Exhibit 10.1

CONSTELLATION ENERGY NUCLEAR GROUP, LLC

a Maryland limited liability company

SECOND AMENDED AND RESTATED OPERATING AGREEMENT

[            ], 200[    ]

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TABLE OF CONTENTS

 

 

          Page ARTICLE I DEFINED TERMS ARTICLE II ORGANIZATION AND NAME; OFFICE;
PURPOSE

Section 2.1

   Organization    10

Section 2.2

   Name of the Company    11

Section 2.3

   Purpose    11

Section 2.4

   Principal Office    11

Section 2.5

   Resident Agent    11

Section 2.6

   Term    11

Section 2.7

   No State Law Partnership; No Concerted Action    11

Section 2.8

   Lack of Authority of Members    12

Section 2.9

   Limitation of Liability of Members    12

Section 2.10

   No Personal Liability of Members    12 ARTICLE III MEMBERSHIP INTERESTS;
ADDITIONAL MEMBERS

Section 3.1

   Membership Interests    12

Section 3.2

   Additional Members    13

Section 3.3

   Representations and Warranties    13 ARTICLE IV CAPITAL CONTRIBUTIONS

Section 4.1

   Initial Capital Contributions    15

Section 4.2

   Additional Capital Contributions    15

Section 4.3

   Nonpayment of Additional Capital Contributions    15

Section 4.4

   Advances by Members    15 ARTICLE V BOOKS AND RECORDS

Section 5.1

   Books and Records    16

Section 5.2

   Fiscal Year    16

Section 5.3

   Bank Accounts    16

 

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Section 5.4

   Company Information    16 ARTICLE VI DISTRIBUTIONS

Section 6.1

   Distributions Other Than Liquidation Proceeds    17

Section 6.2

   Limitations on Distribution    17

Section 6.3

   Withheld Taxes    17

Section 6.4

   Information to Be Provided by Members    19 ARTICLE VII MANAGEMENT: RIGHTS,
POWERS, AND DUTIES

Section 7.1

   General    19

Section 7.2

   The Board of Directors    19

Section 7.3

   Officers    24

Section 7.4

   Budget and Strategic Plan    27

Section 7.5

   Nuclear Advisory Committee    28

Section 7.6

   Existing Nuclear Plant Subsidiaries    28

Section 7.7

   Liability and Indemnification    28

Section 7.8

   Member Approvals    30

Section 7.9

   Staffing    31

Section 7.10

   Governance of Subsidiaries    31

Section 7.11

   Events of Default    31

Section 7.12

   Delegation of Financial Authority    31 ARTICLE VIII TAX MATTERS AND CAPITAL
ACCOUNTS

Section 8.1

   Tax Treatment    32

Section 8.2

   Tax Returns and Information    32

Section 8.3

   Tax Matters Partner and Elections    33

Section 8.4

   Capital Accounts    33

Section 8.5

   Consistent Tax Treatment    36 ARTICLE IX TRANSFER OF MEMBERSHIP INTERESTS

Section 9.1

   Restrictions Applicable to All Transfers by the Members    36

Section 9.2

   Permitted Transfers    38

Section 9.3

   Right of First Offer    39

Section 9.4

   Change of Control of a Member    40

 

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ARTICLE X CERTAIN OBLIGATIONS OF THE COMPANY AND THE MEMBERS

Section 10.1

   Preemptive Rights    40

Section 10.2

   Related Party Transactions    41

Section 10.3

   Power Marketing    41 ARTICLE XI CORPORATE OPPORTUNITIES AND NON-SOLICITATION

Section 11.1

   Corporate Opportunities    42

Section 11.2

   Non-Solicitation    42 ARTICLE XII WITHDRAWAL, DISSOLUTION AND LIQUIDATION

Section 12.1

   No Right of Withdrawal; No Interest    42

Section 12.2

   Terminating Event    43

Section 12.3

   Dissolution    43

Section 12.4

   Winding Up    44 ARTICLE XIII GENERAL PROVISIONS

Section 13.1

   Notices    45

Section 13.2

   Successors and Assigns    45

Section 13.3

   Parallel Vehicle    46

Section 13.4

   Dispute Resolution    46

Section 13.5

   Guarantee    47

Section 13.6

   Governing Law    47

Section 13.7

   Entire Agreement; Amendment    47

Section 13.8

   No Waiver    48

Section 13.9

   Separability of Provisions    48

Section 13.10

   Confidentiality    48

Section 13.11

   Expenses    48

Section 13.12

   Counterparts    49

Section 13.13

   Headings    49

Section 13.14

   Gender and Number    49

Section 13.15

   Further Assurances    49

Section 13.16

   Survival of Obligations    49

Section 13.17

   Insurance    49

Section 13.18

   Nuclear Insurance    49

Section 13.19

   FIRPTA    50

Section 13.20

   Exclusive Remedies    50

 

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Section 13.21

   Title to Company Property    50

Section 13.22

   Waiver of Partition Action    50

Section 13.23

   Statutory References    50

Section 13.24

   Legal Fees    50 EXHIBITS

EXHIBIT A

   Capital Contributions    A-1

EXHIBIT B

   Initial Annual Budget    B-1

EXHIBIT C

   Power Marketing    C-1

 

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CONSTELLATION ENERGY NUCLEAR GROUP, LLC

Second Amended and Restated Operating Agreement

This Second Amended and Restated Operating Agreement (this “Agreement”) is
entered into as of this [__] day of [            ], 200[ ], by and between
Constellation Energy Group, Inc., a Maryland corporation (“Constellation”), and
EDF Development Inc., a Delaware corporation (“EDFD”), as Members (as defined
below), and Constellation Energy Nuclear Group, LLC, a Maryland limited
liability company (the “Company”).

RECITALS

WHEREAS, on December 15, 1999, the Company was formed under the Maryland Limited
Liability Company Act, as amended from time to time (the “Act”), pursuant to
Articles of Organization filed with the Maryland Department of Assessments and
Taxation;

WHEREAS, Constellation entered into an amended and restated operating agreement
of the Company, dated as of July 1, 2002 (the “Original Agreement”);

WHEREAS, concurrently with the execution of this Agreement, EDFD and
Constellation are consummating the membership interest sale transaction pursuant
to that certain Master Put Option and Membership Interest Purchase Agreement,
dated as of                             , 200_ (the “Master Agreement”),
pursuant to which Constellation is selling, transferring and delivering to EDFD,
and EDFD is purchasing, acquiring and assuming, all of Constellation’s right,
title and interest in 49.99% of Constellation’s Membership Interest (as defined
below) in the Company (the “Designated Interest”);

WHEREAS, in connection with EDFD’s purchase of the Designated Interest and
admission to the Company as a Member, the parties desire to enter into this
Agreement to set forth their respective rights and obligations as Members of the
Company and to provide for the management and affairs of the Company and for the
conduct of the business of the Company;

WHEREAS, the parties will assure that the Company and its subsidiaries are in
compliance with U.S. laws and regulations regarding foreign domination and
control, and therefore will assign decision making authority for matters
regulated by the NRC (as defined below) and other U.S. Governmental Authorities
(as defined below), where required or prudent to do so, to U.S. citizens
pursuant to the process set forth herein; and

WHEREAS, the parties hereto desire to amend and restate the Original Agreement
on the terms set forth herein.

NOW, THEREFORE, in consideration of the agreements and obligations set forth
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

 

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ARTICLE I

DEFINED TERMS

As used in this Agreement, the following terms shall have the following
meanings:

“Act” has the meaning set forth in the recitals.

“Additional Capital Contribution” means, with respect to each Member, any
Capital Contribution by such Member to the capital of the Company other than any
Initial Capital Contribution pursuant to Section 4.1.

“Affiliate” means, with respect to any Person, any other Person directly or
indirectly Controlled by, Controlling or under common Control with such Person.

“Agreement” means this Agreement, as amended from time to time.

“Annual Budget” has the meaning set forth in Section 7.4(a).

“Applicable Law” means, for any Person, any domestic or foreign law, rule or
regulation, or judgment, decree, order, permit, license, certificate of
authority, order or governmental approval, in each case of or by any
Governmental Authority, to which the Person or any of its business is subject.

“Articles of Organization” means the articles of organization of the Company, as
amended from time to time, filed with the Department of Assessments and Taxation
of the State of Maryland pursuant to the Act.

“Atomic Energy Act” has the meaning set forth in Section 13.17.

“Bankruptcy Event” means, with respect to any Person, the occurrence of any of
the following: (a) such Person shall institute a voluntary case seeking
liquidation or reorganization under Bankruptcy Law, or shall consent to the
institution of an involuntary case thereunder against it; (b) such Person shall
file a petition or consent or shall otherwise institute any similar proceeding
under any other applicable Federal or state law, or shall consent thereto;
(c) such Person shall apply for, or by consent there shall be an appointment of,
a receiver, liquidator, sequestrator, trustee or other officer with similar
powers for itself or any substantial part of its assets; (d) such Person shall
make an assignment for the benefit of its creditors; (e) such Person shall admit
in writing its inability to pay its debts generally as they become due; (f) an
involuntary case shall be commenced seeking liquidation or reorganization of
such Person under Bankruptcy Law or any similar proceedings shall be commenced
against such Person under any other applicable Federal or state law and (i) the
petition commencing the involuntary case is not dismissed within thirty
(30) days of its filing, (ii) an interim trustee is appointed to take possession
of all or a portion of the property, and/or to operate all or any part of the
business of such Person and such appointment is not vacated within thirty
(30) days, or (iii) an order for relief shall have been issued or entered
therein; (g) a decree or order of a court having jurisdiction in the premises
for the appointment of a receiver, liquidator, sequestrator, trustee or other
officer having similar powers of such Person or all or a part of its property
shall have been entered; or (h) any other similar relief shall be granted
against such Person under any applicable Federal or state law.

 

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“Bankruptcy Law” shall mean, with respect to any Person, any bankruptcy or
insolvency law or other similar law affecting creditors’ rights promulgated by
any federal, state, foreign or international government or any political
subdivision of any of the foregoing.

“Baseball Arbitration” means the following procedure for determination of Fair
Market Value or Implied Acquisition Price. The Members shall first attempt to
agree on fair market value in good faith. If the Members cannot agree on fair
market value within sixty (60) Days, then the selling or contributing Member (as
applicable), on the one hand, and the purchasing or receiving Member or the
Company (as applicable), on the other hand, shall each select an independent
investment banking firm of national reputation and with experience in valuing
assets of the type in question, and such investment banking firms shall each
determine the fair market value of the subject property within sixty (60) Days
of selection, with the average of the two valuations constituting Fair Market
Value. If the two valuations in the previous sentence differ by five percent or
more, then the average of the two valuations shall not be binding, and the
respective Parent CEOs shall use their reasonable efforts to agree on Fair
Market Value within thirty (30) Days of receiving the valuations. If the
respective Parent CEOs cannot reach agreement within such thirty (30) Day
period, then the two investment banking firms shall mutually agree on a third
independent investment banking firm of national reputation within thirty
(30) Days of the end of such period, and such third independent investment
banking firm shall then determine, within sixty (60) Days of selection, which of
the two valuations of the original investment banking firms is closer to fair
market value, and such valuation shall constitute Fair Market Value. Any such
determination shall be binding on the parties. In connection with any
determination of Fair Market Value, each party shall bear the cost of the
investment banking firm that it selects, and the cost of any valuation prepared
by a third investment banking firm shall be borne by the party whose investment
banking firm’s valuation was not selected. If the Company is involved in the
determination of Fair Market Value pursuant to Baseball Arbitration, the
decision of the Company shall be made without participation of the Directors
appointed by the Member involved in the Baseball Arbitration and the
requirements for a quorum and the necessary vote of the Board of Directors shall
be deemed amended as required to allow such action without the approval of such
Directors.

“Board of Directors” has the meaning set forth in Section 7.1(a).

“Business Day” means any working day in France and the United States other than
a Saturday, a Sunday or a day on which banks located in Paris, France or New
York, New York generally are authorized or required by Applicable Law to close.

“Capital Account” has the meaning set forth in Section 8.4(a).

“Capital Contribution” means, with respect to any Member, the amount of money
and the Gross Asset Value of any property (other than money) contributed to the
capital of the Company by such Member.

“CEO” has the meaning set forth in Section 7.3(b).

 

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“Change of Control” of a Person means the consummation of any Transfer or series
of related Transfers to one entity or group of entities acting in concert that
is not an affiliate of such Person that would result in (i) the aggregate
disposition, directly or indirectly, of more than fifty percent (50%) of the
economic or voting power of the then-outstanding equity interests of such
Person, or (ii) a change in a majority of the directors of such Person not
effected by the continuing directors of such Person. For avoidance of doubt,
“Change of Control” will not include Transfers between wholly owned subsidiaries
of a common parent company or equivalent internal corporate reorganizations, but
will include a merger, business combination, acquisition or other transaction
with a non-Affiliate involving the Person or the direct or indirect parent of
the Person.

“Code” means the Internal Revenue Code of 1986, as amended, or any corresponding
provision of any succeeding law.

“Company” has the meaning set forth in the preamble.

“Company Change of Control” means the consummation of any Transfer or series of
related Transfers to one entity or group of entities acting in concert that is
not a Member or an Affiliate of a Member that would result in (i) the aggregate
disposition, directly or indirectly, of more than fifty percent (50%) of the
economic or voting power of the ownership interests of the Company, or (ii) a
change in a majority of directors of the Company not effected by the continuing
directors.

“Constellation” has the meaning set forth in the preamble.

“Constellation Directors” has the meaning set forth in Section 7.2(a).

“Constellation Marketing” has the meaning set forth in Section 10.3.

“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of an entity, whether
through the ownership of securities, by contract or otherwise. The terms
“Controlled” and “Controlling” shall have correlative meanings.

“Day” means a calendar day.

“Defaulting Member” has the meaning specified in the definition of “Event of
Default”.

“Depreciation” means, for each Fiscal Year, an amount equal to the depreciation,
amortization or other cost recovery deduction allowable for Federal income Tax
purposes with respect to an asset for such Fiscal Year; provided, however, that
if the Gross Asset Value of an asset differs from its adjusted basis for Federal
income Tax purposes at the beginning of such Fiscal Year, Depreciation shall be
an amount that bears the same ratio to such beginning Gross Asset Value as the
Federal income Tax depreciation, amortization or other cost recovery deduction
with respect to such asset for such Fiscal Year bears to such beginning adjusted
tax basis; and, provided further, that if the Federal income Tax depreciation,
amortization or other cost recovery deduction with respect to such asset for
such Fiscal Year is zero, Depreciation shall be determined with reference to
such beginning Gross Asset Value using any reasonable method selected by the
Board of Directors.

 

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“Designated Interest” has the meaning set forth in the recitals.

“Director” means any person hereafter elected to act and who is serving as a
member of the Board of Directors as provided in this Agreement.

“EDFD” has the meaning set forth in the preamble.

“EDFD Directors” has the meaning set forth in Section 7.2(a).

“Event of Default” means, as to any Member (the “Defaulting Member”), the
occurrence of the Defaulting Member’s material violation, breach or default of
its obligations under a material provision of this Agreement, which has not been
cured within thirty (30) Days, except that:

(a) in connection with a violation, breach or default of a Defaulting Member’s
payment obligations under this Agreement, the cure period shall be five
(5) Business Days; and

(b) in connection with any violation, breach or default of a Defaulting Member’s
obligations other than payment obligations under this Agreement, if the
Defaulting Member makes reasonably diligent efforts to cure such Event of
Default the cure period shall be extended, but only to the extent reasonably
necessary, for up to an additional thirty (30) Days.

“Fair Market Value” means a valuation agreed by the parties or determined
through Baseball Arbitration.

“Fiscal Year” has the meaning set forth in Section 5.2.

“GAAP” means accounting principles generally accepted in the United States, as
consistently applied throughout the relevant period.

“Governmental Authority” means any domestic or foreign governmental or
regulatory authority, agency, court, commission or other governmental or
regulatory entity (including any self-regulatory organization).

“Gross Asset Value” means, with respect to any asset, such asset’s adjusted
basis for Federal income Tax purposes, except as follows:

(a) the initial Gross Asset Value of any asset contributed by a Member to the
Company shall be the Fair Market Value of such asset at the time of such
contribution;

(b) the Gross Asset Values of all Company assets may, in the sole discretion of
the Board of Directors, be adjusted to equal their respective gross fair market
values (as determined by the Board of Directors), as of the following times:
(i) the acquisition of an additional interest in the Company by any new or
existing Member in exchange for more than a

 

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de minimis Capital Contribution; (ii) the distribution by the Company to a
Member of more than a de minimis amount of Company property as consideration for
an interest in the Company; and (iii) the liquidation of the Company within the
meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(g);

(c) the Gross Asset Value of any Company asset distributed to any Member shall
be adjusted immediately prior to such distribution to equal the gross fair
market value of such asset as of the date of distribution (as determined by the
Board of Directors); and

(d) the Gross Asset Values of Company assets shall be increased (or decreased)
to reflect any adjustments to the adjusted basis of such assets pursuant to Code
Section 734(b) or Code Section 743(b), but only to the extent that such
adjustments are taken into account in determining Capital Accounts pursuant to
Section 1.704-1(b)(2)(iv)(m) of the Treasury Regulations.

If the Gross Asset Value of an asset has been determined or adjusted pursuant to
paragraph (a), (c) or (d) above, such Gross Asset Value shall thereafter be
adjusted by the Depreciation taken into account with respect to such asset for
purposes of computing Net Income and Net Losses.

“Inconsistent Position” has the meaning set forth in Section 8.5.

“Investee Company” means a Person in which the Company or any of its
Subsidiaries owns equity constituting less than 50% of the total equity
interests of such Person.

“IRS” means the U.S. Internal Revenue Service or any successor agency.

“Licensed Facility” means a facility that maintains an NRC license.

“Licensed Subsidiary” means a Subsidiary of the Company that maintains a license
with the NRC.

“Master Agreement” has the meaning set forth in the recitals.

“Member” or “Members” means Constellation, EDFD and any Person who subsequently
is admitted as a member of the Company in accordance with Section 3.2 or Article
IX, as applicable, and Section 7.8.

“Membership Interests” means the total of all ownership rights of a Member in
the Company, which Membership Interest shall be expressed by the number of Units
held by a Member.

“NAC” has the meaning set forth in Section 7.5, and shall be composed initially
of those individuals listed on Exhibit B.

“Net Available Cash” shall mean, at any time, all cash of the Company that the
Board of Directors determines is available for distribution, taking into account
projected cash requirements (including reserves for future operations of the
business and contingencies) and subject to any restrictions set forth in any
credit or other agreement binding on the Company.

 

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“Net Income” and “Net Losses” means, as appropriate, for any Fiscal Year, the
taxable income or taxable loss of the Company determined in accordance with Code
Section 703(a) for such period or other applicable period for Federal income Tax
purposes taking into account any separately stated items, increased by the
amount of any Tax-exempt income of the Company during such period and decreased
by the amount of any Code Section 705(a)(2)(B) expenditures (within the meaning
of Treasury Regulations Section 1.704-1(b)(2)(iv)(i)) of the Company. Gain or
loss from any disposition of property shall be computed by reference to the
Gross Asset Value of the property disposed of, notwithstanding that the adjusted
tax basis of such property may differ from its Gross Asset Value. In lieu of the
depreciation, amortization, or other cost recovery deductions taken into account
in computing taxable income or loss, there shall be taken into account
depreciation computed in accordance with the definition of Depreciation. In the
event that the Gross Asset Value of any Company asset is adjusted, the amount of
such adjustment shall be treated as an item of gain or loss, as appropriate and
shall be taken into account for purposes of computing Net Income or Net Loss.

“New Securities” has the meaning set forth in Section 10.1(b).

“Non-Controllable Items” has the meaning set forth in Section 7.4(c).

“Non-Defaulting Member” has the meaning set forth in Section 7.11.

“NRC” means the U.S. Nuclear Regulatory Commission or any successor agency.

“Objection Notice” has the meaning set forth in Section 8.2(b).

“Offering Member” has the meaning set forth in Section 9.3(a).

“Parallel Vehicle” has the meaning set forth in Section 13.3.

“Parent” means, as applicable, Constellation or Électricité de France
International, S.A.

“Parent CEO” means, with respect to any Member, the chief executive officer of
the ultimate parent entity of such Member.

“Percentage Interest” with respect to a Member is set forth on Exhibit A, as the
same shall be amended from time to time in accordance with this Agreement. The
Percentage Interest of each Member is calculated by dividing the number of Units
owned by a Member by the total number of Units owned by all Members, and shall
be adjusted from time to time in accordance with Section 3.1(d).

“Permitted Transfer” has the meaning set forth in Section 9.1(a).

 

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“Permitted Transferee” means a Member’s Affiliate that is wholly-owned by the
same ultimate parent entity; provided, however, that no Person shall be a
Permitted Transferee (a) if the Transfer to such Person is made with the intent
that the Transferee will make a subsequent Transfer or the transferor will
subsequently Transfer interests in such Transferee in order to avoid the
Transfer restrictions that would otherwise be applicable and (b) unless such
Person agrees in writing with the Company at the time of such Transfer to
Transfer back to the transferring Member the Transferred Membership Interests if
such Person ceases to be a Permitted Transferee.

“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership or other entity.

“Preemptive Notice” has the meaning set forth in Section 10.1(a).

“Prime Rate” means the prime rate published in the Wall Street Journal on the
last Day of each month (or, if not a publication Day, the prime rate last
published prior to such last Day).

“Provisional Budget” has the meaning set forth in Section 7.4(b).

“Redemption Price” has the meaning set forth in Section 12.2(a).

“Repurchase Election Period” has the meaning set forth in Section 12.2(a).

“Rules” has the meaning set forth in Section 13.4(b).

“Safety and Security Issues” has the meaning set forth in Section 7.2(k)(iv).

“Special Matter” has the meaning set forth in Section 7.2(j).

“Strategic Plan” has the meaning set forth in Section 7.4(a).

“Subsidiary” means, for any Person (the “parent”) at any date, any other Person
the accounts of which would be consolidated with those of the parent in the
parent’s consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other Person
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interest are, as of such
date, owned, Controlled or held, or (b) that is, as of such date, otherwise
Controlled by the parent or one or more Subsidiaries of the parent.

“Tax” means any U.S. federal, state, local or non-U.S. tax or other governmental
charge, fee, levy or assessment of whatever kind or nature, including all U.S.
federal, state, local or non-U.S. income, gross receipts, windfall profits,
severance, property, production, sales, use, license, excise, franchise,
employment, premium, recording, documentary, transfer, back-up withholding,
turnover, net asset, capital gains, value added, estimated, ad valorem, payroll
and employee withholding, stamp, customs, occupation or similar taxes, and any
social charges or contributions together with any interest, additions, or
penalties with respect to these Taxes and any interest or penalties.

 

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“Terminating Event” means, and shall occur upon the following:

(a) If a Member:

(i) Makes an assignment for the benefit of creditors;

(ii) Files a voluntary petition in bankruptcy;

(iii) Is adjudged bankrupt or insolvent or has entered against the person an
order for relief in any bankruptcy or insolvency proceeding;

(iv) Files a petition or answer seeking for that person any reorganization,
arrangement, composition, readjustment, liquidation, dissolution, or similar
relief under any statute, law, or regulation;

(v) Seeks, consents to, or acquiesces in the appointment of a trustee for,
receiver for, or liquidation of the Member or of all or any substantial part of
the person’s properties; or

(vi) Files an answer or other pleading admitting or failing to contest the
material allegations of a petition filed against the person in any proceeding
described in this subsection.

(b) The continuation of any proceeding against the Member seeking
reorganization, arrangement, composition, readjustment, liquidation,
dissolution, or similar relief under any statute, law, or regulation, for 120
Days after the commencement thereof, or the appointment of a trustee, receiver,
or liquidator for the Member or all or any substantial part of the Member’s
properties without the Member’s agreement or acquiescence, which appointment is
not vacated or stayed for 120 days or, if the appointment is stayed, for 120
days after the expiration of the stay during which period the appointment is not
vacated.

(c) In the case of a Member:

(i) who is an individual, the individual’s death or adjudication by a court of
competent jurisdiction as incompetent to manage the individual’s person or
property;

(ii) who is acting as a Member by virtue of being a trustee of a trust, the
termination of the trust;

(iii) that is a partnership or a limited liability company, the dissolution and
commencement of winding up of the partnership or limited liability company;

(iv) that is a corporation, the dissolution of the corporation or the revocation
of its charter; or

(v) the distribution by the fiduciary of the estate’s entire interest in the
Company; and, in any such case, the successor or successors to the Member do not
comply and/or cannot comply with the provisions of Article IX of this Agreement.

 

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“Three-Year Budget” has the meaning set forth in Section 7.4(a).

“Transfer” means, when used as a noun, any direct or indirect voluntary or
involuntary sale, hypothecation, pledge, assignment, attachment or other
transfer, including a transfer resulting from a merger, consolidation,
assignment of assets or other similar transaction, and, when used as a verb,
means voluntarily or involuntarily to sell, hypothecate, pledge, assign or
otherwise transfer.

“Transferee” has the meaning set forth in Section 9.1(a).

“Transfer Notice” means the written notice given by a Member proposing to
Transfer a Membership Interest, which shall include all details of such proposed
Transfer, including the name of the Transferee and its material Affiliates, the
date of the proposed Transfer, the portion of the Member’s Membership Interest
to be Transferred, and the cash purchase price for the Membership Interest.

“Treasury Regulations” means the income Tax regulations, including temporary
regulations, promulgated under the Code, as such regulations may be amended from
time to time (including corresponding provisions of succeeding regulations).

“Unburdened Cost” shall mean such party’s out-of-pocket cost (including overhead
and benefits), but shall exclude any profit.

“Units” means units of Membership Interests in the Company having the rights set
forth in this Agreement.

“Withdrawal Interest” has the meaning set forth in Section 12.2(a).

“Withdrawn Member” has the meaning set forth in Section 12.2(a).

“Withholding Agent” has the meaning set forth in Section 6.3(a).

Capitalized terms not otherwise defined in this Article I shall have the
meanings ascribed to such terms in this Agreement.

ARTICLE II

ORGANIZATION AND NAME; OFFICE; PURPOSE

Section 2.1 Organization. The Company was formed on December 15, 1999 by the
execution and filing with the Department of Assessments and Taxation of the
State of Maryland of the Articles of Organization.

 

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Section 2.2 Name of the Company. The name of the Company is “Constellation
Energy Nuclear Group, LLC.” The Company may do business under that name and
under any other name or names that the Board of Directors may, in its sole
discretion, determine. If the Company does business under a name other than that
set forth above, then the Company shall file a trade name application as
required by law.

Section 2.3 Purpose. The Company is organized:

(a) To operate as a holding company;

(b) To directly and indirectly, purchase, own, operate, manage and sell assets
involved in nuclear power generation, storage and distribution businesses,
including, without limitation, ownership interests in the Company’s
Subsidiaries, and their respective assets;

(c) To enter into any agreement providing for the management, operation and
administration of the activities of the Company and its Subsidiaries including
any agreements for the sale of electric capacity, energy or ancillary services;

(d) To negotiate, authorize, execute, deliver and perform any agreement or
instrument or document relating to the activities set forth in clauses
(a) through (c) above; and

(e) To have all of the powers permitted by the Act.

Section 2.4 Principal Office. The principal office of the Company shall be
located at 750 East Pratt Street, Baltimore, Maryland 21202, or at any other
place or places within the State of Maryland as the Board of Directors shall, in
its sole discretion, deem necessary or advisable.

Section 2.5 Resident Agent. The name and address of the Company’s resident agent
in the State of Maryland shall be CT Corporation System, 300 East Lombard
Street, Baltimore, Maryland 21202. The name and/or address of the resident agent
of the Company may at any time be changed by filing the new name and/or address
with the Maryland Department of Assessments and Taxation pursuant to the Act.

Section 2.6 Term. This Agreement shall be effective as of the date hereof. The
existence of the Company shall be perpetual, unless terminated in accordance
with the provisions of this Agreement.

Section 2.7 No State Law Partnership; No Concerted Action.

(a) Notwithstanding the provisions of Article VIII, the Members intend that the
Company shall not be a partnership (including a general partnership or a limited
partnership), and that no Member shall be a partner of any other Member with
respect to the business of the Company for any purposes other than U.S. federal,
state and local Tax purposes, and this Agreement shall not be construed to
suggest otherwise.

(b) Each Member hereby acknowledges and agrees that, except as expressly
provided herein, in performing its obligations or exercising its rights
hereunder, it is acting independently and is not acting in concert with, on
behalf of, as agent for, or as joint venturer or partner of, the other Member.
Other than in respect of the Company, nothing

 

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contained in this Agreement shall be construed as creating a corporation,
association, joint stock company, business trust, organized group of persons,
whether incorporated or not, among or involving either Member or its Affiliates,
and nothing in this Agreement shall be construed as creating or requiring any
continuing relationship or commitment as between such parties other than as
specifically set forth herein. Nothing contained in this Agreement shall be
construed as creating any fiduciary relationship of any nature between the
Members.

Section 2.8 Lack of Authority of Members. Except as expressly set forth herein,
the Members shall not have the authority or power to act for or on behalf of the
Company, to do any act that would be binding on the Company, or to incur any
expenditures, debts, liabilities or obligations on behalf of the Company.
Accordingly, no Member shall be considered an agent of the Company solely by
virtue of being a Member, and no Member shall have authority to act for or bind
the Company solely by virtue of being a Member.

Section 2.9 Limitation of Liability of Members. To the fullest extent permitted
by Maryland law, each Member’s liability to provide capital or other assets to
the Company shall be limited to such Member’s agreed investment in the Company,
including any Additional Capital Contributions such Member is committed to make
under this Agreement to the extent such investment or contribution has not yet
been made, and in the case of Additional Capital Contributions, such obligation
shall be solely to provide such contributions for the purposes such Member has
committed to make such Additional Capital Contributions, and no Member shall
have any further obligation to make any other contributions of capital or
provide other property to the Company.

Section 2.10 No Personal Liability of Members. The debts, obligations and
liabilities of the Company, whether arising in contract, tort or otherwise,
shall be solely the debts, obligations and liabilities of the Company, and, to
the fullest extent permitted by Maryland law, no Member shall be obligated
personally for any such debt, obligation or liability of the Company solely by
reason of being a Member of the Company. No Member shall be liable for any
obligation of the Company unless such liability is expressly assumed by such
Member in a separate written agreement signed by such Member.

ARTICLE III

MEMBERSHIP INTERESTS; ADDITIONAL MEMBERS

Section 3.1 Membership Interests.

(a) The Company has authorized the issuance of [ ] Units. The Board of Directors
may authorize the issuance of additional Units or the creation of additional
classes of Units having such powers, designations and preferences and rights as
may be determined by the Board of Directors (subject to the other terms of this
Agreement (e.g., Section 3.2)), and the Board of Directors shall have the
authority to make such amendments to this Agreement as are necessary or
appropriate to give effect to the foregoing, subject to the requisite Member
consent under Section 7.8.

 

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(b) On the effective date hereof, EDFD purchased 49.99% of the outstanding Units
from Constellation pursuant to the terms of the Master Agreement.

(c) The Membership Interests shall be uncertificated; provided, however, that
all or a portion of a Member’s Membership Interest shall be certificated upon
written request of such Member, in which event the Board of Directors shall
establish procedures related to certificated Membership Interests.

(d) The Units (as set forth on Exhibit A) shall be adjusted from time to time,
as applicable, to reflect (i) the Transfer by a Member of its Membership
Interests in accordance with Section 7.8 and Article IX, (ii) the admission of a
new Member in accordance with Section 3.2, Section 7.2(j)(vii) and Section 7.8,
(iii) Additional Capital Contributions made by the Members in accordance with
Section 4.2, and (iv) such other events as otherwise may give rise to a change
in a Member’s ownership of its Membership Interests under this Agreement. Upon
any change in a Member’s ownership of its Membership Interests, the Board of
Directors shall (or shall cause the CEO to) amend Exhibit A to properly reflect
such change, including any change to the Percentage Interests of the Members,
and the Board of Directors shall (or shall cause the CEO to) deliver a copy of
Exhibit A, as so amended, to each Member.

Section 3.2 Additional Members.

(a) After the date hereof, a Person may be admitted to the Company as a Member
only pursuant to an action by the Board of Directors in accordance with
Section 7.2(j)(vii) (but subject to the restrictions in Section 10.1, the
requirement for Member approval in Section 7.8 (if applicable) and subject to
Article IX in the case of Transfers of Membership Interests by existing
Members). Notwithstanding, and in addition to, the foregoing, no Person shall be
admitted as a Member unless (x) such Person shall execute and deliver a
counterpart of this Agreement, and (y) the Board of Directors is satisfied that
such admission would not result in a violation of any Applicable Law or any term
or condition of this Agreement.

(b) In the event a new Member is to be admitted by the Board of Directors as
provided in Section 3.2(a), the Board of Directors shall determine, in
accordance with Section 7.2(j)(vii), the terms of such new Member’s admission,
including the amount of such new Member’s Capital Contribution and the number of
Units to be issued to such new Member.

Section 3.3 Representations and Warranties.

(a) Member Representations. Each Member represents and warrants to the other
Member and the Company, as to itself only, that:

(i) It has the power and authority to execute and deliver this Agreement and to
perform its obligations under this Agreement.

(ii) The execution, delivery and performance by it of this Agreement has been
duly authorized, and no other action on the part of such Member or its officers,
managers, board of directors, shareholders or members is necessary to authorize
the execution and delivery by it of this Agreement and the performance by it of
its obligations under this Agreement.

 

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(iii) This Agreement has been duly executed and delivered by it and is a legal,
valid and binding obligation of such Member, enforceable against such Member in
accordance with its terms except (1) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance and other similar
laws of general application affecting enforcement of creditors’ rights
generally, and (2) the availability of the remedy of specific performance or
injunctive or other forms of equitable relief may be subject to equitable
defenses and would be subject to the discretion of the court before which any
proceeding therefore may be brought.

(iv) It understands that the Company intends to be classified and taxed as a
partnership for U.S. federal Tax purposes and not as a publicly traded
partnership, and accordingly agrees that it will not Transfer any Membership
Interests in the Company, or cause any such Membership Interests to be marketed,
on or through an “established securities market” within the meaning of
Section 7704(b)(1) of the Code or a “secondary market (or the substantial
equivalent thereof)” within the meaning of Section 7704(b)(2) of the Code,
including, without limitation, an over-the-counter market or an interdealer
quotation system that regularly disseminates firm buy or sell quotations.

(v) It is either:

(1) Not a partnership, grantor trust, S corporation, limited liability company
or other pass-through entity for U.S. federal income Tax purposes; or

(2) If it is an entity referred to in clause (1), then either: (x) it was not
formed for the purpose of acquiring all or part of the Membership Interests and
not more than 40% of the value of the interest of each of its beneficial owners
will be attributable to the Membership Interests so acquired, or (y) it has and
will have only the number of ultimate beneficial owners (looking through a
pass-through entity described in clause (1) above to its beneficial owners,
unless such an entity is able to give the certification in (1) or
(2)(x)) identified to the Company in a written letter accompanying this
Agreement.

(b) Company Representations. The Company has the power and authority to execute
and deliver this Agreement and to perform its obligations under this Agreement.
The execution, delivery and performance by the Company of this Agreement has
been duly authorized by the Company, and no other action on the part of the
Company or the Company’s Board of Directors or Members is necessary to authorize
the execution and delivery by the Company of this Agreement and the performance
by it of its obligations under this Agreement. This Agreement has been duly
executed and delivered by the Company and is a legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms except (1) as limited by applicable bankruptcy, insolvency,

 

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reorganization, moratorium, fraudulent conveyance and other similar laws of
general application affecting enforcement of creditors’ rights generally, and
(2) the availability of the remedy of specific performance or injunctive or
other forms of equitable relief may be subject to equitable defenses and would
be subject to the discretion of the court before which any proceeding therefore
may be brought.

ARTICLE IV

CAPITAL CONTRIBUTIONS

Section 4.1 Initial Capital Contributions. No Member shall be required to make
any initial capital contributions to the Company.

Section 4.2 Additional Capital Contributions.

(a) The Board of Directors shall have the right to call for an Additional
Capital Contribution upon approval of the Board of Directors in accordance with
Section 7.2(j). Notwithstanding anything to the contrary herein, no Additional
Capital Contribution shall be required for the purpose of payment of any
liability of the Company to any third party except for payments of amounts due
in the ordinary course under agreements approved by the Board of Directors
consistent with the Annual Budget.

(b) Prior to making any Additional Capital Contributions, the parties shall
discuss alternative sources of financing (including debt financing).

(c) A Member’s obligation to make Capital Contributions, if any such obligation
exists, shall not inure to the benefit of, or be enforceable by, any Person
other than the Company, the Board of Directors and the other Members.

(d) The making of or failure to make any Additional Capital Contributions
pursuant to this Section 4.2 shall not affect the right of either Member to
participate in the management of the Company or the governance provisions set
forth in this Agreement.

Section 4.3 Nonpayment of Additional Capital Contributions. If a Member fails to
make any Additional Capital Contributions required in accordance with this
Article IV within thirty (30) Business Days after it is requested, interest
shall accrue on the unpaid portion at the lesser of (a) the Prime Rate plus
4% per annum and (b) the maximum rate permitted by Applicable Law. The Company
or the other Member, on behalf of the Company, may institute proceedings under
Sections 13.4(b) and 13.4(c) (it being understood that the escalation process of
Section 13.4(a) would not apply) against a Member that fails to make any
Additional Capital Contributions provided for in this Article IV.

Section 4.4 Advances by Members. If the Company does not have sufficient cash to
pay its obligations, either Member, upon the approval of the Board of Directors
in accordance with Section 7.2(j), may advance all or part of the needed funds
to or on behalf of the Company, provided, however, that if such advance is
necessary due to a failure by a Member to make an Additional Capital
Contribution, an advance by the other Member shall not require

 

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approval of the Board of Directors in accordance with Section 7.2(j). An advance
described in this Section 4.4 shall constitute a loan from such Member to the
Company, shall bear such interest rate as agreed to by the Board of Directors
and such Member from the date of the advance until the date of payment, and
shall not constitute a Capital Contribution.

ARTICLE V

BOOKS AND RECORDS

Section 5.1 Books and Records. The officers of the Company, acting under the
general supervision of the Board of Directors, shall cause to be performed all
general and administrative services on behalf of the Company in order to assure
that complete and accurate books and records of the Company are maintained at
such place designated by the Board of Directors showing the names, addresses and
respective Membership Interests of the relevant Members, all receipts and
expenditures, assets and liabilities, profits and losses, and all other records
necessary for recording the Company’s respective business and affairs.

Section 5.2 Fiscal Year. The fiscal year of the Company for financial and Tax
reporting purposes (the “Fiscal Year”) shall end on December 31 of each year or,
if applicable, on the date of dissolution of the Company, unless a different
fiscal year for Tax reporting purposes is required by the Code.

Section 5.3 Bank Accounts. All funds of the Company will be deposited in its
name in an account or accounts maintained with such bank or banks selected by
the Company. The funds of the Company shall not be commingled with the funds of
any Member. Checks will be drawn upon the Company account or accounts only for
the purposes of the Company and shall be signed by one or more authorized
officers of the Company.

Section 5.4 Company Information.

(a) The Company agrees to deliver to each Member:

(i) within fifteen (15) Days after the end of each month in each Fiscal Year,
unaudited monthly income statements and balance sheets of the Company and its
consolidated Subsidiaries;

(ii) within forty-five (45) Days after the end of each fiscal quarter in each
Fiscal Year, unaudited quarterly financial statements of the Company and its
consolidated Subsidiaries;

(iii) within ninety (90) Days after the end of each Fiscal Year, audited annual
consolidated and consolidating financial statements of the Company and its
consolidated Subsidiaries prepared in accordance with GAAP and audited by
PricewaterhouseCoopers LLP (or any successor auditor (which shall be an
independent nationally recognized accounting firm selected by the Board of
Directors in accordance with Section 7.2(g))); and

 

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(iv) with reasonable promptness, such other data and information regularly
prepared for senior management of the Company as from time to time may be
reasonably requested by either Member.

(b) The Company shall afford, and shall cause its Subsidiaries and its and their
respective officers, Directors, employees, auditors, counsel and agents to
afford, each Member (and the Member’s employees and agents) reasonable access
during regular business hours to the Company’s and its Subsidiaries’ respective
officers, Directors, employees, auditors, counsel and agents and to all of the
Company’s respective properties, books and records, and shall furnish (including
the right to copy) the Member (and the Member’s respective employees and agents)
with all financial, operating and other data and information as the Members may
reasonably request.

ARTICLE VI

DISTRIBUTIONS

Section 6.1 Distributions Other Than Liquidation Proceeds. The Company shall not
make any distributions to the Members except as authorized by the Board of
Directors in accordance with Section 7.2(j)(v). Notwithstanding the preceding
sentence, the Company shall make cash distributions in respect of the Members’
Tax liabilities at least five days prior to the installment due dates specified
in Section 6655(c) of the Code, pro rata to each Member in proportion to the
Member’s Percentage Interest, equal to the lesser of (i) the minimum amount
necessary such that the Member with the highest total allocable income and gain
pursuant to Section 8.4(c) for the taxable period for which such installment is
due and all prior taxable periods has received cash distributions under this
Agreement equal to at least 40% of such total allocable income and gain, and
(ii) Net Available Cash. Any amounts designated for distribution shall be
distributed, subject to the Act, pro rata in accordance with the Members’
respective Percentage Interests.

Section 6.2 Limitations on Distribution. Notwithstanding any provisions herein
to the contrary, the Company shall not make a distribution to either Member if
such distribution would violate the Act.

Section 6.3 Withheld Taxes.

(a) Each Member shall, to the fullest extent permitted by Applicable Law,
indemnify and hold harmless each Person who is, or who is deemed to be, the
responsible withholding agent (the “Withholding Agent”) for federal, state,
local and non-U.S. Tax purposes against all claims, liabilities and expenses of
whatever nature relating to the Agent’s obligation to withhold and to pay over,
or otherwise pay, any withholding or other Taxes on income or gain allocable to
such Member, payable by the Company or as a result of such Member’s
participation in the Company.

(b) Notwithstanding any other provision herein, each Member hereby authorizes
the Company to withhold and to pay over, or otherwise pay, any withholding or
other Taxes payable by the Company with respect to such Member or as a result of
such Member’s

 

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participation in the Company if, and to the extent that, the Company shall be
required to withhold or pay any such Taxes (including any amounts withheld from
amounts payable to the Company to the extent attributable, in the judgment of
the Company, to the interest of such Member in the Company). The Member shall be
deemed for all purposes stated herein to have received a payment from the
Company pursuant to Section 6.1 as of the time such withholding or Tax is
required to be paid, which payment shall be deemed to be a distribution with
respect to such Member’s Interests. To the extent that the aggregate of such
deemed payments to a Member for any period does not exceed the distributions to
which such Member is otherwise entitled for such period, the Company shall
reduce the amount of the distributions which would otherwise have been made to
such Member, and if such distributions are not sufficient to reimburse the
Company for such Tax payments (as the Company reasonably determines), the
Company shall notify such Member who shall pay over to the Company, within
fifteen (15) Business Days of such notice, an amount equal to such shortfall.
Interest shall accrue on any amounts that a Member fails to pay to the Agent
within fifteen (15) Business Days after it is requested under this Section 6.3
at the lesser of (A) the Prime Rate plus 4% per annum and (B) the maximum rate
permitted by Applicable Law. To the extent commercially reasonable, the Company
shall give prompt notice to each Member of any potential withholding or other
Taxes payable by the Company with respect to such Member or as a result of such
Member’s participation in the Company and shall cooperate with each Member
desiring to take reasonable steps to mitigate any such Tax liability provided
that (i) any expenses associated with such cooperation shall be borne solely by
the applicable Member and (ii) the Company shall not be precluded from
fulfilling all its withholding and other Tax obligations under Applicable Law
(and shall not be liable to either Member for fulfilling such obligations).

(c) To the extent able, each Member shall deliver to the Company: (i) an
affidavit in form satisfactory to the Company that such Member (or its partners,
members, shareholders or other owners as the case may be) is or is not subject
to Tax withholding under the provisions of any federal, state, local, foreign or
other law as of the date of this Agreement; and/or (ii) a certificate of
non-foreign status under Treasury Regulations Section 1.1445-5(b)(3)(ii) (or any
successor provision), and any other certificates, forms, or instruments
reasonably requested by the Company relating to such Member’s status under such
laws. Each Member shall cooperate with the Company to the extent reasonably
requested by it in connection with any Tax audit of or involving the Company or
any of its existing or former investments.

(d) The economic burden of any Tax (whether collected through withholding or
directly imposed on the Company or any subsidiary (whether by law, regulation or
contract)) that, in the Company’s reasonable discretion (as determined by the
Board of Directors), is attributable to the identity or jurisdiction of a Member
or to such Member’s failure to provide the information described in
Section 6.3(c) will be specially allocated by the Company to any such Member and
the Company may similarly specially allocate amounts held in reserve by the
Company or any subsidiary related to such Tax, or an indemnity related thereto,
or a purchase price discount, holdback, offset or similar reduction in gross
proceeds reasonably related to such Tax. Any such Member shall be treated as
having received an amount equal to all such Taxes paid or withheld as a
distribution pursuant to Section 6.1.

 

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Section 6.4 Information to Be Provided by Members.

(a) Prior to this Agreement becoming effective, each Member shall provide a duly
completed and executed valid IRS Form W-9 or W-8BEN, and shall provide a new IRS
Form W-9 or W-8BEN (or successor forms) promptly upon learning that any form
provided to the Company has become obsolete or incorrect.

(b) In case of any assignment of a Membership Interest or admission of a new
Member pursuant to this Agreement, a Member shall (unless waived in writing by
the Company) provide a duly completed and executed valid IRS Form W-9 or W-8BEN
(or successor forms) prior to such assignment or admission becoming effective
and shall provide a new IRS Form W-9 (or successor form) promptly upon learning
that any form provided to the Company has become obsolete or incorrect.

ARTICLE VII

MANAGEMENT: RIGHTS, POWERS, AND DUTIES

Section 7.1 General.

(a) Except as provided in this Agreement and except for situations in which the
approval of either Member is expressly required by this Agreement or
non-waivable provisions of Applicable Law, (i) all of the powers of the Company
shall be exercised by or under the authority of, and the business and affairs of
the Company shall be managed under the direction of, a board of directors (the
“Board of Directors”) and (ii) the Board of Directors may make all decisions and
take all actions for the Company not otherwise provided for in this Agreement.
The Board of Directors must act as a board in accordance with the provisions of
this Agreement, and no individual Director, as such, shall have any authority to
bind or act for, or assume any obligation or responsibility on behalf of, the
Company unless expressly authorized to do so by action taken by the Board of
Directors in accordance with this Agreement.

(b) The Members shall have no power to participate in the management or affairs
of the Company other than the right to appoint Directors and the right to
nominate or designate officers as expressly set forth herein and the right to
vote on the matters set forth in Section 7.8 or matters requiring approval of
the Members under Applicable Law. The Members shall not have meetings or voting
rights with respect to the management of the Company and shall not be entitled
to vote on or consent to or approve or disapprove actions or decisions regarding
the Company except as expressly provided herein or as required by Applicable
Law. Accordingly, no Member shall be considered an agent of the Company solely
by virtue of being a Member, and no Member shall have authority to act for or
bind the Company solely by virtue of being a Member. Members shall act by
written consent with respect to any action required or permitted to be taken by
the Members.

Section 7.2 The Board of Directors.

(a) Composition. The Board of Directors shall be composed of ten Directors. Each
of Constellation and EDFD and their respective successors, if any, shall have
the right as a Member to appoint five Directors to the Board (such Directors,
the “Constellation Directors” and the “EDFD Directors,” respectively), which
directors shall include the Chairman (who shall be a U.S. citizen). All of the
Directors appointed by Constellation or any successor to Constellation shall be
U.S. citizens. The Board shall elect the CEO of the Company.

 

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The initial Directors appointed by Constellation shall be: Michael Wallace,
Henry Barron, Charles Berardesco, Jonathan Thayer and George Vanderheyden.

The initial Directors appointed by EDFD shall be: [            ],
[            ], [            ], [            ] and [            ].

(b) Election and Tenure of Directors. Each Director shall hold office until his
successor has been appointed and qualified, or until the earlier of his death,
disability, resignation or removal as provided in this Agreement.

(c) Removals and Vacancies. Any Director may be removed at any time, with or
without cause, only by the Member that appointed such Director. Any Director may
resign at any time upon written notice to the Board of Directors and the
Members. Such resignation shall take effect at the time specified in the written
notice, or, if no time is specified therein, at the time of its receipt by the
Members; provided, however, that the acceptance of a resignation will not be
necessary to make it effective, unless so specified in the resignation. Any
vacancy on the Board of Directors may only be filled by the Member that
originally appointed the Director who is no longer serving in such capacity. The
applicable Member shall promptly appoint a replacement for any such Director who
has resigned or was removed.

(d) Regular Meetings. Regular meetings of the Board of Directors shall be held
no less frequently than quarterly at such time as may be designated from time to
time by the Board of Directors. All meetings of the Board of Directors shall be
held at the general offices of the Company or elsewhere, as determined from time
to time by the Board.

(e) Special Meetings. Special meetings of the Board of Directors may be held at
any time or place upon call by the Chairman of the Board of Directors or the CEO
or upon the written request of at least two Directors (addressed to the
Secretary of the Company).

(f) Notice of Meeting. The Secretary shall give notice to each Director of each
regular and special meeting of the Board of Directors. The notice shall state
the time, place and agenda of the meeting and include appropriate documentation
to be considered at the meeting. Notice for regular meetings is given to a
Director when it is delivered personally to the Director, left at the Director’s
principal residence or usual place of business, or transmitted by facsimile or
telephone, at least seven Business Days before the date of the meeting or, in
the alternative, sent by first priority, overnight (if available) courier
addressed to the Director’s address as it shall appear on the records of the
Company, at least eight (8) Business Days for domestic deliveries to overnight
delivery areas or nine (9) Business Days for international and other deliveries
before the day of the meeting. Notice for special meetings shall be given to
each Director with as much advance notice as is practicable under the
circumstances. Notice of any meeting of the Board of Directors is waived by any
Director who attends the meeting or who, before or after the meeting, signs a
waiver of notice which is filed with the records of the meeting. Any meeting of
the Board of Directors, regular or special, may adjourn from time to time to
reconvene at the same or some other place, and no notice need be given of any
such adjourned meeting other than by announcement.

 

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(g) Quorum; Action by Directors. Except as set forth in Section 7.2(j), the
action of a majority of the Directors present in person or by proxy (which proxy
shall only be given to a Director) at a meeting at which a quorum is present is
an action of the Board of Directors, provided that, at least one director
appointed by each of Constellation and EDFD votes in favor of the action, with
the exception of matters decided by a casting vote pursuant to Section 7.3(c). A
majority of the entire Board of Directors, including at least one Director
appointed by each of Constellation and EDFD, shall constitute a quorum for the
transaction of business. In the absence of a quorum, the Directors present, by
majority vote and without notice other than by announcement, may adjourn the
meeting from time to time until a quorum shall attend. At any such reconvened
meeting at which a quorum shall be present, any business may be transacted which
might have been transacted at the meeting as originally notified. Any action
required or permitted to be taken at a meeting of the Board of Directors may be
taken without a meeting, if a unanimous written consent which sets forth the
action is signed by each Director and filed with the minutes of proceedings of
the Board of Directors.

(h) Meeting by Telephone Conference. Members of the Board of Directors may
participate in a meeting by means of a conference telephone or similar
communications equipment if all persons participating in the meeting can hear
each other at the same time. Participation in a meeting by these means
constitutes presence in person at a meeting.

(i) Committees of the Board of Directors. From time to time, the Board of
Directors may establish one or more committees with such composition,
responsibilities and powers as the Board of Directors may determine, provided,
however, that such committees shall, at a minimum, include an audit committee
and a compensation committee; and provided, further, that Directors appointed by
each of Constellation and EDFD shall be appointed in equal numbers on all such
committees. Committees shall meet at such times as they or the Board of
Directors directs. The decisions of any committee shall be subject to the
ultimate approval of the Board of Directors. The Board of Directors shall
establish rules governing the organization and actions of each committee based
on the provisions of this Agreement with respect to the Board of Directors.

(j) Special Matters. Notwithstanding anything herein to the contrary, but
subject to Section 7.3(c), approval of all the Directors then in office shall be
required with respect to the following matters (each of which shall constitute a
“Special Matter”). At any time that the Directors are considering a Special
Matter, all of the Directors appointed by a Member must vote in the same manner,
either for or against.

(i) The timing of the presentation and adoption of each Annual Budget,
Three-Year Budget and Strategic Plan;

(ii) Any increase in the cost of a material element identified in the Annual
Budget or Provisional Budget that individually or in the aggregate amounts to a
material increase in the cost of such element in the Annual Budget or
Provisional Budget, or any increase in any other costs incurred in accordance
with the Annual Budget or Provisional Budget that amounts to a material increase
in the aggregate costs under the Annual Budget or Provisional Budget (other than
any variance relating to a Non-Controllable Item);

 

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(iii) The entry into of any contract that exceeds $50 million in total potential
liability or risk to the Company over the term of the contract, unless the
expenditures for such contract are provided for in the Annual Budget, Three-Year
Budget or Provisional Budget;

(iv) The entry into of any contract between the Company and either Member or any
of such Member’s Affiliates not specifically provided for in the Annual Budget,
Three-Year Budget or Provisional Budget and exceeding $10 million in total
potential liability or risk to the Company over the term of the contract;

(v) The making of any distribution by the Company to its Members (other than
cash distributions in respect of Members’ Tax liabilities pursuant to
Section 6.1) or by any Subsidiary to the Company;

(vi) Any change to the organization, governance or management of any Subsidiary
of the Company from the principles set forth in Section 7.10, and any
commitments to provide capital or credit support to a Subsidiary or Investee
Company;

(vii) The issuance of any New Securities or the admission of any new Member to
the Company (other than in connection with a Transfer of a Membership Interest
in compliance with Section 9.2(a)(iii) or Section 9.2(b) and subject to any
approval required under Section 7.8);

(viii) Any incurrence of indebtedness, individually or in a series of related
transactions that have not been expressly approved as a Special Matter, in
excess of $50 million, or the granting of any guaranty or lien, mortgage or
pledge over all or substantially all of the assets of the Company and its
Subsidiaries;

(ix) Initiating or making any settlement or compromise of a claim in excess of
$10 million in connection with a dispute (whether or not involving litigation)
involving a third-party, or any dispute with a Governmental Authority;

(x) Staffing of key executive officer positions of the Company, consistent with
Section 7.9;

(xi) A grant of authority to the Chairman, CEO or other officers of the Company
that would materially alter the authority granted to such officer under this
Agreement other than delegations of authority in the ordinary course of
business;

 

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(xii) Any reorganization, dissolution, liquidation, winding up or bankruptcy of
the Company or any Subsidiary of the Company, or any vote by the Company
relating to its ownership interest in any Subsidiary or Investee Company;

(xiii) Any decision requiring the Members to make any Additional Capital
Contributions;

(xiv) Amending in any material respect the charter, bylaws or other
organizational documents of any Company Subsidiary or Investee Company;

(xv) Any decision by the Company to enter into a new line of business;

(xvi) Changes in material accounting policies, other than as required by GAAP;

(xvii) The engagement or discharge of independent auditors;

(xviii) Any decision by the Company to enter into any material acquisition,
divestiture, joint venture or partnership;

(xix) Any decision by the Company to enter into a Company Change of Control
transaction or to effect an initial public offering of the Company;

(xx) Any recapitalization, reclassification or similar event by the Company;

(xxi) Any loans or advances provided to the Company by a Member, except for any
loan made by a Member to the Company in satisfaction of a failure by the other
Member to make a capital contribution in accordance with Section 4.2;

(xxii) The decision as to whether or not to stop operations and/or close a
nuclear facility to begin its decommissioning;

(xxiii) The decision to seek re-licensing of a nuclear facility;

(xxiv) The decision to buy, sell, lease, or otherwise dispose of its interest in
a nuclear facility; and

(xxv) Entering into any agreement or arrangement to do any of the above.

 

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Section 7.3 Officers.

(a) Election, Tenure and Removal of Officers. The officers shall be elected by
the Board of Directors. Where this Agreement provides that the holder of a
particular office is to be nominated by one Member, any person elected to such
office must have been nominated by such Member. An officer shall serve until his
death, resignation or removal. All officers or agents of the Company may be
removed at any time by the Board of Directors. The removal of an officer or
agent does not prejudice any of his contract rights. The Board of Directors (or
any committee or officer authorized by the Board of Directors) shall fill a
vacancy which occurs in any office subject to the nomination rights of a Member
specified in this Agreement.

(b) Executive Officers. The Company shall have a President who shall be the
Chief Executive Officer (the “CEO”) and who shall be a U.S. citizen, a
Secretary, a Treasurer, a Chief Nuclear Officer and such other officers as the
Board of Directors may deem necessary for the conduct of the business and
affairs of the Company. A person may hold more than one office in the Company.

(c) Chairman of the Board. The Chairman of the Board and anyone who acts for him
must be a U.S. citizen. The Chairman shall be designated by Constellation from
among the Directors appointed by Constellation and shall preside at all meetings
of the Board of Directors at which he shall be present. He shall have such
powers as are from time to time assigned to him by the Board of Directors.
Notwithstanding the prior sentence, the Chairman’s primary duties will include
overseeing relationships with U.S. Governmental Authorities and other key
relationships, reviewing corporate communications and providing an interface
with the public. In connection with the latter functions, the Chairman shall
make reasonable efforts, taking into account the urgency of the matter, to
inform and consult with the Board of Directors with regard to corporate
communications and public interface activities involving sensitive matters. In
the event of a deadlock of the Board of the Directors, the Chairman shall have a
casting (deciding) vote on the following matters:

(i) Any matter that, in view of U.S. laws or regulations, requires or makes it
reasonably necessary to assure U.S. control;

(ii) Any matter relating to nuclear safety, security or reliability, including,
but not be limited to, the following matters:

(1) implementation or compliance with any NRC generic letter, bulletin, order,
confirmatory order, or similar requirement issued by the NRC;

(2) prevention or mitigation of a nuclear event or incident or the unauthorized
release of radioactive material;

(3) placement of the plant in a safe condition following any nuclear event or
incident;

(4) compliance with the Atomic Energy Act, the Energy Reorganization Act, or any
NRC rule;

 

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(5) the obtaining of or compliance with a specific license issued by the NRC and
its technical specifications; and

(6) compliance with a specific Final Safety Analysis Report, or other licensing
basis document; provided, that the Chairman shall not exercise the casting vote
in connection with any matter specified in this Section 7.3(c)(ii) to implement
an option that is less likely to promote safety than that being proposed by the
EDFD Directors;

(iii) Any decision relating to U.S. regulatory strategy or the relationship with
the NRC consistent with Section 7.8;

(iv) The adoption of any charter, any change in the authority or composition, or
any matter relating to compensation, of the NAC, provided that such change does
not alter the non-voting advisory nature of the NAC;

(v) Any settlement or compromise of a claim in excess of $10 million but not in
excess of $30 million in connection with a dispute (whether or not involving
litigation) involving a U.S. or Canadian Governmental Authority, provided that
such settlement or compromise does not involve (1) an agreement to a consent
decree or agreement materially restricting and decreasing the value of the
lawful business of the Company, or (2) an admission of criminal liability on the
part of the Company or any of its Subsidiaries;

(vi) Any other issue reasonably determined by the Chairman in his prudent
exercise of discretion to be an exigent nuclear safety, security or reliability
issue; and

(vii) Staffing of key executive officer positions of the Company, and upon any
vacancy in the office of CEO, consideration of the second candidate nominated
for such position under Section 7.2(j);

and, notwithstanding 7.2(g), any such action approved pursuant to this
Section 7.3(c) shall constitute an action of the Board of Directors. The
Chairman’s casting vote shall not apply to any Tax matters.

(d) CEO. The CEO shall be a U.S. citizen. In the absence of the Chairman of the
Board, the CEO shall perform all duties of the Chairman of the Board but shall
not have a vote other than any vote he may have if he is otherwise a Director.
The CEO shall have the power and authority to operate the Company on a
day-to-day basis within the broad parameters set forth in the Annual Budget and
Strategic Plan, including the ability to sign contracts and take other actions
within the scope typically granted to a CEO of a business enterprise. The CEO
may sign and execute, in the name of the Company, all authorized deeds,
mortgages, bonds, contracts or other instruments, except in cases in which the
signing and execution thereof shall have been expressly delegated to some other
officer or agent of the Company; and, in general, he shall perform all duties
incident to the office of a president of a corporation, and such other duties as
are from time to time assigned to him by the Board of

 

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Directors. The CEO shall be responsible, in consultation with the Chief Nuclear
Officer, for appointing key executive officers at each Licensed Subsidiary, in
accordance with Section 7.9. The CEO (including any successor CEO) shall be
appointed by the Board of Directors and may be removed only by the Board of
Directors.

(e) Vice Chairman of the Board. The Vice Chairman shall be designated by the
EDFD Directors and shall have such powers and duties as may be assigned to him
by the Board of Directors. In no event shall the Vice Chairman have a casting
(deciding) vote.

(f) Vice Presidents. Each Vice President, if one is appointed, shall have such
powers and duties as may be assigned to him by the Board of Directors or the
Chairman of the Board. A Vice President may be designated by the Board of
Directors or the Chairman of the Board to perform, in the absence of the CEO,
all the duties of the CEO.

(g) Secretary. The Secretary shall attend all meetings of the Board of Directors
and shall notify the Directors of such meetings in the manner provided in this
Agreement. He shall record the proceedings of all such meetings in books kept
for that purpose. He shall have such other powers and duties as may be assigned
to him by the Board of Directors or the Chairman of the Board, as well as the
specific powers assigned by this Agreement.

(h) Treasurer. The Treasurer shall have the care and custody of the funds and
valuable papers of the Company, and shall receive and disburse all monies in
such manner as may be prescribed by the Board of Directors or the Chairman of
the Board. He shall have such other powers and duties as may be assigned to him
by the Board of Directors or the Chairman of the Board, as well as the specific
powers assigned by this Agreement.

(i) Assistant Officers. Each assistant officer can act in the place of the
person holding the office to which his position relates and perform all of the
duties of such officer, consistent with Applicable Law. In addition, he shall
have such powers as are from time to time assigned to him by the person holding
the office to which his position relates, the CEO, the Chairman of the Board or
the Board of Directors.

(j) Chief Nuclear Officer. The Chief Nuclear Officer of the Company shall be a
U.S. Citizen (not a dual national). The Chief Nuclear Officer shall be
responsible for operation of the Licensed Facilities of the Company and its
Subsidiaries. The Chief Nuclear Officer shall report directly to the CEO.

(k) Compensation. Subject to the limitations of the Annual Budget, officers of
the Company (other than the CEO) shall receive such compensation as shall be
determined by the CEO after consultation with the compensation committee.
Subject to the limitations of the Annual Budget, the CEO and any independent
Directors shall receive such compensation as shall be determined by the Board of
Directors (after receiving a recommendation from the compensation committee).

(l) Paramount Responsibility of Certain Officers. The Chairman of the Board of
Directors, the Company’s CEO and the Company’s Chief Nuclear Officer shall have
the responsibility and authority to ensure, and shall ensure, that the business
and activities of the

 

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Company and its Subsidiaries with respect to its Licensed Facilities are at all
times conducted in a manner consistent with the protection of the public health
and safety and common defense and security of the United States.

Section 7.4 Budget and Strategic Plan.

(a) Annual Budget and Strategic Plan. The initial annual operating budget for
the Company for the year in which the execution of this Agreement occurs shall
be the budget as in effect at such time, which is attached hereto as Exhibit B.
In the absence of contrary direction from the Board of Directors, the CEO shall
present to the Board, no later than the fourth quarter of each Fiscal Year
(beginning in the year of the execution of this Agreement), (i) an annual
operating budget for the Company for the following fiscal year (the “Annual
Budget”), (ii) an operating and capital expenditures budget for the Company for
the following three Fiscal Years (a “Three-Year Budget”), and (iii) a strategic
business and operating plan for the following three years (a “Strategic Plan”),
for the Company, its Subsidiaries and its Investee Companies for review and
approval by the Board. The Board will seek to approve the Annual Budget, the
Three-Year Budget and the Strategic Plan, in accordance with the requirements of
Section 7.2(j)(i), no later than the end of the calendar year with respect to
the following year’s budgets and Strategic Plan.

(b) Provisional Budget. If a proposed Annual Budget is not adopted by the Board
of Directors prior to the end of a fiscal year, then the Annual Budget
previously approved by the Board for the preceding Fiscal Year shall remain in
effect, after giving effect to any dispositions or other material changes to the
assets of the Company or any of its Subsidiaries during such Fiscal Year (the
“Provisional Budget”). Any items of the proposed Annual Budget that have been
approved will become operative. If the Board of Directors adopts an Annual
Budget prior to the end of such Fiscal Year, such Annual Budget shall then
become effective.

(c) A Provisional Budget shall be adjusted automatically for the following (to
the extent it does not already incorporate such item): (i) the budgeted amount
for any expenditures over which the Company, its Subsidiaries and its Investee
Companies have little or no control, such as real property Taxes, insurance
premiums, utility charges, interest and principal due on then-existing
indebtedness entered into in accordance with terms of this Agreement and amounts
payable pursuant to the terms of then-existing contracts by which the Company,
its Subsidiaries and relevant Investee Companies are bound (collectively,
“Non-Controllable Items”) shall be the amount required to pay such items, and
(ii) the budgeted amount for recurring capital expenditures and any other items
of expense that are not Non-Controllable Items shall be the applicable amount
set forth in the then most recently approved Annual Budget or, if not
represented in the Annual Budget, in the Three-Year Budget, such amounts in
(ii) above being adjusted for changes in inflation as reflected in the
appropriate price index for such item and/or locale.

(d) The Company and its Subsidiaries may make any expenditures that are
consistent with the Annual Budget or the Provisional Budget.

 

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(e) Notwithstanding the vote required to approve the Annual Budget, Three-Year
Budget and Strategic Plan as set forth in Section 7.2(j)(ii), to the extent a
Special Matter has been unanimously approved by the Board of Directors pursuant
to Section 7.2(j), the Annual Budget, Three-Year Budget and Strategic Plan shall
be considered to have been revised accordingly.

Section 7.5 Nuclear Advisory Committee. The Nuclear Advisory Committee (the
“NAC”) shall serve the Company in a non-voting advisory capacity, shall report
to and provide transparency to the NRC and other U.S. Governmental Authorities
regarding foreign ownership and control of nuclear operations. The NAC shall be
composed of U.S. citizens who are not officers, directors or employees of the
Company, EDFD or Constellation and shall be appointed by the Board of Directors.
Members of the NAC shall be appointed for a term of two years, at the end of
which they shall be reappointed or replaced by the Board of Directors. The
initial members of the NAC shall be composed of the individuals who, as of the
date hereof, serve on the Advisory Committee of Unistar Nuclear Energy, LLC
pursuant to the Unistar Nuclear Energy, LLC Operating Agreement, dated as of
July 20, 2007, by and among Constellation, EDFD and Unistar Nuclear Energy, LLC.
At least annually, the NAC shall prepare a report and supporting documentation
to be delivered to the Board of Directors, which report shall advise the Company
as to whether additional measures should be taken to ensure that the Company is
in compliance with U.S. laws and regulations regarding foreign domination or
control of nuclear operations and that a decision of a foreign government could
not adversely affect or interfere with the reliable and safe operation of any
nuclear assets of the Company, its Subsidiaries or Affiliates. In connection
with its duties, the NAC shall have the power and authority, at the Company’s
reasonable expense, to retain outside consultants, lawyers and accountants,
delegate matters to Company personnel and otherwise do such other acts as are
reasonably necessary or advisable to carry out its duties hereunder. The Board
of Directors may at reasonable times and upon reasonable cause request the NAC
to provide a justification or explanation regarding the expenses of the NAC. The
Board of Directors will have direct access to the NAC regarding issues
pertaining to foreign ownership and control of the Company. The NAC will advise
on and recommend appropriate additional policies to prudently assure the
Company’s continued compliance with provisions of U.S. law and regulations
regarding (i) nuclear security plans, including physical security and cyber
security; (ii) screening of nuclear personnel; (iii) protection of critical
nuclear infrastructures; and (iv) U.S. export regulations.

Section 7.6 Existing Nuclear Plant Subsidiaries. Each Licensed Subsidiary will
have a board of directors appointed by the Board of Directors of the Company in
accordance with Section 7.9. The Board of Directors of each Licensed Subsidiary
shall be appointed in accordance with Section 7.2(j).

Section 7.7 Liability and Indemnification.

(a) Liability for Certain Acts. Each Director and officer shall perform his
duties (i) in good faith; (ii) in a manner the person reasonably believes to be
in the best interests of the Company and (iii) with such care as an ordinarily
prudent person in a like position would use under similar circumstances.
Notwithstanding the foregoing, (1) Directors may vote or consent in accordance
with the direction of the Member appointing them, and shall not be held liable
to the Company or any Member for a breach of any obligation to the Company or a
Member when acting in accordance with any such directions and (2) the Directors
and officers shall not be liable to the Company or any Member for any action
taken or omission in

 

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managing the business or affairs of the Company if the Directors and officers
have the reasonable belief that such act or omission is in or is not contrary to
the best interests of the Company and is within the scope of authority granted
to them by the Agreement. In performing his duties, a Director or officer shall
be entitled to rely on any information, opinion, report, or statement, including
any financial statement or other financial data, prepared or presented by
(x) any officer (in the case of a Director) or any other officer (in the case of
an officer) or any employee of the Company whom the person reasonably believes
to be reliable and competent in the matters presented; (y) a lawyer, certified
public accountant, or other person, as to a matter which the person reasonably
believes to be within such person’s professional or expert competence; or
(z) with respect to a Director only, a committee of the Board of Directors on
which the Director does not serve, as to a matter within the committee’s
designated authority, if the Director reasonably believes the committee to merit
confidence. However, a Director or officer will not be acting in good faith if
he has any actual knowledge concerning the matter in question which would cause
such reliance to be unwarranted.

(b) Members. The Members shall not be engaged in the management of the Company,
and shall not be liable to the Company for any loss or damage sustained by the
Company except for (i) any loss or damage resulting from intentional misconduct
or knowing violation of Applicable Law, or (ii) liability for any breach of this
Agreement. To the fullest extent provided by law, no Member shall have any
fiduciary duty, duty of care or any other duty to any other Member or to the
Company; provided, however, that the foregoing shall not limit any Member’s
obligation under or liability for breach of the express terms of this Agreement
or the Master Agreement. The Members shall be entitled to rely on information,
opinions, reports or statements, including but not limited to financial
statements or other financial data, prepared or presented by any Director,
officer or any employee of the Company whom the person reasonably believes to be
reliable and competent in the matters presented, or any lawyer, certified public
accountant, or other person, as to a matter which the person reasonably believes
to be within such person’s professional or expert competence.

(c) Indemnification.

(i) The Company shall indemnify, advance expenses and hold each Director, each
officer and each member of the NAC harmless against any and all claims, actions,
demands, costs, expenses (including attorneys fees), damages and losses as a
result of any allegation, claim or proceeding relating to any act, decision or
omission concerning the activities of the Company and/or the authority granted
such person pursuant to this Agreement, except for fraud. The Board of Directors
may cause the Company to indemnify and advance expenses to other employees and
agents of the Company to the same or to a lesser extent as indemnification is
provided to the Directors, officers and members of the NAC. Any indemnification
and advancement of expenses provided by the Company shall inure to the benefit
of the heirs, executors, administrators, successors and assigns of the person
entitled to indemnification.

(ii) The foregoing rights of indemnification shall not be exclusive of any other
rights to which those seeking indemnification may be entitled.

 

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(iii) The Board of Directors may take such action as is necessary to carry out
these indemnification provisions and is expressly empowered to adopt, approve
and amend from time to time this Agreement, resolutions or contracts
implementing such provisions and to provide for any further indemnification
arrangements as may be permitted by law. No amendment of this Agreement or
repeal of any of its provisions shall limit or eliminate the right to
indemnification or advancement of expenses provided hereunder with respect to
any act or omission occurring prior to such amendment or repeal. The Company
may, if the Board of Directors deems it appropriate in its sole discretion,
obtain insurance for the benefit of the Board of Directors and the officers,
employees and agents of the Company.

(iv) Notwithstanding anything to the contrary contained herein, no person
serving as a Director, officer or member of the NAC shall be liable to the
Company or any Member for money damages except to the extent that (1) it is
proved that the person actually received an improper benefit or profit in money,
property, or services for the amount of the benefit or profit in money,
property, or services actually received, or (2) a judgment or other final
adjudication adverse to the person is entered in a proceeding based on a finding
in the proceeding that the person’s action, or failure to act, was the result of
active and deliberate dishonesty and was material to the cause of action
adjudicated in the proceeding. No amendment of this Agreement or repeal of any
of its provisions shall limit or eliminate the limitation on liability for money
damages provided to Directors, officers and members of the NAC hereunder with
respect to any act or omission occurring prior to such amendment or repeal.

(v) Notwithstanding anything to the contrary contained herein, the advancement
of expenses to any Person shall be conditioned upon the Person seeking such
advancement providing the Company (1) a written affirmation that the Person has
a good faith belief that the standard of conduct necessary for indemnification
as provided in this Section 7.7 has been met and (2) a written undertaking to
repay the amount advanced if it is ultimately determined that the standard of
conduct was not met.

Section 7.8 Member Approvals. The following actions will require approval by
written consent of each Member in addition to any approval required of the Board
of Directors:

(a) Approval of any amendment to this Agreement other than amendments expressly
permitted to be made by the Board of Directors pursuant to this Agreement;

(b) Transfer of a Membership Interest (except as expressly permitted by this
Agreement) or the admission of any Person as a Member (except for a transferee
pursuant to a transfer expressly permitted by this Agreement);

 

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(c) Approval of any amendment to the Company’s Articles of Organization; and

(d) Except as provided in this Section 7.8, no act of the Company requires the
unanimous consent of the Member. Accordingly, except as provided in this
Section 7.8, wherever the Act would otherwise require unanimous consent of the
Members to approve or take any action, such consent shall not be required.

Section 7.9 Staffing.

(a) Non-Discrimination Policy. The Members acknowledge that U.S. law and policy
require that certain activities of the Company remain under the control and
management of U.S. citizens and direct that the Company at all times comply with
such foreign ownership, control or influence limitations as have been
established by U.S. law, regulation or agreement with any Governmental
Authority. Without in any way diminishing the foregoing, it shall be the policy
of the Company to endeavor, to the maximum extent possible consistent with the
foregoing, to permit the involvement of Directors, executive officers, officers
and other personnel appointed, seconded, assigned or nominated by EDFD or any of
its Affiliates in accordance with this Agreement, the assignment and secondment
agreement or the technical services agreement to a position with the Company or
a Subsidiary of the Company, without regard to nationality. This policy shall be
subject to such exceptions as may be necessary or appropriate to avoid even an
appearance of foreign control or influence over such additional areas of the
Company’s business deemed sensitive by U.S. Governmental Authorities, but such
exceptions shall be subject to approval by the Board of Directors.

(b) Appointment of Employees. Each Member will agree to contribute adequate
staff for the management of the Company, its Subsidiaries and Investee Companies
in accordance with the Member’s special competencies, capabilities, the
requirements of Applicable Law, the regulatory strategy of the Company and other
agreements.

Section 7.10 Governance of Subsidiaries. Except as determined in accordance with
Section 7.2(j)(vi) and Section 7.6, the agreements regarding organization,
management and governance with respect to Subsidiaries and the responsibilities
of the Members with respect thereto shall be substantially equivalent to those
of the Company, with appropriate changes to reflect their positions as
Subsidiaries of the Company.

Section 7.11 Events of Default. Upon an Event of Default, the non-Defaulting
Member (the “Non-Defaulting Member”) may elect to transfer all or any portion of
its membership interests in the Company without regard to the requirements of
Section 9.3.

Section 7.12 Delegation of Financial Authority. The Company and its Subsidiaries
shall implement and operate pursuant to a written delegation of financial
authority (“DOFA”) policy, which shall be reviewed and approved periodically by
the Audit Committee of the Board of Directors.

 

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ARTICLE VIII

TAX MATTERS AND CAPITAL ACCOUNTS

Section 8.1 Tax Treatment. For U.S. federal income Tax purposes, pursuant to
Revenue Ruling 99-5, the sale by Constellation to EDFD of the Designated
Interest is treated as the purchase by EDFD of 49.99% of the assets of the
Company, immediately followed by a contribution by EDFD and Constellation of
their respective interests in those assets to the Company in exchange for
membership interests in the Company. Each of the Members intends for its initial
capital contribution to the Company to qualify as a tax-free contribution
pursuant to Section 721 of the Code. Upon such initial capital contribution, the
Company will be treated as a partnership for U.S. federal income Tax purposes,
and neither the Company nor either Member shall take any action or position that
is inconsistent with such classification.

Section 8.2 Tax Returns and Information.

(a) The Board of Directors shall cause to be prepared at the expense of the
Company and shall timely file or cause to be filed all required and necessary
Tax or information returns and all other filings for the Company which shall be
prepared by a nationally recognized accounting firm prepared in accordance with
Applicable Law. The Board of Directors shall cause, at the expense of the
Company, to be provided to each Member a copy of any Tax return or other
information statement reasonably required by such Member, including IRS Schedule
K-1 within ninety (90) Days after the end of the Fiscal Year (or as soon as
reasonably practicable thereafter) in order to properly comply with its Tax
filing requirements and shall cause to be provided to each Member all other
information as may be reasonably requested by such Member in order to enable
such Member (or the holder of a direct or indirect interest therein) to comply
with its Tax obligations, including without limitation copies of notices from
Tax authorities and other Tax-related information received by the Company. In
addition, the Company shall cause to be prepared any filings, applications or
elections necessary to obtain any available exemption from, or refund of, any
material withholding or other Taxes imposed by any non-U.S. (whether sovereign
or local) Taxing authority with respect to amounts distributable to the Members
pursuant to this Agreement, to the extent the Company can do so without
unreasonable effort or expense. Each Member agrees that it will cooperate with
the Company in making any such filings, applications or elections to the extent
the Company determines that such cooperation is necessary or desirable. If
either Member must make any such filings, applications or elections directly,
the Company, at the request of such Member shall provide such information and
take such other action as may reasonably be necessary to complete or make such
filings, applications or elections, to the extent the Company can do so without
unreasonable effort or expense. The Company shall distribute any amounts
received as refunds of such non-U.S. Taxes to the Members in respect of which
such non-U.S. Taxes were imposed. Any refunds of such non-U.S. Taxes received by
the Company or a Member shall be treated as an additional distribution pursuant
to Section 6.1 unless such amounts were already treated as having been
distributed to such Member. In the event that a Member makes a request for a
refund of non-U.S. Taxes previously paid by such Member or the Company, a copy
of the request shall be sent by the Member to the Company.

 

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(b) The Company shall deliver to EDFD and Constellation a draft IRS Form 1065
and drafts of any other state income Tax returns, 30 days prior to the date on
which the relevant return is to be filed (including extensions). Each of EDFD
and Constellation shall have the right within 15 days of receipt of the draft
return to deliver a notice (an “Objection Notice”) to the Company stating that
EDFD, or Constellation (as may be the case) objects to any information contained
on or omitted from any draft Company tax return and setting forth an alternative
treatment of the item or items disputed. If EDFD or Constellation files an
Objection Notice, the Board of Directors shall negotiate in good faith to
resolve the item or items disputed. If EDFD or Constellation (as the case may
be) and the Board of Directors fail to resolve any disputed item, the Company
shall file the Company Tax Return in a manner consistent with the draft Company
Tax Return provided to EDFD and Constellation.

Section 8.3 Tax Matters Partner and Elections.

(a) The Members agree and consent that Constellation may, on behalf of the
Company, at any time, and without further notice to or consent from either
Member act as the tax matters partner within the meaning of Section 6231(a)(7)
of the Code for U.S. Federal income, state or local tax purposes.

(b) All material Tax decisions and other matters not specifically and expressly
provided for by the terms of this Agreement concerning accounting procedures and
the allocation of profits, gains, deductions, losses and credits among the
Members (including, but not limited to, elections under Section 754 of the Code,
or special allocations under Section 704(c) of the Code), shall be determined by
the Board of Directors in good faith. Such determinations made in good faith by
the Board of Directors shall, in the absence of manifest error, be final as
applied to all Members. The Tax Matters Partner shall, after any such
determinations are made, file any elections or forms or documents with the IRS
in accordance with these determinations, and shall otherwise take reasonable
action with respect to any remaining Tax matters as may from time-to-time be
required or advisable under the Treasury Regulations or other Applicable Law.

Section 8.4 Capital Accounts.

(a) “Capital Account” means, with respect to any Member, the Capital Account the
Company shall maintain for such Member in accordance with the following
provisions:

(i) Each Member’s Capital Account shall be increased by the amount of any money
and the Gross Asset Value of any other property contributed to the Company by
such Member (net of liabilities secured by contributed property that the Company
is considered to assume or take subject to under Section 752 of the Code), as
may be adjusted pursuant to a revaluation, as well as any Net Income allocated
to such Member pursuant to this Section 8.4 and the amount of any Company
liabilities assumed by such Member or secured by any Company assets distributed
to such Member.

 

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(ii) Each Member’s Capital Account shall be decreased by the amount of money and
the Gross Asset Value of any other Company property distributed to such Member
pursuant to any provision of this Agreement, any Net Losses allocated to such
Member pursuant to this Section 8.4 (including the Member’s share of
expenditures described in Section 705(a)(2)(B) of the Code) and the amount of
any liabilities of such Member assumed by the Company.

(iii) In the event any Member’s Membership Interest (or portion thereof) is
transferred in accordance with the terms of this Agreement, the transferee shall
succeed to the Capital Account of such Member to the extent such Capital Account
relates to the transferred Membership Interest (or portion thereof) and the
Company’s Net Income and Net Loss shall be allocated between the transferor and
the transferee on a basis consistent with applicable requirements under
Section 706 of the Code; provided that no allocation agreed to between the
transferor and the transferee shall be effective unless (A) the transferor and
the transferee shall have given the Company written notice, prior to the
effective date of such Transfer, stating their agreement that such allocation
shall be made on a certain basis consistent with the applicable requirements
under Section 706 of the Code, (B) the Tax Matters Partner shall have consented,
in its sole discretion, to the manner the transferor and transferee have agreed
to with respect to such allocation and (C) the transferor and the transferee
shall have agreed to reimburse the Company for any incremental accounting fees
and other expenses incurred by the Company in making such allocation.

(b) For Capital Account purposes, after giving effect to the special allocations
required by this Agreement (including pursuant to Sections 6.3, 8.4(e), (f),
(g), and (h), if any, Net Income and Net Loss of the Company for each Fiscal
Year (or shorter tax accounting period selected by the Tax Matters Partner or as
required by law) shall be allocated among the Members, based on their Percentage
Interest.

(c) For U.S. federal, state and local income Tax purposes, items of income,
gain, loss, and deduction shall be allocated to the Members in accordance with
the allocations of the corresponding items for Capital Account purposes under
this Section 8.4, except that each Member’s allocable share of each item of
income, gain, loss and deduction shall be adjusted to reflect the difference
between such Member’s share of the adjusted tax basis and the Gross Asset Value
of each of the Company assets, and the Board of Directors shall specially
allocate any adjustments pursuant to Section 482 of the Code, if any, to the
Members that may be subject to such potential adjustments. The adjusted Tax
basis and the Gross Asset Value (for the Company) of the Initial Capital
Contributions of the Company assets are indicated in Exhibit A (as it may be
amended or supplemented from time-to-time). The Company shall elect to use the
“Traditional Method” of making tax allocations described in Treasury Regulations
Section 1.704-3 with respect to Company assets, unless the Board of Directors
elects otherwise. This provision is intended to comply with the requirements of
Section 704(c) of the Code, the Treasury Regulations thereunder, and Treasury
Regulations Section 1.704-1(b)(4)(i) and shall be interpreted as in conformity
therewith. Credits (including without limitation credits under Section 45J of
the Code) shall be allocated among the Members in accordance with their
respective Percentage Interests.

 

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(d) The provisions of this Section 8.4 and the other provisions of this
Agreement relating to the maintenance of Capital Accounts are intended to comply
with the rules of Treasury Regulations Section 1.704 and shall be interpreted
and applied in a manner consistent with such Regulations. The Board of Directors
shall be authorized to make appropriate amendments to the allocations of items
pursuant to this Section 8.4 if necessary in order to comply with Section 704 of
the Code or applicable Treasury Regulations thereunder.

(e) In the event the Company incurs any nonrecourse liabilities within the
meaning of Treasury Regulations Section 1.704-2(b)(3), income and gain shall be
allocated in accordance with the “minimum gain chargeback” provisions of
Sections 1.704-1(b)(4)(iv) and 1.704-2 of the Treasury Regulations.

(f) In the event either Member unexpectedly receives any adjustments,
allocations, or distributions described in Treasury Regulations Sections
1.704-1(b)(2)(ii)(d)(4), (5) and (6), items of Company income and gain shall be
specially allocated to such Member in an amount and manner sufficient to
eliminate as quickly as possible any deficit balance in its Capital Account in
excess of that permitted under Section 8.4(g) created by such adjustments,
allocations or distributions. Any special allocations of items of income or gain
pursuant to this Section 8.4(f) shall be taken into account in computing
subsequent allocations pursuant to this Section 8.4 so that the net amount of
any items so allocated and all other items allocated to each Member pursuant to
this Section 8.4 shall, to the extent possible, be equal to the net amount that
would have been allocated to each such Member pursuant to the provisions of this
Section 8.4 if such unexpected adjustments, allocations or distributions had not
occurred.

(g) Notwithstanding any provision set forth in this Section 8.4, no item of
deduction or loss shall be allocated to a Member to the extent the allocation
would cause a negative balance in such Member’s Capital Account (after crediting
to such Capital Account any amounts that such Member is deemed to be obligated
to restore pursuant to Treasury Regulations Sections 1.704-2(g) and
1.704-2(i)(5), and after taking into account the adjustments, allocations and
distributions described in Treasury Regulations Sections
1.704-1(b)(2)(ii)(d)(4), (5) and (6)) that exceeds the amount that such Member
would be required to reimburse the Company pursuant to this Agreement or under
Applicable Law. In the event either but not both of the Members would have such
excess Capital Account deficits as a consequence of such an allocation of loss
or deduction, the limitation set forth in this Section 8.4(g) shall be applied
on a Member by Member basis so as to allocate the maximum permissible deduction
or loss to each Member under Section 1.704-1(b)(2)(ii)(d) of the Treasury
Regulations. In the event any loss or deduction shall be specially allocated to
a Member pursuant to either of the two preceding sentences, an equal amount of
income of the Company shall be specially allocated to such Member prior to any
allocation pursuant to Section 8.4(b).

(h) Any partner “nonrecourse deductions” within the meaning of Treasury
Regulations Sections 1.704-2(b)(1) and 1.704-2(b)(4) shall be allocated as
provided in the applicable Treasury Regulations.

(i) The Capital Accounts of the Members may be adjusted at the Board of
Director’s discretion in accordance with Treasury Regulations
Section 1.704-1(b)(2)(iv)(f) to reflect the fair market value of Company
property (i) whenever a Membership Interest in the

 

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Company is relinquished to the Company, (ii) whenever a new or existing Member
acquires an interest in the Company in exchange for more than a de minimis
Capital Contribution, (iii) upon any termination of the Company within the
meaning of Section 708 of the Code, and (iv) when the Company is liquidated
pursuant to Article XI, and shall be adjusted in accordance with Treasury
Regulations Section 1.704-1(b)(2)(iv)(e) in the case of a distribution of any
property (other than cash) to a Member.

Section 8.5 Consistent Tax Treatment. Each Member agrees that without the prior
written consent of the Company, approved by the Board of Directors, it shall not
(i) treat on its own income Tax returns or any other Tax-related filings, any
item of income, gain, loss, deduction or credit relating to its Membership
Interests in a manner inconsistent with the terms of this Agreement or the
treatment of such items by the Company as reflected on the Tax return or other
information statements furnished to such Member pursuant to Section 5.4 hereof,
or (ii) file any claim for a refund relating to any such item based on, or which
would result in, such inconsistent treatment, or take any other inconsistent
action (an “Inconsistent Position”). Notwithstanding the foregoing sentence, a
Member shall be allowed to take an Inconsistent Position, if (i) it obtains a
written opinion from nationally recognized counsel approved by the Company that
the treatment adopted by the Company is not consistent with law, (ii) notifies
the Company in writing in advance and attaches a copy of such opinion to such
notice, and (iii) discusses its position in good faith with the Company. Nothing
in this Article VIII shall limit the ability of either Member to take any
position in its individual capacity relating to any audit or other
administrative proceedings of Company matters that is left to the determination
of any individual Member under the Code or under any similar state or local
provision.

ARTICLE IX

TRANSFER OF MEMBERSHIP INTERESTS

Section 9.1 Restrictions Applicable to All Transfers by the Members.

(a) Each Member agrees with the other Member and the Company that such Member
shall not Transfer to any Person (a “Transferee”) all or any portion of its
Membership Interests except as hereinafter expressly permitted in this Article
IX (each such permitted Transfer, a “Permitted Transfer”), provided, however,
that this Section 9.1, Section 9.2 and Section 9.3 shall not apply to a Transfer
resulting from a Change of Control of Constellation or of Électricité de France,
S.A.or Transfers of capital stock or other equity interests of Constellation or
of Électricité de France, S.A. Any purported Transfer of Membership
Interests other than a Permitted Transfer shall be null and void.

(b) No Member shall Transfer any of its Membership Interests at any time unless
such action would not:

(i) constitute a violation of any Applicable Laws of any jurisdiction or a
breach of the conditions to any exemption from registration of securities under
any Applicable Law or a breach of any undertaking or agreement of such Member
entered into pursuant to any Applicable Law or in connection with obtaining an
exemption thereunder;

 

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(ii) affect the Company’s existence or qualification as a limited liability
company under the Act or any other Applicable Law that is or might be applicable
to the Company;

(iii) in the opinion of nationally recognized counsel, render the Company a
publicly traded partnership under Sections 7704 or 469 of the Code, or otherwise
cause it to be an association taxable as a corporation for U.S. federal income
Tax purposes; or

(iv) cause the Company to be terminated under Section 708(b)(1)(B) of the Code
(unless this restriction is waived by the other Member).

(c) Each Transferee of Membership Interests that is not already a Member shall
execute, and deliver to each Member and the Company, a counterpart of this
Agreement. Each such Transferee of Membership Interests shall thereafter be
deemed to be a Member hereunder and shall have the benefit of, and be subject
to, all of the rights, obligations and limitations with respect to such
Transferred Membership Interests (including the restrictions on Transfers set
forth in this Article IX) to the same extent as the transferring Member under
this Agreement; provided, that in the event of a Transfer by a Member to an
Affiliate (whether or not a Permitted Transferee), such Member shall not be
relieved of its obligations hereunder unless the Transfer has been approved by
the Company and the other Member. With respect to Transfers to Affiliates, no
such Transfer shall be effective unless, as a condition to the Transfer, such
Affiliate agrees that it will not cease to be an Affiliate of such Member,
unless prior to ceasing to be an Affiliate, such Affiliate Transfers to such
Member or another Affiliate thereof all of the Membership Interests then owned
by such Affiliate.

(d) No Transfer of Membership Interests hereunder shall release the transferring
Member from any liability or obligation it may have hereunder with respect to
liabilities and obligations incurred prior to the date of such Transfer or with
respect to Membership Interests that it continues to own after the date of such
Transfer.

(e) Each certificate, if any, evidencing any Membership Interests owned by
either Member on the date hereof, or hereafter acquired by either Member, shall
contain the following restrictive legend:

THE SALE, ASSIGNMENT, TRANSFER OR OTHER DISPOSITION OF THE SECURITIES EVIDENCED
BY THIS CERTIFICATE IS RESTRICTED BY THE TERMS OF THE SECOND AMENDED AND
RESTATED OPERATING AGREEMENT OF CONSTELLATION ENERGY NUCLEAR GROUP, LLC, A
MARYLAND LIMITED LIABILITY COMPANY, DATED AS OF [            ], COPIES OF WHICH
ARE ON FILE WITH THE ISSUER OF THIS CERTIFICATE. NO SALE, ASSIGNMENT, TRANSFER
OR OTHER DISPOSITION SHALL BE EFFECTIVE UNLESS AND UNTIL THE TERMS AND
CONDITIONS OF THE AFORESAID OPERATING AGREEMENT SHALL HAVE BEEN COMPLIED WITH IN
FULL.

 

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THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, UNDER THE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR UNDER THE SECURITIES LAWS OF ANY OTHER
JURISDICTION; AND SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED UNLESS (I) A
REGISTRATION STATEMENT COVERING SUCH SECURITIES IS EFFECTIVE UNDER THE
SECURITIES ACT OF 1933 OR (II) THE TRANSACTION IS EXEMPT FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933 AND, IF THE COMPANY REQUESTS, AN OPINION SATISFACTORY
TO THE COMPANY TO SUCH EFFECT HAS BEEN RENDERED BY COUNSEL.

In the event the requirement that all or any part of the restrictive legend
above be placed upon a certificate has terminated, or in the event that the
Board of Directors determines it is advisable to remove, replace or modify such
restrictive legend (based on the advice of competent outside legal counsel), the
Company shall provide each Member and any other Person that owns any such
securities, at its request, without any expense (other than applicable transfer
Taxes and similar governmental charges, if any), with new certificates, if any,
for such securities of like tenor either (i) not bearing the legend with respect
to which the restriction has ceased and terminated, and/or (ii) bearing such
additional and/or modified restrictive legends as the Board of Directors
determines advisable based on the above-mentioned legal advice.

Section 9.2 Permitted Transfers.

(a) At any time, a Member may Transfer its Membership Interests if the Transfer
otherwise complies with the following terms and conditions:

(i) such Member shall have delivered a Transfer Notice in accordance with
Section 9.3(a) (except in the case of a Transfer to a Permitted Transferee
pursuant to this Section 9.2);

(ii) the Member delivering the Transfer Notice has complied with the right of
first offer provisions in Section 9.3 and otherwise shall comply with
Section 9.1;

(iii) such Transfer would not, in the reasonable view of the non-transferring
Member, create a regulatory challenge or restriction that has the potential to
materially disrupt operation of the Company or its Subsidiaries;

(iv) such Member and its Transferee execute, acknowledge, and deliver to the
Company such instruments of Transfer and assignment with respect to such
Transfer as are in form and substance reasonably satisfactory to the Company,
including without limitation, the execution of this Agreement;

(v) the Company has determined, at such Member’s expense, that the Transfer
would not violate Section 9.1(b);

 

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(vi) such Member provides the Company with the notification required by
Code §6050K(c)(1); and

(vii) all costs and expenses incurred by the Company in connection with the
Transfer of Membership Interests shall be paid by the transferring Member or by
the Transferee.

(b) Notwithstanding anything in Section 9.2(a) to the contrary, a Member may
Transfer all or any portion of its Membership Interests to Permitted Transferees
of the Member at any time and without being subject to the right of first offer
provisions in Section 9.3, but subject to compliance with clauses (a)(iii),
(a)(iv), (a)(v) and (a)(vi) of this Section 9.2.

(c) In the event the conditions set forth in Section 9.2(a) above are not
satisfied in connection with any Transfer subject thereto, the Transfer shall be
null and void ab initio, the Company shall not recognize the attempted
purchaser, assignee, or Transferee for any purpose whatsoever, and the Member
attempting such Transfer shall have breached this Agreement, for which the
Company and the other Members shall have all remedies available under Applicable
Law. Each Member specifically acknowledges that a breach of this Article IX
would cause the Company and the Member to suffer immediate and irreparable harm,
which could not be remedied by the payment of money. In the event of a breach or
threatened breach by a Member of the provisions of this Article IX, the Company
or other Member shall be entitled to injunctive relief to prevent or end such
breach. Nothing herein shall be construed to prevent the Company or other Member
from pursuing any other remedies available to it for such breach or such
threatened breach, including the recovery of damages, reasonable attorneys’ fees
and expenses. A Transferee shall automatically be admitted as a Member of the
Company with respect to the transferred Membership Interest upon consummation of
the Transfer in compliance with this Article IX.

Section 9.3 Right of First Offer.

(a) Except in the case of a Transfer to a Permitted Transferee pursuant to
Section 9.2, prior to the Transfer of Membership Interests, the Member proposing
to Transfer all or any portion of its Membership Interest (the “Offering
Member”) must deliver a Transfer Notice to the other Member at least sixty
(60) Days but no more than ninety (90) Days prior to the proposed Transfer. The
other Member shall have the option to purchase (or to designate a third party to
purchase) all of the Membership Interests proposed to be Transferred for the
cash purchase price set forth in the Transfer Notice and pursuant to the other
terms and conditions set forth in this Agreement. The other Member shall have
sixty (60) Days from receipt of the Transfer Notice in which to exercise its
option to purchase (or to designate a third party to purchase) all of the
Membership Interests pursuant to this Section 9.3(a) by providing written notice
of exercise of the option to the Offering Member and to the Company.

(b) In the event that at the end of the sixty (60) Day period contemplated by
Section 9.3(a), the other Member has not elected to purchase or (or to designate
a third party to purchase) all of the Membership Interests proposed to be
Transferred, then the Offering Member shall be free to consummate the
transaction described in the Transfer Notice, provided that within sixty
(60) Days after the end of the sixty (60) Day period contemplated by

 

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Section 9.3(a), a definitive agreement is executed for the sale of such
Membership Interests, and the terms and conditions (including price) in such
agreement are no more favorable to the purchaser than those set forth in the
Transfer Notice. In the event a Member exercises the option to purchase (or to
designate a third party to purchase) under Section 9.3(a), but such Member (or
its designee, if applicable) fails to tender the required consideration at the
closing, in addition to being entitled to complete the proposed transaction, the
transferring Member shall have all rights and remedies against the other Member
(and its designee, if applicable) available for breach of contract.

(c) The parties shall use their reasonable efforts to close any purchase under
Section 9.3 as promptly as possible after (i) the other Member provides written
notice of the exercise of its option under Section 9.3(a), or (ii) the Offering
Member executes a definitive agreement as contemplated by Section 9.3(b), as
applicable. At the closing, the Offering Member shall deliver to the purchaser
an executed assignment of the subject Membership Interest satisfactory in form
to counsel for the Company, and the purchaser shall deliver the purchase price
in cash or immediately available funds. The Offering Member and the purchaser
each shall execute and deliver such other documents as may reasonably be
requested by the other. If the closing of any purchase by the other Member (or
its designee, if applicable) under Section 9.3(a) does not occur within one year
of the expiration of the sixty (60) Day period contemplated by Section 9.3(a),
then the right to close on the purchase shall lapse and the Offering Member may
sell the Membership Interests proposed to be Transferred in accordance with
Section 9.3(b) (on terms and conditions (including price) no more favorable to
the purchaser than those set forth in the Transfer Notice).

Section 9.4 Change of Control of a Member. If either Member should undergo a
Change of Control, then the other Member may elect to transfer all or any
portion of its Membership Interests in the Company without regard to the
requirements of Section 9.3. In the event of a Change of Control of
Constellation Energy Group, Inc., certain provisions of Article II and Article
III of, and as specified in, the Amended and Restated Investor Agreement, dated
as of             , 200  , by and between Électricité de France International,
SA and Constellation Energy Group, Inc. shall terminate and shall be of no
further force and effect, as provided for therein.

ARTICLE X

CERTAIN OBLIGATIONS OF THE COMPANY AND THE MEMBERS

Section 10.1 Preemptive Rights.

(a) If the Company offers to issue or sell any New Securities in accordance with
Section 7.2(j)(vii), each Member shall have the right (exercisable for a period
of not less than thirty (30) Days after notice to the other Member of the intent
to issue such New Securities and the terms (including the minimum price) of such
proposed issue (the “Preemptive Notice”)) to subscribe to all or any portion of
such New Securities on the same terms and conditions and for the same price per
New Securities as the Company proposes to issue or sell such New Securities. If
both Members exercise this right, the purchase of New Securities shall be in
such proportion as they agree, or failing an agreement, each shall have the
prior right to purchase a pro-rata portion based on their Percentage Interests
and a secondary right to purchase any New Securities not purchased by the other
Member exercising its full prior right.

 

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(b) “New Securities” shall mean any direct equity or ownership interest of any
kind in the Company, whether now or hereafter authorized, and rights, options or
warrants to purchase such an interest, and securities of any type whatsoever
that are, or may become, convertible into such an interest in the Company;
provided, however, that “New Securities” shall not include:

(i) Equity or ownership interests issued in connection with the acquisition of
another business entity or line of business of another business entity by the
Company through merger, consolidation, purchase of all or substantially all of
the assets, or other reorganization as a result of which the Company owns not
less than 51% of the voting power of such entity; provided, that any dilution to
the Membership Interests of the Members resulting from the issuance of such
securities shall be borne by the Members, pro rata, in proportion to their
Percentage Interests; or

(ii) Equity or ownership interests issued in connection with any
recapitalization, reclassification or similar event by the Company; provided,
that any dilution to the Membership Interests of the Members resulting from such
recapitalization, reclassification or similar event shall be allocated among the
Members, pro rata, in proportion to their Percentage Interests.

(c) Following the completion of the decision period for the Members to exercise
their preemptive rights pursuant to this Section 10.1, the Company shall have
the right, for a period of one hundred and eighty (180) Days, to sell any New
Securities not purchased by the Members, on terms and conditions no more
favorable to the purchaser than those specified in the Preemptive Notice,
including with respect to the price per New Security. Thereafter, any issuance
or reissuance of New Securities shall be subject to the provisions of this
Section 10.1.

Section 10.2 Related Party Transactions.

(a) Subject to Section 7.2(j), to the extent either Member or an Affiliate of
either Member provides assigned or seconded personnel or administrative services
to the Company, such services shall be priced at Unburdened Cost.

(b) To support the operations of the Company in areas in which it needs
additional resources, the parties shall negotiate in good faith the necessary
agreements to govern the assignment and secondment of personnel employed by the
Members to the Company and the provision of administrative services to the
Company.

Section 10.3 Power Marketing. The Company shall market the capacity, energy and
ancillary services generated by the nuclear generation facilities owned in whole
or in part by the Company, its Subsidiaries and Investee Companies through
Constellation’s established energy marketing Affiliate (“Constellation
Marketing”) and shall evaluate alternative approaches to marketing of as set
forth on Exhibit C.

 

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ARTICLE XI

CORPORATE OPPORTUNITIES AND NON-SOLICITATION

Section 11.1 Corporate Opportunities. Except as specifically provided in Unistar
Nuclear Energy, LLC Operating Agreement, dated as of July 20, 2007, by and among
Constellation, EDFD and Unistar Nuclear Energy, LLC, neither the Company nor any
Member shall have any expectation or interest in any business opportunity that
is presented to any of the Members or any of their respective officers,
directors or employees or designees to the Board, unless, in the case of any
such person who is a director or officer of the Company, such business
opportunity is expressly offered to such director or officer in his or her
capacity as a Company director or officer. Each of the Members and their
Affiliates shall be expressly permitted to acquire and hold any debt securities
or evidence of indebtedness issued by the Company or its Affiliates.

Section 11.2 Non-Solicitation. From and after the date hereof through the date
such Member no longer owns any Membership Interests, and other than expressly
set forth herein or in any ancillary agreement hereto, neither Member or its
Affiliates shall, directly or indirectly, solicit, induce, encourage or attempt
to persuade any employee of the Company, its Subsidiaries, the Members or their
Affiliates (a) to leave his employment with the Company, its Subsidiaries, the
Members or their Affiliates in order to become an employee, consultant or
independent contractor to or for any other Person or (b) to terminate or
adversely modify such employee’s relationship with the Company, its
Subsidiaries, the Members or their Affiliates; provided, however, that this
Section 11.2 shall not restrict an employer from publishing or posting open
positions in the course of normal hiring practices that are not specifically
sent to, or do not specifically target, employees of the Company, its
Subsidiaries, the Members or their Affiliates.

ARTICLE XII

WITHDRAWAL, DISSOLUTION AND LIQUIDATION

Section 12.1 No Right of Withdrawal; No Interest.

(a) Except as otherwise provided herein, no Member shall have the right to
withdraw from the Company or to demand or to receive the return of all or any
part of its Capital Account. In the event a Member withdraws in violation of
this Section 12.1(a), such Member hereby agrees that such withdrawal will
constitute a breach of this Agreement and such Member also agrees that the
Company, in addition to any remedies otherwise available to the Company, may
offset any damages due to such breach against any amounts otherwise
distributable to such Member. Subject to the foregoing, upon withdrawal by any
Member, such Person shall not be entitled to receive any monies or property for
its Membership Interest and the withdrawn Member or the successor to the
withdrawn Member shall be deemed to be an assignee of the withdrawn Member under
Sections 4A-603 and 4A-604 of the Act.

 

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(b) Except as otherwise provided herein, no interest shall be paid to either
Member in respect of its Capital Contribution or Capital Account balance. Except
as otherwise provided in this Agreement, no Member shall be entitled or
permitted to withdraw any Capital Contributions or any money or other property
from the Company without the written consent of the Board of Directors which
consent may be withheld for any reason or for no reason. If circumstances
require a return of any capital, no Member shall have the right to receive
property other than cash, unless otherwise specifically agreed in writing by the
Board of Directors at the time of such distribution.

Section 12.2 Terminating Event.

(a) Notwithstanding anything to the contrary contained in this Agreement, upon
the occurrence of a Terminating Event with respect to a Member, the Member shall
immediately notify the Company, and the Company, for one hundred and twenty
(120) days after it first learns of such Terminating Event, may elect to
purchase (the “Repurchase Election Period”) such Member’s entire Membership
Interest in the Company (the “Withdrawal Interest”) from such Member or such
Member’s legal or personal representative(s) or successor(s) (as applicable)
(individually and collectively, the “Withdrawn Member”) for a price equal to the
Fair Market Value of the Withdrawal Interest (the “Redemption Price”). If the
Company timely makes that election, the Company shall purchase from the
Withdrawn Member, and the Withdrawn Member shall sell to the Company, the
Withdrawal Interest at the Redemption Price and on the terms set forth in the
next paragraph. If the Company does not elect to purchase the Withdrawal
Interest at the Redemption Price and on the terms set forth in the next
paragraph, then, unless the Board of Directors determines otherwise, the
Withdrawn Member, effective as of the occurrence of the Terminating Event, shall
be and shall only have the rights of an unadmitted assignee under Section 4A-603
and Section 4A-604 of the Act.

(b) The closing for any sale of a Withdrawal Interest of a Withdrawn Member, and
purchase by the Company, shall take place at the Company’s principal office on
the tenth Business Day following the end of the Repurchase Election Period. At
the closing, (i) the Withdrawn Member shall assign and transfer to the Company
all right, title, and interest in and to the Withdrawal Interest (free and clear
of all liens and encumbrances) and shall execute and deliver to the Company such
other and further assurances as the Board of Directors may reasonably require to
transfer to and vest the Withdrawal Interest in the Company, and (ii) the
Company shall pay the Redemption Price in cash.

Section 12.3 Dissolution. The Company shall be dissolved and its affairs wound
upon the occurrence of any of the following events:

(a) upon a sale or condemnation of all or substantially all of the equity
securities or the assets of the Subsidiaries of the Company and the receipt of
cash consideration therefor;

(b) upon an affirmative vote of the Board of Directors in accordance with
Section 7.2(j)(xii);

(c) upon the appointment of a trustee, custodian or other similar receiver for
the Company or the occurrence of a Bankruptcy Event with respect to the Company;

 

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(d) the filing by the last remaining Member of a petition in bankruptcy, the
occurrence of any other Bankruptcy Event with respect to such last remaining
Member or the termination of the legal existence of the last remaining Member;

(e) at any time that there are no Members of the Company, unless the business of
the Company is continued without dissolution in a manner permitted by the Act;
or

(f) upon the entry of a decree of judicial dissolution of the Company pursuant
to the Act.

Section 12.4 Winding Up.

(a) Upon dissolution pursuant to Section 12.3, the Board of Directors shall
proceed as promptly as practicable to wind up the affairs of the Company and
distribute the assets thereof or appoint one or more liquidating trustees to do
so; provided, that the assets of the Company shall be liquidated in an orderly
and businesslike manner so as not to obtain less than fair market value
therefor. The appointment of any one or more liquidating trustees may be
revoked, or a successor or additional liquidating trustee(s) may be appointed,
by the Board of Directors.

(b) Upon dissolution pursuant to Section 12.3, all of the Company’s assets, or
the proceeds therefrom, shall be distributed in the following order of priority:

(i) first, to creditors of the Company, including either Member in its capacity
as creditor, to the extent otherwise permitted by law, in satisfaction of debts,
liabilities and obligations of the Company;

(ii) second, to the payment of the expenses of liquidation;

(iii) third, to the setting up of any reserves that the Board of Directors or
the liquidating trustee(s), as the case may be, may deem reasonably necessary
for any contingent, conditional or unmatured claims and obligations of the
Company; and

(iv) fourth, to the Members, in accordance with their Percentage Interests.

(c) At no time during the term of the Company or upon dissolution or liquidation
of the Company shall a Member with a deficit balance in its Capital Account have
any obligation to the Company or to the other Members to restore such deficit
balance, except as may be required by Applicable Law or in respect of any
deficit balance resulting from a distribution made in contravention of this
Agreement.

(d) Upon compliance with the distribution plan set forth herein, the proper
officers of the Company shall execute, acknowledge and cause to be filed with
the Department of Assessments and Taxation of the State of Maryland Articles of
Cancellation of the Company. Subject to the provisions of the Act, upon the
filing of Articles of Cancellation, the Company’s existence shall terminate.

 

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ARTICLE XIII

GENERAL PROVISIONS

Section 13.1 Notices. All notices, requests, consents, agreements or other
communications under this Agreement must be in writing to be effective and,
except as set forth in Section 7.2(f), will take effect (or be deemed to have
been given or delivered, as the case may be): (a) on the Business Day sent, when
delivered by hand or facsimile transmission (with confirmation) during normal
business hours of the recipient, or (b) on the Business Day following the
Business Day of sending, if delivered by internationally recognized overnight
courier, in each case, to such party at its address (or number) set forth below
or such other address (or number) as the party may specify by notice. Any new
Member of the Company admitted pursuant to Article IX hereof, promptly upon its
admission, shall provide its address for notices to the Secretary of the Company
and to the other Members.

If to Constellation:

Constellation Energy Group, Inc.

750 East Pratt Street, 17th Floor

Baltimore, Maryland 21202

Attention: General Counsel

Phone: (410) 470-3011

Fax: (410) 470-5766

If to EDFD:

EDF Development Inc.

c/o Électricité de France International, S.A.

20 Place de la Défense

Paris la Défense Cedex, France 92050

Attention: Marianne Laigneau

Phone: +33 1 56 65 39 71

Fax: +33 1 40 42 61 67

If to the Company:

Constellation Energy Nuclear Group, LLC

750 East Pratt Street, 17th Floor

Baltimore, Maryland 21202

Attention: General Counsel

Phone: (410) 470-3312

Fax: (443) 213-3680

Section 13.2 Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the Members and the Company, and their respective
successors and Permitted Transferees. This Agreement is personal to the Members
and the Company, and no Member or the Company may assign or Transfer (except in
connection with Permitted

 

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Transfers) the rights accruing hereunder nor (except as aforesaid or as
permitted by this Agreement) may performance of any duties by either Member or
the Company be delegated or assumed by any other Person without the prior
written consent of the other Members and the Company. Assignments or delegations
made in violation of this Section 13.2 shall be null and void.

Section 13.3 Parallel Vehicle. If the Company encounters legal, Tax, business,
accounting, regulatory or other impediments to the making of a potential
investment, or the Company determines that having the Members make a potential
investment or hold an existing investment through an entity other than the
Company would be more favorable from a Tax, legal, business, accounting,
regulatory or other perspective, the Company may require such Members to
participate in the potential or existing investment, as the case may be, through
one or more other entities organized by or on behalf of the Company or the
Members and having economic terms and conditions substantially identical (on a
single investment basis, if applicable), to the extent practicable, to those of
the Company (the “Parallel Vehicle”). The agreements regarding organization,
management and governance with respect to the Parallel Vehicle and the
responsibilities of the Members with respect thereto shall be substantially
equivalent to those of the Company, with appropriate changes to reflect its
position as a parallel vehicle of the Company.

Section 13.4 Dispute Resolution.

(a) In the event of a deadlock vote of the Board of Directors on a matter
presented for determination, a failure of the Members to agree on a matter
requiring Member approval under Section 7.8 or requiring unanimous approval by
the Board of Directors under Section 7.2(j) (other than a matter subject to
resolution pursuant to Section 7.3(c)), or in connection with any dispute
between the Members concerning the Company, the Members will use their
reasonable efforts to resolve the dispute within thirty (30) Days. If the issue
has not been resolved within such 30-Day period, the Members will escalate the
dispute to the respective Parent CEOs, who will meet to discuss and use their
reasonable efforts to resolve the dispute. Such resolution may include, if the
respective Parent CEOs so agree (subject to any required approval by the
respective Members’ boards of directors): (i) to dissolve the Company; (ii) to
allow one Member to depart the Company by having such Member sell all of its
Membership Interests to a third-party; (iii) to have either Member withdraw from
the Company; or (iv) any other resolution upon which the Parent CEOs may so
agree. If the Members remain unable to resolve the dispute within thirty
(30) Days of the initial meeting of the Parent CEOs, either party may submit the
dispute to binding arbitration pursuant to this Section 13.4.

(b) Except as otherwise specifically provided herein, all disputes arising out
of or in connection with this Agreement, including any dispute regarding its
existence, termination or validity, each Member shall have the right to have
recourse to and shall be bound by the pre-arbitral referee procedure of the
International Chamber of Commerce in accordance with its rules for a
Pre-Arbitral Referee Procedure. All disputes arising out of or in connection
with this Agreement (including as to existence, termination and validity) shall
be finally settled under the Rules of Arbitration of the International Chamber
of Commerce (the “Rules”) by three arbitrators appointed in accordance with said
Rules. The place of the pre-arbitral referee procedure and of the arbitration
procedure shall be New York, New York, United States of

 

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America. The proceedings before the arbitral tribunal (including with respect to
the Pre-Arbitral Referee Procedure) shall be governed by the Rules. The rules of
law to be applied by the arbitral tribunal to the merits of the dispute shall be
the rules of laws of the State of New York. The language of the arbitration
shall be English. Evidence shall be provided in English and pleadings shall be
done in English. The arbitral tribunal shall render its decision within six
months from the date of signature on the terms of reference. Any decision or
award of the arbitral tribunal shall be final and binding upon the parties to
the arbitration proceeding. The Members waive to the extent permitted by
applicable law any rights to appeal or to review of such award by any court or
tribunal. The Members agree that the arbitral award may be enforced against the
parties to the arbitration proceeding or their assets wherever they may be found
and that a judgment upon the arbitral award may be entered in any court having
jurisdiction thereof.

Section 13.5 Guarantee. Each of Constellation and Électricité de France
International, S.A., unless the Parent is the Member, unconditionally,
absolutely and, subject to the following sentence, irrevocably guarantees to
each Member (other than the Member of which such Parent is an Affiliate) the
full and prompt payment, as and when due and payable, of all financial
obligations hereunder (the “Guarantee”). The Parent’s Guarantee shall remain in
effect for so long as this Agreement remains in effect and an Affiliate of
Parent remains a Member. Parent hereby guarantees that its Guarantee will be
paid and performed strictly in accordance with the terms of this Agreement,
regardless of any law, regulation or order now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of any Member with
respect thereto. Each Parent agrees that its Guarantee constitutes a guarantee
of payment when due and not of collection, and hereby waives demand, presentment
and notice of default or breach for non-performance of any of the covenants,
terms, conditions or agreements in any other matter or thing mentioned and
described in this Agreement. Furthermore, the occurrence of any one or more of
the following shall not affect the enforceability or effectiveness of the
Parent’s Guarantee: (i) any modification, amendment, settlement, release (in
whole or in part) or enforcement of the obligations guaranteed, (ii) any merger,
consolidation, restructuring or termination of the corporate existence of the
Member that is an Affiliate of Parent, (iii) the illegality, invalidity or
unenforceability of all or any part of the obligations guaranteed or any
agreement or instrument related thereto, (iv) the failure of any Member or the
Company to exhaust any right, remedy, power or privilege it may have against the
Member that is an Affiliate of Parent (including failure to file or enforce a
claim in any bankruptcy or other proceeding), (v) any bankruptcy, insolvency,
reorganization, winding-up, adjustment of debts or appointment of a custodian or
liquidator, or similar proceedings commenced by or against such Member,
including any discharge of, or bar or stay against collecting, all or any part
of the obligations guaranteed and (vi) any other defense with respect to the
performance of all or any part of the Parent’s Guarantee, including but not
limited to the effect of any statute of limitations.

Section 13.6 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF MARYLAND WITHOUT REGARD TO PRINCIPLES
OF CONFLICT OF LAWS.

Section 13.7 Entire Agreement; Amendment. This Agreement (including the exhibits
hereto) contains the entire agreement among the parties hereto with respect to
the transactions contemplated herein, supersedes all prior written agreements
and negotiations and

 

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oral understandings, if any, including the Original Agreement, and this
Agreement (including exhibits hereto) may not be amended or supplemented except
with the written consent of each Member or as otherwise permitted by the terms
of this Agreement to be amended by the Board of Directors.

Section 13.8 No Waiver. No failure to exercise and no delay in exercising any
right, power or privilege of a Member shall operate as a waiver or a consent to
the modification of the terms hereof unless given by that Member in writing.

Section 13.9 Separability of Provisions. Each provision of this Agreement shall
be considered separable; and if, for any reason, any provision or provisions
herein are determined to be invalid and contrary to any existing or future law,
such invalidity shall not impair the operation of or affect those portions of
this Agreement which are valid.

Section 13.10 Confidentiality. Each Member shall use reasonable efforts to keep,
and shall ensure that its Affiliates, shareholders, members, directors,
officers, employees, agents and other representatives use reasonable efforts to
keep, from and after the date hereof through a period of two years from the date
such Member no longer owns any Membership Interests, confidential all
information acquired from the Company or its Subsidiaries or Affiliates or from
the other Members or their Affiliates pursuant to this Agreement or otherwise,
including the contents of this Agreement, except that the foregoing restriction
shall not apply to any information that (a) is or hereafter becomes generally
available to the public other than by reason of any default with respect to a
confidentiality obligation under this Agreement; (b) was already known to the
recipient; (c) is disclosed to the recipient by a third party who, to the
recipient’s knowledge, is not in default of any confidentiality obligation to
the disclosing party hereunder; (d) was developed by or on behalf of the
receiving Member without reliance on confidential information received
hereunder; (e) is disclosed by either Member to its auditors, attorneys,
financial advisors, consultants and other advisors, provided, that any such
auditors and attorneys have been informed of the confidential nature of such
information and any such financial advisors, consultants and other advisors have
signed a confidentiality agreement agreeing to treat such information as
confidential; (f) is disclosed to a regulatory authority to the extent that
disclosure is, in the party’s good faith judgment, required or appropriate;
provided, that such party requests confidential treatment for any information so
disclosed; or (g) is otherwise required to be disclosed in compliance with
Applicable Law or stock exchange rules or regulations or order by a court or
other regulatory body having competent jurisdiction; provided, that such party
provides the other parties with prior notice of such disclosure to the extent
permitted by Applicable Law, stock exchange rules or other regulation.
Notwithstanding the foregoing, each Member (and each employee, representative,
or other agent of such Member) may disclose to any and all persons, without
limitation of any kind, the Tax treatment and Tax structure of: (i) the Company;
and (ii) any transactions of the Company, and all materials of any kind
(including opinions or other Tax analyses) that are provided to the Member
relating to such Tax treatment and Tax structure. For this purpose, “Tax
structure” means any facts relevant to the U.S. federal income Tax treatment of
a transaction but does not include information relating to the identity of the
Company or its Members.

Section 13.11 Expenses. Each party agrees that it shall be solely responsible
for any fees or expenses incurred by it in connection with the drafting,
negotiation or execution of this Agreement and any ancillary documents hereto
(including the cost of any attorneys, accountants, consultants and any other
representatives or agents retained by such party).

 

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Section 13.12 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

Section 13.13 Headings. The section and other headings contained in this
Agreement are for reference purposes only and shall not affect the meaning or
interpretation of this Agreement.

Section 13.14 Gender and Number. Whenever required by the context hereof, all
pronouns and any variations thereof will be deemed to refer to the masculine,
feminine and neuter, singular and plural.

Section 13.15 Further Assurances. From time to time, at the reasonable request
of any party hereto and without further consideration, each other party hereto
shall execute and deliver such additional documents and take all such further
action as may be necessary or appropriate to consummate and make effective, in
the most expeditious manner practicable, the transactions contemplated by this
Agreement or to carry out the terms of this Agreement.

Section 13.16 Survival of Obligations. The obligations of the parties under
Section 7.7, Section 13.3, Section 13.4, Section 13.7 and Section 13.8 of this
Agreement shall survive any expiration, termination or cancellation of this
Agreement or the dissolution of the Company.

Section 13.17 Insurance. The Company shall, and shall cause each of its
Subsidiaries and Investee Companies to maintain with financially sound and
reputable insurance companies, insurance in such amounts and against such risks
as are customarily maintained by companies engaged in the same or similar
businesses operating in the same or similar locations.

Section 13.18 Nuclear Insurance. The Company shall cause each of its Licensed
Subsidiaries and each Investee Companies that is an NRC licensee to obtain and
maintain insurance coverage, for itself and its contractors, for public
liability arising in connection with a nuclear incident (as those terms are
defined in the Atomic Energy Act of 1954, as amended (the “Atomic Energy Act”))
at, or arising out of, the operation of such nuclear power units. This insurance
shall be in such form and in such amount as required by the NRC pursuant to
Section 170 of the Atomic Energy Act. The Company shall cause each of its
Licensed Subsidiaries and each Investee Companies that is an NRC licensee to
execute the governmental indemnity agreement required by Section 170 of the
Atomic Energy Act. In the event the nuclear liability protection requirements in
effect on the date of this Agreement expire or are amended or repealed, the
Company shall cause each of its Licensed Subsidiaries and each Investee Company
that is an NRC licensee and each such company operating any nuclear project to
maintain (i) the insurance coverage provided by law, and (ii) at least the same
level insurance coverage and public liability protection as is currently
provided through governmental indemnity and liability insurance to the extent
available.

 

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Section 13.19 FIRPTA. Upon the reasonable request of any Member in connection
with any proposed Transfer by such Member of its Membership Interest in
accordance with the terms of this Agreement, and at the Member’s sole expense,
the Company will issue a written statement certifying as to whether or not fifty
percent or more of the value of the gross assets of the Company consists of U.S.
real property interests under Section 897(c)(1)(A) of the Code or ninety percent
or more of the value of the gross assets of the Company consists of U.S. real
property interests plus cash or cash equivalents.

Section 13.20 Exclusive Remedies. Each Party’s exclusive remedies and
liabilities for any alleged or actual breach of this Agreement shall be as set
forth in this Agreement.

Section 13.21 Title to Company Property. All property owned by the Company,
whether real or personal, tangible or intangible, shall be deemed to be owned by
the Company as an entity, and no Member, individually, shall have any ownership
of such property. The Company may hold any of its assets in its own name or in
the name of its nominee, which nominee may be one or more Persons.

Section 13.22 Waiver of Partition Action. Each of the parties hereto irrevocably
waives any right which it may have to maintain an action for partition with
respect to Company property.

Section 13.23 Statutory References. Each reference in this Agreement to a
particular statute or regulation, or a provision thereof shall, at any
particular time, be deemed to be a reference to such statute or regulation, or
provision thereof or to any similar or superseding statute or regulation, or
provision thereof, as at such time is in effect.

Section 13.24 Legal Fees. In the event of any litigation arising out of or in
connection with this Agreement or with any parties’ performance hereunder, the
party that prevails in any such litigation shall be paid its reasonable
attorney’s fees and expenses, through all appeals, by the party that does not
prevail in such litigation. The provisions of this Section 13.23 shall survive
any dissolution of the Company.

[Remainder of Page Intentionally Left Blank.]

 

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IN WITNESS WHEREOF, the Members and the Company have executed this Second
Amended and Restated Agreement as of the date set forth above.

 

MEMBERS:     CONSTELLATION ENERGY GROUP, INC.     By:           Name:       Its:

 

    EDF DEVELOPMENT INC.     By:           Name:       Its:

 

THE COMPANY:     CONSTELLATION ENERGY NUCLEAR GROUP, LLC     By:           Name:
      Its: