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EXHIBIT 1.1
Commonwealth Edison
Company
First Mortgage 5.80%
Bonds, Series 108, due 2018
UNDERWRITING
AGREEMENT
March 19,
2008
To the Representatives named
in
Schedule I hereto of the
Underwriters
named in Schedule II hereto
Ladies and Gentlemen:
1. Introductory .
Commonwealth Edison Company, an Illinois corporation (the “
Company ”), proposes to issue and sell from time to
time First Mortgage Bonds (the “ Mortgage Bonds
”). The Mortgage Bonds will be issued by the Company under
its Mortgage, dated as of July 1, 1923, as amended and
supplemented through the date hereof and as further supplemented by
the Supplemental Indenture dated as of March 10, 2008 (the
“ Supplement ”) from the Company to BNY Midwest
Trust Company, as trustee (the “ Trustee ”), and
D.G. Donovan, as co-trustee (the “ Co-Trustee
”). As used herein, the term “ Mortgage ”
refers to the Company’s Mortgage referred to above together
with any and all amendments or supplements thereto, including the
Supplement. The Company proposes to sell to the underwriters named
in Schedule II hereto (the “ Underwriters ”),
for whom you are acting as Representatives (the “
Representatives ”), a series of Mortgage Bonds in the
aggregate principal amount and with the terms specified in Part A
of Schedule I hereto (the “ Purchased Bonds
”).
2. Representations and
Warranties of the Company . As of the date of this Agreement,
the Applicable Time of Sale and the Closing Date, 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 ”) an automatic shelf registration
statement on Form S-3 (Registration No. 333-133966) relating
to unsecured notes and first mortgage bonds, which include the
Purchased Bonds (the “ Securities ”), and the
offering thereof from time to time in accordance with Rule 415
under the Securities Act of 1933, as amended (the “
Act ”). Such registration statement became effective
upon filing under Rule 462(e) under the Act. Such registration
statement, 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 ”), including by any information
contained in any prospectus, preliminary prospectus supplement or
prospectus supplement that is deemed to be a part of the
Registration Statement pursuant to Rule 430B, 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, including by
any preliminary
prospectus supplement relating to the
Purchased Bonds or the Prospectus Supplement (as defined below), is
referred to herein as the “ Prospectus ”;
provided , however , that a supplement to the
Prospectus relating to an offering of Securities, other than the
Purchased Bonds, 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) (i) At the time of filing
the Registration Statement, (ii) at the time of the most
recent amendment thereto for the purposes of complying with
Section 10(a)(3) of the Act (whether such amendment was by
post-effective amendment, incorporated report filed pursuant to
Sections 13 or 15(d) of the Exchange Act or form of prospectus),
and (iii) at the time the Company or any person acting on its
behalf (within the meaning, for this clause only, of Rule 163(c))
made any offer relating to the Securities in reliance on the
exemption in Rule 163, the Company was a “well-known seasoned
issuer” as defined in Rule 405. The Company agrees to pay the
fees required by the Commission relating to the Securities within
the time required by Rule 456(b)(1) without regard to the proviso
therein and otherwise in accordance with Rules 456(b) and 457(r).
In addition, (x) at the earliest time after the filing of the
Registration Statement that the Company or another offering
participant made a bona fide offer (within the meaning of Rule
164(h)(2)) of the Purchased Bonds and (y) as of the date of
this Agreement (with such date being used as the determination date
for purposes of this clause (y)), the Company was not and is not an
Ineligible Issuer (as defined in Rule 405), without taking account
of any determination by the Commission pursuant to Rule 405 that it
is not necessary that the Company be considered an Ineligible
Issuer.
(c) The Registration
Statement, the Prospectus and the Mortgage, 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 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, at the time it became effective under the
Act and as of the “new effective date” with respect to
the Purchased Bonds pursuant to, and within the meaning of, Rule
430B(f)(2) under the Act, 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, include 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 2(c) 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 the Provided Statements (as defined in
Section 8(b) below).
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(d) The Disclosure Package
(as defined below in Section 4(d)) did not, as of the time and
date designated as the “Applicable Time of Sale” in
Part C of Schedule I hereto (the “ Applicable Time of
Sale ”), include 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
representation and warranty made in this Section 2(d) shall
not apply to statements in or omissions from the Disclosure Package
made in reliance upon and in conformity with the Provided
Statements.
(e) The Company has not made
and will not make (other than the final term sheet prepared and
filed pursuant to Section 4(b) hereof) any offer relating to
the Purchased Bonds that would constitute a “free writing
prospectus” (as defined in Rule 405 under the Act), without
the prior consent of the Representatives; the Company will comply
with the requirements of Rule 433 under the Act with respect to any
such free writing prospectus; any such free writing prospectus will
not, as of its issue date and through the Closing Date, include any
information that is inconsistent with the information contained in
the Registration Statement and the Prospectus, and any such free
writing prospectus, when taken together with the information
contained in the Registration Statement, the Disclosure Package and
the Prospectus, did not, when issued or filed pursuant to Rule 433
under the Act, include an untrue statement of a material fact or
omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading. For the purposes of clarity, nothing in this
Section 2(e) shall restrict the Company from making any
filings required in order to comply with its reporting obligations
under the Exchange Act or the rules and regulations of the
Commission promulgated thereunder.
(f) PricewaterhouseCoopers
LLP, the accountants who certified certain of the financial
statements included or incorporated by reference in the Prospectus,
are independent registered public accountants as required by the
Act and the rules and regulations of the Commission
thereunder.
(g) The financial statements
included or incorporated by reference in the Disclosure Package and
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 Disclosure Package
and 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
Disclosure Package and the Prospectus.
(h) Except as set forth in or
contemplated by the Disclosure Package and 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, in each case since the respective dates as of which
information is given in the Disclosure Package and the
Prospectus.
(i) 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 Disclosure Package and the
Prospectus.
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(j) Each significant
subsidiary of the Company, as defined in Rule 1-02 of Regulation
S-X of the Commission (each a “ 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.
(k) Neither the Company nor
any Significant Subsidiary is in violation of its articles or
certificate of incorporation, or in default in the performance or
observance of any material obligation, agreement, covenant or
condition contained in any mortgage or any material contract,
lease, note or other instrument to which it is a party or by which
it may be bound, or materially in violation of any law,
administrative regulation or administrative, arbitration or court
order to which it is subject or bound, except in each case to such
extent as may be set forth in the Disclosure Package and 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 or any mortgage, contract,
lease, note or other instrument to which the Company or any
Significant Subsidiary is a party or by which it or any Significant
Subsidiary may be bound, or any law, administrative regulation or
administrative, arbitration or court order to which it is subject
or bound.
(l) The Company has filed
with the Illinois Commerce Commission (the “ ICC
”) a petition with respect to the issuance and sale of the
Purchased Bonds and the ICC has issued its order that authorizes
and approves 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 Bonds, except as may be required under the blue sky laws
of any jurisdiction in connection with the purchase and
distribution of the Purchased Bonds by the Underwriters in the
manner contemplated herein and in the Disclosure Package and the
Prospectus.
(m) There is no pending or
threatened suit or proceeding before any court or governmental
agency, authority or body or any arbitration involving the Company
or any of its Significant Subsidiaries required to be disclosed in
the Prospectus which is not adequately disclosed in the
Prospectus.
(n) This Agreement has been
duly authorized, executed and delivered by the Company.
(o) The Mortgage has been
duly authorized by the necessary corporate action and duly
qualified under the Trust Indenture Act; and the Mortgage has been
duly authorized and, assuming due authorization, execution and
delivery of the Supplement by the Trustee and due execution and
delivery of the Supplement by the Co-Trustee, when executed and
delivered by the Company, will constitute a legal, valid and
binding instrument enforceable against the
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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).
(p) The issuance and sale of
the Purchased Bonds by the Company in accordance with the terms of
this Agreement have been duly authorized; the Purchased Bonds, when
executed and authenticated in accordance with the provisions of the
Mortgage and delivered to and paid for by the Underwriters, will
have been duly executed and delivered by the Company and will
constitute the legal, valid and binding obligations of the Company
entitled to the benefits of the Mortgage (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 the holders of the Purchased
Bonds will be entitled to the payment of principal and interest as
therein provided; and the statements under the headings
“Description of the Bonds” in the Disclosure Package
and the Prospectus Supplement (as defined below) and
“Description of Bonds” in the Disclosure Package and
the Prospectus fairly summarize the matters therein
described.
(q) 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; and 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).
(r) The Company has good and
sufficient title to all property described or referred to in the
Mortgage and purported to be conveyed thereby, 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); the Mortgage
has been duly filed for recordation in such manner and in such
places as is required by law in order to give constructive notice
of, establish, preserve and protect the lien of the Mortgage; the
Mortgage constitutes a valid, direct first mortgage lien on
substantially all property (including franchises) now owned by the
Company, except property expressly excepted by the terms of the
Mortgage, subject to permitted liens as defined therein; and the
Mortgage will constitute a valid, direct first mortgage lien on all
property of the character of that now subject to the lien of the
Mortgage hereafter acquired by the Company, subject to permitted
liens as defined in the Mortgage, and to liens, if any, existing or
placed on such after-acquired property at the time of the
acquisition thereof.
(s) The Company maintains
systems of internal accounting controls sufficient to provide
reasonable assurance that transactions are executed in accordance
with management’s general or specific authorizations,
transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability, access
to assets is permitted only in accordance with management’s
general or specific authorizations, and the recorded accountability
for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences.
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(t) The Company maintains
disclosure controls and procedures (as such term is defined in Rule
13a-15(e) under the Exchange Act) that comply with the requirements
of the Exchange Act, such disclosure controls and procedures have
been designed to ensure that material information relating to the
Company is made known to the Company’s principal executive
officer and principal financial officer by others within those
entities, and such disclosure controls and procedures are
effective.
(u) The Company is not, and,
after giving effect to the offering and sale of the Securities and
the application of the proceeds thereof as described in the
Disclosure Package and the Final Prospectus, will not be required
to register as an “investment company” under the
Investment Company Act.
(v) There is, and has been,
no failure on the part of the Company to comply, in all material
respects, with all applicable provisions of the Sarbanes-Oxley Act
of 2002 and the rules and regulations promulgated in connection
therewith.
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 Purchased Bonds
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 Company agrees to sell to each
Underwriter, and each Underwriter agrees, severally and not
jointly, to purchase from the Company at the purchase price set
forth in Schedule I hereto, the principal amount of the Purchased
Bonds set forth opposite each Underwriter’s name in Schedule
II hereto. It is understood that the Underwriters propose to offer
the Purchased Bonds for sale to the public as set forth in the
Disclosure Package, the Prospectus, Prospectus Supplement (as
hereinafter defined) relating to the Purchased Bonds and the final
term sheet contemplated by Section 4(b) hereof. 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 referred to as the “ Closing Date
.” Delivery of the Purchased Bonds 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 Purchased
Bonds shall be made through the facilities of The Depository Trust
Company.
4. Agreements . The
Company agrees with the several Underwriters that:
(a) Promptly following the
execution of this Agreement, the Company will cause the Prospectus,
including as part thereof a prospectus supplement relating to the
Purchased Bonds (the “ Prospectus Supplement ”),
to be filed with the Commission pursuant to Rule 424 under the Act
within the applicable time period prescribed for such filing by the
rules and regulations under the Act, and the Company will promptly
advise the Representatives when such filing has been made. Prior to
such filing, the Company 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.
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(b) The Company shall prepare
a final term sheet, containing solely a description of the
Purchased Bonds, substantially in the form of Annex I hereto and
approved by the Representatives, and shall file such term sheet
pursuant to Rule 433(d) under the Act within the time period
prescribed by such rule; and shall file promptly all other material
required to be filed by the Company with the Commission pursuant to
Rule 433(d) under the Act.
(c) The Company 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 stop order suspending the effectiveness of the
Registration Statement or of any notice objecting to its use or the
institution or threatening of any proceeding for that purpose and
(iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Purchased
Bonds for sale in any jurisdiction or the initiation or threatening
of any proceeding for such purpose. The Company will not file any
amendment to the Registration Statement or amendment or supplement
to the Prospectus unless the Company has 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 Company will use its best efforts to
prevent the issuance of any such stop order and, if issued, to
obtain as soon as possible the withdrawal thereof.
(d) If, at any time when a
prospectus relating to the Purchased Bonds is required to be
delivered under the Act (including circumstances when such
requirement may be satisfied pursuant to Rule 172), 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 (c) of this
Section 4, an amendment or supplement that will correct such
statement or omission or an amendment or supplement that will
effect such compliance. If, prior to the Closing Date, there occurs
an event or development as a result of which the Disclosure Package
(as defined below) would include an untrue statement of a material
fact or would omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances when
the Disclosure Package is delivered to a purchaser, not misleading,
the Company promptly will notify the Representatives so that any
use of the Disclosure Package may cease until it is amended or
supplemented, and will promptly prepare an amendment or supplement
that will correct such statement or omission. “ Disclosure
Package ” shall mean (i) the preliminary prospectus
supplement, including the base prospectus, as amended and
supplemented to the Applicable Time of Sale, (ii) the final
term sheet contemplated by Section 4(b) hereof, and
(iii) any Issuer Free Writing Prospectus (as defined in
Section 8(a) below). Notwithstanding any provision hereof to
the contrary, each document included in the Disclosure Package
shall be deemed to include all documents (including any Current
Report on Form 8-K (other than any information furnished under
Items 2.02, 7.01 or
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9.01 of any such Current Report on Form
8-K)) incorporated therein by reference, whether any such
Incorporated Document is filed before or after the document into
which it is incorporated, so long as the Incorporated Document is
filed sufficiently before the Applicable Time of Sale to permit
conveyance to the investor.
(e) The Company 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 and
all Incorporated Documents (including exhibits, other than exhibits
incorporated by reference), (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 (including circumstances when
such requirement may be satisfied pursuant to Rule 172), any
amendments thereof and supplements thereto (but without
Incorporated Documents or exhibits), as soon as available and in
such quantities as the Representatives may reasonably
request.
(f) The Company will arrange,
if necessary, for the qualification of the Purchased Bonds 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 Purchased
Bonds) in any jurisdiction where it is not now so subject. The
Company will promptly advise the Representatives of the receipt by
the Company of any notification with respect to the qualification
of the Purchased Bonds for sale in any jurisdiction or the
initiation or threatening of any proceeding for such
purpose.
(g) The Company agrees to pay
the costs and expenses relating to the following ma
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