exh10-3.htm


     

    Exhibit
      10.3

     

    
      ADMINISTRATION
        AGREEMENT

       

      This
        ADMINISTRATION AGREEMENT, dated as of _______ __, 2007 (this “Administration
        Agreement”), is entered into by and between BALTIMORE GAS AND ELECTRIC
        COMPANY (“BGE”), as administrator (in such capacity, the
“Administrator”), and RSB BONDCO LLC, a Delaware limited liability
        company (the “Issuer”). Capitalized terms used herein and not otherwise
        defined herein shall have the meanings assigned to such terms in Appendix
        A to the Indenture (as defined below).

       

       

      W
        I T N E
        S S E T H:

       

      WHEREAS,
        the Issuer is issuing Rate Stabilization Bonds pursuant to that certain
        Indenture (including Appendix A thereto) dated as of the date hereof (the
“Indenture”), by and between the Issuer and _________, a _________
        banking corporation, in its capacity as indenture trustee (the “Indenture
        Trustee”) and in its separate capacity as a securities intermediary (the
“Securities Intermediary”), as the same may be amended, restated,
        supplemented or otherwise modified from time to time, and each Series
        Supplement;

       

      WHEREAS,
        the Issuer has entered into certain agreements in connection with the issuance
        of the Rate Stabilization Bonds, including (i) the Indenture, (ii) the Rate
        Stabilization Property Servicing Agreement, dated as of _______ __, 2007
        (the
“Servicing Agreement”), by and between the Issuer and BGE, as Servicer,
        (iii) the Rate Stabilization Property Purchase and Sale Agreement, dated
        as of
        _______ __, 2007 (the “Sale Agreement”), by and between the Issuer and
        BGE, as Seller, and (iv) the other Basic Documents to which the Issuer is
        a
        party, relating to the Rate Stabilization Bonds (the Indenture, the Servicing
        Agreement, the Sale Agreement and the other Basic Documents to which the
        Issuer
        is a party, as such agreements may be amended, restated, supplemented or
        otherwise modified from time to time, being referred to hereinafter collectively
        as the “Initial Related Agreements”);

       

      WHEREAS,
        pursuant to the Initial Related Agreements, the Issuer is required to perform
        certain duties in connection with the Initial Related Agreements, the Rate
        Stabilization Bonds and the Rate Stabilization Bond Collateral pledged to
        the
        Indenture Trustee pursuant to the Indenture;

       

      WHEREAS,
        the Issuer may from time to time enter into and be required to perform certain
        duties under additional agreements similar to the Initial Related Agreements
        in
        connection with the issuance of one or more additional series of Rate
        Stabilization Bonds (together with the Initial Related Agreements, the
“Related Agreements”);

       

      WHEREAS,
        the Issuer has no employees, other than its officers, and does
        not  intend to hire any employees, and consequently desires to have
        the Administrator perform certain of the duties of the Issuer referred to
        in the
        preceding clauses and to provide such additional services consistent with
        the
        terms of this Administration Agreement and the Related Agreements as the
        Issuer
        may from time to time request; and

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      WHEREAS,
        the Administrator has the capacity to provide the services and the facilities
        required thereby and is willing to perform such services and provide such
        facilities for the Issuer on the terms set forth herein;

       

      NOW,
        THEREFORE, in consideration of the mutual covenants contained herein, and
        other
        good and valuable consideration, the receipt and sufficiency of which are
        hereby
        acknowledged, the parties agree as follows:

       

      1.           Duties
        of the Administrator – Management Services.  The Administrator
        hereby agrees to provide the following corporate management services to the
        Issuer and to cause third parties to provide professional services required
        for
        or contemplated by such services in accordance with the provisions of this
        Administration Agreement:

       

      (a)           furnish
        the Issuer with ordinary clerical, bookkeeping and other corporate
        administrative services necessary and appropriate for the Issuer, including,
        without limitation, the following services:

       

      (i)           maintain
        at the Premises (as defined below) general accounting records of the Issuer
        (the
“Account Records”), subject to year-end audit, in accordance with
        generally accepted accounting principles, separate and apart from its own
        accounting records, prepare or cause to be prepared such quarterly and annual
        financial statements as may be necessary or appropriate and arrange for year-end
        audits of the Issuer's financial statements by the Issuer's independent
        accountants;

       

      (ii)           prepare
        and, after execution by the Issuer, file with the Securities and Exchange
        Commission (the “Commission”) and any applicable state agencies documents
        required to be filed by the Issuer with the Commission and any applicable
        state
        agencies, including, without limitation, periodic reports required to be
        filed
        under the Securities Exchange Act of 1934, as amended;

       

      (iii)           prepare
        for execution by the Issuer and cause to be filed such income, franchise
        or
        other tax returns of the Issuer as shall be required to be filed by applicable
        law (the “Tax Returns”) and cause to be paid on behalf of the Issuer from
        the Issuer's funds any taxes required to be paid by the Issuer under applicable
        law;

       

      (iv)           prepare
        or cause to be prepared for execution by the Issuer’s Managers minutes of the
        meetings of the Issuer’s Managers and such other documents deemed appropriate by
        the Issuer to maintain the separate limited liability company existence and
        good
        standing of the Issuer (the “Company Minutes”) or otherwise required
        under the Related Agreements (together with the Account Records, the Tax
        Returns, the Company Minutes, the LLC Agreement, and the Certificate of
        Formation, the “Issuer Documents”); and any other documents deliverable
        by the Issuer thereunder or in connection therewith; and

       

      (v)           hold,
        maintain and preserve at the Premises (or such other place as shall be required
        by any of the Related Agreements) executed copies (to the extent applicable)
        of
        the Issuer Documents and other documents executed by the Issuer thereunder
        or in
        connection therewith;

       

      
        
          
          

        

        
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      (b)           take
        such actions on behalf of the Issuer, as are necessary or desirable for the
        Issuer to keep in full force and effect its existence, rights and franchises
        as
        a limited liability company under the laws of the state of Delaware and obtain
        and preserve its qualification to do business in each jurisdiction in which
        it
        becomes necessary to be so qualified;

       

      (c)           take
        such actions on the behalf of the Issuer as are necessary for the issuance
        and
        delivery of one or more series of Rate Stabilization Bonds;

       

      (d)           provide
        for the performance by the Issuer of its obligations under each of the Related
        Agreements, and prepare, or cause to be prepared, all documents, reports,
        filings, instruments, notices, certificates and opinions that it shall be
        the
        duty of the Issuer to prepare, file or deliver pursuant to the Related
        Agreements;

       

      (e)           enforce
        each of the rights of the Issuer under the Related Agreements, at the direction
        of the Indenture Trustee;

       

      (f)           provide
        for the defense, at the direction of the Issuer's Managers, of any action,
        suit
        or proceeding brought against the Issuer or affecting the Issuer or any of
        its
        assets;

       

      (g)           provide
        office space (the “Premises”) for the Issuer and such reasonable
        ancillary services as are necessary to carry out the obligations of the
        Administrator hereunder, including telecopying, duplicating and word processing
        services;

       

      (h)           undertake
        such other administrative services as may be appropriate, necessary or requested
        by the Issuer; and

       

      (i)           provide
        such other services as are incidental to the foregoing or as the Issuer and
        the
        Administrator may agree.

       

      In
        providing the services under this Section 1 and as otherwise provided
        under this Administration Agreement, the Administrator will not knowingly
        take
        any actions on behalf of the Issuer which (i) the Issuer is prohibited from
        taking under the Related Agreements, or (ii) would cause the Issuer to be
        in
        violation of any federal, state or local law or the LLC Agreement.

       

      2.           Compensation.  As
        compensation for the performance of the Administrator’s obligations under this
        Administration Agreement (including the compensation of Persons serving as
        Managers, other than the independent managers, and officers of the Issuer,
        but,
        for the avoidance of doubt, excluding the performance by BGE of its obligations
        in its capacity as Servicer), the Administrator shall be entitled to an annual
        fee of $100,000 (the “Administration Fee”), payable by the Issuer in
        arrears proportionately on each Payment Date.  The Administration Fee
        shall not exceed $100,000 in the aggregate annually, provided,
however, that BGE may seek approval from the PSC to recover from
        Customers, through the Financing Credit Order in accordance with the Qualified
        Rate Order, any  incremental costs it incurs to provide administrative
        support services to the Issuer to the extent such incremental costs exceed
        $100,000, and furtherprovided that such excess amounts shall
        neither be considered an Operating Expense nor be paid out of the Collection
        Account or included in the calculation of True-Up Adjustments.  In
        addition, the Administrator shall be entitled to be reimbursed by the Issuer
        for
        all costs and expenses of services performed by unaffiliated third parties
        and
        actually

       

      
        
          
          

        

        
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      incurred
        by the Administrator in connection with the performance of its obligations
        under
        this Administration Agreement in accordance with Section 3 (but, for the
        avoidance of doubt, excluding any such costs and expenses incurred by BGE
        in its
        capacity as Servicer), to the extent that such costs and expenses are supported
        by invoices or other customary documentation and are reasonably allocated
        to the
        Issuer (“Reimbursable Expenses”).  The Administration Fee shall
        be modified, and this Section 2 shall be deemed to have been amended,
        without further act or deed by any Person to reflect any such modification
        or
        amendment, to the extent provided in any Qualified Rate Order issued by the
        PSC
        providing for the issuance of an additional series of Rate Stabilization
        Bonds.

       

      3.           Third
        Party Services.  Any services required for or contemplated by the
        performance of the above-referenced services by the Administrator to be provided
        by unaffiliated third parties (including independent auditors' fees and counsel
        fees) may, if provided for or otherwise contemplated by any related Qualified
        Rate Order issued by the PSC and if the Issuer deems it necessary or desirable,
        be arranged by the Issuer or by the Administrator at the direction (which
        may be
        general or specific) of the Issuer.  Costs and expenses associated
        with the contracting for such third-party professional services may be paid
        directly by the Issuer or paid by the Administrator and reimbursed by the
        Issuer
        in accordance with Section 2, or otherwise as the Administrator and the
        Issuer may mutually arrange.

       

      4.           Additional
        Information to be Furnished to the Issuer.  The Administrator
        shall furnish to the Issuer from time to time such additional information
        regarding the Rate Stabilization Bond Collateral as the Issuer shall reasonably
        request.

       

      5.           Independence
        of the Administrator.  For all purposes of this Administration
        Agreement, the Administrator shall be an independent contractor and shall
        not be
        subject to the supervision of the Issuer with respect to the manner in which
        it
        accomplishes the performance of its obligations hereunder.  Unless
        expressly authorized by the Issuer, the Administrator shall have no authority,
        and shall not hold itself out as having the authority, to act for or represent
        the Issuer in any way and shall not otherwise be deemed an agent of the
        Issuer.

       

      6.           No
        Joint Venture.  Nothing contained in this Administration Agreement
        (a) shall constitute the Administrator and the Issuer as partners or co-members
        of any partnership, joint venture, association, syndicate, unincorporated
        business or other separate entity, (b) shall be construed to impose any
        liability as such on either of them or (c) shall be deemed to confer on either
        of them any express, implied or apparent authority to incur any obligation
        or
        liability on behalf of the other.

       

      7.           Other
        Activities of Administrator.  Nothing herein shall prevent the
        Administrator or any of its shareholders, directors, officers, employees,
        subsidiaries or affiliates from engaging in other businesses or, in its sole
        discretion, from acting in a similar capacity as an Administrator for any
        other
        person or entity even though such person or entity may engage in business
        activities similar to those of the Issuer.

       

      8.           Term
        of Agreement; Resignation and Removal of Administrator.

       

      
        
          
          

        

        
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      (a)           This
        Administration Agreement shall continue in force until the payment in full
        of
        the Rate Stabilization Bonds and any other amount which may become due and
        payable under the Indenture, upon which event this Administration Agreement
        shall automatically terminate.

       

      (b)           Subject
        to Sections 8(e) and 8(f), the Administrator may resign its duties
        hereunder by providing the Issuer with at least sixty (60) days’ prior written
        notice.

       

      (c)           Subject
        to Sections 8(e) and 8(f), the Issuer may remove the Administrator
        without cause by providing the Administrator with at least sixty (60) days’
prior written notice.

       

      (d)           Subject
        to Sections 8(e) and 8(f), at the sole option of the Issuer, the
        Administrator may be removed immediately upon written notice of termination
        from
        the Issuer to the Administrator if any of the following events shall
        occur:

       

      (i)           the
        Administrator shall default in the performance of any of its duties under
        this
        Administration Agreement and, after notice of such default, shall fail to
        cure
        such default within ten (10) days (or, if such default cannot be cured in
        such
        time, shall (A) fail to give within ten (10) days such assurance of cure
        as
        shall be reasonably satisfactory to the Issuer and (B) fail to cure such
        default
        within thirty (30) days thereafter);

       

      (ii)           a
        court of competent jurisdiction shall enter a decree or order for relief,
        and
        such decree or order shall not have been vacated within sixty (60) days,
        in
        respect of the Administrator in any involuntary case under any applicable
        bankruptcy, insolvency or other similar law now or hereafter in effect, or
        such
        court shall appoint a receiver, liquidator, assignee, custodian, trustee,
        sequestrator or similar official for the Administrator or any substantial
        part
        of its property or order the winding-up or liquidation of its affairs;
        or

       

      (iii)           the
        Administrator shall commence a voluntary case under any applicable bankruptcy,
        insolvency or other similar law now or hereafter in effect, shall consent
        to the
        entry of an order for relief in an involuntary case under any such law, shall
        consent to the appointment of a receiver, liquidator, assignee, trustee,
        custodian, sequestrator or similar official for the Administrator or any
        substantial part of its property, shall consent to the taking of possession
        by
        any such official of any substantial part of its property, shall make any
        general assignment for the benefit of creditors or shall fail generally to
        pay
        its debts as they become due.

       

      The
        Administrator agrees that if any of the events specified in clauses (ii)
        or (iii) of this Section 8(d) shall occur, it shall give written
        notice thereof to the Issuer and the Indenture Trustee as soon as practicable
        but in any event within seven (7) days after the happening of such
        event.

      


      (e)           No
        resignation or removal of the Administrator pursuant to this Section 8
        shall be effective until a successor Administrator has been appointed by
        the
        Issuer, and such successor Administrator has agreed in writing to be bound
        by
        the terms of this Administration Agreement in the same manner as the
        Administrator is bound hereunder.

       

      
        
          
          

        

        
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      (f)           The
        appointment of any successor Administrator shall be effective only after
        satisfaction of the Rating Agency Condition with respect to the proposed
        appointment.

       

      9.           Action
        upon Termination, Resignation or Removal.  Promptly upon the
        effective date of termination of this Administration Agreement pursuant to
        Section 8(a), the resignation of the Administrator pursuant to Section
        8(b) or the removal of the Administrator pursuant to Section 8(c) or
8(d), the Administrator shall be entitled to be paid a pro-rated
        portion
        of the annual fee described in Section 2 hereof through the date of
        termination and all Reimbursable Expenses incurred by it through the date
        of
        such termination, resignation or removal.  The Administrator shall
        forthwith upon such termination pursuant to Section 8(a) deliver to the
        Issuer all property and documents of or relating to the Rate Stabilization
        Bond
        Collateral then in the custody of the Administrator.  In the event of
        the resignation of the Administrator pursuant to Section 8(b) or the
        removal of the Administrator pursuant to Section 8(c) or 8(d), the
        Administrator shall cooperate with the Issuer and take all reasonable steps
        requested to assist the Issuer in making an orderly transfer of the duties
        of
        the Administrator.

       

      10.           Administrator’s
        Liability.  Except as otherwise provided herein, the Administrator
        assumes no liability other than to render or stand ready to render the services
        called for herein, and neither the Administrator nor any of its members,
        managers, officers, employees, subsidiaries or affiliates shall be responsible
        for any action of the Issuer or any of the shareholders, directors, officers,
        employees, subsidiaries or affiliates of the Issuer (other than the
        Administrator itself).  The Administrator shall not be liable for nor
        shall it have any obligation with regard to any of the liabilities, whether
        direct or indirect, absolute or contingent of the Issuer or any of the members,
        managers, officers, employees, subsidiaries or affiliates of the Issuer (other
        than the Administrator itself).

       

      11.           INDEMNITY.

       

      (a)           SUBJECT
        TO THE PRIORITY OF PAYMENTS SET FORTH IN THE INDENTURE, THE ISSUER SHALL
        INDEMNIFY THE ADMINISTRATOR, ITS SHAREHOLDERS, DIRECTORS, OFFICERS, EMPLOYEES
        AND AFFILIATES AGAINST ALL LOSSES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS,
        LIABILITIES AND EXPENSES (INCLUDING, WITHOUT LIMITATION, ALL EXPENSES OF
        LITIGATION OR PREPARATION THEREFOR WHETHER OR NOT THE ADMINISTRATOR IS A
        PARTY
        THERETO) WHICH ANY OF THEM MAY PAY OR INCUR ARISING OUT OF OR RELATING TO
        THIS
        ADMINISTRATION AGREEMENT AND THE SERVICES CALLED FOR HEREIN; PROVIDED,
        HOWEVER, THAT SUCH INDEMNITY SHALL NOT APPLY TO ANY SUCH LOSS, CLAIM,
        DAMAGE, PENALTY, JUDGMENT, LIABILITY OR EXPENSE RESULTING FROM THE
        ADMINISTRATOR’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT IN THE PERFORMANCE OF ITS
        OBLIGATIONS HEREUNDER.

       

      (b)           THE
        ADMINISTRATOR SHALL INDEMNIFY THE ISSUER, ITS MEMBERS, MANAGERS, OFFICERS
        AND
        EMPLOYEES AGAINST ALL LOSSES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, LIABILITIES
        AND EXPENSES (INCLUDING, WITHOUT LIMITATION, ALL EXPENSES OF LITIGATION OR
        PREPARATION THEREFOR WHETHER OR NOT THE ISSUER IS A PARTY THERETO)

       

      
        
          
          

        

        
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      WHICH
        ANY
        OF THEM MAY INCUR AS A RESULT OF THE ADMINISTRATOR’S GROSS NEGLIGENCE OR WILLFUL
        MISCONDUCT IN THE PERFORMANCE OF ITS OBLIGATIONS HEREUNDER.

       

      12.           Notices.  Any
        notice, report or other communication given hereunder shall be in writing
        and
        addressed as follows:

       

      (a)           if
        to the Issuer, to:

       

      RSB
        BondCo LLC

      Suite
        202

      103
        Foulk
        Road

      Wilmington,
        Delaware 19803

      Attention:
        Manager

      Telephone:
        (302) 691-0123

      Facsimile:  (302)
        652-8667

      


      (b)           if
        to the Administrator, to:

       

      740
        E.
        Pratt Street

      16th
        Floor

      Baltimore,
        Maryland
        21202                                                                

      Attention:
        Treasurer

      Telephone:
        (410) 783-3620

      Facsimile:  (410)
        783-3619


      


      
        	
                 

              	
                (c)

              	
                if
                  to the Indenture Trustee, to the Corporate Trust
                  Office;

              


      

      


      or
        to
        such other address as any party shall have provided to the other parties
        in
        writing. Any notice required to be in writing hereunder shall be deemed given
        if
        such notice is mailed by certified mail, postage prepaid, or hand-delivered
        to
        the address of such party as provided above.

      


      13.           Amendments.  This
        Administration Agreement may be amended from time to time by a written amendment
        duly executed and delivered by each of the Issuer and the Administrator,
        with
        the prior written consent of the Indenture Trustee and the satisfaction of
        the
        Rating Agency Condition.  Promptly after the execution of any such
        amendment or consent, the Issuer shall furnish written notification of the
        substance of such amendment or consent to each of the Rating
        Agencies.

       

      14.           Successors
        and Assigns.  This Administration Agreement may not be assigned by
        the Administrator unless such assignment is previously consented to in writing
        by the Issuer and the Indenture Trustee and subject to the satisfaction of
        the
        Rating Agency Condition in connection therewith.  Any assignment with
        such consent and satisfaction, if accepted by the assignee, shall bind the
        assignee hereunder in the same manner as the Administrator is bound hereunder.
        Notwithstanding the foregoing, this Administration Agreement may be assigned
        by
        the Administrator without the consent of the Issuer or the Indenture Trustee
        to
        a corporation or

       

      
        
          
          

        

        
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      other
        organization that is a successor (by merger, consolidation or purchase of
        assets) to the Administrator; provided that such successor organization
        executes and delivers to the Issuer an Agreement in which such corporation
        or
        other organization agrees to be bound hereunder by the terms of said assignment
        in the same manner as the Administrator is bound hereunder.  Subject
        to the foregoing, this Administration Agreement shall bind any successors
        or
        assigns of the parties hereto.

       

      15.           Governing
        Law.  This Administration Agreement shall be construed in
        accordance with the laws of the State of Maryland, without reference to its
        conflict of law provisions, and the obligations, rights and remedies of the
        parties hereunder shall be determined in accordance with such laws.

       

      16.           Headings.  The
        Section headings hereof have been inserted for convenience of reference only
        and
        shall not be construed to affect the meaning, construction or effect of this
        Administration Agreement.

       

      17.           Counterparts.  This
        Administration Agreement may be executed in counterparts, each of which when
        so
        executed shall be an original, but all of which together shall constitute
        but
        one and the same Administration Agreement.

       

      18.           Severability.  Any
        provision of this Administration Agreement that is prohibited or unenforceable
        in any jurisdiction shall be ineffective to the extent of such prohibition
        or
        unenforceability without invalidating the remaining provisions hereof and
        any
        such prohibition or unenforceability in any jurisdiction shall not invalidate
        or
        render unenforceable such provision in any other jurisdiction.

       

      19.           Nonpetition
        Covenant.  Notwithstanding any prior termination of this
        Administration Agreement, the Administrator, solely in its capacity as a
        creditor of the Issuer, covenants that it shall not, prior to the date which
        is
        one year and one day after payment in full of the Rate Stabilization Bonds,
        acquiesce, petition or otherwise invoke or cause the Issuer to invoke or
        join
        with any Person in invoking the process of any court or Governmental Authority
        for the purpose of commencing or sustaining an involuntary case against the
        Issuer under any federal or state bankruptcy, insolvency or similar law or
        appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator
        or
        other similar official of the Issuer or any substantial part of the property
        of
        the Issuer, or ordering the dissolution, winding up or liquidation of the
        affairs of the Issuer.

       

      20.           Assignment
        to Indenture Trustee.  BGE hereby acknowledges and consents to any
        mortgage, pledge, assignment and grant of a security interest by the Issuer
        to
        the Indenture Trustee pursuant to the Indenture for the benefit of the Secured
        Parties of all right, title and interest of the Issuer in, to and under this
        Administration Agreement, and the assignment of any or all of the Issuer’s
        rights hereunder to the Indenture Trustee for the benefit of the Secured
        Parties.

       

       

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      IN
        WITNESS WHEREOF, the parties have caused this Administration Agreement to
        be
        duly executed and delivered as of the day and year first above
        written.

      

        
          	 	
                  RSB
                    BONDCO LLC, as Issuer

                   

                   

                
	 	
                  By:

                	 
	 	 	
                  Name:

                  Title:

                
	 	 	
                   

                   

                   

                
	 	
                  BALTIMORE
                    GAS AND ELECTRIC COMPANY, as Administrator

                   

                   

                
	 	
                  By:

                	 
	 	 	
                  Name:

                  Title:

                


        

      

       

      
        
          
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            Administration
              Agreement