as do not (I) affect the value of any such properties that are material to the business of the Company in any material respect or (II) affect the use made or proposed to be made of such properties by the Company in any material respect; and the descriptions of all such property contained in the Mortgage are adequate for purposes of the lien purported to be created by the Mortgage. |
||
16. The Mortgage constitutes a valid first lien or charge, to the extent that it purports to be such, upon the interest held by the Company in its property covered by the Mortgage, subject only to such exceptions, defects, qualifications and other matters as may be permitted by the Mortgage and to such other matters as in my opinion do not materially affect the security for the Collateral Bonds. The Mortgage (except for the Supplemental Indenture) has been duly recorded, and the Supplemental Indenture has been duly filed for recordation as a mortgage of real estate, in the only counties in which any real property subject to the lien of the Mortgage is located, and all requisite steps have been taken to perfect the security interest of the Mortgage in personal property of the Company; and all taxes and recording and filing fees required to be paid with respect to the execution, recording or filing of the Mortgage, the filing of financing statements and similar documents and the issuance of the Collateral Bonds have been paid. |
||
I am not passing upon and do not assume responsibility for the accuracy, completeness or fairness of the statements contained in the Registration Statement or the Prospectus and make no representations that I have independently verified the accuracy, completeness or fairness of such statements, except insofar as such statements refer specifically to me. However, based on my examination of the Registration Statement and the Prospectus, on my general familiarity with the affairs of the Company and on my participation in conferences with officials and other representatives of, and other counsel for, the Company, with PricewaterhouseCoopers LLP, the independent accountants of the Company, and with your representatives and your counsel, I do not believe that the Registration Statement (except for financial statements, including the notes thereto, financial schedules and other financial data included or incorporated by reference therein or omitted therefrom, as to all of which I express no belief), at the time such Registration Statement became effective, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that the Prospectus (except as aforesaid with respect to the Registration Statement), at the time the Prospectus was issued, contained, or the Prospectus (except as aforesaid w ith respect to the Registration Statement) at the Closing Time contains, an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. |
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My opinion in paragraphs 8 and 9 above are subject to the following limitations and qualifications: |
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I express no opinion as to: |
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(i) |
waivers of defenses or other rights or benefits bestowed by operation of law; |
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(ii) |
releases or waivers of unmatured claims or rights; |
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(iii) |
provisions requiring amendments and waivers to be in writing; |
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A-4
|
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(iv) |
provisions making notices effective even if not actually received; or |
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(v) |
provisions purporting to make a party's determination conclusive. |
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I am a member of the Bar of the District of Columbia and the Bar of the State of Maryland, and I express no opinion herein as to any law other than the laws of the District of Columbia, the State of Maryland, the Commonwealth of Virginia, the Commonwealth of Pennsylvania and the federal law of the United States. With respect to the laws of the Commonwealth of Virginia (except as to such matters as relate expressly to the Company, are governed by the Virginia Stock Corporation Act and are expressly addressed herein) and the Commonwealth of Pennsylvania, I have received advice, satisfactory to me, from Virginia and Pennsylvania counsel admitted in such jurisdictions whom I deem fully competent to furnish such advice. |
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The opinions contained herein are rendered solely for your benefit and may not be relied on by any other person, except that I hereby authorize Dewey Ballantine LLP, in connection with rendering its opinion to you on the date hereof relating to the offer and sale of the Securities, to rely on this opinion with respect to matters governed by the laws of the District of Columbia, the State of Maryland, the Commonwealth of Virginia, and the Commonwealth of Pennsylvania. The opinions expressed in this letter are limited to the matters set forth herein, and no opinion should be inferred beyond those opinions expressly stated. I assume no obligation to advise you of any facts that come to my attention, or any changes in law, subsequent to the date hereof. |
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Very truly yours, |
||
Kirk J. Emge |
||
A-5
|
EXHIBIT 4.1
|
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE TRANSFERRED TO, OR REGISTERED OR EXCHANGED FOR SECURITIES REGISTERED IN THE NAME OF, ANY PERSON OTHER THAN THE DEPOSITARY OR A NOMINEE THEREOF, AND NO SUCH TRANSFER MAY BE REGISTERED, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE. EVERY SECURITY AUTHENTICATED AND DELIVERED UPON REGISTRATION OF TRANSFER OF, OR IN EXCHANGE FOR OR IN LIEU OF, THIS SECURITY SHALL BE A GLOBAL SECURITY THAT IS SUBJECT TO THE FOREGOING, EXCEPT IN SUCH LIMITED CIRCUMSTANCES. |
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POTOMAC ELECTRIC POWER COMPANY |
701 Ninth Street, N.W., Washington, D.C. |
TO |
THE BANK OF NEW YORK |
101 Barclay Street, New York, NY
|
------------------ |
Supplemental Indenture |
Dated as of May 24, 2005 |
------------------ |
Supplemental to Mortgage and Deed of Trust |
Dated July 1, 1936 |
------------------ |
FIRST MORTGAGE BONDS, 5.40% COLLATERAL SERIES DUE JUNE 1, 2035 |
|
POTOMAC ELECTRIC POWER COMPANY |
SUPPLEMENTAL INDENTURE DATED AS OF MAY 24, 2005 |
TABLE OF CONTENTS*
|
PAGE |
||
Parties |
1 |
|
Recitals |
1 |
|
PART I.
|
||
SECTION 1. |
General description of Bonds of 2035 Series |
4 |
SECTION 2. |
Form of face of Bond of 2035 Series |
6 |
Form of Trustee's certificate |
8 |
|
Text appearing on reverse side of Bond of 2035 Series |
8 |
|
SECTION 3. |
Denominations of Bonds of 2035 Series |
10 |
SECTION 4. |
Execution and form of temporary Bonds of 2035 Series |
10 |
PART II.
|
||
SECTION 1. |
Limitation as to principal amount |
10 |
SECTION 2. |
Issue of Bonds of 2035 Series |
10 |
PART III.
|
||
SECTION 1. |
Bonds of 2035 Series redeemable |
11 |
SECTION 2. |
Event of Default under Senior Note Indenture |
11 |
SECTION 3. |
Occurrence of Release Date |
11 |
SECTION 4. |
Cancellation |
12 |
PART IV.
|
||
SECTION 1. |
Company not to withdraw moneys pursuant to Section 2 of Article VIII in excess of an amount equal to principal amount of issued refundable bonds |
12 |
_______________________ |
||
* The Table of Contents is not part of the Supplemental Indenture and should not be considered as such. |
||
|
||
SECTION 2. |
No property additions made on or prior to December 31, 1946 to be used for any purpose under the Indenture |
12 |
PART V.
|
||
12 |
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PART VI.
|
||
Acceptance of trusts by the Trustee |
13 |
|
Trustee not responsible for validity of the Supplemental Indenture |
13 |
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PART VII.
|
||
Execution of Supplemental Indenture in counterparts |
13 |
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Appointment of attorneys-in-fact by parties |
13 |
|
Testimonium |
||
Execution |
||
Company's Acknowledgments |
||
Trustee's Acknowledgments |
||
|
The Bank of New York, as Trustee |
|
(Corporate Seal) |
By
DOROTHY MILLER
|
Attested: |
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PATRICIA GALLAGHER
|
|
Signed, sealed and delivered by The
|
|
G. BARRIS |
|
ROBERT A. MASSIMILLO
|
|
|
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City of Washington,
|
|
I, Linda J. Epperly, a Notary Public in and for the District of Columbia, United States of America, do hereby certify that Anthony J. Kamerick and Ellen Sheriff Rogers, whose names as Vice President and Secretary, respectively, of Potomac Electric Power Company, a corporation, are signed to the foregoing and hereto attached deed, bearing date as of the 24th day of May, 2005, personally appeared this day before me in my District aforesaid and acknowledged themselves to be, respectively, a Vice President and the Secretary of Potomac Electric Power Company, and that they as such, being authorized so to do, executed the said deed by signing the name of Potomac Electric Power Company by Anthony J. Kamerick, as Vice President, and attested by Ellen Sheriff Rogers, as Secretary, and acknowledged the same before me in my District aforesaid and acknowledged the foregoing instrument to be the act and deed of Potomac Electric Power Company. |
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Given under my hand and official seal this 24th day of May, 2005. |
|
(Notarial Seal) |
|
|
LINDA J. EPPERLY
|
|
My Commission Expires:
January 1, 2010
|
|
|
City of Washington,
|
|
I, Linda J. Epperly, a Notary Public in and for the District of Columbia, United States of America, do hereby certify that Anthony J. Kamerick, a Vice President of Potomac Electric Power Company, a corporation, one of the parties to the foregoing instrument bearing date as of the 24th day of May, 2005, and hereto annexed, this day personally appeared before me in the City of Washington, the said Anthony J. Kamerick being personally well known to me as the person who executed the said instrument as a Vice President of and on behalf of said Potomac Electric Power Company and known to me to be the attorney-in-fact duly appointed therein to acknowledge and deliver said instrument on behalf of said corporation, and, as such attorney-in-fact, he acknowledged said instrument to be the act and deed of said Potomac Electric Power Company, and delivered the same as such. I further certify that the said Anthony J. Kamerick, being by me duly sworn, did depose and say that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal and was so affixed by order of the Board of Directors of said corporation; and that he signed his name thereto by like order. |
|
Given under my hand and official seal this 24th day of May, 2005. |
|
(Notarial Seal) |
|
|
LINDA J. EPPERLY
|
|
My Commission Expires:
January 1, 2010
|
|
|
State of New York,
|
|
I, William J. Cassels, a Notary Public in and for the State of New York, United States of America, do hereby certify that Dorothy Miller and Patricia Gallagher, whose names as Vice Presidents of The Bank of New York, a corporation, are signed to the foregoing and hereto attached deed, bearing date as of the 24th day of May, 2005, personally appeared before me this day in the State of New York and acknowledged themselves to be, respectively, Vice Presidents of The Bank of New York, and that they as such, being authorized so to do, executed the said deed by signing the name of The Bank of New York, by Dorothy Miller as Vice President, and attested by Patricia Gallagher, as Vice President, and acknowledged the same before me in the State aforesaid and acknowledged the foregoing instrument to be the act and deed of The Bank of New York, as therein set forth. |
|
Given under my hand and official seal this 24th day of May, 2005. |
|
(Notarial Seal) |
|
|
WILLIAM J. CASSELS
|
|
My Commission Expires:
|
|
|
State of New York,
|
|
Dorothy Miller, of full age, being sworn according to law, on her oath deposes and says that she is a Vice President of The Bank of New York, the Trustee named in the foregoing Supplemental Indenture, dated as of the 24th day of May, 2005, that she is the agent of said Trustee for the purpose of perfecting such Supplemental Indenture and that the consideration in the Original Indenture referred to therein and in all indentures supplemental to said Original Indenture, including the foregoing Supplemental Indenture, is true and bona fide as therein set forth. |
|
|
DOROTHY MILLER
|
Subscribed and sworn to before me
|
|
WILLIAM J. CASSELS
|
|
My Commission Expires: |
|
(Notarial Seal)
WILLIAM J. CASSELS
|
|
|
|
State of New York,
|
|
I, William J. Cassels, a Notary Public in and for the State of New York, United States of America, do hereby certify that Dorothy Miller, a Vice President of The Bank of New York, a corporation, one of the parties to the foregoing instrument bearing date as of the 24th day of May, 2005, and hereto annexed, this day personally appeared before me in the State of New York, the said Dorothy Miller, being personally well known to me as the person who executed the said instrument as a Vice President of and on behalf of said The Bank of New York, and known to me to be the attorney-in-fact duly appointed therein to acknowledge and deliver said instrument on behalf of said corporation, and, as such attorney-in-fact, she acknowledged said instrument to be the act and deed of said The Bank of New York, and delivered the same as such. I further certify that the said Dorothy Miller, being by me duly sworn, did depose and say that she knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal and was so affixed by order of the Board of Directors of said corporation; and that she signed her name thereto by like order. |
|
Given under my hand and official seal this 24th day of May, 2005. |
|
(Notarial Seal) |
|
|
WILLIAM J. CASSELS
|
|
My Commission Expires:
WILLIAM J. CASSELS
|
|
|
CERTIFICATE OF RESIDENCE |
|
The Bank of New York, Mortgagee and Trustee within named, hereby certifies that its precise residence is 101 Barclay Street, New York, NY 10286. |
|
|
The Bank of New York |
|
By
DOROTHY MILLER
|
|
|
701 NINTH STREET, N.W.
|
KIRK J. EMGE
|
Telephone: (202) 872-3175
|
Exhibit 5 |
|
May 26, 2005 |
|
Potomac Electric Power Company
|
|
Ladies and Gentlemen: |
|
I am General Counsel of Potomac Electric Power Company, a District of Columbia and Virginia corporation (the "Company"), and have acted as counsel to the Company in connection with the offer and sale by the Company of $175,000,000 in aggregate principal amount of 5.40% Senior Notes due June 1, 2035 (the "Notes") under and pursuant to a Registration Statement on Form S-3 (Registration No. 333-106209) (the "Registration Statement") under the Securities Act of 1933, as amended (the "Act"), which was declared effective by the Securities and Exchange Commission (the "Commission") on July 11, 2003, the Prospectus, dated July 11, 2003, included in the Registration Statement and a Prospectus Supplement dated May 24, 2005 and filed with Commission pursuant to Rule 424(b) under the Act on May 25, 2005, and the Purchase Agreement, dated May 24, 2005, between the Company and Credit Suisse First Boston LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, on their own behalf and on behalf of Citigroup Global Markets Inc., Wachovia Capital Markets, LLC, BNY Capital Markets, Inc., Morgan Stanley & Co. Incorporated, Lazard Capital Markets LLC, KeyBanc Capital Markets (a division of McDonald Investments Inc.), SunTrust Capital Markets, Inc., J.P. Morgan Securities Inc., Scotia Capital (USA) Inc. and Greenwich Capital Markets, Inc. (the "Purchase Agreement"). The Notes will be issued under an indenture, dated as of November 17, 2003, between the Company and The Bank of New York, as Trustee (the "Indenture"). |
|
In connection with this opinion, I, or my representatives, have examined originals, or copies certified or otherwise identified to my or their satisfaction, of such instruments, certificates, records and documents, and have reviewed such questions of law, as I have deemed necessary or appropriate for purposes of this opinion. In such examination, I or my representatives have assumed the genuineness of all signatures, the authenticity of all documents submitted to me or them as originals, the conformity to the original documents of all documents submitted as copies and the authenticity of the originals of such latter documents. As to any facts material to my opinion, I have relied upon the aforesaid instruments, certificates, records and documents and inquiries of the Company's representatives. |
|
Based upon the foregoing, I am of the opinion that the Notes have been duly authorized for issuance and, when executed by the Company and authenticated by the Trustee in the manner provided in the Indenture and delivered against payment of the purchase price therefor set forth in the Purchase Agreement, will be duly and validly issued and will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws of general applicability relating to or affecting creditors' rights and to general equity principles. |
|
I hereby consent to the filing of this opinion as an exhibit to a Current Report on Form 8-K that will be incorporated by reference into the Registration Statement. |
|
Very truly yours, /s/ KIRK J. EMGE |