Document:

Form of Servicing Agreement

     

    Exhibit
      10.2

     

     

    

      FORM
        OF

       

      RATE
        STABILIZATION PROPERTY SERVICING AGREEMENT

       

      by
        and between

      

       

      RSB
        BONDCO LLC,

       

      Issuer

       

      and

       

      BALTIMORE
        GAS AND ELECTRIC COMPANY,

       

      Servicer

       

      

       

      Dated
        as of ______ __, 2007

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    

      
        	
                ARTICLE
                  I

                DEFINITIONS

              
	 	 	 
	
                SECTION
                  1.01.

              	
                Definitions.

              	
                1

              
	 	 	 
	
                ARTICLE
                  II

                APPOINTMENT
                  AND AUTHORIZATION

              
	 	 	 
	
                SECTION
                  2.01.

              	
                Appointment
                  of Servicer; Acceptance of Appointment.

              	
                2

              
	
                SECTION
                  2.02.

              	
                Authorization

              	
                2

              
	
                SECTION
                  2.03.

              	
                Dominion
                  and Control Over the Rate Stabilization Property

              	
                2

              
	 	 	 
	
                ARTICLE
                  III

                ROLE
                  OF SERVICER

              
	 	 	 
	
                SECTION
                  3.01.

              	
                Duties
                  of Servicer.

              	
                3

              
	
                SECTION
                  3.02.

              	
                Servicing
                  and Maintenance Standards

              	
                5

              
	
                SECTION
                  3.03.

              	
                Annual
                  Reports on Compliance with Regulation AB

              	
                6

              
	
                SECTION
                  3.04.

              	
                Annual
                  Report by Independent Registered Public Accountants.

              	
                6

              
	
                SECTION
                  3.05.

              	
                Monitoring
                  of Third-Party Collectors

              	
                7

              
	 	 	 
	
                ARTICLE
                  IV

                SERVICES
                  RELATED TO TRUE-UP ADJUSTMENTS

              
	 	 	 
	
                SECTION
                  4.01.

              	
                True-Up
                  Adjustments.

              	
                9

              
	
                SECTION
                  4.02.

              	
                Limitation
                  of Liability.

              	
                14

              
	 	 	 
	
                ARTICLE
                  V 

                THE
                  RATE STABILIZATION PROPERTY

              
	 	 	 
	
                SECTION
                  5.01.

              	
                Custody
                  of Rate Stabilization Property Records.

              	
                14

              
	
                SECTION
                  5.02.

              	
                Duties
                  of Servicer as Custodian

              	
                15

              
	
                SECTION
                  5.03.

              	
                Effective
                  Period and Termination

              	
                16

              

      

       

      
        
          
          

        

        
          i

          
            

          

        

        
          
          

        

      

       

      
        	
                ARTICLE
                  VI

                THE
                  SERVICER

              
	 	 	 
	
                SECTION
                  6.01.

              	
                Representations
                  and Warranties of Servicer

              	
                16

              
	
                SECTION
                  6.02.

              	
                Indemnities
                  of Servicer; Release of Claims

              	
                26

              
	
                SECTION
                  6.03.

              	
                Binding
                  Effect of Servicing Obligations

              	
                18

              
	
                SECTION
                  6.04.

              	
                Limitation
                  on Liability of Servicer and Others.

              	
                19

              
	
                SECTION
                  6.05.

              	
                BGE
                  Not to Resign as Servicer

              	
                20

              
	
                SECTION
                  6.06.

              	
                Servicing
                  Compensation

              	
                20

              
	
                SECTION
                  6.07.

              	
                Compliance
                  with Applicable Law.

              	
                21

              
	
                SECTION
                  6.08.

              	
                Access
                  to Certain Records and Information Regarding Rate Stabilization
                  Property

              	
                21

              
	
                SECTION
                  6.09.

              	
                Appointments

              	
                22

              
	
                SECTION
                  6.10.

              	
                No
                  Servicer Advances.

              	
                22

              
	
                SECTION
                  6.11.

              	
                Remittances

              	
                22

              
	
                SECTION
                  6.12.

              	
                Maintenance
                  of Operations

              	
                23

              
	 	 	 
	
                ARTICLE
                  VII

                DEFAULT

              
	 	 	 
	
                SECTION
                  7.01.

              	
                Servicer
                  Default

              	
                23

              
	
                SECTION
                  7.02.

              	
                Appointment
                  of Successor

              	
                25

              
	
                SECTION
                  7.03.

              	
                Waiver
                  of Past Defaults

              	
                26

              
	
                SECTION
                  7.04.

              	
                Notice
                  of Servicer Default

              	
                26

              
	
                SECTION
                  7.05.

              	
                Cooperation
                  with Successor

              	
                26

              
	 	 	 
	
                ARTICLE
                  VIII

                MISCELLANEOUS
                  PROVISIONS

              
	 	 	 
	
                SECTION
                  8.01.

              	
                Amendment.

              	
                28

              
	
                SECTION
                  8.02.

              	
                Maintenance
                  of Accounts and Records..

              	
                29

              
	
                SECTION
                  8.03.

              	
                Notices

              	
                29

              
	
                SECTION
                  8.04.

              	
                Assignment.

              	
                30

              
	
                SECTION
                  8.05.

              	
                Limitations
                  on Rights of Others..

              	
                30

              
	
                SECTION
                  8.06.

              	
                Severability

              	
                30

              
	
                SECTION
                  8.07.

              	
                Separate
                  Counterparts.

              	
                30

              
	
                SECTION
                  8.08.

              	
                Headings.

              	
                30

              
	
                SECTION
                  8.09.

              	
                GOVERNING
                  LAW

              	
                30

              
	
                SECTION
                  8.10.

              	
                Assignment
                  to Indenture Trustee

              	
                31

              
	
                SECTION
                  8.11.

              	
                Nonpetition
                  Covenants

              	
                31

              
	
                SECTION
                  8.12.

              	
                Limitation
                  of Liability.

              	
                31

              

      

    

     

    
      
        
        

      

      
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      EXHIBITS
        AND SCHEDULES

      

      Exhibit
        A       Form
        of
        Monthly Servicer’s Certificate

      Exhibit
        B        Form
        of
        Certificate of Compliance

      Exhibit
        C        Form
        of
        Servicer Certificate

      Schedule
        4.01(a)  
Expected
        Amortization Schedule

       

      ANNEXES

       

      Annex
        I  Servicing
        Procedures

       

    

    
      
        
        

      

      
        iii

        
          

        

      

      
        
        

      

    

     

    This
      RATE
      STABILIZATION PROPERTY SERVICING AGREEMENT (this “Agreement”),
      dated
      as of ______ __, 2007, is between RSB BONDCO LLC, a Delaware limited liability
      company, as issuer (the “Issuer”),
      and
      BALTIMORE GAS AND ELECTRIC COMPANY (“BGE”),
      a
      Maryland corporation, as servicer (the “Servicer”).

     

    RECITALS

     

    WHEREAS,
      pursuant to the Rate Stabilization Law and the Initial Qualified Rate Order,
      BGE, in its capacity as seller (the “Seller”),
      and
      the Issuer are concurrently entering into the Sale Agreement pursuant to which
      (i) the Seller is selling and the Issuer is purchasing Initial Rate
      Stabilization Property created pursuant to the Rate Stabilization Law and the
      Initial Qualified Rate Order, and (ii) the Seller may sell Subsequent Rate
      Stabilization Property to the Issuer; 

     

    WHEREAS,
      in connection with its ownership of the Rate Stabilization Property, and in
      order to collect the associated Qualified Rate Stabilization Charges, the Issuer
      desires to engage the Servicer to carry out the functions described herein
      (such
      functions or similar functions currently performed by the Servicer for itself
      with respect to its own charges to its residential electric customers) and
      the
      Servicer desires to be so engaged; 

     

    WHEREAS,
      the Issuer desires to engage the Servicer to act on its behalf in submitting
      True-Up Adjustments to the PSC and the Servicer desires to be so
      engaged;

     

    NOW,
      THEREFORE, in consideration of the premises and the mutual covenants herein
      contained, the parties hereto agree as follows:

     

    ARTICLE
      I

    DEFINITIONS

     

    SECTION
      1.01. Definitions.

     

    (a)    Unless
      otherwise defined herein, capitalized terms used herein shall have the meanings
      assigned to them in that certain Indenture (including Appendix
      A
      thereto)
      dated as of the date hereof between the Issuer and __________, a _________
      banking corporation, in its capacity as the 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.

     

    (b)    All
      terms
      defined in this Agreement shall have the defined meanings when used in any
      certificate or other document made or delivered pursuant hereto unless otherwise
      defined therein.

     

    (c)    The
      words
“hereof,” “herein,” “hereunder” and words of similar import, when used in this
      Agreement, shall refer to this Agreement as a whole and not to any particular
      provision of this Agreement; Section, Schedule, Exhibit, Annex and Attachment
      references contained in this Agreement are references to Sections, Schedules,
      Exhibits, Annexes and Attachments in or to this Agreement unless otherwise
      specified; and the term “including” shall mean “including without
      limitation.”

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (d)    The
      definitions contained in this Agreement are applicable to the singular as well
      as the plural forms of such terms.

     

    (e)    Non-capitalized
      terms used herein which are defined in the Utilities Code shall, as the context
      requires, have the meanings assigned to such terms in the Utilities Code, but
      without giving effect to amendments to the Utilities Code after the date hereof
      which have a material adverse effect on the Issuer or the Holders.

     

    ARTICLE
      II

    APPOINTMENT
      AND AUTHORIZATION

     

    SECTION
      2.01.    Appointment
      of Servicer; Acceptance of Appointment.
      The
      Issuer hereby appoints the Servicer, and the Servicer hereby accepts such
      appointment, to perform the Servicer’s obligations pursuant to this Agreement on
      behalf of and for the benefit of the Issuer or any assignee thereof in
      accordance with the terms of this Agreement and applicable Requirements of
      Law.
      This appointment and the Servicer’s acceptance thereof may not be revoked except
      in accordance with the express terms of this Agreement.

     

    SECTION
      2.02.    Authorization.
      With
      respect to all or any portion of the Rate Stabilization Property, the Servicer
      shall be, and hereby is, authorized and empowered by the Issuer to (a) execute
      and deliver, on behalf of itself and/or the Issuer, as the case may be, any
      and
      all instruments, documents or notices, and (b) on behalf of itself and/or the
      Issuer, as the case may be, make any filing and participate in proceedings
      of
      any kind with any Governmental Authority, including with the PSC. The Issuer
      shall execute and deliver to the Servicer such documents as have been prepared
      by the Servicer for execution by the Issuer and shall furnish the Servicer
      with
      such other documents as may be in the Issuer’s possession, in each case as the
      Servicer may determine to be necessary or appropriate to enable it to carry
      out
      its servicing and administrative duties hereunder. Upon the Servicer’s written
      request, the Issuer shall furnish the Servicer with any powers of attorney
      or
      other documents necessary or appropriate to enable the Servicer to carry out
      its
      duties hereunder.

     

    SECTION
      2.03.    Dominion
      and Control Over the Rate Stabilization Property.
      Notwithstanding any other provision herein, subject to the terms of the Basic
      Documents, the Issuer shall have dominion and control over the Rate
      Stabilization Property, and the Servicer, in accordance with the terms hereof,
      is acting solely as the servicing agent and custodian for the Issuer with
      respect to the Rate Stabilization Property and the Rate Stabilization Property
      Records. The Servicer shall not take any action that is not authorized by this
      Agreement, that would contravene applicable Requirements of Law, that is not
      consistent with its customary procedures and practices, or that shall impair
      the
      rights of the Issuer in the Rate Stabilization Property, in each case unless
      such action is required by applicable Requirements of Law.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      III

    ROLE
      OF
      SERVICER

     

    SECTION
      3.01.    Duties
      of Servicer.
      The
      Servicer, as agent for the Issuer, shall have the following duties:

     

    (a)    Duties
      of Servicer Generally.
      The
      Servicer’s duties in general shall include management, servicing and
      administration of the Rate Stabilization Property; obtaining meter reads,
      calculating usage (including any such usage by Customers served by a Third-Party
      Collector), billing, collections and posting of all payments in respect of
      the
      Rate Stabilization Property; responding to inquiries by Customers, Third-Party
      Collectors, the PSC, or any other Governmental Authority with respect to the
      Rate Stabilization Property; delivering Bills to Customers or Third-Party
      Collectors; investigating and handling delinquencies (and furnishing reports
      with respect to such delinquencies to the Issuer), processing and depositing
      collections and making periodic remittances; furnishing periodic reports to
      the
      Issuer, the Indenture Trustee and the Rating Agencies; making all filings with
      the PSC and the Maryland State Department of Assessments and Taxation and all
      filings pursuant to the UCC and taking such other action as may be necessary
      to
      perfect the Issuer’s ownership interests in and the Indenture Trustee’s first
      priority lien on and security interest in the Rate Stabilization Property;
      making all filings with the PSC and the Maryland State Department of Assessments
      and Taxation and all filings pursuant to the UCC and taking such other action
      as
      may be necessary to perfect and maintain the perfection and first priority
      of
      the Indenture Trustee’s lien on and security interest in all Rate Stabilization
      Bond Collateral; selling as the agent for the Issuer as its interests may appear
      defaulted or written off accounts in accordance with the Servicer’s usual and
      customary practices; taking all necessary action in connection with True-Up
      Adjustments as set forth herein; and performing such other duties as may be
      specified under the Applicable Qualified Rate Order to be performed by it.
      Anything to the contrary notwithstanding, the duties of the Servicer set forth
      in this Agreement shall be qualified in their entirety by applicable
      Requirements of Law, as are in effect at the time such duties are to be
      performed. Without limiting the generality of this Section
      3.01(a),
      in
      furtherance of the foregoing, the Servicer hereby agrees that it shall also
      have, and shall comply with, the duties and responsibilities relating to data
      acquisition, usage and bill calculation, billing, customer service functions,
      collections, payment processing and remittance set forth in Annex
      I
      hereto,
      as it may be amended from time to time. For the avoidance of doubt, the term
      “usage” when used herein refers to kilowatt hour consumption.

     

    (b)    Reporting
      Functions.

     

    (i)    Monthly
      Servicer’s Certificate.
      On or
      before the twenty-fifth calendar day of each month (or if such day is not a
      Servicer Business Day, on the immediately following Servicer Business Day),
      the
      Servicer shall prepare and deliver to the Issuer, the Indenture Trustee and
      the
      Rating Agencies a written report substantially in the form of Exhibit
      A
      hereto
      (a “Monthly
      Servicer’s Certificate”)
      setting forth certain information relating to Estimated QRSC Collections by
      the
      Servicer during the Collection Period immediately preceding such date;
provided,
      however,
      that
      for any month in which the Servicer is required to deliver a Servicer’s
      Certificate pursuant to Section
      4.01(c)(ii),
      the
      Servicer 

     

    
      
        
        

      

      
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    shall
      prepare and deliver the Monthly Servicer’s Certificate no later than the date of
      delivery of such Servicer’s Certificate.

     

    (ii)    Notification
      of Laws and Regulations.
      The
      Servicer shall immediately notify the Issuer, the Indenture Trustee and the
      Rating Agencies in writing of any Requirements of Law hereafter promulgated
      or
      published that would reasonably be expected to have a material adverse effect
      on
      the Servicer’s ability to perform its duties under this Agreement.

     

    (iii)    Other
      Information.
      Upon
      the reasonable request of the Issuer, the Indenture Trustee or any Rating
      Agency, the Servicer shall provide to the Issuer, the Indenture Trustee or
      such
      Rating Agency, as the case may be, any public financial information in respect
      of the Servicer, or any material information regarding the Rate Stabilization
      Property to the extent it is reasonably available to the Servicer, as may be
      reasonably necessary and permitted by applicable Requirements of Law to enable
      the Issuer, the Indenture Trustee or the Rating Agencies to monitor the
      performance by the Servicer hereunder. In addition, so long as any of the Rate
      Stabilization Bonds of any Series are outstanding, the Servicer shall provide
      the Issuer and the Indenture Trustee, within a reasonable time after written
      request therefor, any information available to the Servicer or reasonably
      obtainable by it that is necessary to calculate the Qualified Rate Stabilization
      Charges.

     

    (iv)    Preparation
      of Reports.
      The
      Servicer shall prepare and deliver such additional reports as required under
      this Agreement, including a copy of each Servicer’s Certificate described in
Section 4.01(c)(ii),
      the
      annual Certificate of Compliance described in Section
      3.03,
      and the
      Annual Accountant’s Report described in Section
      3.04.
      In
      addition, the Servicer shall prepare, procure, deliver and/or file, or cause
      to
      be prepared, procured, delivered or filed, any reports, attestations, exhibits,
      certificates or other documents required to be delivered or filed with the
      SEC
      (and/or any other Governmental Authority) by the Issuer or the Sponsor under
      the
      federal securities laws or other applicable Requirements of Law or in accordance
      with the Basic Documents, including, but without limiting the generality of
      foregoing, filing with the SEC, if applicable, a copy or copies of (i) the
      Monthly Servicer’s Certificates described in Section
      3.01(b)
      (under
      Form 10-D or any other applicable form), (ii) the Servicer’s Certificates
      described in Section
      4.01(c)(ii)
      (under
      Form 10-D or any other applicable form), (iii) the annual statements of
      compliance, attestation reports and other certificates described in Section
      3.03,
      and
      (iv) the Annual Accountant’s Report (and any attestation required under
      Regulation AB) described in Section
      3.04.
      In
      addition, the appropriate officer or officers of the Servicer shall (in its
      separate capacity as Servicer) sign any annual report on Form 10-K (and any
      other applicable SEC or other reports, attestations, certifications and other
      documents), to the extent that the Servicer’s signature is required by, and
      consistent with, the federal securities laws and/or any other applicable
      Requirements of Law, including Regulation AB.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (c)    Opinions
      of Counsel.
      The
      Servicer shall deliver to the Issuer and the Indenture Trustee: 

     

    (i)    promptly
      after the execution and delivery of this Agreement and of each amendment hereto,
      promptly after the execution of the Sale Agreement and of each amendment thereto
      and on each Subsequent Transfer Date, an Opinion of Counsel from external
      counsel of the Issuer either (A) to the effect that, in the opinion of such
      counsel, all filings, including filings with the PSC and the Maryland State
      Department of Assessments and Taxation and all filings pursuant to the UCC,
      that
      are necessary under the UCC and the Rate Stabilization Law to fully preserve,
      protect and perfect the Liens of the Indenture Trustee in the Rate Stabilization
      Property have been authorized, executed and filed, and reciting the details
      of
      such filings or referring to prior Opinions of Counsel in which such details
      are
      given, or (B) to the effect that, in the opinion of such counsel, no such action
      shall be necessary to fully preserve, protect and perfect such Liens; and

     

    (ii)    within
      ninety (90) days after the beginning of each calendar year beginning with the
      first calendar year beginning more than three (3) months after the date hereof,
      an Opinion of Counsel from external counsel of the Issuer, dated as of a date
      during such ninety (90)-day period, either (A) to the effect that, in the
      opinion of such counsel, all filings, including filings with the PSC and the
      Maryland State Department of Assessments and Taxation and all filings pursuant
      to the UCC, have been executed and filed that are necessary under the UCC and
      the Rate Stabilization Law to fully preserve, protect and perfect the Liens
      of
      the Indenture Trustee in the Rate Stabilization Property, and reciting the
      details of such filings or referring to prior Opinions of Counsel in which
      such
      details are given, or (B) to the effect that, in the opinion of such counsel,
      no
      such action shall be necessary to fully preserve, protect and perfect such
      Liens.

     

    Each
      Opinion of Counsel referred to in clause
      (i)
      or
(ii)
      above
      shall specify any action necessary (as of the date of such opinion) to be taken
      in the following year to preserve, protect and continue the perfection of such
      Lien. 

     

    SECTION
      3.02.    Servicing
      and Maintenance Standards.
      On
      behalf of the Issuer, the Servicer shall manage, service, administer and make
      collections in respect of the Rate Stabilization Property with reasonable care
      and in material compliance with applicable Requirements of Law, using the same
      degree of care and diligence that the Servicer exercises with respect to similar
      assets for its own account and, if applicable, for others; follow customary
      standards, policies and procedures for the industry in Maryland in performing
      its duties as Servicer; use all reasonable efforts, consistent with its
      customary servicing procedures, to enforce, and maintain rights in respect
      of,
      the Rate Stabilization Property and to bill and collect the Qualified Rate
      Stabilization Charges; comply with all Requirements of Law applicable to and
      binding on it relating to the Rate Stabilization Property; file all PSC notices
      described in the Rate Stabilization Law and file and maintain the effectiveness
      of UCC and Maryland State Department of Assessments and Taxation filings with
      respect to the property transferred from time to time under the Sale Agreement,
      and (f) take such other action on behalf of the Issuer to ensure that the Lien
      of the Indenture Trustee on the Rate Stabilization Bond

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

     Collateral
      remains perfected and of first priority. The Servicer shall follow such
      customary and usual practices and procedures as it shall deem necessary or
      advisable in its servicing of all or any portion of the Rate Stabilization
      Property, which, in the Servicer’s judgment, may include the taking of legal
      action, at the Issuer’s expense but subject to the priority of payment set forth
      in Section 8.02(e)
      of the
      Indenture.

     

    SECTION
      3.03.    Annual
      Reports on Compliance with Regulation AB.
      

     

    (a)    The
      Servicer shall deliver to the Issuer, the Indenture Trustee and the Rating
      Agencies, on or before the earlier of (a) March 31 of each year, beginning
      March
      31, 2008, or (b) with respect to each calendar year during which the Sponsor’s
      annual report on Form 10-K is required to be filed in accordance with the
      Exchange Act and the rules and regulations thereunder, the date on which the
      annual report on Form 10-K is required to be filed in accordance with the
      Exchange Act and the rules and regulations thereunder, certificates from a
      Responsible Officer of the Servicer (i) containing, and certifying as to, the
      statements of compliance required by Item 1123 (or any successor or similar
      items or rule) of Regulation AB, as then in effect and (ii) containing, and
      certifying as to, the statements and assessment of compliance required by Item
      1122(a) (or any successor or similar items or rule) of Regulation AB, as then
      in
      effect.

     

    (b)    The
      Servicer shall use commercially reasonable efforts to obtain from each other
      party participating in the servicing function any additional certifications
      as
      to the statements and assessment required under Item 1122 or Item 1123 of
      Regulation AB to the extent required in connection with the filing of any annual
      report on Form 10-K; provided, however, that a failure to obtain such
      certifications shall not be a breach of the Servicer’s duties hereunder. The
      parties acknowledge that the Indenture Trustee’s certifications shall be limited
      to the Item 1122 certifications described in Exhibit
      E
      of the
      Indenture.

     

    SECTION
      3.04.    Annual
      Report by Independent Registered Public Accountants.

     

    (a)    The
      Servicer, at its own expense in partial consideration of the Servicing Fee
      paid
      to it, shall cause
      a
      firm of Independent registered public accountants (which may provide other
      services to the Servicer or the Seller) to prepare annually, and the Servicer
      shall deliver annually to the Issuer, the Indenture Trustee
      and the Rating Agencies on or before the earlier of (a) March 31 of each year,
      beginning March 31, 2008, or (b) with respect to each calendar year during
      which
      the Sponsor’s annual report on Form 10-K is required to be filed in accordance
      with the Exchange Act and the rules and regulations thereunder, the date on
      which the annual report on Form 10-K is required to be filed in accordance
      with
      the Exchange Act and the rule and regulations thereunder, a report addressed
      to
      the Servicer (the “Annual
      Accountant’s Report”)
      to the
      effect that such firm has performed certain procedures, agreed between the
      Servicer and such accountants, in connection with the Servicer’s compliance with
      its obligations under this Agreement during the preceding twelve (12) months
      ended December 31 (or, in the case of the first Annual Accountant’s Report to be
      delivered on or before March 31, 2008, the period of time from the date of
      this
      Agreement until December 31, 2007), identifying the results of such procedures
      and including any exceptions noted.
      In the
      event that the accounting firm 

     

    
      
        
        

      

      
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    providing
      such report requires the Indenture Trustee to agree or consent to the procedures
      performed by such firm, the Issuer shall direct the Indenture Trustee in writing
      to so agree; it being understood and agreed that the Indenture Trustee will
      deliver such letter of agreement or consent in conclusive reliance upon the
      direction of the Issuer, and the Indenture Trustee will not make any independent
      inquiry or investigation as to, and shall have no obligation or liability in
      respect of the sufficiency, validity or correctness of such
      procedures.

     

    (b)    The
      Annual Accountant’s Report shall also indicate that the accounting firm
      providing such report is independent of the Servicer in accordance with the
      Rules of the Public Company Accounting Oversight Board, and shall include the
      attestation report required under Item 1122(b) of Regulation AB (or any
      successor or similar items or rule), as then in effect.

     

    SECTION
      3.05.    Monitoring
      of Third-Party Collectors.
      From
      time to time, until the Retirement of the Rate Stabilization Bonds, the Servicer
      shall, in accordance with the Servicing Standard, take all actions with respect
      to Third-Party Collectors required to be taken by the Servicer as set forth,
      if
      applicable, in any agreement with the Servicer and applicable Requirements
      of
      Law in effect from time to time and implement such additional procedures and
      policies as are necessary to ensure that the obligations of all Third-Party
      Collectors in connection with Qualified Rate Stabilization Charges are properly
      enforced in accordance with, if applicable, the terms of any agreement with
      the
      Servicer and applicable Requirements of Law in effect from time to time. Such
      procedures and policies shall include the following:

     

    (a)    Maintenance
      of Records and Information.
       In addition to any actions required by applicable Requirements of Law, the
      Servicer shall:

     

    (i)    maintain
      adequate records for promptly identifying and contacting each Third-Party
      Collector;

     

    (ii)    maintain
      records of end-user Customers which are billed by Third-Party Collectors to
      permit prompt transfer of billing responsibilities in the event of default
      by
      such Third-Party Collectors;

     

    (iii)    maintain
      adequate records for enforcing compliance by all Third-Party Collectors with
      their obligations with respect to Qualified Rate Stabilization Charges,
      including compliance with all Remittance Requirements, TPC Credit Requirements
      and TPC Deposit Requirements; and

     

    (iv)    provide
      to each Third-Party Collector such information necessary for such Third-Party
      Collector to confirm the Servicer’s calculation of Qualified Rate Stabilization
      Charges and remittances, including, if applicable, Charge-Off
      amounts.

     

    The
      Servicer shall update the records described above no less frequently than
      quarterly.

     

    (b)    Credit
      and Collection Policies.
      The
      Servicer shall, to the fullest extent permitted under applicable Requirements
      of
      Law, impose such terms with respect to credit and collection policies applicable
      to Third-Party Collectors as may be reasonably necessary to 

     

    
      
        
        

      

      
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    prevent
      the then-current rating of the Rate Stabilization Bonds of any Series from
      being
      downgraded, withdrawn or suspended. The Servicer shall, in accordance with
      and
      to the extent permitted by applicable Requirements of Law, include and impose
      the above-described terms in all instances in which BGE or Third-Party
      Collectors issue single bills to BGE’s Customers that include Qualified Rate
      Stabilization Charges. The Servicer shall periodically review the need for
      modified or additional terms based upon, among other things, the relative amount
      of QRSC Payments received from Customers or through Third-Party Collectors
      relative to the Periodic Billing Requirement, the historical payment and default
      experience of Customers and each Third-Party Collector and such other credit
      and
      collection policies to which the Customers and Third-Party Collectors are,
      or
      may become, subject.

     

    (c)    Monitoring
      of Performance and Payment by Third-Party Collectors.
      In
      addition to any actions required by applicable Requirements of Law, the Servicer
      shall undertake to do the following:

     

    (i)    The
      Servicer shall require each Third-Party Collector to pay all Qualified Rate
      Stabilization Charges (less an allowance for Charge-Offs) billed to such
      Third-Party Collector in accordance with the provisions of any applicable
      Requirements of Law (whether or not disputed). The Servicer shall monitor
      compliance by each Third-Party Collector with all Remittance Requirements,
      TPC
      Credit Requirements and TPC Deposit Requirements and take prompt action to
      enforce such requirements.

     

    (ii)    Where
      a
      Third-Party Collector is responsible for billing the Customers, the Servicer
      shall, consistent with its customary billing practices, bill each Applicable
      Third-Party Collector no less frequently than the billing cycle otherwise
      applicable to such Customers.

     

    (iii)    The
      Servicer shall work with Third-Party Collectors to resolve any disputes using
      the dispute resolution procedures established by applicable Requirements of
      Law,
      in accordance with the Servicing Standard.

     

    (d)    Enforcement
      of Third-Party Collector Obligations.
      The
      Servicer shall ensure that each Third-Party Collector remits all QRSC Payments
      which it is obligated to remit to the Servicer. In the event of any default
      by
      any Third-Party Collector, the Servicer shall enforce all rights set forth
      in
      and take all other steps permitted by any applicable Requirements of Law as
      it
      determines, in accordance with the Servicing Standard, are reasonably necessary
      to ensure the prompt payment of QRSC Payments by such Third-Party Collector
      and
      to preserve the rights of the Holders with respect thereto, including, where
      appropriate, terminating the right of any Third-Party Collector to bill and
      collect Qualified Rate Stabilization Charges or petitioning the PSC to impose
      such other remedies or penalties as may be available under the circumstances.
      Any agreement entered into between the Servicer and a defaulted Third-Party
      Collector will be limited to the terms of this Agreement and will satisfy the
      Rating Agency Condition. In the event the Servicer has actual knowledge that
      a
      Third-Party Collector is in default, including due to the downgrade by the
      Rating Agencies of any party providing credit support for such Third-Party
      Collector, the Servicer shall promptly notify a Responsible Officer

     

    
      
        
        

      

      
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    of
      the
      Indenture Trustee in writing of the same and, shall, if applicable, instruct
      the
      Indenture Trustee either to:

     

    (i)    withdraw
      from such Third-Party Collector’s TPC Deposit Account and deposit into the
      applicable Collection Accounts the lesser of (x) the amount of cash on deposit
      in such TPC Deposit Account and (y) the amount of any Qualified Rate
      Stabilization Charges then due and payable by such Third-Party Collector;
      or

     

    (ii)    make
      demand under any letter of credit, guarantee or other credit support up to
      the
      lesser of (x) the amount of such letter of credit, guarantee or other credit
      support and (y) the amount of any Qualified Rate Stabilization Charges then
      due
      and payable by such Third-Party Collector, and deposit the amounts received,
      if
      any, as a result of such demand into the applicable Collection
      Accounts.

     

    The
      Indenture Trustee shall, within two (2) Business Days of receipt of such written
      notice, withdraw such funds from the TPC Deposit Account or make demand under
      such credit support, as applicable, and deposit such funds withdrawn or
      received, as applicable, into the applicable Collection Accounts.

     

    (e)    Maintenance
      of TPC Deposit Accounts.
      The
      Servicer shall cause the entity acting as Indenture Trustee to maintain one
      or
      more TPC Deposit Accounts as described in Section
      8.02(g)
      of the
      Indenture. The Servicer shall provide written direction to the Indenture Trustee
      regarding the allocation and release of funds on deposit in the TPC Deposit
      Accounts, as permitted or required by the Indenture, this Agreement, or any
      applicable Requirements of Law. The Indenture Trustee shall be entitled to
      conclusively rely on any such written directions from the Servicer. The Servicer
      will seek and use reasonable best efforts to obtain, from any Third-Party
      Collector which wishes to satisfy its credit support requirements by making
      a
      deposit to a TPC Deposit Account, a written security agreement stating that
      (i)
      by making such deposit the Third-Party Collector has granted a security interest
      in such deposit in favor of the Indenture Trustee, and (ii) the Indenture
      Trustee, in holding such deposit as collateral, will have the rights and
      remedies of a secured party under Article 9 of the UCC with respect to such
      collateral, and the Servicer will promptly forward any such agreement to the
      Indenture Trustee.

     

    (f)    Affiliated
      Third-Party Collectors.
      In
      performing its obligations under this Section
      3.05,
      the
      Servicer shall deal with any Third-Party Collectors which are Affiliates of
      the
      Servicer on terms which are no more favorable in the aggregate to such
      affiliated Third-Party Collector than those used by the Servicer in its dealings
      with Third-Party Collectors that are not Affiliates of the
      Servicer.

     

    ARTICLE
      IV

    SERVICES
      RELATED TO TRUE-UP ADJUSTMENTS

     

    SECTION
      4.01.    True-Up
      Adjustments.
      From
      time to time, until the Retirement of the Rate Stabilization Bonds, the Servicer
      shall identify the need for True-Up Adjustments for each Series and shall take
      all reasonable action to obtain and implement such True-Up Adjustments, all
      in
      accordance with the following:

     

    
      
        
        

      

      
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    (a)    Expected
      Amortization Schedule.
      The
      Expected Amortization Schedule for the initial Series of Rate Stabilization
      Bonds is attached hereto as Schedule
      4.01(a).
      In
      connection with the Issuer’s issuance of any additional Series of Rate
      Stabilization Bonds after the Closing Date, the Servicer, on or prior to the
      Series Issuance Date therefor, shall revise the Expected Amortization Schedule
      to add a new schedule for each new Series of Rate Stabilization Bonds and set
      forth, as of each Payment Date through the latest Scheduled Final Payment Date
      for any Series of Rate Stabilization Bonds, the aggregate principal amounts
      of
      the Rate Stabilization Bonds of all Series, including such additional Series,
      expected to be outstanding on such Payment Date. If the Expected Amortization
      Schedule is revised as set forth above, the Servicer shall send a copy of such
      revised Expected Amortization Schedule to the Issuer, the Indenture Trustee
      and
      the Rating Agencies promptly thereafter.

     

    (b)    True-Up
      Adjustments.

     

    (i)    Semi-Annual
      True-Up Adjustments and Filings.
      Prior
      to the
      Scheduled Final Payment Date of the last Tranche of a Series, during the term
      of
      the Rate Stabilization Bonds, no later than forty-five (45) days before the
      rolling six month anniversary date of the Series Issuance Date for each Series,
      the Servicer shall: (A) update the data and assumptions underlying the
      calculation of the Qualified Rate Stabilization Charges, including projected
      electricity usage during the next Calculation Period and interest and estimated
      expenses and fees of the Issuer to be paid during such period; (B) determine
      the
      Periodic Payment Requirement and Periodic Billing Requirement for the next
      12
      Collection Periods based on such updated data and assumptions; (C) calculate
      the
      undercollections or overcollections for the previous Calculation Period,
      including without limitation any undercollections or overcollections caused
      by
      Third-Party Collector defaults, by subtracting the Estimated QRSC Collections
      for such previous Calculation Period from the Periodic Billing Requirement
      for
      such previous Calculation Period; (D) taking into account the then-current
      Collections Curve and Charge-Offs, calculate the amount needed to correct such
      undercollections or overcollections during the forthcoming 12 Collection
      Periods; (E) sum the amount in step (D) with the scheduled Periodic Billing
      Requirement for the upcoming 12 Collection Periods to determine an adjusted
      Periodic Billing Requirement; (F) divide the amount calculated in step (E)
      by
      the appropriate forecasted Periodic Billing Requirement to determine the
      adjusted Qualified Rate Stabilization Charge rate for the upcoming 12 Collection
      Periods; (G) make all required notice and other filings with the PSC to reflect
      the revised Qualified Rate Stabilization Charges; and (H) take all reasonable
      actions and make all reasonable efforts to effect such Semi-Annual True-Up
      Adjustment on the Semi-Annual True-Up Adjustment Date and to enforce the
      provisions of applicable Requirements of Law. 

     

    (ii)    Interim
      True-Up Adjustments and Filings.
      At any
      time during the term of the Rate Stabilization Bonds, the Servicer shall
      periodically compare the anticipated Unrecovered Balance, as of the next Payment
      Date and after giving effect to payments to be made on such Payment Date, to
      the
      Projected 

     

    
      
        
        

      

      
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    Unrecovered
      Balance as of such Payment Date. As a result of such periodic comparison, (A)
      the Servicer may make an InterimTrue-Up Adjustment to correct any
      undercollection or overcollection if, in its sole and exclusive discretion,
      an
      Interim True-Up Adjustment is necessary in order to provide for timely payment
      of the Rate Stabilization Bonds based on Rating Agency and Bondholder
      considerations, and (B) the Servicer shall, no later than fifteen (15) days
      prior to commencement of the next Collection Period, make all required notice
      and other filings with the PSC to implement a mandatory Interim True-Up
      Adjustment (1) if the Servicer determines collection of Qualified Rate
      Stabilization Charges as of the next Payment Date would result in a difference
      greater than 5% in absolute value between (x) the outstanding principal amount
      of the Rate Stabilization Bonds plus amounts on deposit in the applicable Excess
      Funds Subaccount and (y) such Projected Unrecovered Balance as of such Payment
      Date or (2) to meet a Rating Agency Requirement that any Tranche of Rate
      Stabilization Bonds be paid in full by its Scheduled Final Payment Date. The
      Servicer shall implement the revised Qualified Rate Stabilization Charges,
      if
      any, resulting from such Interim True-Up Adjustment on the Interim True-Up
      Adjustment Date and shall otherwise take all reasonable actions and make all
      reasonable efforts to effect such Interim True-Up Adjustment on the Interim
      True-Up Adjustment Date and to enforce the provisions of applicable Requirements
      of Law. 

     

    (iii)    Non-Standard
      True-Up Adjustments and Filings.
      At any
      time during the term of the Rate Stabilization Bonds, the Servicer shall take
      all reasonable actions and make all required notice and other filings with
      the
      PSC to implement an amendment of the True-Up Adjustment Mechanism if it deems
      such an amendment to be necessary or appropriate in order to address any
      material deviations between Estimated QRSC Collections or Actual QRSC
      Collections and the Periodic Payment Requirement. No such change shall cause
      the
      then-current credit ratings of the Rate Stabilization Bonds to be suspended,
      withdrawn or downgraded. 

     

    (iv)    Quarterly
      True-Up Adjustments and Filings.
      To the
      extent that Rate Stabilization Bonds of any Series remain Outstanding after
      the
      Scheduled Final Payment Date of the last Tranche of such Series, during the
      term
      of the Rate Stabilization Bonds, no later than forty-five (45) days before
      the
      rolling three month anniversary date of the Series Issuance Date, the Servicer
      shall: (A) update the data and assumptions underlying the calculation of the
      Qualified Rate Stabilization Charges, including projected electricity usage
      during the next Calculation Period and interest and estimated expenses and
      fees
      of the Issuer to be paid during such period; (B) determine the Periodic Payment
      Requirement and Periodic Billing Requirement for the next 12 Collection Periods
      based on such updated data and assumptions; (C) taking into account the
      then-current Collections Curve and Charge-Offs, calculate the undercollections
      or overcollections for the previous Calculation Period, including without
      limitation any undercollections or overcollections caused by Third-Party
      Collector defaults, by subtracting the Estimated QRSC Collections for such
      previous Calculation Period from the Periodic Billing Requirement for such
      previous Calculation 

     

    
      
        
        

      

      
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      Period
        from the Periodic Billing Requirement for such previous Calculation Period;
        (D)
        calculate the amount needed to correct such undercollections or overcollections
        during the forthcoming 12 Collection Periods; (E) sum the amount in step
        (D)
        with the scheduled Periodic Billing Requirement for the upcoming 12 Collection
        Periods to determine an adjusted Periodic Billing Requirement; (F) divide
        the
        amount calculated in step (E) by the appropriate forecasted Periodic Billing
        Requirement to determine the adjusted Qualified Rate Stabilization Charge
        rate
        for the upcoming 12 Collection Periods; (G) make all required notice and
        other
        filings with the PSC to reflect the revised Qualified Rate Stabilization
        Charges; and (H) take all reasonable actions and make all reasonable efforts
        to
        effect such Quarterly True-Up Adjustment on the Quarterly True-Up Adjustment
        Date and to enforce the provisions of applicable Requirements of
        Law.

    

     

    (c)    Reports.

     

    (i)    Notification
      of Amendatory Tariff Filings and True-Up Adjustments.
      Whenever the Servicer files an Amendatory Tariff with the PSC, the Servicer
      shall send a copy of such filing or notice (together with a copy of all notices
      and documents which, in the Servicer’s reasonable judgment, are material to the
      adjustments effected by such Amendatory Tariff or notice) to the Issuer, the
      Indenture Trustee and the Rating Agencies concurrently therewith. If, for any
      reason any revised Qualified Rate Stabilization Charges are not implemented
      and
      effective on the applicable date set forth herein, the Servicer shall notify
      the
      Issuer, the Indenture Trustee and each Rating Agency by the end of the second
      Servicer Business Day after such applicable date.

     

    (ii)    Servicer’s
      Certificate.
      Not
      later than five (5) Servicer Business Days prior to each Payment Date or Special
      Payment Date, the Servicer shall deliver a written report, for each Series
      of
      Rate Stabilization Bonds, substantially in the form of Exhibit
      C
      hereto
      (the “Servicer’s
      Certificate”)
      to the
      Issuer, the Indenture Trustee and the Rating Agencies which shall include all
      of
      the following information (to the extent applicable and including any other
      information so specified in the applicable Series Supplement) as to the Rate
      Stabilization Bonds of such Series with respect to such Payment Date or Special
      Payment Date or the period since the previous Payment Date, as
      applicable:

     

    (A)    the
      amount of the payment to Holders allocable to principal, if any;

     

    (B)    the
      amount of the payment to Holders allocable to interest;

     

    (C)    the
      aggregate Outstanding Amount of such Rate Stabilization Bonds, before and after
      giving effect to any payments allocated to principal reported under clause
      (A)
      above;

     

    (D)    the
      difference, if any, between the amount specified in clause
      (C)
      above
      and the Outstanding Amount of such Rate Stabilization Bonds specified in the
      related Expected Amortization Schedule;

     

    
      
        
        

      

      
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    (E)    any
      other
      transfers and payments to be made on such Payment Date or Special Payment Date,
      including amounts paid to the Indenture Trustee and to the Servicer;
      and

     

    (F)    the
      amounts on deposit in the applicable Capital Subaccount and the applicable
      Excess Funds Subaccount, after giving effect to the foregoing payments.

     

    (iii)    Reports
      to Customers.

     

    (A)    After
      each revised Qualified Rate Stabilization Charge has gone into effect pursuant
      to a True-Up Adjustment, the Servicer shall, to the extent and in the manner
      and
      time frame required by applicable PSC Regulations, if any, cause to be prepared
      and delivered to Customers any required notices announcing such revised
      Qualified Rate Stabilization Charges.

     

    (B)    The
      Servicer shall comply with applicable Requirements of Law with respect to the
      identification of Qualified Rate Stabilization Charges on Bills, and, in the
      Bills regularly sent to Customers or Third-Party Collectors, the Servicer will
      separately identify the Qualified Rate Stabilization Charges as being owned
      by
      the Issuer. Unless prohibited by applicable Requirements of Law, the Servicer
      shall use reasonable efforts to cause each Applicable Third-Party Collector,
      at
      least once each year, to include notices in the bills sent by such Applicable
      Third-Party Collector to Customers indicating additionally that the Qualified
      Rate Stabilization Charges are not owned by such Applicable Third-Party
      Collector (to the extent that such Applicable Third-Party Collector does not
      include such information in the Bills regularly sent to Customers). Such notice
      shall be included either as an insert to or in the text of the Bills delivered
      to such Customers or shall be delivered to Customers by electronic means or
      such
      other means as the Servicer or the Applicable Third-Party Collector may from
      time to time use to communicate with its respective Customers.

     

    (C)    Except
      to
      the extent that applicable PSC Regulations make the Applicable Third-Party
      Collector responsible for such costs, or the Applicable Third-Party Collector
      has otherwise agreed to pay such costs, the Servicer shall pay from its own
      funds all costs of preparation and delivery incurred in connection with
clauses
      (A)
      and
(B)
      above,
      including printing and postage costs as the same may increase or decrease from
      time to time.

     

    (iv)    Third-Party
      Collector Reports.
      The
      Servicer shall provide to the Rating Agencies, upon request, any publicly
      available reports filed by the Servicer with the PSC (or otherwise made publicly
      available by the Servicer) relating to Third-Party Collectors and any other
      non-confidential and non-proprietary information relating to Third-Party
      Collectors reasonably requested by the Rating Agencies to the extent such
      information is reasonably available to the Servicer.

     

    
      
        
        

      

      
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    SECTION
      4.02.    Limitation
      of Liability.
      The
      Issuer and the Servicer expressly agree and acknowledge that:

     

    (i)    In
      connection with any True-Up Adjustment, the Servicer is acting solely in its
      capacity as the servicing agent hereunder.

     

    (ii)    Neither
      the Servicer nor the Issuer nor the Indenture Trustee is responsible in any
      manner for, and shall have no liability whatsoever as a result of, any action,
      decision, ruling or other determination made or not made, or any delay (other
      than any delay resulting from the Servicer’s failure to make any filings
      required by Section
      4.01
      in a
      timely and correct manner or any breach by the Servicer of its duties under
      this
      Agreement that adversely affects the Rate Stabilization Property or the True-Up
      Adjustments), by the PSC in any way related to the Rate Stabilization Property
      or in connection with any True-Up Adjustment, the subject of any filings under
      Section
      4.01,
      any
      proposed True-Up Adjustment, or the approval of any revised Qualified Rate
      Stabilization Charges and the scheduled adjustments thereto.

     

    (iii)    Except
      to
      the extent that the Servicer is liable under Section
      8.01,
      the
      Servicer shall have no liability whatsoever relating to the calculation of
      any
      revised Qualified Rate Stabilization Charges and the scheduled adjustments
      thereto, including as a result of any inaccuracy of any of the assumptions
      made
      in such calculation regarding expected energy usage volume, the Collections
      Curve, Charge-Offs and estimated expenses and fees of the Issuer, so long as
      the
      Servicer has acted in good faith and has not acted in a grossly negligent manner
      in connection therewith, nor shall the Servicer have any liability whatsoever
      as
      a result of any Person, including the Holders, not receiving any payment, amount
      or return anticipated or expected or in respect of any Rate Stabilization Bond
      generally.

     

    (b)    Notwithstanding
      the foregoing, this Section
      4.02
      shall
      not relieve the Servicer of liability for any misrepresentation by the Servicer
      under Section
      6.01
      or for
      any breach by the Servicer of its other obligations under this
      Agreement.

     

    ARTICLE
      V

    THE
      RATE
      STABILIZATION PROPERTY

     

    SECTION
      5.01.    Custody
      of Rate Stabilization Property Records.
      To
      assure uniform quality in servicing the Rate Stabilization Property and to
      reduce administrative costs, the Issuer hereby revocably appoints the Servicer,
      and the Servicer hereby accepts such appointment, to act as the agent of the
      Issuer as custodian of any and all documents and records that the Seller shall
      keep on file, in accordance with its customary procedures, relating to the
      Rate
      Stabilization Property, including copies of any Qualified Rate Orders, Issuance
      Advice Letters, Tariffs and Amendatory Tariffs relating thereto and all
      documents filed with the PSC in connection with any True-Up Adjustment and
      computational records relating thereto (collectively, the “Rate
      Stabilization Property Records”),
      which
      are hereby constructively delivered to the Indenture Trustee, as pledgee of
      the
      Issuer (or, in the case of the Subsequent 

     

    
      
        
        

      

      
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    Rate
      Stabilization Property, will as of the applicable Subsequent Transfer Date
      be
      constructively delivered to the Indenture Trustee, as pledgee of the Issuer)
      with respect to all Rate Stabilization Property.

     

    SECTION
      5.02.    Duties
      of Servicer as Custodian.

     

    (a)    Safekeeping.
       The Servicer shall hold the Rate Stabilization Property Records on behalf
      of the Issuer and maintain such accurate and complete accounts, records and
      computer systems pertaining to the Rate Stabilization Property Records as shall
      enable the Issuer and the Indenture Trustee, as applicable, to comply
      with this Agreement, the Sale Agreement and the Indenture. In performing its
      duties as custodian,
      the Servicer shall act with reasonable care, using that degree of care and
      diligence that the Servicer exercises with respect to comparable assets that
      the
      Servicer services for itself or, if applicable, for others. The Servicer shall
      promptly report to the Issuer, the Indenture Trustee and the Rating Agencies
      any
      failure on its part to hold the Rate Stabilization Property Records and maintain
      its accounts, records and computer systems as herein provided and promptly
      take
      appropriate action to remedy any such failure. Nothing herein shall be deemed
      to
      require an initial review or any periodic review by the Issuer or the Indenture
      Trustee of the Rate Stabilization Property Records. The Servicer’s duties to
      hold the Rate Stabilization Property Records set forth in this Section
      5.02,
      to the
      extent such Rate Stabilization Property Records have not been previously
      transferred to a successor Servicer pursuant to Article
      VII,
      shall
      terminate one year and one day after the earlier of the date on which (i) the
      Servicer is succeeded
      by a successor Servicer in accordance with Article
      VII
      and (ii)
      no Rate Stabilization Bonds of any Series are Outstanding.

     

    (b)    Maintenance
      of and Access to Records.
       The Servicer shall maintain the Rate Stabilization Property Records at 110
      W. Fayette Street, Baltimore, Maryland 21201-3708 or at such other office as
      shall be specified to the Issuer and the Indenture Trustee by written notice
      at
      least thirty (30) days prior to any change in location. The Servicer shall
      make
      available for inspection, audit and copying to the Issuer and the Indenture
      Trustee or their respective duly authorized representatives, attorneys or
      auditors the Rate Stabilization Property Records at such times during normal
      business hours as the Issuer or the Indenture Trustee shall reasonably request
      and which do not unreasonably interfere with the Servicer’s normal operations.
      Nothing in this Section
      5.02(b)
      shall
      affect the obligation of the Servicer to observe any applicable Requirements
      of
      Law prohibiting disclosure of information regarding the Customers, and the
      failure of the Servicer to provide access to such information as a result of
      such obligation shall not constitute a breach of this Section
      5.02(b).

     

    (c)    Release
      of Documents.
       Upon instruction from the Indenture Trustee in accordance with the
      Indenture, the Servicer shall release any Rate Stabilization Property Records
      to
      the Indenture Trustee, the Indenture Trustee’s agent or the Indenture Trustee’s
      designee, as the case may be, at such place or places as the Indenture Trustee
      may designate, as soon as practicable. Nothing in this Section
      5.02(c)
      shall
      affect the obligation of the Servicer to observe any applicable Requirements
      of
      Law prohibiting disclosure of information regarding the Customers, and the
      failure of the Servicer to provide access to such information as a result of
      such obligation shall not constitute a breach of this Section
      5.02(c).

     

    
      
        
        

      

      
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    (d)    Defending
      Rate Stabilization Property Against Claims.
      The
      Servicer shall institute any action or proceeding necessary to compel
      performance by each Third-Party Collector (at the earliest possible time) of
      any
      of their respective obligations or duties under applicable Requirements of
      Law
      with respect to the Rate Stabilization Property. In addition, the Servicer
      shall
      institute any action or proceeding necessary to compel performance by the PSC
      or
      the State of Maryland, or any political subdivision, agency or other
      instrumentality of the State of Maryland, of any of their respective obligations
      or duties under applicable Requirements of Law with respect to the Rate
      Stabilization Property. The Servicer further agrees to take such legal or
      administrative actions, including without limitation defending against or
      instituting and pursuing legal actions and appearing or testifying at hearings
      or similar proceedings, as may be reasonably necessary to block or overturn
      any
      attempts to cause a repeal of, modification of or supplement to the Rate
      Stabilization Law or any Qualified Rate Order. In any proceedings related to
      the
      exercise of the power of eminent domain by any municipality to acquire a portion
      of BGE’s electric distribution facilities, the Servicer shall assert that the
      court ordering such condemnation must treat such municipality as a successor
      to
      BGE under the Rate Stabilization Law and Qualified Rate Order and that Customers
      in such municipalities must remain responsible for payment of Qualified Rate
      Stabilization Charges. The costs of any action described in this Section
      5.02(d)
      shall be
      payable from the Collection Account as an Operating Expense in accordance with
      Section
      8.02(e)
      of the
      Indenture. The Servicer’s obligations pursuant to this Section
      5.02(d)
      shall
      survive and continue notwithstanding that payment of such Operating Expense
      may
      be delayed pursuant to the terms of the Indenture (it being understood that
      the
      Servicer may be required initially to advance its own funds to satisfy its
      obligations hereunder).

     

    SECTION
      5.03.    Effective
      Period and Termination.
      The
      Servicer’s appointment as custodian shall become effective as of the Closing
      Date and shall continue in full force and effect until terminated pursuant
      to
      this Section
      5.03.
      If the
      Servicer shall resign as Servicer in accordance with the provisions of this
      Agreement or if all of the rights and obligations of the Servicer shall have
      been terminated under Section
      7.01,
      the
      appointment of the Servicer as custodian shall be terminated effective as of
      the
      date on which the termination or resignation of the Servicer is effective.
      Additionally, if not sooner terminated as provided above, the Servicer’s
      obligations as Custodian shall terminate one year and one day after the date
      on
      which no Rate Stabilization Bonds of any Series are Outstanding.

     

    ARTICLE
      VI

    THE
      SERVICER

     

    SECTION
      6.01.    Representations
      and Warranties of Servicer.
      The
      Servicer makes the following representations and warranties, as of the Closing
      Date, as of each Subsequent Transfer Date relating to the sale of Subsequent
      Rate Stabilization Property, and as of such other dates as expressly provided
      in
      this Section
      6.01,
      on
      which the Issuer and the Indenture Trustee are deemed to have relied in entering
      into this Agreement relating to the servicing of the Rate
      Stabilization Property. The representations and warranties shall survive the
      execution and delivery of this Agreement, the sale of any Rate Stabilization
      Property and the pledge thereof to the Indenture Trustee pursuant to the
      Indenture.

     

    
      
        
        

      

      
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    (a)    Organization
      and Good Standing.
      The
      Servicer is duly organized and validly existing and is in good standing under
      the laws of the State of Maryland, with the requisite corporate or other power
      and authority to own its properties and to conduct its business as such
      properties are currently owned and such business is presently conducted and
      to
      execute, deliver and carry out the terms of this Agreement, and had at all
      relevant times, and has, the requisite power, authority and legal right to
      service the Rate Stabilization Property and to hold the Rate Stabilization
      Property Records as custodian.

     

    (b)    Due
      Qualification.
      The
      Servicer is duly qualified to do business and is in good standing, and has
      obtained all necessary licenses and approvals, in all jurisdictions in which
      the
      ownership or lease of property or the conduct of its business (including the
      servicing of the Rate Stabilization Property as required by this Agreement)
      shall require such qualifications, licenses or approvals (except where the
      failure to so qualify would not be reasonably likely to have a material adverse
      effect on the Servicer’s business, operations, assets, revenues or properties or
      to its servicing of the Rate Stabilization Property).

     

    (c)Power
      and Authority.
      The
      execution, delivery and performance of this Agreement have been duly authorized
      by all necessary action on the part of the Servicer under its organizational
      or
      governing documents and laws.

     

    (d)    Binding
      Obligation.
      This
      Agreement constitutes a legal, valid and binding obligation of the Servicer
      enforceable against the Servicer in accordance with its terms, subject to
      applicable insolvency, reorganization, moratorium, fraudulent transfer and
      other
      laws relating to or affecting creditors’ rights generally from time to time in
      effect and to general principles of equity (including concepts of materiality,
      reasonableness, good faith and fair dealing), regardless of whether considered
      in a proceeding in equity or at law.

     

    (e)    No
      Violation.
      The
      consummation of the transactions contemplated by this Agreement and the
      fulfillment of the terms hereof do not conflict with, result in any breach
      of
      any of the terms and provisions of, nor constitute (with or without notice
      or
      lapse of time) a default under, the organizational documents of the Servicer,
      or
      any indenture or other agreement or instrument to which the Servicer is a party
      or by which it or any of its property is bound; nor result in the creation
      or
      imposition of any Lien upon any of its properties pursuant to the terms of
      any
      such indenture, agreement or other instrument (other than any Lien that may
      be
      granted under the Basic Documents or any Lien created pursuant to Section 7-542
      of the Rate Stabilization Law); nor violate any existing Requirements of Law
      applicable to the Servicer of any Governmental Authority having jurisdiction
      over the Servicer or its properties.

     

    (f)    No
      Proceedings.
      There
      are no proceedings or investigations pending or, to the Servicer’s knowledge,
      threatened, before any Governmental Authority having jurisdiction over the
      Servicer or its properties involving or relating to the Servicer or the Issuer
      or, to the Servicer’s knowledge, any other Person: (i) asserting the invalidity
      of this Agreement or any of the other Basic Documents, (ii) seeking to prevent
      the issuance of the Rate Stabilization Bonds or the consummation of any of
      the
      transactions contemplated by this Agreement or any of the other Basic Documents,
      (iii) seeking any determination or ruling that could reasonably be expected
      to
      materially and adversely affect the performance by the Servicer of its
      obligations under, or the validity or enforceability of, this Agreement, any
      of
      the other Basic Documents or

     

    
      
        
        

      

      
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     the
      Rate Stabilization Bonds or (iv) seeking to adversely affect the federal income
      tax or state income or franchise tax classification of the Rate Stabilization
      Bonds of any Series as debt.

     

    (g)    Approvals.
      No
      approval, authorization, consent, order or other action of, or filing with,
      any
      Governmental Authority is required in connection with the execution and delivery
      by the Servicer of this Agreement, the performance by the Servicer of the
      transactions contemplated hereby or the fulfillment by the Servicer of the
      terms
      hereof, except those that have been obtained or made, those that the Servicer
      is
      required to make in the future pursuant to Article
      IV
      and
      those that the Servicer may need to file in the future to continue the
      effectiveness of any UCC or Maryland State Department of Assessments and
      Taxation filings.

     

    (h)    Reports
      and Certificates.
      Each
      report and certificate delivered in connection with an Issuance Advice Letter
      or
      delivered in connection with any filing made to the PSC by the Servicer on
      behalf of the Issuer with respect to the Qualified Rate Stabilization Charges
      or
      True-Up Adjustments will constitute a representation and warranty by the
      Servicer that each such report or certificate, as the case may be, is true
      and
      correct in all material respects; provided,
      however,
      that to
      the extent any such report or certificate is based in part upon or contains
      assumptions, forecasts or other predictions of future events, the representation
      and warranty of the Servicer with respect thereto will be limited to the
      representation and warranty that such assumptions, forecasts or other
      predictions of future events are reasonable based upon historical performance
      (and facts known to the Servicer on the date such report or certificate is
      delivered).

     

    SECTION
      6.02.    Binding
      Effect of Servicing Obligations.
      The
      obligations to continue to provide service and to collect and account for
      Qualified Rate Stabilization Charges will be binding upon the Servicer and
      any
      successor entity, including any municipality or public entity, which is a
      successor, to the Servicer, in whole or in part, and that provides electric
      transmission and distribution services to a Person that was a residential
      electric customer located within BGE’s service territory as it exists on the
      date of adoption of the Applicable Qualified Rate Order, or that became a
      residential electric customer within such area after that date and is still
      located within such territory. Any Person (a) into which the Servicer may be
      merged, converted or consolidated and which is a Permitted Successor, (b) that
      may result from any merger, conversion or consolidation to which the Servicer
      shall be a party and which is a Permitted
      Successor, (c) that may succeed to the properties and assets of the Servicer
      substantially as a whole and which is a Permitted Successor, (d) which results
      from the division of the Servicer into two or more Persons and which is a
      Permitted Successor, or (e) which otherwise is a Permitted Successor, which
      Person in any of the foregoing cases executes an agreement of assumption to
      perform all of the obligations of the Servicer hereunder, shall be the successor
      to the Servicer under this Agreement without further act on the part of any
      of
      the parties to this Agreement; provided,
      however,
      that
      (i) immediately after giving effect to such transaction, no representation
      or
      warranty made pursuant to Section
      6.01
      shall
      have been breached and no Servicer Default and no event which, after notice
      or
      lapse of time, or both, would become a Servicer Default shall have occurred
      and
      be continuing, (ii) the Servicer shall have delivered to the Issuer and the
      Indenture Trustee an Officer’s Certificate and an Opinion of Counsel from
      external counsel stating that such consolidation, conversion,
      merger, division
      or succession and such agreement of assumption complies with this Section
      6.02
      and that
      all conditions precedent, if any, provided for in this Agreement relating to
      such transaction have

     

    
      
        
        

      

      
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    been
      complied with, (iii) the Servicer shall have delivered to the Issuer, the
      Indenture Trustee
      and the Rating Agencies an Opinion of Counsel from external counsel of the
      Servicer either (A) stating that, in the opinion of such counsel, all filings
      to
      be made by the Servicer, including filings with the PSC and the Maryland State
      Department of Assessments and Taxation pursuant to the Rate Stabilization Law
      and the UCC, have been executed and filed and are in full force and effect
      that
      are necessary to fully preserve, protect and perfect the priority of the
      interests of the Issuer and the Lien of the Indenture Trustee in the Rate
      Stabilization Property and reciting the details of such filings or (B) stating
      that, in the opinion of such counsel, no such action shall be necessary to
      preserve, protect and continue the perfection of such interests or such Lien,
      (iv) the Servicer shall have delivered to the Issuer, the Indenture Trustee,
      the
      Rating Agencies and the PSC an Opinion of Counsel from independent tax counsel
      stating that, for federal income tax purposes, such consolidation, conversion,
      merger, division or succession and such agreement of assumption will not result
      in a material federal income tax consequence to the Issuer or the Holders of
      Rate Stabilization Bonds and (v) the Servicer shall have given the Rating
      Agencies prior written notice of such transaction. When any Person (or more
      than
      one Person) acquires the properties and assets of the Servicer substantially
      as
      a whole or otherwise becomes the successor, by merger, conversion,
      consolidation, sale, transfer, lease or otherwise, to all or substantially
      all
      the electric transmission and distribution business of the Servicer (or, if
      electric transmission and distribution
      are not provided by a single entity, provides electric delivery service directly
      to customers taking services at facilities, premises or loads located in BGE’s
      service area as it existed on the date of the adoption of the Qualified Rate
      Order in accordance with the terms of this Section 6.02),
      then
      upon satisfaction of all of the other conditions of this Section
      6.02,
      the
      preceding Servicer shall automatically and without further notice be released
      from all its obligations hereunder.

     

    SECTION
      6.03.    Limitation
      on Liability of Servicer and Others.
      Except
      as otherwise provided under this Agreement, including but not limited to
Section
      8.01,
      neither
      the Servicer nor any of the directors, officers, employees or agents of the
      Servicer shall be liable to the Issuer or any other Person for any action taken
      or for refraining from the taking of any action pursuant to this Agreement
      or
      for good faith errors in judgment; provided,
      however,
      that
      this provision shall not protect the Servicer or any such
      person against any liability that would otherwise be imposed by reason of
      willful misconduct, bad faith or gross negligence in the performance of duties
      or by reason of reckless disregard of obligations and duties under this
      Agreement. The Servicer and any director, officer, employee or agent of the
      Servicer may rely in good faith on the advice of counsel reasonably acceptable
      to the Indenture Trustee or on any document of any kind, prima facie properly
      executed and submitted by any Person, respecting any matters arising under
      this
      Agreement.

     

    Except
      as
      provided in this Agreement, including but not limited to Section
      5.02(d),
      the
      Servicer shall not be under any obligation to appear in, prosecute or defend
      any
      legal action relating to the Rate Stabilization Property that is not directly
      related to one of the Servicer’s enumerated duties in this Agreement or related
      to its obligation to pay indemnification, and that in its reasonable opinion
      may
      cause it to incur any expense or liability; provided,
      however,
      that
      the Servicer may, in respect of any Proceeding, undertake any action that is
      not
      specifically identified in this Agreement as a duty of the Servicer but that
      the
      Servicer reasonably determines is necessary or desirable in order to protect
      the
      rights and duties of the Issuer or the Indenture Trustee under this Agreement
      and the interests of the Holders and 

     

    
      
        
        

      

      
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    Customers
      under this Agreement. The Servicer’s costs and expenses incurred in connection
      with any such proceeding shall be payable from the Collection Account as an
      Operating Expense in accordance with Section
      8.02(e)
      of the
      Indenture. The Servicer’s obligations pursuant to this Section
      6.03
      shall
      survive and continue notwithstanding that payment of such Operating Expense
      may
      be delayed pursuant to the terms of the Indenture (it being understood that
      the
      Servicer may be required initially to advance its own funds to satisfy its
      obligations hereunder).

     

    SECTION
      6.04.    BGE
      Not to Resign as Servicer.
      Subject
      to the provisions of Section
      6.02,
      BGE
      shall not resign from the obligations and duties hereby imposed on it
      as Servicer
      under this Agreement unless BGE delivers to the Indenture Trustee and
      the PSC
      an
      opinion of external counsel to the effect that BGE’s performance of its duties
      under this Agreement shall no longer be permissible under applicable
      Requirements of Law. No such resignation
      shall become effective until a successor Servicer shall have assumed the
      responsibilities and obligations of BGE in accordance with Section
      7.02.

     

    SECTION
      6.05.    Servicing
      Compensation.
      

     

    (a)    
      In
      consideration for its services hereunder, until the Retirement of the Rate
      Stabilization Bonds, the Servicer shall receive an annual fee (the “Servicing
      Fee”)
      in an
      amount equal to:

     

    (i)    for
      so
      long as BGE is the Servicer, 0.05% of the aggregate initial principal amount
      of
      all Outstanding Series of Rate Stabilization Bonds, provided
      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 service the Rate Stabilization Property to the extent such
      incremental costs exceed 0.05% of the aggregate initial principal amount of
      all
      Outstanding Series of Rate Stabilization Bonds, and further provided
      that
      such excess amount 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 the event that the Servicing Fee exceeds the Servicer’s actual
      incremental costs to service the Rate Stabilization Property, then the Servicer
      will refund to Customers, in accordance with the Financing Credit Order, the
      difference between such incremental costs and the Servicing Fee. The Servicing
      Fee shall be modified, and this Section
      6.05(a)
      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. 

     

    (ii)    if
      BGE is
      not the Servicer, 1.25% of the aggregate initial principal amount of all
      Outstanding Series of Rate Stabilization Bonds, provided,
      however,
      that
      BGE may seek approval from the PSC for a higher fee under this Section
      6.05(a)(ii)
      if it
      can reasonably demonstrate to the PSC that the services cannot be obtained
      under
      then-current market conditions for a fee of 1.25% of the aggregate initial
      principal amount of all Outstanding Series of Rate Stabilization Bonds.

     

    
      
        
        

      

      
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    The
      Servicing Fee owing in respect of each Series shall be calculated based on
      the
      initial principal amount of such Series and shall be paid [semi-annually] with
      [one half] of the Servicing Fee being paid on each Payment Date.  

    

    (b)    The
      Servicing Fee set forth in Section
      6.05(a)
      and
      allocable to each Series shall be paid to the Servicer by the Indenture Trustee,
      on each Payment Date in accordance with the priorities set forth in Section
      8.02(e)
      of the
      Indenture, by wire transfer of immediately available funds from the applicable
      Collection Account to an account designated by the Servicer. Any portion of
      the
      Servicing Fee not paid on any such date should be added to the Servicing Fee
      payable on the subsequent Payment Date. In no event shall the Indenture Trustee
      be liable for the payment of any Servicing Fee or other amounts specified in
      this Section
      6.05;
      provided
      that
      this Section
      6.05
      does not
      relieve the Indenture Trustee of any duties it has to allocate funds for payment
      for such fees under Section
      8.02
      of the
      Indenture.

     

    (c)    Except
      as
      expressly provided elsewhere in this Agreement, the Servicer shall be required
      to pay from its own account expenses incurred by the Servicer in connection
      with
      its activities hereunder (including any fees to and disbursements by
      accountants, counsel, or any other Person, any taxes imposed on the Servicer
      and
      any expenses incurred in connection with reports to Holders) out of the
      compensation retained by or paid to it pursuant to this Section
      6.06,
      and
      shall not be entitled to any extra payment or reimbursement
      therefor.

     

    (d)    The
      foregoing Servicing Fees constitute a fair and reasonable price for the
      obligations to be performed by the Servicer. Such Servicing Fee shall be
      determined without regard to the income of the Issuer, shall not be deemed
      to
      constitute distributions to the recipient of any profit, loss or capital of
      the
      Issuer, shall not be considered an Operating Expense of the Issuer, and shall
      be
      subject to any limitations on such expenses set forth in the Applicable
      Qualified Rate Order.

     

    SECTION
      6.06.    Compliance
      with Applicable Requirements of Law.
      The
      Servicer covenants and agrees, in servicing the Rate Stabilization Property,
      to
      comply in all material respects with applicable Requirements of Law applicable
      to, and binding upon, the Servicer and relating to such Rate Stabilization
      Property the noncompliance with which would have a material adverse effect
      on
      the value of the Rate Stabilization Property; provided,
      however,
      that
      the foregoing is not intended to, and shall not, impose any liability
      on the Servicer for noncompliance with any applicable Requirements of Law that
      the Servicer is contesting in good faith in accordance with its customary
      standards and procedures.

     

    SECTION
      6.07.    Access
      to Certain Records and Information Regarding Rate Stabilization
      Property.
      The
      Servicer shall provide to the Indenture Trustee access to the Rate Stabilization
      Property Records as is reasonably required for the Indenture Trustee to perform
      its duties and obligations under the Indenture and the other Basic Documents,
      and shall provide access to such records to the Holders as required by
      applicable Requirements of Law. Access shall be afforded without charge, but
      only upon reasonable request and during normal business hours at the respective
      offices of the Servicer. Nothing in this Section
      6.07
      shall
      affect the obligation of the Servicer to observe any applicable Requirements
      of
      Law prohibiting disclosure of information regarding the Customers, and the
      failure of the Servicer to provide access to such information as a result of
      such obligation shall not constitute a breach of this Section
      6.07.

     

    
      
        
        

      

      
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    SECTION
      6.08.    Appointments.
      The
      Servicer may at any time appoint any Person to perform all or any portion of
      its
      obligations as Servicer hereunder; provided,
      however,
      that,
      unless such Person is an Affiliate of BGE, the Rating Agency Condition shall
      have been satisfied in connection therewith; provided further
      that the
      Servicer shall remain obligated and be liable under this Agreement for the
      servicing and administering of the Rate Stabilization Property in accordance
      with the provisions hereof without diminution of such obligation and liability
      by virtue of the appointment of such Person and to the same extent and under
      the
      same terms and conditions
      as if the
      Servicer alone were servicing and administering the Rate Stabilization Property.
      The fees and expenses of any such Person shall be as agreed between the Servicer
      and such Person from time to time and none of the Issuer, the Indenture Trustee,
      the Holders or any other Person shall have any responsibility therefor or right
      or claim thereto. Any such appointment shall not constitute a Servicer
      resignation under Section 6.04.

     

    SECTION
      6.09.    No
      Servicer Advances.
      The
      Servicer shall not make any advances of interest or principal on the Rate
      Stabilization Bonds.

     

    SECTION
      6.10.    Remittances.
      

     

    (a)    
      On each
      Servicer Business Day, with respect to each Series, the Servicer shall remit
      to
      the applicable General Subaccount of
      the
      applicable Collection Account for such Series the total Estimated QRSC
      Collections for such Servicer Business Day in respect of all previously billed
      Qualified Rate Stabilization Charges (the “Daily
      Remittance”),
      which
      Daily Remittance shall be calculated according to the procedures set forth
      in
Annex
      I
      and
      shall be remitted as soon as reasonably practicable but in no event later than
      the second Servicer Business Day after such payments are estimated to have
      been
      received. Prior to each remittance to the applicable General Subaccount of
      the
      applicable Collection Account pursuant to this Section
      6.10,
      the
      Servicer shall provide written notice to the Indenture Trustee of each such
      remittance (including the exact dollar amount to be remitted).
      The
      Servicer shall also, promptly upon receipt, remit to the applicable Collection
      Account any other proceeds of the Series Rate Stabilization Bond Collateral
      which it may have received from time to time.

     

    (b)    If
      the
      Servicer remits Estimated QRSC Collections to the applicable General Subaccount
      of the applicable Collection Account for such Series less frequently than on
      each Servicer Business Day, then, in accordance with the Financing Credit Order,
      the Servicer shall credit Customers, not less frequently than semi-annually,
      with interest on the balance of such Estimated QRSC Collections, which interest
      will be calculated in accordance with the Initial Qualified Rate Order,
provided
      that
      payment of such interest will be the sole financial responsibility of the
      Servicer and shall neither be considered an Operating Expense nor be paid out
      of
      the Collection Account or included in the calculation of True-Up Adjustments.
      

     

    (c)    The
      Servicer agrees and acknowledges that it holds all QRSC Payments collected
      by it
      and any other proceeds for the Series Rate Stabilization Bond Collateral
      received by it in trust for the benefit of the Indenture Trustee and the Holders
      and that all such amounts will be remitted by the Servicer in accordance with
      this Section
      6.10
      without
      any surcharge, fee, offset, charge or other deduction except as set forth
      in
      clause (d)
      below.
      The Servicer further agrees not to make any claim to reduce its obligation
      to
      remit all QRSC Payments collected by it in accordance with this Agreement except
      as set forth in clause
      (d)
      below.

     

    
      
        
        

      

      
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    (d)    On
      or
      before each Reconciliation Date, the Servicer will reconcile Actual QRSC
      Collections with Estimated QRSC Collections in respect of each of the 12
      Collection Periods beginning with the Collection Period that ended 15 months
      prior to such Reconciliation Date (or from the first Series Issuance Date,
      if
      less than 15 months have elapsed). The Servicer shall calculate the amount
      of
      any Remittance Shortfall or Excess Remittance for the first Collection Period
      of
      the immediately preceding Reconciliation Period, shall allocate such Remittance
      Shortfall or Excess Remittance to each outstanding Series ratably based on
      the
      Qualified Rate Stabilization Charges billed for such Series for such
      Reconciliation Period, and (A) if a Remittance Shortfall exists, the Servicer
      shall make a supplemental remittance, to the applicable General Subaccount
      of
      the applicable Collection Account for each Series within two (2) Servicer
      Business Days, or (B) if an Excess Remittance exists, the Servicer shall be
      entitled either (i) to reduce the amount of each Daily Remittance which the
      Servicer subsequently remits to the applicable General Subaccount of the
      applicable Collection Account for application to the amount of such Excess
      Remittance until the balance of such Excess Remittance has been reduced to
      zero,
      the amount of such reduction becoming the property of the Servicer or (ii)
      so
      long as such withdrawal would not cause the amounts on deposit in the applicable
      General Subaccount or the applicable Excess Funds Subaccount for any Series
      to
      be insufficient for the payment of the next installment of interest on the
      Rate
      Stabilization Bonds or principal due at maturity on the next Payment Date or
      upon acceleration on or before the next Payment Date, to be paid immediately
      from such General Subaccount or Excess Funds Subaccount such Series’ allocable
      share of the amount of such Excess Remittance, such payment becoming the
      property of the Servicer. If there is a Remittance Shortfall, the amount which
      the Servicer remits to the applicable General Subaccounts of the applicable
      Collection Accounts on the relevant date set forth above shall be increased
      by
      the amount of such Remittance Shortfall, provided that
      remittance of such increase will be the sole financial responsibility of the
      Servicer and shall neither be considered an Operating Expense nor be paid out
      of
      the Collection Account or included in the calculation of True-Up
      Adjustments.

     

    (e)    Unless
      otherwise directed to do so by the Issuer, the Servicer shall be responsible
      for
      selecting Eligible Investments in which the funds in each Collection Account
      shall be invested pursuant to Section
      8.03
      of the
      Indenture.

     

    SECTION
      6.11.    Maintenance
      of Operations.
      Subject
      to Section
      6.02,
      BGE
      agrees to continue to provide residential electric delivery service so long
      as
      it is acting as the Servicer under this Agreement.

     

    ARTICLE
      VII

    DEFAULT

     

    SECTION
      7.01.    Servicer
      Default.
      If any
      one or more of the following events (a “Servicer
      Default”)
      shall
      occur and be continuing:

     

    (a)    any
      failure by the Servicer to remit to the Collection Account for any Series on
      behalf of the Issuer any required remittance that shall continue unremedied
      for
      a period of five (5) Business Days after written notice of such failure is
      received by the Servicer from the Issuer or the Indenture Trustee or after
      discovery of such failure by an officer of the Servicer; or

     

    
      
        
        

      

      
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    (b)    any
      failure on the part of the Servicer or, so long as the Servicer is BGE, any
      failure on the part of BGE, as the case may be, duly to observe or to perform
      in
      any material respect any covenants or agreements of the Servicer or BGE, as
      the
      case may be, set forth in this Agreement (other than as provided in clause
      (a)
      of this
Section
      7.01)
      or any
      other Basic Document to which it is a party, which failure shall (i) materially
      and adversely affect the rights of the Holders and (ii) continue unremedied
      for
      a period of sixty (60) days after the date on which (A) written notice of such
      failure, requiring the same to be remedied, shall have been given to the
      Servicer or BGE, as the case may be, by the Issuer (with a copy to the Indenture
      Trustee) or to the Servicer or BGE, as the case may be, by the Indenture Trustee
      or (B) such failure is discovered by an officer of the Servicer; or

     

    (c)    any
      failure by the Servicer duly to perform its obligations under Section
      4.01(b)
      of this
      Agreement in the time and manner set forth therein, which failure continues
      unremedied for a period of five (5) days; or 

     

    (d)    any
      representation or warranty made by the Servicer in this Agreement or any Basic
      Document shall prove to have been incorrect when made, which has a material
      adverse effect on the Holders and which material adverse effect continues
      unremedied for a period of sixty (60) days after the date on which (A) written
      notice thereof, requiring the same to be remedied, shall have been delivered
      to
      the Servicer (with a copy to the Indenture Trustee) by the Issuer or the
      Indenture Trustee or (B) such failure is discovered by an officer of the
      Servicer; or

     

    (e)    an
      Insolvency Event occurs with respect to the Servicer or BGE; 

     

    then,
      and
      in each and every case, so long as the Servicer Default shall not have been
      remedied, either the Indenture Trustee may, or shall upon the instruction of
      Holders evidencing not less than a majority of the Outstanding Amount of the
      Rate Stabilization Bonds of all Series, by notice then given in writing to
      the
      Servicer (and to the Indenture Trustee if given by the Holders) (a “Termination
      Notice”),
      terminate all the rights and obligations (other than the obligations set forth
      in Section
      8.01
      and the
      obligation under Section
      7.02
      to
      continue performing its functions as Servicer until a Successor Servicer is
      appointed) of the Servicer under this Agreement. In addition, upon a Servicer
      Default described in Section
      7.01(a),
      the
      Holders and the Indenture Trustee as financing parties under the Rate
      Stabilization Law (or any of their representatives) shall be entitled to (i)
      apply to the Circuit Court of Baltimore City for sequestration and payment
      of
      revenues arising with respect to the Rate Stabilization Property, (ii) foreclose
      on or otherwise enforce the lien and security interests in any Rate
      Stabilization Property and (iii) apply to the PSC for an order that amounts
      arising from the Qualified Rate Stabilization Charges be transferred to a
      separate account for the benefit of the Secured Parties, in accordance with
      the
      Rate Stabilization Law. On or after the receipt by the Servicer of a Termination
      Notice, all authority and power of the Servicer under this Agreement, whether
      with respect to the Rate Stabilization Bonds, the Rate Stabilization Property,
      the Qualified Rate Stabilization Charges or otherwise, shall, without further
      action, pass to and be vested in such successor Servicer as may be appointed
      under Section
      7.02;
      and,
      without limitation, the Indenture Trustee is hereby authorized and empowered
      to
      execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact
      or otherwise, any and all documents and other instruments, and to do or
      accomplish all other acts or things necessary or appropriate to effect the
      purposes of such Termination Notice, whether to complete the transfer of the
      Rate Stabilization Property Records 

     

    
      
        
        

      

      
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    and
      related documents, or otherwise. The predecessor Servicer shall cooperate with
      the successor Servicer, the Issuer and the Indenture Trustee in effecting the
      termination of the responsibilities and rights of the predecessor Servicer
      under
      this Agreement, including the transfer to the Successor Servicer for
      administration by it of all Rate Stabilization Property Records and all cash
      amounts that shall at the time be held by the predecessor Servicer for
      remittance, or shall thereafter be received by it with respect to the Rate
      Stabilization Property or the Qualified Rate Stabilization Charges. As soon
      as
      practicable after receipt by the Servicer of such Termination Notice, the
      Servicer shall deliver the Rate Stabilization Property Records to the Successor
      Servicer. In case a Successor Servicer is appointed as a result of a Servicer
      Default, all reasonable costs and expenses (including reasonable attorney’s fees
      and expenses) incurred in connection with transferring the Rate Stabilization
      Property Records to the successor Servicer and amending this Agreement to
      reflect such succession as Servicer pursuant to this Section
      7.01
      shall be
      paid by the predecessor Servicer upon presentation of reasonable documentation
      of such costs and expenses. Termination of BGE as Servicer shall not terminate
      BGE’s rights or obligations under the Sale Agreement (except rights thereunder
      deriving from its rights as the Servicer hereunder).

     

    SECTION
      7.02.    Appointment
      of Successor.  

     

    (a)    Upon
      the
      Servicer’s receipt of a Termination Notice pursuant to Section
      7.01
      or the
      Servicer’s resignation or removal in accordance with the terms of this
      Agreement, the predecessor Servicer shall continue to perform its functions
      as
      Servicer under this Agreement, and shall be entitled to receive the requisite
      portion of the Servicing Fee, until a successor Servicer shall have assumed
      in
      writing the obligations of the Servicer hereunder as described below. In the
      event of the Servicer’s removal or resignation hereunder, the Indenture Trustee
      may at the written direction and with the consent of
      the
      Holders of at least a majority of the Outstanding Amount of the Rate
      Stabilization Bonds shall appoint a successor Servicer with the Issuer’s prior
      written consent thereto (which consent shall not be unreasonably withheld),
      and
      the Successor Servicer shall accept its appointment by a written assumption
      in
      form reasonably acceptable
      to the Issuer and the Indenture Trustee and provide prompt written notice of
      such assumption to the Issuer and the Rating Agencies. If within thirty (30)
      days after the delivery of the Termination Notice, a Successor Servicer shall
      not have been appointed, the Indenture Trustee may petition a court of competent
      jurisdiction to appoint a successor Servicer under this Agreement. A Person
      shall qualify as a Successor Servicer only if (i) such Person is permitted
      under
      PSC Regulations to perform the duties of the Servicer, (ii) the Rating Agency
      Condition shall have been satisfied and (iii) such Person enters into a
servicing
      agreement with the Issuer having substantially the same provisions as this
      Agreement (as the Rate Stabilization Bond Servicer).
      In no
      event shall the Indenture Trustee be liable for its appointment of a Successor
      Servicer. The Indenture Trustee’s expenses incurred under this Section
      7.02(a)
      shall be
      at the sole expense of the Issuer and payable from the Collection Accounts
      as
      provided in Section
      8.02
      of the
      Indenture.

     

    (b)    Upon
      appointment, the Successor Servicer shall be the successor in all respects
      to
      the predecessor Servicer and shall be subject to all the responsibilities,
      duties and liabilities arising thereafter relating thereto placed on the
      predecessor Servicer and shall be

     

    
      
        
        

      

      
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    entitled
      to the Servicing Fee and all the rights granted to the predecessor Servicer
      by
      the terms and provisions of this Agreement.

     

    SECTION
      7.03.    Waiver
      of Past Defaults.
      The
      Holders evidencing not less than a majority of the Outstanding Amount of the
      Rate Stabilization Bonds of all Series may, on behalf of all Holders, direct
      the
      Indenture Trustee to waive in writing any default by the Servicer in the
      performance of its obligations hereunder
      and its consequences, except a default in making any required deposits to the
      Collection Account for any Series in accordance with this Agreement. Upon any
      such waiver of a past default, such default shall cease to exist, and any
      Servicer Default arising therefrom shall be deemed to have been remedied for
      every purpose of this Agreement. No such waiver shall extend to any subsequent
      or other default or impair any right consequent thereto.

     

    SECTION
      7.04.    Notice
      of Servicer Default.
      The
      Servicer shall deliver to the Issuer, the Indenture Trustee, the PSC and the
      Rating Agencies, promptly after having obtained knowledge thereof, but in no
      event later than five (5) Business Days thereafter, written notice of any event
      which with the giving of notice or lapse of time, or both, would become a
      Servicer Default under Section
      7.01.

     

    SECTION
      7.05.    Cooperation
      with Successor.
      The
      Servicer covenants and agrees with the Issuer that it will, on an ongoing basis,
      cooperate with the Successor Servicer and provide whatever information is,
      and
      take whatever actions are, reasonably necessary to assist the successor Servicer
      in performing its obligations hereunder.

     

    ARTICLE
      VIII

    INDEMNIFICATION

    

    SECTION
      8.01.    Servicer’s
      Indemnification; Release of Claims.
      

     

    (a)    The
      Servicer shall be liable in accordance herewith only to the extent of the
      obligations specifically undertaken as the Servicer under this
      Agreement.

     

    (b)    The
      Servicer shall indemnify the Issuer, the Indenture Trustee (for itself and
      for
      the benefit of the Holders), and the Independent Managers and each of their
      respective trustees, officers, directors, employees and agents (each, an
“Indemnified
      Person”)
      for,
      and defend and hold harmless each such Indemnified Person from and against,
      any
      and all liabilities, obligations, losses, damages, payments and claims, and
      reasonable costs or expenses, of any kind whatsoever (collectively,
“Losses”)
      imposed on, incurred by or asserted against any such Indemnified Person as
      a
      result of (i) the Servicer’s willful misconduct, bad faith or gross negligence
      in the performance of its duties or observance of its covenants under this
      Agreement or its reckless disregard of its obligations and duties under this
      Agreement, (ii) the Servicer’s breach of any of its representations and
      warranties contained in this Agreement, (iii) any litigation or related expenses
      relating to the Servicer’s status or obligations as Servicer (other than any
      proceeding the Servicer is required to institute under the Servicing Agreement)
      or (iv) any finding that interest payable to a Third-Party Collector with
      respect to disputed funds must be paid by the Issuer or from the Rate
      Stabilization Property, except to the extent of Losses either resulting from
      the
      willful misconduct, bad faith or gross negligence of such Indemnified
      Person

     

    
      
        
        

      

      
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     seeking
      indemnification hereunder or resulting from a breach of a representation or
      warranty made by such Indemnified Person seeking indemnification hereunder
      in
      any of the Basic Documents that gives rise to the Servicer’s
      breach.

     

    (c)    For
      purposes of Section
      8.01(b),
      in the
      event of the termination of the rights and obligations of BGE (or any successor
      thereto pursuant to Section
      6.02)
      as
      Servicer pursuant to Section
      7.01,
      or a
      resignation by such Servicer pursuant to this Agreement, such Servicer shall
      be
      deemed to be the Servicer pending appointment of a successor Servicer pursuant
      to Section 7.02.

     

    (d)    Indemnification
      under this Section
      8.01
      shall
      survive any repeal of, modification of, or supplement to, or judicial
      invalidation of, the Rate Stabilization Law or any Qualified Rate Order and
      shall survive the resignation or removal of the Indenture Trustee or any
      Independent Manager or the termination of this Agreement and shall include
      reasonable out-of-pocket fees and expenses of investigation and litigation
      (including reasonable attorney’s fees and expenses).

     

    (e)    Except
      to
      the extent expressly provided in this Agreement or the other Basic Documents
      (including the Servicer’s claims with respect to the Servicing Fee,
      reimbursement for any Excess Remittance, reimbursement for costs incurred
      pursuant to Section
      5.02(d)
      and the
      payment of the purchase price of Rate Stabilization Property), the Servicer
      hereby releases and discharges the Issuer, the Independent Managers, and the
      Indenture Trustee and each of their respective officers, directors and agents
      (collectively, the “Released
      Parties”)
      from
      any and all actions, claims and demands whatsoever, whenever arising, which
      the
      Servicer, in its capacity as Servicer or otherwise, shall or may have against
      any such Person relating to the Rate Stabilization Property or the Servicer’s
      activities with respect thereto other than any actions, claims and demands
      arising out of the willful misconduct, bad faith or gross negligence of the
      Released Parties.

     

    (f)    Promptly
      after receipt by an Indemnified Person of notice (or, in the case of the
      Indenture Trustee, receipt of notice by a Responsible Officer only) of the
      commencement of any action, proceeding or investigation, such Indemnified Person
      shall, if a claim in respect thereof is to be made against the Servicer under
      this Section
      8.01,
      notify
      the Servicer in writing of the commencement thereof. Failure by an Indemnified
      Person to so notify the Servicer shall relieve the Servicer from the obligation
      to indemnify and hold harmless such Indemnified Person under this Section
      8.01
      only to
      the extent that the Servicer suffers actual prejudice as a result of such
      failure. With respect to any action, proceeding or investigation brought by
      a
      third party for which indemnification may be sought under this Section
      8.01,
      the
      Servicer shall be entitled to conduct and control, at its expense and with
      counsel of its choosing that is reasonably satisfactory to such Indemnified
      Person, the defense of any such action, proceeding or investigation (in which
      case the Servicer shall not thereafter be responsible for the fees and expenses
      of any separate counsel retained by the Indemnified Person except as set forth
      below); provided that the Indemnified Person shall have the right to participate
      in such action, proceeding or investigation through counsel chosen by it and
      at
      its own expense. Notwithstanding the Servicer’s election to assume the defense
      of any action, proceeding or investigation, the Indemnified Person shall have
      the right to employ separate counsel (including local counsel), and the Servicer
      shall bear the reasonable fees, costs and expenses of such 

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

    separate
      counsel if (i) the defendants in any such action include both the Indemnified
      Person and the Servicer and the Indemnified Person shall have reasonably
      concluded that there may be legal defenses available to it that are different
      from or additional to those available to the Servicer, (ii) the Servicer shall
      not have employed counsel reasonably satisfactory to the Indemnified Person
      to
      represent the Indemnified Person within a reasonable time after notice of the
      institution of such action, (iii) the Servicer shall authorize the Indemnified
      Person to employ separate counsel at the expense of the Servicer or (iv) in
      the
      case of the Indenture Trustee, such action exposes the Indenture Trustee to
      a
      material risk of criminal liability or forfeiture or a Servicer Default has
      occurred and is continuing. Notwithstanding the foregoing, the Servicer shall
      not be obligated to pay for the fees, costs and expenses of more than one
      separate counsel for the Indemnified Persons other than one local counsel,
      if
      appropriate.

     

    ARTICLE
      IX

    MISCELLANEOUS
      PROVISIONS

     

    SECTION
      9.01.    Amendment. 

     

    (a)    This
      Agreement may be amended in writing by the Servicer and the Issuer 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.

     

    Prior
      to
      the execution of any amendment to this Agreement, the Issuer and the Indenture
      Trustee shall be entitled to receive and conclusively rely upon an Opinion
      of
      Counsel of external counsel stating that such amendment is authorized or
      permitted by this Agreement and upon the Opinion of Counsel from external
      counsel referred to in Section
      3.01(c)(i).
      The
      Issuer and the Indenture Trustee may, but shall not be obligated to, enter
      into
      any such amendment which affects their own rights, duties, indemnities or
      immunities under this Agreement or otherwise.

    

    (b)    Notwithstanding
      Section
      9.01(a)
      or
      anything to the contrary in this Agreement, the Servicer and the Issuer may
      amend Annex
      I
      to this
      Agreement in writing with prior written notice given to the Indenture Trustee
      and the Rating Agencies, but without the consent of the Indenture Trustee,
      any
      Rating Agency or any Holder, solely to address changes to the Servicer’s method
      of calculating QRSC Payments as a result of changes to the Servicer’s current
      computerized customer information system, including changes which would replace
      the remittances of Estimated QRSC Collections contemplated by the estimation
      procedures set forth in Annex I with remittances of Actual QRSC Collections
      determined to have been actually received; provided
      that any
      such amendment shall not have a material adverse effect on the Holders of then
      Outstanding Rate Stabilization Bonds.

     

    (c)    If
      the
      PSC adopts a rule or regulation the effect of which is to modify or supplement
      any provision of this Agreement related to the TPC Credit Requirements and
      the
      TPC Deposit Requirements, this Agreement will be deemed so modified or
      supplemented on the effective date of such rule or regulation in the manner
      necessary to comply therewith without the 

     

    
      
        
        

      

      
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    necessity
      of any further action by any party hereto; provided
      that (i)
      the Rating Agency Condition has been satisfied, (ii) the Servicer shall have
      notified the Issuer and the Indenture Trustee of such modification or supplement
      and delivered an Opinion of Counsel as described in the second paragraph of
      Section
      9.01(a)
      and
      (iii) neither the Issuer nor the Indenture Trustee shall be bound by any such
      modification to the extent it affects their own rights, duties, indemnities
      or
      immunities under this Agreement or otherwise.

     

    SECTION
      9.02.    Maintenance
      of Accounts and Records.
      

     

    (a)    The
      Servicer shall maintain accounts and records as to the Rate Stabilization
      Property accurately and in accordance with its standard accounting procedures
      and in sufficient detail to permit reconciliation between Actual QRSC
      Collections received by the Servicer and Estimated QRSC Collections from time
      to
      time deposited in the Collection Accounts.

     

    (b)    The
      Servicer shall permit the Indenture Trustee and its agents at any time during
      normal business hours, upon reasonable notice to the Servicer and to the extent
      it does not unreasonably interfere with the Servicer’s normal operations, to
      inspect, audit and make copies of and abstracts from the Servicer’s records
      regarding the Rate Stabilization Property and the Qualified Rate Stabilization
      Charges. Nothing in this Section
      9.02(b)
      shall
      affect the obligation of the Servicer to observe any applicable Requirements
      of
      Law prohibiting disclosure of information regarding the Customers, and the
      failure of the Servicer to provide access to such information as a result of
      such obligation shall not constitute a breach of this
      Section 9.02(b).

     

    SECTION
      9.03.    Notices.
      Unless
      otherwise specifically provided herein, all demands, notices and communications
      upon or to the Servicer, the Issuer, the Indenture Trustee or the Rating
      Agencies under this Agreement shall be sufficiently given for all
      purposes hereunder
      if in writing and delivered personally, sent by documented delivery service
      or,
      to the extent
      receipt is confirmed telephonically, sent by telecopy or other form of
      electronic transmission:

     

    (a)    in
      the
      case of the Servicer, to Baltimore Gas and Electric Company, at 110 W. Fayette
      Street, Baltimore, Maryland 21201-3708, Attention: _________, Telephone: ______,
      Facsimile: _______;

     

    (b)    in
      the
      case of the Issuer, to RSB BondCo LLC at [_______________-, _________, Delaware
      _____], Attention: _____, Telephone: ______, Facsimile: ______; 

     

    (c)    in
      the
      case of the Indenture Trustee, to the Corporate Trust Office; 

     

    (d)    in
      the
      case of the PSC, to ________, Baltimore, Maryland 21202, Attention: _______,
      Telephone: ________, Facsimile: ________; 

     

    (e)    in
      the
      case of Moody’s, to Moody’s Investors Service, Inc., ABS Monitoring Department,
      99 Church Street, New York, New York 10007, Telephone: (212) 553-3686,
      Facsimile: (212) 553-0573; 

     

    
      
        
        

      

      
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    (f)    in
      the
      case of Standard & Poor’s, to Standard & Poor’s Ratings Services, a
      division of The McGraw-Hill Companies, Inc., 55 Water Street, 41st Floor, New
      York, New York 10041, Attention: Asset Backed Surveillance Department,
      Telephone: (212) 438-2000, Facsimile: (212) 438-2665; 

     

    (g)    in
      the
      case of Fitch, to Fitch Ratings, One State Street Plaza, New York, NY 10004,
      Attention: ABS Surveillance, Telephone: (212) 908-0500, Facsimile:
      (212) 908-0355; or 

     

    (h)    as
      to
      each of the foregoing, at such other address as shall be designated by written
      notice to the other parties.

     

    SECTION
      9.04.    Assignment.
      Notwithstanding anything to the contrary contained herein, except as provided
      in
Section
      6.02
      and as
      provided in the provisions of this Agreement concerning the resignation of
      the
      Servicer, this Agreement may not be assigned by the Servicer.

     

    SECTION
      9.05.    Limitations
      on Rights of Others.
      The
      provisions of this Agreement are solely for the benefit of the Servicer and
      the
      Issuer and, to the extent provided herein or in the Basic Documents, Customers,
      the Indenture Trustee and the Holders, and the other Persons expressly referred
      to herein, and such Persons shall have the right to enforce the relevant
      provisions of this Agreement. Nothing in this Agreement, whether express or
      implied, shall be construed to give to any other Person any legal or equitable
      right, remedy or claim in the Rate Stabilization Property or Rate Stabilization
      Bond Collateral or under or in respect of this Agreement or any covenants,
      conditions or provisions contained herein.
      Notwithstanding anything to the contrary contained herein, for the avoidance
      of
      doubt, any right, remedy or claim to which any Customer may be entitled pursuant
      to the Applicable Qualified Rate Order and to this Agreement may be asserted
      or
      exercised only by the PSC (or by the Attorney General of the State of Maryland
      in the name of the PSC) for the benefit of such Customer.

     

    SECTION
      9.06.    Severability.
      Any
      provision of this Agreement that is prohibited or unenforceable in any
      jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
      such prohibition or unenforceability without invalidating the remainder of
      such
      provision (if any) or the remaining provisions hereof (unless such a
      construction shall be unreasonable), and any such prohibition or
      unenforceability in any jurisdiction shall not invalidate or render
      unenforceable such provision in any other jurisdiction.

     

    SECTION
      9.07.    Separate
      Counterparts.
      This
      Agreement may be executed by the parties hereto in separate counterparts, each
      of which when so executed and delivered shall
      be
      an original, but all such counterparts shall together constitute but one and
      the
      same instrument.

     

    SECTION
      9.08.    Headings.
      The
      headings of the various Articles and Sections herein are for convenience of
      reference only and shall not define or limit any of the terms or provisions
      hereof.

     

    SECTION
      9.09.    GOVERNING
      LAW.
      THIS
      AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
      THE

     

    
      
        
        

      

      
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    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.

     

    SECTION
      9.10.    Assignment
      to Indenture Trustee.
      (a) The
      Servicer hereby acknowledges and consents to any mortgage, pledge, assignment
      and grant of a security interest by the Issuer to the Indenture Trustee for
      the
      benefit of the Secured Parties pursuant to the Indenture of any or all of the
      Issuer’s rights hereunder and (b) in no event shall the Trustee have any
      liability for the representations, warranties, covenants, agreements or other
      obligations of the Issuer hereunder or in any of the certificates delivered
      pursuant hereto, as to all of which any recourse shall be had solely to the
      assets of the Issuer subject to the availability of funds therefor under
Section
      8.02
      of the
      Indenture.

     

    SECTION
      9.11.    Nonpetition
      Covenants.
      Notwithstanding any prior termination of this Agreement or the Indenture, the
      Servicer, solely in its capacity as a creditor of the Issuer, shall not, prior
      to the date which is one year and one day after the satisfaction and discharge
      of the Indenture, 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.

     

    SECTION
      9.12.    Limitation
      of Liability.
      It is
      expressly understood and agreed by the parties hereto that this Agreement is
      executed and delivered by the Indenture Trustee, not individually or personally
      but solely as Indenture Trustee in the exercise of the powers and authority
      conferred and vested in it, and that the Indenture Trustee, in acting hereunder,
      is entitled to all rights, benefits, protections, immunities and indemnities
      accorded to it under the Indenture.

     

    [SIGNATURE
      PAGE FOLLOWS]

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
      executed by their respective officers as of the day and year first above
      written.

     

    

     

    
      	 	
              RSB
                BONDCO LLC, as Issuer

            
	 	 
	 	 
	 	
              By:
                ________________________________

              Name:

                  Title:

            
	 	 
	 	 
	 	
              BALTIMORE
                GAS AND ELECTRIC COMPANY, as Servicer

            
	 	 
	 	 
	 	
              By:
                ________________________________

              Name:

                  Title:

            
	 	 
	 	 
	
              ACKNOWLEDGED
                AND ACCEPTED:

            	 
	
               

              __________,

              as
                Indenture Trustee

               

            	 
	
              By:
                ______________________________

              Name:
                

                  Title:
                

            	 

    

    

    
 

    
      
        
          Signature
            Page to

          Rate
            Stabilization Property Servicing Agreement

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      A

     

    MONTHLY
      SERVICER’S CERTIFICATE

     

    

    See
      Attached.

     

    

    
      
        
          
            EXHIBIT
              A

            1

          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    EXHIBIT
      A

     

    TO
      RATE STABILIZATION PROPERTY 

     

    SERVICING
      AGREEMENT

     

    FORM
      OF
      MONTHLY SERVICER’S CERTIFICATE 

    (TO
      BE
      DELIVERED EACH MONTH PURSUANT TO SECTION 3.01(b)(i) 

    OF
      THE
      SERIES [ ] RATE STABILIZATION PROPERTY SERVICING AGREEMENT)

     

    RSB
      BONDCO LLC, 

    Series
      [         ] Bonds

     

    Baltimore
      Gas and Electric Company, as Servicer

     

    Pursuant
      to the Series [         ] Rate
      Stabilization Property Servicing Agreement dated as of __________, 2007 (the
      “Series [         ] Rate Stabilization
      Property Servicing Agreement”) between Baltimore Gas and Electric Company, as
      Servicer, and RSB BondCo LLC, as Issuer, the Servicer does hereby certify as
      follows: 

     

    SERIES
      [         ] COLLECTION PERIOD:
      ________

     

    
      
        
          	
                  Customer
                    Class

                   

                	
                  a. 
                     Series [ ] 

                  Qualified
                    Rate Stabilization

                   Charge
                    in

                  Effect

                   

                	
                   

                  b.  
                    Series [         ] 

                  Billed

                  QRSCs

                   

                	
                   

                  c.  
                    Series [         ] 

                  Estimated

                  QRSC

                  Collections

                   

                	
                  d.  
                    Series [         ] 

                  QRSC

                  Collections

                  Remitted
                    to

                  Trustee

                   

                
	
                   

                  Residential
                    Service

                   

                	
                   

                  __
                    cents/kWh

                   

                	 	 	 

        

      

    

     

    Capitalized
      terms used herein have their respective meanings set forth in the Series [
      ]
      Rate Stabilization Property Servicing Agreement.

     

    In
      WITNESS HEREOF, the undersigned has duly executed and delivered this Monthly
      Servicer’s Certificate this [    ]th day of _____,
      ______.

     

     

    BALTIMORE
      GAS AND ELECTRIC COMPANY, 

    as
      Servicer

    

     

    By
      ________________________ 

    Title:

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      B

     

    CERTIFICATE
      OF COMPLIANCE

     

    The
      undersigned hereby certifies that he/she is the duly elected and acting
[__________]
      of
[NAME
      OF
      SERVICER],
      as
      servicer (the “Servicer”)
      under
      the Rate Stabilization Property Servicing Agreement dated as of ______ __,
      2007
      (the “Servicing
      Agreement”)
      between the Servicer and RSB BondCo LLC (the “Issuer”)
      and
      further that:

     

    1. A
      review
      of the activities of the Servicer and of its performance under the Servicing
      Agreement during the twelve months ended [________],
      [      
      ]
      has been
      made under the supervision of the undersigned pursuant to Section
      3.03
      of the
      Servicing Agreement; and

     

    2. To
      the
      best of the undersigned’s knowledge, based on such review, the Servicer has
      fulfilled all of its obligations in all material respects under the Servicing
      Agreement throughout the twelve months ended [________],[
      _____],
      except
      as set forth on Annex
      A
      hereto.

     

    

     

    Executed
      as of this ______________ day of _________________, ____.

     

    
      	 	
               

              [NAME
                OF SERVICER]

            
	 	 
	 	
              By:
                ________________________________

              Name:

                  Title:

            

    

     

    
      
        
        

      

      
        
          EXHIBIT
            B

          1

        

        
          

        

      

      
        
        

      

    

     

    ANNEX
      A

    TO
      CERTIFICATE OF COMPLIANCE

     

    LIST
      OF SERVICER DEFAULTS

     

    The
      following Servicer Defaults, or events which with the giving of notice, the
      lapse of time, or both, would become Servicer Defaults known to the undersigned
      occurred during the year ended [__________]:

     

    
      	
              Nature
                of Default

            	
              Status

            
	 	 
	 	 

    

     

    
      
        
        

      

      
        
          EXHIBIT
            B

          2

        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      C

     

    SERVICER’S
      CERTIFICATE

     

    

    The
      undersigned hereby certifies that he/she is the duly elected and acting
[__________]
      of
[BALTIMORE
      GAS AND ELECTRIC COMPANY],
      as
      servicer (the “Servicer”)
      under
      the Rate Stabilization Property Servicing Agreement dated as of ______ __,
      2007
      (the “Servicing
      Agreement”)
      between the Servicer and RSB BondCo LLC (the “Issuer”)
      and
      further that:

     

    1.    The
      undersigned is responsible for assessing the Servicer’s compliance with the
      servicing criteria set forth in Item 1122(d) of Regulation AB (the “Servicing
      Criteria”).

     

    2.     With
      respect to each of the Servicing Criteria, the undersigned has made the
      following assessment of the Servicing Criteria in accordance with Item 1122(d)
      of Regulation AB, with such discussion regarding the performance of such
      Servicing Criteria during the fiscal year covered by the Sponsor’s annual report
      on Form 10-K Report (such fiscal year, the “Assessment
      Period”):

     

    

      
        	 	
                 

                Servicing
                  Criteria 

              	
                 

                Applicable
                  

                Servicing
                  Criteria

              
	
                 

                Reference

              	
                 

                Criteria

              	 
	 	
                 

                General
                  Servicing Considerations

              	 
	
                 

                1122(d)(1)(i)

              	
                 

                Policies
                  and procedures are instituted to monitor any performance or other
                  triggers
                  and events of default in accordance with the transaction
                  agreements.

              	
                 

                Applicable;
                  assessment below. 

              
	
                 

                1122(d)(1)(ii)

              	
                 

                If
                  any material servicing activities are outsourced to third parties,
                  policies and procedures are instituted to monitor the third party’s
                  performance and compliance with such servicing activities.

              	
                 

                Not
                  applicable; no servicing activities were outsourced.

              
	
                 

                1122(d)(1)(iii)

              	
                 

                Any
                  requirements in the transaction agreements to maintain a back-up
                  servicer
                  for pool assets are maintained.

              	
                 

                Not
                  applicable; documents do not provide for a back-up
                  servicer.

              
	
                 

                1122(d)(1)(iv)

              	
                 

                A
                  fidelity bond and errors and omissions policy is in effect on the
                  party
                  participating in the servicing function throughout the reporting
                  period in
                  the amount of coverage required by and otherwise in accordance
                  with the
                  terms of the transaction agreements.

              	
                 

                Not
                  applicable; Qualified Rate Order imposes credit standards on Third-Party
                  Collectors who handle customer collections and govern performance
                  

              

      

       

      
        
          
          

        

        
          
            EXHIBIT
              C

            1

          

          
            

          

        

        
          
          

        

      

       

      
        
          
            	 	
                     

                    Servicing
                      Criteria 

                  	
                     

                    Applicable
                      

                    Servicing
                      Criteria

                  
	
                     

                    Reference

                  	
                     

                    Criteria

                  	 
	 	
                  	
                    requirements
                      of utilities.

                  
	 	
                     

                    Cash
                      Collection and Administration

                  	 
	
                     

                    1122(d)(2)(i)

                  	
                     

                    Payments
                      on pool assets are deposited into the appropriate custodial
                      bank accounts
                      and related bank clearing accounts no more than two business
                      days
                      following receipt, or such other number of days specified in
                      the
                      transaction agreements.

                  	
                     

                    Applicable;
                      assessment below.

                  
	
                     

                    1122(d)(2)(ii)

                  	
                     

                    Disbursements
                      made via wire transfer on behalf of an obligor or to an investor
                      are made
                      only by authorized personnel.

                  	
                     

                    Applicable;
                      assessment below.

                  
	
                     

                    1122(d)(2)(iii)

                  	
                     

                    Advances
                      of funds or guarantees regarding collections, cash flows or
                      distributions,
                      and any interest or other fees charged for such advances, are
                      made,
                      reviewed and approved as specified in the transaction
                      agreements.

                  	
                     

                    Applicable,
                      but no current assessment required; no advances by the Servicer
                      are
                      permitted under the transaction agreements.

                  
	
                     

                    1122(d)(2)(iv)

                  	
                     

                    The
                      related accounts for the transaction, such as cash reserve
                      accounts or
                      accounts established as a form of overcollateralization, are
                      separately
                      maintained (e.g., with respect to commingling of cash) as set
                      forth in the
                      transaction agreements.

                  	
                     

                    Applicable,
                      but no current assessment is required since transaction accounts
                      are
                      maintained by and in the name of the Indenture Trustee.

                  
	
                     

                    1122(d)(2)(v)

                  	
                     

                    Each
                      custodial account is maintained at a federally insured depository
                      institution as set forth in the transaction agreements. For
                      purposes of
                      this criterion, “federally insured depository institution” with respect to
                      a foreign financial institution means a foreign financial institution
                      that
                      meets the requirements of Rule 13k-1(b)(1) of the Securities
                      Exchange
                      Act.

                  	
                     

                    Applicable,
                      but no current assessment required; all “custodial accounts” are
                      maintained by the Indenture Trustee.

                  
	
                     

                    1122(d)(2)(vi)

                  	
                     

                    Unissued
                      checks are safeguarded so as to prevent unauthorized
                      access.

                  	
                     

                    Not
                      applicable; all transfers made by wire transfer.

                  
	
                     

                    1122(d)(2)(vii)

                  	
                     

                    Reconciliations
                      are prepared on a monthly basis for all asset-backed securities
                      related
                      bank accounts, including custodial accounts and related bank
                      clearing
                      accounts. These reconciliations are (A) mathematically accurate;
                      (B)
                      prepared within 30 calendar days after the bank statement cutoff
                      date, or
                      such other number of days specified in the transaction agreements;
                      (C)
                      reviewed and approved by someone other than the person who
                      prepared the
                      reconciliation; and (D) contain 

                  	
                     

                    Applicable;
                      assessment below.

                  

          

        

      

    

     

    
      
        
        

      

      
        
          EXHIBIT
            C

          2

        

        
          

        

      

      
        
        

      

    

    

      
        	 	
                 

                Servicing
                  Criteria 

              	
                 

                Applicable
                  

                Servicing
                  Criteria

              
	
                 

                Reference

              	
                 

                Criteria

              	 
	 	
                 

                explanations
                  for reconciling items. These reconciling items are resolved within
                  90
                  calendar days of their original identification, or such other number
                  of
                  days specified in the transaction agreements.

              	 
	 	
                 

                Investor
                  Remittances and Reporting

              	 
	
                 

                1122(d)(3)(i)

              	
                 

                Reports
                  to investors, including those to be filed with the Commission,
                  are
                  maintained in accordance with the transaction agreements and applicable
                  Commission requirements. Specifically, such reports (A) are prepared
                  in
                  accordance with timeframes and other terms set forth in the transaction
                  agreements; (B) provide information calculated in accordance with
                  the
                  terms specified in the transaction agreements; (C) are filed with
                  the
                  Commission as required by its rules and regulations; and (D) agree
                  with
                  investors’ or the trustee’s records as to the total unpaid principal
                  balance and number of pool assets serviced by the
                  Servicer.

              	
                 

                Applicable;
                  assessment below. 

              
	
                 

                1122(d)(3)(ii)

              	
                 

                Amounts
                  due to investors are allocated and remitted in accordance with
                  timeframes,
                  distribution priority and other terms set forth in the transaction
                  agreements.

              	
                 

                Applicable;
                  assessment below.

              
	
                 

                1122(d)(3)(iii)

              	
                 

                Disbursements
                  made to an investor are posted within two business days to the
                  Servicer’s
                  investor records, or such other number of days specified in the
                  transaction agreements.

              	
                 

                Applicable

              
	
                 

                1122(d)(3)(iv)

              	
                 

                Amounts
                  remitted to investors per the investor reports agree with cancelled
                  checks, or other form of payment, or custodial bank
                  statements.

              	
                 

                Applicable;
                  assessment below.

              
	 	
                 

                Pool
                  Asset Administration

              	 
	
                 

                1122(d)(4)(i)

              	
                 

                Collateral
                  or security on pool assets is maintained as required by the transaction
                  agreements or related documents.

              	
                 

                Applicable;
                  assessment below. 

              
	
                 

                1122(d)(4)(ii)

              	
                 

                Pool
                  assets and related documents are safeguarded as required by the
                  transaction agreements.

              	
                 

                Applicable;
                  assessment below. 

              
	
                 

                1122(d)(4)(iii)

              	
                 

                Any
                  additions, removals or substitutions to the asset pool are made,
                  reviewed
                  and approved in accordance with any conditions or requirements
                  in the
                  transaction agreements.

              	
                 

                Not
                  applicable; no removals or substitutions of Rate Stabilization
                  Property
                  are contemplated or allowed under the transaction
                  

              

      

    

     

    
      
        
        

      

      
        
          EXHIBIT
            C

          3

        

        
          

        

      

      
        
        

      

    

     

    
      
        	 	
                 

                Servicing
                  Criteria 

              	
                 

                Applicable

                Servicing
                  Criteria

              
	
                 

                Reference

              	
                 

                Criteria

              	 
	 	 	
                 

                documents.

              
	
                 

                1122(d)(4)(iv)

              	
                 

                Payments
                  on pool assets, including any payoffs, made in accordance with
                  the related
                  pool asset documents are posted to the Servicer’s obligor records
                  maintained no more than two business days after receipt, or such
                  other
                  number of days specified in the transaction agreements, and allocated
                  to
                  principal, interest or other items (e.g., escrow) in accordance
                  with the
                  related transaction agreements.

              	
                 

                Applicable;
                  assessment below.

              
	
                 

                1122(d)(4)(v)

              	
                 

                The
                  Servicer’s records regarding the pool assets agree with the Servicer’s
                  records with respect to an obligor’s unpaid principal
                  balance.

              	
                 

                Not
                  applicable; because underlying obligation (Qualified Rate Stabilization
                  Charge) is not an interest bearing instrument

              
	
                 

                1122(d)(4)(vi)

              	
                 

                Changes
                  with respect to the terms or status of an obligor’s pool assets (e.g.,
                  loan modifications or re-agings) are made, reviewed and approved
                  by
                  authorized personnel in accordance with the transaction agreements
                  and
                  related pool asset documents.

              	
                 

                Applicable;
                  assessment below

              
	
                 

                1122(d)(4)(vii)

              	
                 

                Loss
                  mitigation or recovery actions (e.g., forbearance plans, modifications
                  and
                  deeds in lieu of foreclosure, foreclosures and repossessions, as
                  applicable) are initiated, conducted and concluded in accordance
                  with the
                  timeframes or other requirements established by the transaction
                  agreements.

              	
                 

                Applicable;
                  assessment below. 

              
	
                 

                1122(d)(4)(viii)

              	
                 

                Records
                  documenting collection efforts are maintained during the period
                  any pool
                  asset is delinquent in accordance with the transaction agreements.
                  Such
                  records are maintained on at least a monthly basis, or such other
                  period
                  specified in the transaction agreements, and describe the entity’s
                  activities in monitoring delinquent pool assets including, for
                  example,
                  phone calls, letters and payment rescheduling plans in cases where
                  delinquency is deemed temporary (e.g., illness or
                  unemployment).

              	
                 

                Applicable,
                  but does not require assessment since no explicit documentation
                  requirement with respect to delinquent accounts are imposed under
                  the
                  transactional documents due to availability of “true-up” mechanism.
                  

              
	
                 

                1122(d)(4)(ix)

              	
                 

                Adjustments
                  to interest rates or rates of return for pool assets with variable
                  rates
                  are computed based on the related pool asset documents.

              	
                 

                Not
                  applicable; Qualified Rate Stabilization Charges are not interest
                  bearing
                  instruments.

              

      
 

    
      
        
        

      

      
        
          EXHIBIT
            C

          4

        

        
          

        

      

      
        
        

      

    

    

      
        	 	
                 

                Servicing
                  Criteria 

              	
                 

                Applicable
                  

                Servicing
                  Criteria

              
	
                 

                Reference

              	
                 

                Criteria

              	 
	
                 

                1122(d)(4)(x)

              	
                 

                Regarding
                  any funds held in trust for an obligor (such as escrow accounts):
                  (A) such
                  funds are analyzed, in accordance with the obligor’s pool asset documents,
                  on at least an annual basis, or such other period specified in
                  the
                  transaction agreements; (B) interest on such funds is paid, or
                  credited, to obligors in accordance with applicable pool asset
                  documents
                  and state laws; and (C) such funds are returned to the obligor
                  within 30
                  calendar days of full repayment of the related pool assets, or
                  such other
                  number of days specified in the transaction agreements.

              	
                 

                Applicable;
                  Servicer maintains TPC deposit accounts in accordance with PSC
                  rules and
                  regulations.

              
	
                 

                1122(d)(4)(xi)

              	
                 

                Payments
                  made on behalf of an obligor (such as tax or insurance payments)
                  are made
                  on or before the related penalty or expiration dates, as indicated
                  on the
                  appropriate bills or notices for such payments, provided that such
                  support
                  has been received by the servicer at least 30 calendar days prior
                  to these
                  dates, or such other number of days specified in the transaction
                  agreements.

              	
                 

                Not
                  applicable; Servicer does not make payments on behalf of
                  obligors.

              
	
                 

                1122(d)(4)(xii)

              	
                 

                Any
                  late payment penalties in connection with any payment to be made
                  on behalf
                  of an obligor are paid from the Servicer’s funds and not charged to the
                  obligor, unless the late payment was due to the obligor’s error or
                  omission.

              	
                 

                Not
                  applicable; servicer cannot make advances of its own funds on behalf
                  of
                  customers under the transaction documents.

              
	
                 

                1122(d)(4)(xiii)

              	
                 

                Disbursements
                  made on behalf of an obligor are posted within two business days
                  to the
                  obligor’s records maintained by the servicer, or such other number of days
                  specified in the transaction agreements.

              	
                 

                Not
                  applicable; servicer cannot make advances of its own funds on behalf
                  of
                  customers to pay principal or interest on the bonds. 

              
	
                 

                1122(d)(4)(xiv)

              	
                 

                Delinquencies,
                  Charge-Offs and uncollectible accounts are recognized and recorded
                  in
                  accordance with the transaction agreements.

              	
                 

                Applicable;
                  assessment below. 

              
	
                 

                1122(d)(4)(xv)

              	
                 

                Any
                  external enhancement or other support, identified in Item 1114(a)(1)
                  through (3) or Item 1115 of Regulation AB, is maintained as set
                  forth in
                  the transaction agreements.

              	
                 

                Not
                  applicable; no external enhancement is required under the transaction
                  documents.

              

      

    

     

    3.    To
      the
      best of the undersigned’s knowledge, based on such review, the Servicer is in
      compliance in all material respects with the applicable servicing criteria
      set
      forth 

     

    
      
        
        

      

      
        
          EXHIBIT
            C

          5

        

        
          

        

      

      
        
        

      

    

     

    above
      as
      of and for the period ending the end of the fiscal year covered by the Sponsor’s
      annual report on Form 10-K. [If
      not
      true, include description of any material instance of noncompliance.] 

     

    Executed
      as of this ______________ day of _________________, ____.

     

    
      	 	
               

              BALTIMORE
                GAS AND ELECTRIC COMPANY

            
	 	
               

              By:
                ________________________________

              Name:

              Title:

            

    

     

    
      
        
        

      

      
        
          EXHIBIT
            C

          6

        

        
          

        

      

      
        
        

      

    

    

    SCHEDULE
      4.01(a)

     

    EXPECTED
      AMORTIZATION SCHEDULE

     

    

    See
      Attached.

     

    
      
        
        

      

      
        
          SCHEDULE
            4.01(a)

          1

        

        
          

        

      

      
        
        

      

    

     

    ANNEX
      I

     

    The
      Servicer agrees to comply with the following servicing procedures:

     

    SECTION
      1.  DEFINITIONS.

     

    (a)   Capitalized
      terms used herein and not otherwise defined herein shall have the meanings
      ascribed to such terms in the Rate Stabilization Property Servicing Agreement
      (the “Agreement”).

     

    (b)   Whenever
      used in this Annex
      I,
      the
      following words and phrases shall have the following meanings:

     

    “Applicable
      MDMA”
means
      with respect to each Customer, the meter data management agent providing meter
      reading services for that Customer’s account.

     

    “Billed
      QRSCs”
means
      the amounts of Qualified Rate Stabilization Charges billed by the Servicer,
      whether billed directly to Customers by the Servicer or indirectly through
      Third-Party Collectors.

     

    “Servicer
      Policies and Practices”
means,
      with respect to the Servicer’s duties under this Annex
      I,
      the
      policies and practices of the Servicer applicable to such duties that the
      Servicer follows with respect to comparable assets that it services for itself
      and, if applicable, others.

     

    SECTION
      2.  DATA
      ACQUISITION.

     

    (a)   Installation
      and Maintenance of Meters.
      Except
      to the extent that a Third-Party Collector is responsible for such services,
      the
      Servicer shall cause to be installed, replaced and maintained meters in such
      places and in such condition as will enable the Servicer to obtain usage
      measurements for each Customer at least once every Billing Period. To the extent
      a Third-Party Collector is responsible for such services, but not performing
      such services, the Servicer shall take all reasonably necessary actions to
      obtain usage measurements for each Customer at least once every Billing Period.
      

     

    (b)   Meter
      Reading.
      At
      least once each Billing Period, the Servicer shall obtain usage measurements
      from the Applicable MDMA for each Customer; provided,
      however,
      that
      the Servicer may estimate any Customer’s usage determined in accordance with
      applicable PSC Regulations.

     

    (c)   Cost
      of Metering.
      The
      Issuer shall not be obligated to pay any costs associated with the routine
      metering duties set forth in this Section
      2,
      including the costs of installing, replacing and maintaining meters, nor shall
      the Issuer be entitled to any credit against the Servicing Fee for any cost
      savings realized by the Servicer or any Third-Party Collector as a result of
      new
      metering and/or billing technologies.

     

    
      
        
        

      

      
        
          ANNEX
            I

          1

        

        
          

        

      

      
        
        

      

    

     

    (d)   PJM.  The
      Servicer shall take
      all reasonable actions available under PSC Regulations or other rules or
      regulations to obtain timely information from PJM, if any, which is necessary
      for the Servicer to fulfill its obligations under the Servicing
      Agreement.

     

    SECTION
      3.  USAGE
      AND BILL CALCULATION.

     

    The
      Servicer (a) shall obtain a calculation of each Customer’s usage (which may be
      based on data obtained from such Customer’s meter read or on usage estimates
      determined in accordance with applicable PSC Regulations) at least once each
      Billing Period; and (b) shall either (i) determine therefrom each Customer’s
      individual Qualified Rate Stabilization Charges to be included on Bills issued
      by it to such Customer or to the Applicable Third-Party Collector responsible
      for billing such Customer, or (ii) where the Applicable Third-Party Collector
      is
      responsible for billing the Customers, allow the Applicable Third-Party
      Collector, rather than the Servicer, to determine such Customers’ individual
      Qualified Rate Stabilization Charges to be included on such Customers’ Bills
      based on billing factors provided by the Servicer, and, in such case, the
      Servicer shall deliver to the Applicable Third-Party Collector such billing
      factors as are necessary for the Applicable Third-Party Collector to calculate
      such Customers’ respective Qualified Rate Stabilization Charges as such charges
      may change from time to time pursuant to the True-Up Adjustments.

     

    SECTION
      4.  BILLING.

     

    The
      Servicer shall implement the Qualified Rate Stabilization Charges as of the
      Closing Date and shall thereafter bill each Customer or, with respect to
      Customers billed by a Third-Party Collector, the Applicable Third-Party
      Collector, for the respective Customer’s outstanding current and past due
      Qualified Rate Stabilization Charges accruing through the date on which such
      Qualified Rate Stabilization Charges may no longer be billed under the Tariff,
      all in accordance with the following:

     

    (a)   Frequency
      of Bills; Billing Practices. 
      In accordance with the Servicer’s then-existing Servicer Policies and Practices
      for its own charges, as such Servicer Policies and Practices may be modified
      from time to time, the Servicer shall generate and issue a Bill to each
      Customer, or, where the Applicable Third-Party Collector is responsible for
      billing the Customers, to the Applicable Third-Party Collector, for such
      Customers’ Qualified Rate Stabilization Charges once every applicable Billing
      Period, at the same time, with the same frequency and on the same Bill as that
      containing the Servicer’s own charges to such Customers or Third-Party
      Collectors, as the case may be. In the event that the Servicer makes any
      material modification to these practices, it shall notify the Issuer, the
      Indenture Trustee, and the Rating Agencies prior to the effectiveness of any
      such modification; provided,
      however,
      that
      the Servicer may not make any modification that will materially adversely affect
      the Holders.

     

    (b)   Format.

     

    (i)    Each
      Bill
      issued by the Servicer shall contain the charge corresponding to the respective
      Qualified Rate Stabilization Charges owed by such Customer for the applicable
      Billing Period. The Qualified Rate Stabilization Charges shall be separately
      identified as owned by the Issuer. Unless prohibited by applicable Requirements
      of Law, the Servicer shall use 

     

    
      
        
        

      

      
        
          ANNEX
            I

          2

        

        
          

        

      

      
        
        

      

    

     

    reasonable
      efforts to cause each Applicable Third-Party Collector to provide Customers
      with
      the annual notice required by Section
      4.01(c)(iii)(B)
      of the
      Servicing Agreement.

     

    (ii)    Where
      a
      Third-Party Collector is responsible for billing the Customers, the Servicer
      shall deliver to the Applicable Third-Party Collector itemized charges for
      such
      Customer setting forth such Customers’ Qualified Rate Stabilization
      Charges.

     

    (iii)    The
      Servicer shall conform to such requirements in respect of the format, structure
      and text of Bills delivered to Customers and Third-Party Collectors in
      accordance with any applicable Requirements of Law. To the extent that Bill
      format, structure and text are not prescribed by applicable Requirements of
      Law,
      the Servicer shall, subject to clauses
      (i)
      and
(ii)
      above,
      determine the format, structure and text of all Bills in accordance with its
      reasonable business judgment, its Servicer Policies and Practices with respect
      to its own charges and prevailing industry standards.

     

    (c)   Delivery. 
      The Servicer shall deliver all Bills issued by it (i) by United States mail
      in
      such class or classes as are consistent with the Servicer Policies and Practices
      followed by the Servicer with respect to its own charges to its customers or
      (ii) by any other means, whether electronic or otherwise, that the Servicer
      may
      from time to time use to present its own charges to its customers. Where a
      Third-Party Collector is responsible for billing the Customers, the Servicer
      shall deliver all Bills to the Applicable Third-Party Collector by such means
      as
      are prescribed by applicable PSC Regulations, or if not prescribed by applicable
      PSC Regulations, by such means as are mutually agreed upon by the Servicer
      and
      the Applicable Third-Party Collector and are consistent with PSC Regulations.
      The Servicer or each Third-Party Collector, as applicable, shall pay from its
      own funds all costs of issuance and delivery of all Bills, including but not
      limited to printing and postage costs as the same may increase or decrease
      from
      time to time.

     

    SECTION
      5.  CUSTOMER
      SERVICE FUNCTIONS.

     

    The
      Servicer shall handle all Customer inquiries and other Customer service matters
      according to the same procedures it uses to service Customers with respect
      to
      its own charges.

     

    SECTION
      6.  COLLECTIONS;
      PAYMENT PROCESSING; REMITTANCE.

     

    (a)   Collection
      Efforts, Policies, Procedures.

     

    (i)    The
      Servicer shall use reasonable efforts to collect all Billed QRSCs from Customers
      and Third-Party Collectors as and when the same become due and shall follow
      such
      collection procedures as it follows with respect to comparable assets that
      it
      services for itself or others, including with respect to the
      following:

     

    
      	 	
              (A)

            	
              The
                Servicer shall prepare and deliver overdue notices to Customers and
                Third-Party Collectors in accordance with applicable PSC Regulations
                and
                Servicer Policies and Practices.

            

    

     

    
      
        
        

      

      
        
          ANNEX
            I

          3

        

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (B)

            	
              The
                Servicer shall apply late payment charges to outstanding Customer
                and
                Third-Party Collector balances in accordance with applicable PSC
                Regulations and as required by the Qualified Rate Order.
                

            

    

     

    
      	 	
              (C)

            	
              In
                circumstances where the Servicer bills Customers directly, the Servicer
                shall deliver oral and written final notices of delinquency and possible
                disconnection in accordance with applicable PSC Regulations and Servicer
                Policies and Practices.

            

    

     

    
      	 	
              (D)

            	
              The
                Servicer shall adhere to and carry out disconnection policies and
                termination of Third-Party Collector billing in accordance with applicable
                Requirements of Law and the Servicer Policies and
                Practices.

            

    

     

    
      	 	
              (E)

            	
              The
                Servicer may employ the assistance of collection agents to collect
                any
                past-due Qualified Rate Stabilization Charges in accordance with
                applicable Requirements of Law and Servicer Policies and
                Practices.

            

    

     

    
      	 	
              (F)

            	
              The
                Servicer shall apply Customer and Third-Party Collector deposits
                to the
                payment of delinquent accounts in accordance with applicable PSC
                Regulations and Servicer Policies and Practices and according to
                the
                priorities set forth in Section
                6(b)(ii),
                (iii),
                (iv)
                and (v)
                of
                this Annex
                I.

            

    

     

    (ii)   The
      Servicer shall not waive any late payment charge or any other fee or charge
      relating to delinquent payments, if any, or waive, vary or modify any terms
      of
      payment of any amounts payable by a Customer, in each case unless such waiver
      or
      action: (A) would be in accordance with the Servicer’s customary practices or
      those of any successor Servicer with respect to comparable assets that it
      services for itself and for others; (B) would not materially adversely affect
      the rights of the Holders; and (C) would comply with applicable Requirements
      of
      Law; provided,
      however,
      that
      notwithstanding anything in the Agreement or this Annex
      I
      to the
      contrary, the Servicer is authorized to write off any Billed QRSCs, in
      accordance with its Servicer Policies and Practices.

     

    (iii)   The
      Servicer shall accept payment from Customers in respect of Billed QRSCs in
      such
      forms and methods and at such times and places as it accepts for payment of
      its
      own charges. The Servicer shall accept payment from Third-Party Collectors
      in
      respect of Billed QRSCs in such forms and methods and at such times and places
      as the Servicer and each Third-Party Collector shall mutually agree in
      accordance with any applicable Requirements of Law.

     

    (b)   Payment
      Processing; Allocation; Priority of Payments.

     

    (i)    The
      Servicer shall post all payments received to Customer accounts as promptly
      as
      practicable, and, in any event, substantially all payments shall be posted
      no
      later than three (3) Business Days after receipt.

     

    (ii)    Subject
      to clause
      (iii)
      below,
      the Servicer shall apply payments received to each Customer’s or each Applicable
      Third-Party Collector’s account in proportion to the charges contained on the
      outstanding Bill to such Customer or Applicable Third-Party
      Collector.

     

    
      
        
        

      

      
        
          ANNEX
            I

          4

        

        
          

        

      

      
        
        

      

    

    (iii)  
Any
      amounts collected by the Servicer that represent partial payments of the total
      Bill shall be allocated to gas and electric charges in accordance with
      applicable PSC Regulations.

     

    (iv)  
With
      respect to partial payments of the Electric Bill, such partial payments shall
      be
      allocated ratably, based on the amount owed for Billed QRSCs and other fees
      and
      charges, other than late charges, owed to the Servicer, and then to late
      charges. If more than one Series of Rate Stabilization Bonds is outstanding,
      the
      Servicer shall allocate amounts owed to the Issuer ratably based on the total
      amount of Qualified Rate Stabilization Charges on such bill which were billed
      in
      respect of each such Series. 

     

    (v)   The
      Servicer shall hold all over-payments for the benefit of the Issuer and BGE
      and
      shall apply such funds to future Bill charges in accordance with clauses
      (ii)
      and
(iii)
      as such
      charges become due.

     

    (vi)  
For
      Customers on a Budget Billing Plan, the Servicer shall treat payments received
      from such Customers as if such Customers had been billed for their respective
      Qualified Rate Stabilization Charges in the absence of the Budget Billing Plan;
      partial payment of a Budget Billing Plan payment shall be allocated according
      to
clause
      (iv)
      and
      overpayment of a Budget Billing Plan payment shall be allocated according to
      clause
      (v).

     

    (c)   Accounts;
      Records.

     

    The
      Servicer shall maintain accounts and records as to the Rate Stabilization
      Property accurately and in accordance with its standard accounting procedures
      and in sufficient detail (i) to permit reconciliation between payments or
      recoveries with respect to the Rate Stabilization Property and the amounts
      from
      time to time remitted to the Collection Accounts in respect of the Rate
      Stabilization Property and (ii) to permit the QRSC Payments held by the Servicer
      to be accounted for separately from the funds with which they may be commingled,
      so that the dollar amounts of QRSC Payments commingled with the Servicer’s funds
      may be properly identified and traced.

     

    (d)   Investment
      of QRSC Payments Received.

     

    Prior
      to
      each Daily Remittance, the Servicer may invest QRSC Payments received at its
      own
      risk and (except as required by applicable PSC Regulations) for its own benefit.
      So long as the Servicer complies with its obligations under Section
      6(c),
      neither
      such investments nor such funds shall be required to be segregated from the
      other investments and funds of the Servicer.

     

    (e)   Calculation
      Updates.

     

    (i)    Annually,
      on or before ______ of each year, beginning on _____, 2008, the Servicer shall
      update the Collections Curve and the Charge-Off percentage in order to be able
      to calculate the Periodic Billing Requirement and to calculate any change in
      the
      Daily Remittances.

     

    
      
        
        

      

      
        
          ANNEX
            I

          5

        

        
          

        

      

      
        
        

      

    

     

    (ii)   The
      Servicer and the Issuer acknowledge that, as contemplated in Section
      9.01(b)
      of the
      Agreement, the Servicer may make certain changes to its current computerized
      customer information system, which changes, when functional, would affect the
      Servicer’s method of calculating the Estimated QRSC Collections or Actual QRSC
      Collections during each Collection Period. Should these changes to the
      computerized customer information system become functional during the term
      of
      the Agreement, the Servicer and the Issuer agree that they shall review the
      procedures used to calculate the Estimated QRSC Collections and Actual QRSC
      Collections in light of the capabilities of such new system and shall amend
      this
Annex
      I
      in
      writing to make such modifications and/or substitutions to such procedures
      as
      may be appropriate in the interests of efficiency, accuracy, cost and/or system
      capabilities; provided, however, that the Servicer may not make any modification
      or substitution that will materially adversely affect the Holders. As soon
      as
      practicable, and in no event later than sixty (60) Business Days after the
      date
      on which all Customer accounts are being billed under such new system, the
      Servicer shall notify the Issuer, the Indenture Trustee and the Rating Agencies
      of the same.

     

    (iii) All
      calculations of collections, each update of the Collections Curve or Charge-Off
      percentage and any changes in procedures used to calculate the Estimated QRSC
      Collections or Actual QRSC Collections pursuant to this Section
      6(e)
      shall be
      made in good faith, and in the case of any update pursuant to clause
      (i)
      above or
      any change in procedures pursuant to clause
      (ii)
      above,
      in a manner reasonably intended to provide estimates and calculations that
      are
      at least as accurate as those that would be provided on the Closing Date
      utilizing the initial procedures.

     

    (f)   Remittances.

     

    (i)    The
      Issuer shall cause to be established the Collection Accounts in the name of
      the
      Indenture Trustee in accordance with the Indenture.

     

    (ii)   The
      Servicer shall make remittances to the Collection Accounts in accordance with
      Section
      6.10
      of the
      Agreement.

     

    (iii)  
In
      the
      event of any change of account or change of institution affecting any Collection
      Account, the Issuer shall provide written notice thereof to the Servicer not
      later than five (5) Business Days from the effective date of such
      change.

     

    
      
        
        

      

      
        
          ANNEX
            I

          6EX-4.7

 

Exhibit 4.7

[Letterhead of Centerplate, Inc.]

As of May 4, 2007

BCP Volume L.P.

BCP Offshore Volume L.P.

VSI Management Direct L.P.

c/o The Blackstone Group L.P.

345 Park Avenue

New York, New York 10154

Recreational Services L.L.C.

c/o General Electric Capital Corporation

201 Merrit 7

Norwalk, Connecticut 06851

Re: Amended and Restated Stockholders Agreement dated as of December 10, 2003

Ladies and Gentlemen:

     Reference is made to: (a) that certain Amended and Restated Stockholders Agreement dated as of
December 10, 2003 (the “Stockholders Agreement”) by and among Centerplate, Inc., a Delaware
corporation formerly known as Volume Services America Holdings, Inc. (the “Company”), VSI
Management Direct L.P., a Delaware limited partnership (“Direct”), BCP Volume L.P., a
Delaware limited partnership, BCP Offshore Volume L.P., a Cayman Islands limited partnership, (BCP
Volume L.P. and BCP Offshore Volume L.P. together, “Blackstone”) and Recreational Services
L.L.C., a Delaware limited liability company (“GE”); and (b) that certain Registration
Rights Agreement dated as of December 10, 2003 by and among the Company, Direct, Blackstone, GE,
Lawrence E. Honig and Kenneth R. Frick, as amended by a letter agreement dated March 22, 2007 (the
“Registration Rights Agreement”). Capitalized terms used but not defined herein have the
meanings given to them in the Registration Rights Agreement.

     At the request of Direct, Blackstone and GE (each, a “Selling Party”), and in
accordance with the Registration Rights Agreement, on March 23, 2007 the Company filed a shelf
registration statement on Form S-3 (the “Shelf Registration Statement”) with the SEC. In
order to facilitate the offer of Registrable Securities and in order to respond to certain comments
raised by the SEC in their letter to the Company dated April 16, 2007, the Company and the Selling
Parties hereby agree that:

	 	1.	 	during the 36-month period following the effective date of the Shelf Registration
Statement, in connection with any underwritten public offering of IDSs under the Shelf
Registration Statement, the Company shall, at the option of Direct,

 

 

	 	 	 	Blackstone or GE, exchange with each Selling Party a portion of the shares of Common Stock
held by such Selling Party for an amount of Subordinated Notes, such
that the number of shares of Common Stock and Subordinated Notes held by the Company or its agents on behalf
of such Selling Party make the integral whole number of IDSs that such Selling Party
desires to sell in such underwritten public offering (in accordance with the exchange rate
provided in Section 1.4 of the Stockholders Agreement);
	 
	 	2.	 	the Company shall take all action reasonably necessary (including, without
limitation, actions required by The Depository Trust Company or The Bank of New York) in
order to combine the shares of Common Stock and Subordinated Notes held on behalf of the
Selling Party in order to form the integral whole number of IDSs that such Selling Party
desires to sell in any underwritten public offering under the Shelf Registration Statement
(and in accordance with the Registration Rights Agreement);
	 
	 	3.	 	in connection with any underwritten public offering under the Shelf Registration
Statement, upon written request by such Selling Party the Company shall transfer or
arrange for the transfer of the IDSs formed in accordance with paragraphs 1 and 2 above to
the Selling Party or any underwriter in such underwritten public offering in accordance
with the Registration Rights Agreement; and
	 
	 	4.	 	the Company and any Selling Party shall (a) enter into such mutually satisfactory
custody agreements or other arrangements if the respective counsel to the Company and such
Selling Party determine such agreements or arrangements are necessary, and (b) furnish
each other with such further information, certificates and documents as the Company or the
Selling Party may reasonably request in connection with the foregoing.

     For the avoidance of doubt, nothing in this letter agreement shall be construed to amend,
modify or waive the terms of the Stockholders Agreement (except as expressly provided herein) or
the Registration Rights Agreement.

     This letter agreement and the rights and duties of the parties hereto shall be governed by,
and construed in accordance with, the laws of the State of New York and may be executed in
counterparts, each of which when executed shall be deemed to be an original and all of which taken
together shall constitute one and the same instrument.

     If the above reflects your understanding of the parties’ agreement, please acknowledge your
acceptance of the foregoing by executing the countersignature below.

[Signature Pages Follow]

 

 

	 	 	 	 	 
	 	Very Truly Yours,

CENTERPLATE, INC.

 	 
	 	By:  	 	 
	 	Name:  	 	 
	 	Title:  	 	 
	 

 

 

Acknowledged and Agreed

as of the date first above written:

	 	 	 	 	 	 	 	 	 
	BCP VOLUME L.P.	 	 
	 
	 	 	 	 	 	 	 	 
	By:	 	Blackstone Capital Partners II Merchant

Banking Fund L.P., as General Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Blackstone Management Associates II L.L.C.,

as General Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	BCP OFFSHORE VOLUME L.P.	 	 
	 
	 	 	 	 	 	 	 	 
	By:	 	Blackstone Management Associates II L.L.C.,

as General Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:	 	Blackstone Service (Cayman) LDC,

as Administrative General Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	VSI MANAGEMENT DIRECT L.P.	 	 
	 
	 	 	 	 	 	 	 	 
	By:	 	VSI Management I L.L.C.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Blackstone Management Associates II L.L.C.,

as Managing Member	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 

 

 

	 	 	 	 	 	 	 
	RECREATIONAL SERVICES L.L.C.  
	 
	 	 	 	 	 	 
	By:	 	General Electric Capital Corporation,

as Managing Member	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:

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