Document:

Exhibit 10.1

 

EXECUTION COPY

 

 

CREDIT
AGREEMENT

 

Dated as of November 13,
2008

 

Among

 

CONSTELLATION
ENERGY GROUP, INC.,

as
Borrower

 

THE
LENDERS NAMED HEREIN

 

and

 

THE ROYAL
BANK OF SCOTLAND PLC,

as
Administrative Agent

 

 

RBS
SECURITIES CORPORATION 

d/b/a RBS GREENWICH CAPITAL

and

UBS
SECURITIES LLC

Co-Lead Arrangers and Co-Book Managers

 

and

 

UBS
SECURITIES LLC

Syndication Agent

 

 

TABLE OF
CONTENTS

 

	
  ARTICLE I DEFINITIONS; CONSTRUCTION

  	
  1

  
	
   

  	
   

  
	
   

  	
  Section 1.01.
  Defined Terms

  	
  1

  
	
   

  	
  Section 1.02. Terms Generally

  	
  16

  
	
   

  	
  Section 1.03. Time

  	
  17

  
	
   

  	
   

  	
   

  
	
  ARTICLE II THE ADVANCES

  	
  17

  
	
   

  	
   

  
	
   

  	
  Section 2.01. Making the Advances

  	
  17

  
	
   

  	
  Section 2.02. The Advances

  	
  17

  
	
   

  	
  Section 2.03. Borrowing and Conversion
  Procedures

  	
  18

  
	
   

  	
  Section 2.04. Fees

  	
  19

  
	
   

  	
  Section 2.05. Repayment of Advances; Evidence
  of Indebtedness

  	
  20

  
	
   

  	
  Section 2.06. Interest

  	
  20

  
	
   

  	
  Section 2.07. Default Interest

  	
  21

  
	
   

  	
  Section 2.08. Alternate Rate of Interest

  	
  21

  
	
   

  	
  Section 2.09. Termination and Reduction of
  Commitments; Commitment Increase

  	
  22

  
	
   

  	
  Section 2.10. Prepayment

  	
  23

  
	
   

  	
  Section 2.11. Reserve Requirements; Change in
  Circumstances

  	
  24

  
	
   

  	
  Section 2.12. Change in Legality

  	
  25

  
	
   

  	
  Section 2.13. Pro Rata Treatment

  	
  26

  
	
   

  	
  Section 2.14. Sharing of Setoffs

  	
  26

  
	
   

  	
  Section 2.15. Payments

  	
  27

  
	
   

  	
  Section 2.16. Taxes

  	
  27

  
	
   

  	
  Section 2.17. Assignment of Commitments Under
  Certain Circumstances

  	
  29

  
	
   

  	
   

  	
   

  
	
  ARTICLE III CONDITIONS OF
  LENDING

  	
  30

  
	
   

  	
   

  
	
   

  	
  Section 3.01. Conditions Precedent to
  Effectiveness of this Agreement

  	
  30

  
	
   

  	
  Section 3.02. Conditions Precedent to Each
  Borrowing

  	
  31

  
	
   

  	
  Section 3.03. Reliance on Certificates

  	
  32

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV REPRESENTATIONS AND
  WARRANTIES

  	
  32

  
	
   

  	
   

  
	
   

  	
  Section 4.01. Representations and Warranties of
  the Borrower

  	
  32

  
	
   

  	
   

  	
   

  
	
  ARTICLE V COVENANTS OF THE
  BORROWER

  	
  34

  
	
   

  	
   

  
	
   

  	
  Section 5.01.
  Affirmative Covenants

  	
  34

  
	
   

  	
  Section 5.02.
  Negative Covenants

  	
  36

  
	
   

  	
  Section 5.03. Reporting Requirements

  	
  39

  
	
   

  	
  Section 5.04. Specified Indebtedness to
  Capitalization

  	
  40

  
	
   

  	
  Section 5.05. Consolidated EBITDA to
  Consolidated Interest Expense

  	
  41

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI EVENTS OF DEFAULT

  	
  41

  
	
   

  	
   

  
	
   

  	
  Section 6.01. Events of Default

  	
  41

  
	
   

  	
  Section 6.02. Remedies

  	
  43

  

 

i

 

	
  ARTICLE VII THE ADMINISTRATIVE
  AGENT

  	
  43

  
	
   

  	
   

  	
   

  
	
   

  	
  Section 7.01. Authorization and Action

  	
  43

  
	
   

  	
  Section 7.02. Agent’s Reliance, Etc

  	
  44

  
	
   

  	
  Section 7.03. Discretionary Action

  	
  44

  
	
   

  	
  Section 7.04. Successor Agent

  	
  44

  
	
   

  	
  Section 7.05. RBS and Affiliates

  	
  45

  
	
   

  	
  Section 7.06. Indemnification

  	
  45

  
	
   

  	
  Section 7.07. Bank Credit Decision

  	
  45

  
	
   

  	
  Section 7.08. Relationship with Lenders

  	
  46

  
	
   

  	
  Section 7.09. Syndication Agent and Arrangers

  	
  46

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII MISCELLANEOUS

  	
  46

  
	
   

  	
   

  
	
   

  	
  Section 8.01.
  Notices

  	
  46

  
	
   

  	
  Section 8.02.
  Survival of Agreement

  	
  47

  
	
   

  	
  Section 8.03. Binding Effect

  	
  47

  
	
   

  	
  Section 8.04. Successors and Assigns

  	
  47

  
	
   

  	
  Section 8.05. Expenses; Indemnity

  	
  50

  
	
   

  	
  Section 8.06. Right of Setoff

  	
  52

  
	
   

  	
  Section 8.07. Applicable Law

  	
  52

  
	
   

  	
  Section 8.08. Waivers; Amendment

  	
  52

  
	
   

  	
  Section 8.09. ENTIRE AGREEMENT

  	
  53

  
	
   

  	
  Section 8.10. Severability

  	
  53

  
	
   

  	
  Section 8.11. Counterparts/Telecopy

  	
  53

  
	
   

  	
  Section 8.12. Headings

  	
  54

  
	
   

  	
  Section 8.13. Jurisdiction; Venue; Waiver of
  Jury Trial

  	
  54

  
	
   

  	
  Section 8.14. Electronic Communications

  	
  54

  
	
   

  	
  Section 8.15. Confidentiality

  	
  56

  

 

SCHEDULES AND EXHIBITS

 

	
  Schedule I

  	
  —

  	
  Schedule of Lenders

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
  —

  	
  Form of Assignment
  and Acceptance

  
	
  Exhibit B

  	
  —

  	
  Form of Borrowing
  Request

  
	
  Exhibit C

  	
  —

  	
  Form of Notice of
  Conversion

  
	
  Exhibit D

  	
  —

  	
  Form of Opinion of
  Counsel for the Borrower

  
	
  Exhibit E

  	
  —

  	
  Form of Compliance
  Certificate

  
	
  Exhibit F

  	
  —

  	
  Form of Solvency
  Certificate

  

 

ii

 

This CREDIT AGREEMENT (this “Agreement”), dated as
of November 13, 2008, is entered into among CONSTELLATION ENERGY GROUP,
INC., a Maryland corporation (the “Borrower”), the lenders listed in Schedule I
(together with their successors and assigns, the “Lenders”)
and THE ROYAL BANK OF SCOTLAND PLC (“RBS”), as administrative agent for the
Lenders (in such capacity, the “Administrative Agent”).

 

PRELIMINARY
STATEMENT

 

WHEREAS, the Borrower has requested that the Lenders
extend credit to the Borrower on the terms and conditions hereinafter set
forth;

 

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

 

ARTICLE I

DEFINITIONS; CONSTRUCTION

 

Section 1.01.  Defined
Terms.

 

As used in this Agreement, terms not defined in the
lead paragraph or preamble shall have the meanings specified below:

 

“Administrative
Agent” shall have the meaning given such term in the preamble
hereto.

 

“Advance”
shall mean a Eurodollar Advance or Base Rate Advance.

 

“Affiliate”
shall mean, when used with respect to a specified Person, another Person that
directly or indirectly controls or is controlled by or is under common control
with the Person specified.  For this
purpose, “control” of a Person shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person, whether through ownership of voting shares, by
contract or otherwise.

 

“Applicable
Lending Office” shall mean, with respect to each Lender, such
Lender’s Domestic Lending Office in the case of a Base Rate Advance, and such
Lender’s Eurodollar Lending Office in the case of a Eurodollar Advance.

 

“Applicable Margin”
shall mean, with respect to any Type of Advance, at all times during which any
Applicable Rating Level set forth below is in effect, the rate per annum set
forth below for such Type of Advance next to such Applicable Rating Level:

 

	
  Applicable

  Rating

  Level

  	
   

  	
  Applicable

  Margin for

  Eurodollar

  Advances

  	
   

  	
  Applicable

  Margin for Base

  Rate Advances

  	
   

  
	
  1

  	
   

  	
  2.00.

  	
  %

  	
  1.00

  	
  %

  
	
  2

  	
   

  	
  2.25

  	
  %

  	
  1.25

  	
  %

  
	
  3

  	
   

  	
  2.75

  	
  %

  	
  1.75

  	
  %

  
	
  4

  	
   

  	
  3.00

  	
  %

  	
  2.00

  	
  %

  
	
  5

  	
   

  	
  3.50

  	
  %

  	
  2.50

  	
  %

  

 

 

A change in the Applicable Margin resulting from a
change in the Applicable Rating Level shall become effective upon the date of
announcement of a change in any Reference Rating that results in a change in
the Applicable Rating Level.

 

“Applicable
Rating Level” shall be determined, at any time, in accordance
with the then- applicable Reference Ratings as follows:

 

	
  Reference
  Ratings

  	
   

  	
  Applicable

  Rating

  Level

  
	
  One
  of the following ratings shall be in effect:

  Reference
  Rating by S&P of  BBB+ or higher or

  Reference
  Rating by Moody’s of Baa1 or higher

  	
   

  	
  1

  
	
  One
  of the following ratings shall be in effect:

  Reference
  Rating by S&P of  at least BBB
  or

  Reference
  Rating by Moody’s of at least Baa2

  	
   

  	
  2

  
	
  One
  of the following ratings shall be in effect:

  Reference
  Rating by S&P of  at least
  BBB- or

  Reference
  Rating by Moody’s of at least Baa3

  	
   

  	
  3

  
	
  One
  of the following ratings shall be in effect:

  Reference
  Rating by S&P of  at least BB+
  or

  Reference
  Rating by Moody’s of at least Ba1

  	
   

  	
  4

  
	
  Both
  of the following ratings shall be in effect:

  Reference
  Rating by S&P lower than BB+ (or unrated) and

  Reference
  Rating by Moody’s lower than Ba1 (or unrated)

  	
   

  	
  5

  

 

In the event
that none of Applicable Rating Levels 1, 2, 3 or 4 shall be applicable, or no
Reference Rating by either S&P or Moody’s shall be in effect, then the
Applicable Rating Level shall be Applicable Rating Level 5.  The Applicable Rating Level shall be
redetermined on the date of announcement of a change in any of these Reference
Ratings.

 

Notwithstanding
the above, (i) if at any time there is a split between Reference Ratings
by S&P and Moody’s, the Applicable Rating Level shall be determined by the
higher Reference Rating, unless there is a difference of more than one Level
between such Reference Ratings, in which case the Applicable Rating Level shall
be the Applicable Rating Level that corresponds to the Reference Ratings one
Level below the higher Reference Rating.

 

“Approved
Fund” means any Fund that is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate
of an entity that administers or manages a Lender.

 

“Asset Disposition”
means any event described in paragraph (iii) of the definition of
Prepayment Event.

 

2

 

 “Assignment and Acceptance”
shall mean an assignment and acceptance entered into by a Lender and an
assignee in the form of Exhibit A.

 

“Base
Rate” shall mean, for any day, a rate per annum equal to the greatest
of (i) the rate of interest per annum announced from time to time by RBS
as its prime rate, (ii) the Federal Funds Effective Rate in effect on such
day plus 1⁄2 of 1% and (iii) the rate of interest per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) appearing on a nationally
recognized service such as Reuters Page LIBOR01 (or any successor page) as
displaying the London interbank offered rate for deposits in dollars at
approximately 11:00 A.M. (London time) such day for a term of one month
(the “One-Month LIBOR Rate”) plus 1%; provided, however, if more than one rate
is specified on such service, the applicable rate shall be the arithmetic mean
of all such rates plus 1%.  Any change in
the Base Rate due to a change in RBS’s prime rate, the Federal Funds Effective
Rate or the One-Month LIBOR Rate shall be effective at the opening of business
on the effective date of such change in such prime rate, the Federal Funds
Effective Rate or One-Month LIBOR rate, respectively.

 

“Base
Rate Advance” shall mean an Advance that bears interest at a
rate determined by reference to the Base Rate in accordance with the provisions
of Article II.

 

“Base
Rate Borrowing” shall mean a Borrowing comprised of Base Rate
Advances.

 

“BGE”
shall mean Baltimore Gas and Electric Company, a Subsidiary of Borrower.

 

“Board”
shall mean the Board of Governors of the Federal Reserve System of the United
States.

 

“Borrower”
shall mean Constellation Energy Group, Inc., a Maryland corporation.

 

“Borrowing”
shall mean a borrowing consisting of (i) simultaneous Advances of the same
Type and having the same interest period made by each of the Lenders pursuant
to Section 2.03.  All Advances of
the same Type, having the same Interest Period and made or Converted on the
same day shall be deemed a single Borrowing hereunder until repaid or next
Converted.

 

“Borrowing
Request” shall mean a request made pursuant to Section 2.03
in the form of Exhibit B.

 

“Business
Day” shall mean any day (other than a day that is a Saturday,
Sunday or legal holiday in the State of New York or the State of Maryland) on
which banks are open for business in New York, New York and Baltimore,
Maryland; provided, however,
that, when used in connection with a Eurodollar Advance, the term “Business Day” shall
also exclude any day on which banks are not open for dealings in dollar
deposits in the London interbank market.

 

“Capitalization”
shall mean, with respect to any Person, the sum of (i) the aggregate of
the capital stock, including preferred and preference stock, (but excluding
treasury stock and capital stock subscribed and unissued) and other equity
accounts (including retained earnings, paid-in capital and minority interest)
of such Person and its Subsidiaries as the same appears on its balance sheet
prepared in accordance with GAAP as of the date of determination, but including
(without duplication and except as expressly provided otherwise herein) Equity-Preferred

 

3

 

Securities of such Person
and its Subsidiaries and excluding the effect on accumulated other
comprehensive income (loss) resulting from (A) Financial Accounting
Statement No. 133 (Accounting for Derivative Instruments and Hedging
Activities) and (B) any pension and other post-retirement benefits liability
adjustments recorded in accordance with GAAP, and (ii) the amount of all
Specified Indebtedness of such Person and its Subsidiaries as of the same date.

 

“Capitalized
Lease Obligation” shall mean any obligation to pay rent or other
amounts under any lease of (or other arrangement conveying the right to use)
real and/or personal property, which obligation is required to be classified
and accounted for as a capital lease on a balance sheet prepared in accordance
with GAAP, and for purposes hereof the amount of such obligation shall be the
capitalized amount determined in accordance with such principles.

 

“Cash
Equivalents” shall mean (i) marketable direct obligations
issued by, or unconditionally guaranteed by, the United States government or
issued by any agency thereof and backed by the full faith and credit of the
United States of America, in each case maturing within one year from the date
of acquisition; (ii) certificates of deposit, time deposits, eurodollar
time deposits or overnight bank deposits having maturities of six months or
less from the date of acquisition issued by any Lender or by any commercial
bank organized under the laws of the United States of America or any state
thereof having combined capital and surplus of not less than $500,000,000; (iii) commercial
paper of an issuer rated at least A-2 by S&P or P-2 by Moody’s, or carrying
an equivalent rating by a nationally recognized rating agency, if both of the
two named rating agencies cease publishing ratings of commercial paper issuers
generally, and maturing within six months from the date of acquisition; (iv) repurchase
obligations of any Lender or of any commercial bank satisfying the requirements
of clause (ii) of this definition, having a term of not more than 30 days
with respect to securities issued or fully guaranteed or insured by the United
States government; (v) securities with maturities of one year or less from
the date of acquisition issued or fully guaranteed by any state, commonwealth
or territory of the United States, by any political subdivision or taxing
authority of any such state, commonwealth or territory or by any foreign
government, the securities of which state, commonwealth, territory, political
subdivision, taxing authority or foreign government (as the case may be) are
rated at least A by S&P or A by Moody’s; (vi) securities with maturity
of six months or less from the date of acquisition backed by standby letters of
credit issued by any Lender or any commercial bank satisfying the requirements
of clause (ii) of this definition; and (vii) shares of money market
mutual or similar funds that invest exclusively in assets satisfying the
requirements of clauses (i) through (vi) of this definition.

 

“Change
in Control” shall mean the occurrence of either of the following:
(i) any entity, person (within the meaning of Section 14(d) of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act) either (A) acquires shares of common stock of the Borrower
in a transaction or series of transactions that results in such entity, person
or group becoming, directly or indirectly, the beneficial owner (as defined in Rule 13d-3
under the Exchange Act) of 20% or more of the outstanding common stock of the
Borrower, or (B) acquires, by proxy or otherwise, the right to vote, for
the election of directors, for any merger, combination or consolidation of the
Borrower, or for any other matter or question, 20% or more of the then
outstanding voting securities of the Borrower (except where such acquisition is
made by a person or persons appointed by at least a majority of the board of
directors of the Borrower to act as proxy for any purpose); or (ii) the

 

4

 

election or appointment,
within a twelve-month period, of persons to the Borrower’s board of directors
who were not directors of the Borrower at the beginning of such twelve-month
period, and whose election or appointment was not approved by a majority of
those persons who were directors at the beginning of such period, where such
newly elected or appointed directors constitute 30% or more of the directors of
the board of directors of the Borrower. 
Notwithstanding the foregoing, the acquisition of the Borrower by
MidAmerican Energy Holdings Company substantially in accordance with the terms
described in the Borrower’s Current Report on Form 8-K, as filed with the
Securities and Exchange Commission on September 18, 2008, will not
constitute a “Change in Control”.

 

“Code”
shall mean the Internal Revenue Code of 1986, as amended from time to time and
the regulations promulgated and rulings issued thereunder.

 

“Commitment”
shall mean, with respect to each Lender, the commitment of such Lender to make
Advances under this Agreement as set forth in Schedule I hereto, as such
commitment may be terminated or reduced from time to time pursuant to Section 2.09
or modified from time to time pursuant to Section 8.04.

 

“Commitment
Fee Rate” shall mean, at all times during which any Applicable
Rating Level is in effect, the rate per annum set forth below next to such
Applicable Rating Level:

 

	
  Applicable

  Rating

  Level

  	
   

  	
  Commitment

  Fee

  	
   

  
	
  1

  	
   

  	
  0.500

  	
  %

  
	
  2

  	
   

  	
  0.625

  	
  %

  
	
  3

  	
   

  	
  0.75

  	
  %

  
	
  4

  	
   

  	
  1.000

  	
  %

  
	
  5

  	
   

  	
  1.250

  	
  %

  

 

A change in
the Commitment Fee Rate resulting from a change in the Applicable Rating Level
shall become effective upon the date of announcement of a change in any
Reference Rating that results in a change in the Applicable Rating Level.

 

“Commitment
Percentage” shall mean, as to any Lender as of any date of
determination, the percentage describing such Lender’s pro rata share of the
Commitments set forth in the Register from time to time.

 

“Consolidated EBITDA”
means, for any period, an amount equal to Consolidated Net Income for such
period plus (i) the following to the
extent deducted in calculating such Consolidated Net Income and without
duplication: (A) Consolidated Interest Expense for such period, (B) the
provision for Federal, state, local and foreign income taxes payable by the
Borrower and its Subsidiaries for such period, (C) depreciation and
amortization expense, (D) non-recurring expenses and charges and (E) extraordinary
expenses and charges, minus (ii) the
following to the extent included in calculating such Consolidated Net Income
and without duplication: (A) Federal, state, local and foreign income tax
credits of the Borrower and its Subsidiaries for such period, (B) non-cash
items increasing Consolidated Net Income for such

 

5

 

period, other than items
of the type described in the Borrower’s financial statements delivered pursuant
to Section 3.01(c)(vi) as “Derivative assets and liabilities,
excluding collateral”, (C) non-recurring income and (D) extraordinary
income.

 

“Consolidated Interest
Expense” means, for any period, the sum of (i) all
interest, premium payments, debt discount, fees, charges and related expenses
of the Borrower and its consolidated Subsidiaries in connection with borrowed
money (including capitalized interest) or in connection with the deferred
purchase price of assets, in each case to the extent treated as interest in
accordance with GAAP, and (ii) the portion of rent expense of the Borrower
and its consolidated Subsidiaries with respect to such period under capital
leases that is treated as interest in accordance with GAAP less
consolidated interest income including interest earned on cash margin accounts
with counterparties.

 

“Consolidated Net Income”
means, for any period, the net income of the Borrower and its consolidated
Subsidiaries for that period.

 

“Constellation
Commodities Group” shall mean Constellation Energy Commodities
Group, Inc. (formerly known as Constellation Power Source, Inc.), a
Delaware corporation.

 

“Constellation
Generation” shall mean Constellation Energy Nuclear Group, LLC
(formerly known as Constellation Nuclear, LLC), a Maryland limited liability
company.

 

“Convert”,
“Conversion”
and “Converted”
each shall mean a conversion of Borrowings of one Type into Borrowings of another
Type, or the selection of a new, or the renewal of the same, Interest Period
for Eurodollar Borrowings pursuant to the terms of this Agreement.

 

“Credit
Documents” shall mean this Agreement, any Note, any Borrowing
Request, the Fee Letter and all other related agreements and documents issued
or delivered hereunder or thereunder or pursuant hereto or thereto.

 

“Defaulting Lender”
shall mean any Lender that (i) has not made available to the
Administrative Agent such Lender’s ratable portion of a requested Borrowing
within three Business Days after the date due therefor in accordance with Section 2.02(c),
(ii) has notified the Borrower or the Administrative Agent that it does
not intend to comply with its obligations under Section 2.02(c) or (iii) is
the subject of a bankruptcy, insolvency or similar proceeding.

 

“Designated Lender”
shall mean a Defaulting Lender or a Downgraded Lender.

 

“Downgraded Lender”
shall mean any Lender (i) the long-term, senior unsecured Indebtedness of
which is rated below BBB- by S&P, Baa3 by Moody’s or a comparable rating by
any other nationally-recognized rating agency, or (ii) that is a
Subsidiary of a Person that is the subject of a bankruptcy, insolvency or
similar proceeding.

 

“Domestic
Lending Office” shall mean, with respect to any Lender, the
office of such Lender specified as its “Domestic Lending Office” opposite its name
on Schedule I hereto or such other office of such Lender as such Lender may
from time to time specify to the Borrower and the Administrative Agent.

 

6

 

“Eligible
Assignee” shall mean any of the following entities: (i) a
financial institution organized under the laws of the United States, or any
State thereof, and having total assets in excess of $1,000,000,000; and (ii) a
financial institution organized under the laws of any other country that is a
member of the Organization for Economic Cooperation and Development, or a
political subdivision of any such country, and having total assets in excess of
$1,000,000,000, provided that such financial institution is acting through a
branch or agency located in the United States.

 

“Equity-Preferred
Securities” of any Person means (i) debt or preferred
securities that are mandatorily convertible or mandatorily exchangeable into
common shares of such Person and (ii) any other securities, however
denominated, including but not limited to trust originated preferred
securities, (A) issued by such Person or any Subsidiary of such Person, (B) that
are not subject to mandatory redemption or the underlying securities, if any,
of which are not subject to mandatory redemption, (C) that are perpetual
or mature no less than 30 years from the date of issuance, (D) the
indebtedness issued in connection with which, including any guaranty, is
subordinate in right of payment to the unsecured and unsubordinated
indebtedness of the issuer of such indebtedness or guaranty, and (E) the
terms of which permit the deferral of the payment of interest or distributions
thereon.

 

“ERISA”
shall mean the Employee Retirement Income Security Act of 1974, as amended from
time to time (or any successor statute) and the regulations promulgated and
rulings issued thereunder.

 

“ERISA
Affiliate” shall mean, with respect to any Person, any trade or
business (whether or not incorporated) which together with such Person is a
single employer within the meaning of Section 4001(b)(1) of ERISA or Section 414
of the Code.

 

“ERISA
Event” shall mean (i) (A) the occurrence of a
Reportable Event or (B) the satisfaction of the requirements of paragraph (1) of
Section 4043(b) of ERISA with respect to the Borrower or an ERISA
Affiliate of the Borrower that is a contributing sponsor, as defined in Section 4001(a)(13)
of ERISA, of a Title IV Plan, and an event described in paragraph (9), (10),
(11), (12) or (13) of Section 4043(c) of ERISA of which the Borrower
has actual knowledge will occur with respect to such Title IV Plan within the
following thirty (30) days; (ii) the filing of an application for a
minimum funding waiver with respect to a Title IV Plan; (iii) the provision
by the administrator of any Title IV Plan of a notice of intent to terminate
such Title IV Plan pursuant to Section 4041(a)(2) of ERISA (including
any such notice with respect to a plan amendment referred to in Section 4041(e) of
ERISA); (iv) the cessation of operations at a facility of the Borrower or
any ERISA Affiliate of the Borrower in the circumstances described in Section 4062(e) of
ERISA; (v) the withdrawal by the Borrower or any ERISA Affiliate of the
Borrower from a Multiple Employer Plan during a plan year for which it was a
substantial employer, as defined in Section 4001(a)(2) of ERISA; (vi) the
withdrawal by the Borrower or any ERISA Affiliate of the Borrower from a
Multiemployer Plan that results in a liability to the Borrower or any ERISA Affiliate
of the Borrower of at least $25,000,000; (vii) the fulfillment of the
conditions for the imposition of a lien under Section 302(f) or 303(k) of
ERISA or Section 430(k) of the Code with respect to any Title IV
Plan; (viii) the adoption of an amendment to a Title IV Plan requiring the
provision of security to such Title IV Plan pursuant to Section 307 of
ERISA, the provision of security pursuant to Section 206(g)(5)(a) of
ERISA or Section 436(f)(1) 

 

7

 

of the Code, or the
violation of Section 206(g) of ERISA or Section 436 of the Code
with respect to a Single Employer Plan, or Section 305 of ERISA or Section 432
of the Code with respect to a Multiemployer Plan; (ix) the institution by
the PBGC of proceedings to terminate a Title IV Plan or the appointment of a
trustee to administer a Title IV Plan pursuant to Section 4042 of ERISA,
or any other event or condition that constitutes grounds under Section 4042
of ERISA for the termination of, or the appointment of a trustee to administer,
any Title IV Plan; or (x) the reorganization (as described in Section 4241
of ERISA), the insolvency (as described in Section 4245 of ERISA) or the
termination of a Multiemployer Plan that results in a liability to the Borrower
or any ERISA Affiliate of the Borrower of at least $25,000,000.

 

“Eurocurrency
Liabilities” shall have the meaning specified in Regulation D of
the Board, as in effect from time to time.

 

“Eurodollar
Advance” shall mean an Advance that bears interest at the
Eurodollar Rate in accordance with the provisions of Article II.

 

“Eurodollar
Borrowing” shall mean a Borrowing comprised of Eurodollar
Advances.

 

“Eurodollar
Lending Office” shall mean, with respect to any Lender, the
office of such Lender specified as its “Eurodollar Lending Office” opposite its name
on Schedule I hereto (or, if no such office is specified, its Domestic Lending
Office) or such other office of such Lender as such Lender may from time to
time specify to the Borrower and the Administrative Agent.

 

“Eurodollar
Rate” shall mean, for each Interest Period for each Eurodollar
Advance made as part of the same Borrowing, the rate of interest per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on a
nationally recognized service such as Reuters Page LIBOR01 (or any
successor page) as displaying the London interbank offered rate for deposits in
dollars at approximately 11:00 A.M. (London time) two Business Days prior
to the first day of such Interest Period for a term comparable to such Interest
Period; provided, however, if
more than one rate is specified on such service, the applicable rate shall be
the arithmetic mean of all such rates. 
If, for any reason, such rate is not available, the term “Eurodollar Rate” shall
mean, with respect to any Eurodollar Advance for the Interest Period applicable
thereto, the average of the rates of interest per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) that are offered by the Reference Banks
deposits in dollars at approximately 11:00 A.M. (London time) two Business
Days prior to the first day of such Interest Period for a term comparable to
such Interest Period.

 

“Eurodollar
Reserve Percentage” of any Lender for each Interest Period for
each Eurodollar Advance shall mean the reserve percentage applicable during
such Interest Period (or if more than one such percentage shall be so
applicable, the daily average of such percentages for those days in such
Interest Period during which any such percentage shall be so applicable) under
Regulation D or other regulations issued from time to time by the Board (or any
successor) for determining the maximum reserve requirement (including, without
limitation, any emergency, supplemental or other marginal reserve requirement,
without benefit of or credit for proration, exemptions or offsets) for such
Lender with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities having a term equal to such Interest Period.

 

8

 

“Event
of Default” shall have the meaning assigned to such term in Section 6.01.

 

“Federal
Funds Effective Rate” shall mean, for any day, the rate per
annum (rounded upwards to the next 1/100th of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for such
day by the Federal Reserve Bank of New York, or, if such rate is not so
released for any day which is a Business Day, the arithmetic average (rounded
upwards to the next 1/100th of 1%), as determined by the Administrative Agent,
of the quotations for the day of such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by it.

 

“Fee
Letter” shall mean that certain Fee Letter, dated August 26,
2008, as amended, modified and supplemented from time to time, among the
Borrower, RBS, RBS GC, UBS Loan Finance LLC and UBS Securities LLC.

 

“Fund”
shall mean any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.

 

“GAAP”
shall mean generally accepted accounting principles, applied on a consistent
basis.

 

“Guarantee
Obligation” shall mean, as to any Person (the “guaranteeing person”),
any obligation of (i) the guaranteeing person or (ii) another Person
(including, without limitation, any bank under any letter of credit), if to
induce the creation of such obligation of such other Person the guaranteeing
person has issued a reimbursement, counterindemnity or similar obligation, in
either case guaranteeing or in effect guaranteeing any Indebtedness, leases,
dividends or other obligations (the “primary obligations”) of any other third
Person (the “primary
obligor”) in any manner, whether directly or indirectly,
including, without limitation, any obligation of the guaranteeing person,
whether or not contingent, (A) to purchase any such primary obligation or
any property constituting direct or indirect security therefor, (B) to
advance or supply funds (1) for the purchase or payment of any such
primary obligation or (2) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (C) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary obligation
of the ability of the primary obligor to make payment of such primary
obligation or (D) otherwise to assure or hold harmless the owner of any
such primary obligation against loss in respect thereof; provided, however, that the term Guarantee
Obligation shall not include endorsements of instruments for deposit or
collection in the ordinary course of business. 
The amount of any Guarantee Obligation of any guaranteeing person shall
be deemed to be the lower of (x) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Guarantee Obligation is made and (y) the maximum amount for which such
guaranteeing person may be liable pursuant to the terms of the instrument
embodying such Guarantee Obligation, unless such primary obligation and the
maximum amount for which such guaranteeing person may be liable are not stated
or determinable, in which case the amount of such Guarantee Obligation shall be
such guaranteeing person’s maximum reasonably anticipated liability in respect
thereof as determined by such Person in good faith.

 

9

 

“Hazardous
Substance” shall mean any waste, substance, or material
identified as hazardous, dangerous or toxic by any office, agency, department,
commission, board, bureau, or instrumentality of the United States or of the
State or locality in which the same is located having or exercising
jurisdiction over such waste, substance or material.

 

“Hostile
Acquisition” shall mean any Target Acquisition involving a
tender offer or proxy contest that has not been recommended or approved by the
board of directors (or similar governing body) of the person that is the
subject of such Target Acquisition.  As
used herein, “Target
Acquisition” shall mean any transaction, or any series of
related transactions, by which the Borrower and/or any of its Subsidiaries
directly or indirectly (i) acquires any ongoing business or all or
substantially all of the assets of any Person or division thereof, whether
through purchase of assets, merger or otherwise, (ii) acquires (in one
transaction or as the most recent transaction in a series of transactions)
control of at least a majority in ordinary voting power of the securities of a
Person that has ordinary voting power for the election of directors or (iii) otherwise
acquires control of a more that 50% ownership interest in any such Person.

 

“Indebtedness”
shall mean, with respect to any Person at any date, without duplication, (i) all
indebtedness of such Person for borrowed money; (ii) all obligations of
such Person, issued, undertaken or assumed as the deferred purchase price of
property or services (other than trade payables incurred in the ordinary course
of such Person’s business) which purchase price is due more than one year from
the date of incurrence of the obligation in respect thereof or is evidenced by
a note or other instrument; (iii) all reimbursement obligations of such
Person with respect to surety bonds, letters of credit (to the extent not
collateralized with cash or Cash Equivalents), banker’s acceptances and similar
instruments (in each case, whether or not matured); (iv) all obligations
of such Person evidenced by notes, bonds, debentures or other similar
instruments including obligations so evidenced incurred in connection with the
acquisition of property, assets or business; (v) all indebtedness created
or arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such property); (vi) all
Capitalized Lease Obligations, leverage leases, sale and leasebacks and other
similar lease arrangements of such Person in amounts that exceed $25,000,000 in
the aggregate; (vii) all Off-Balance Sheet Liabilities; (viii) withdrawal
liability incurred under ERISA to any Multiemployer Plan by such Person or any
ERISA Affiliate of such Person (ix) all indebtedness of others of the type
referred to in (i) through (viii) as to which such Person has a
Guarantee Obligation.

 

 “Interest Payment Date”
shall mean, with respect to any Advance, the last day of the Interest Period
applicable thereto and, in the case of a Eurodollar Advance with an Interest
Period of more than three months’ duration, each day that would have been an
Interest Payment Date for such Advance had successive Interest Periods of three
months’ duration been applicable to any Advance and, in addition, the date of
any prepayment of each Advance or Conversion of any Advance to an Advance of a
different Type or having a new Interest Period.

 

“Interest
Period” shall mean (i) as to any Eurodollar Advance, the
period commencing on the date of such Advance or the date of the Conversion of
any Advance into a Eurodollar Advance and ending on the numerically
corresponding day (or, if there is no numerically corresponding day, on the
last day) in the calendar month that is 1, 2 or 3 months thereafter, or 

 

10

 

such other period as the
Borrower and all the Lenders may agree in any specific instance and (ii) as
to any Base Rate Advance, the period commencing on the date of such Advance or
the Conversion of any Advance into a Base Rate Advance and ending on the
earliest of (A) the Termination Date and (B) the date such Advance is
repaid, prepaid or Converted; provided,
however, that if any Interest Period would end on a day other than a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless, in the case of Eurodollar Advances only, such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day.

 

“Lender”
shall have the meaning given such term in the preamble hereto.

 

“LIBOR
Market Rate Spread” shall mean, for any Interest Period for any
Eurodollar Borrowing, 100% of the Borrower’s five-year credit default swap
spread (as obtained by the Administrative Agent from the Markit Group Limited
website) on the date two Business Days prior to the first day of such Interest
Period.  The Administrative Agent will
determine the LIBOR Market Rate Spread no later than 11:00 A.M. on the
date two Business Days prior to the first day of the Interest Period for any
Eurodollar Borrowing; provided, however,
that in the event that the LIBOR Market Rate Spread for such Eurodollar
Borrowing is not available from Markit Group Limited two Business Days prior to
the first day of the Interest Period for such Eurodollar Borrowing, the
Borrower, RBS (or any of its Affiliates) and UBS Loan Finance LLC (or any of
its Affiliates) shall negotiate in good faith (for a period of up to 30 days
after the credit default swap spread becomes unavailable (such 30-day period,
the “Negotiation Period”)) to agree on an
alternative method for establishing the LIBOR Market Rate Spread.  The LIBOR Market Rate Spread at any date of
determination thereof that falls during the Negotiation Period shall be based
upon the then most recently available quote of the credit default swap spread
determined pursuant to the first sentence of this definition.  If no such alternative method is agreed upon
during the Negotiation Period, the LIBOR Market Rate Spread as at any date of
determination after the end of the Negotiation Period shall be a rate per annum
equal to the greater of (i) 100% of the maximum Applicable Margin for
Eurodollar Advances and (ii) the average of the Borrower’s five-year
credit default swap spreads (as obtained by the Administrative Agent from the
Markit Group Limited website) during the 30 day period ending on the date on
which such swap spread was most recently available from Markit Group Limited.

 

“Lien”
shall have the meaning specified in Section 5.02(a).

 

“Majority
Lenders” shall mean Lenders having Commitments representing in
excess of 50% of the aggregate Commitments or, if the Commitments have been
terminated, Lenders holding Outstanding Credits representing in excess of 50%
of the Outstanding Credits.

 

“Margin
Regulations” shall mean Regulations T, U and X of the Board as
from time to time in effect, and all official rulings and interpretations
thereunder or thereof.

 

“Margin
Stock” shall have the meaning given such term under Regulation U
of the Board.

 

“Material
Adverse Change” shall mean any event, development or
circumstance that has had a material adverse effect on (i) the
transactions contemplated by this Agreement, (ii) the 

 

11

 

financial condition or
financial results of operations of the Borrower and its Subsidiaries taken as a
whole on a consolidated basis or (iii) the validity or enforceability of
any of the Credit Documents or the rights and remedies of the Administrative
Agent and the Lenders hereunder and thereunder.

 

“Material
Subsidiary” shall mean (i) Constellation Commodities Group
and Constellation Generation and (ii) any Subsidiary of the Borrower (x) the
assets of which are equal to or greater than 30% of the consolidated assets
(valued at book value) of the Borrower and its Subsidiaries, taken as a whole,
and (y) the net income (determined in accordance with GAAP) of which is
equal to or greater than 25% of the net income of the Borrower and its
Subsidiaries, taken as a whole (initially determined as of the date hereof by
reference to the audited financial statements of the Borrower and its
Subsidiaries delivered to the Administrative Agent pursuant to Section 3.01(c)(v) and
thereafter determined as of the date annual audited financial statements of the
Borrower and its consolidated Subsidiaries are required to be delivered to the
Administrative Agent pursuant to Section 5.03(c)).

 

“Moody’s”
shall mean Moody’s Investors Service, Inc. or any successor thereto.

 

“Multiemployer
Plan” shall mean a multiemployer plan, as defined in Section 4001(a)(3) of
ERISA, to which the Borrower or any ERISA Affiliate of the Borrower (i) is
making or accruing an obligation to make contributions, or (ii) within any
of the preceding six plan years, made or accrued an obligation to make contributions.

 

“Multiple
Employer Plan” shall mean a single employer plan, as defined in Section 4001(a)(15)
of ERISA, that (i) is maintained for employees of the Borrower or any
ERISA Affiliate of the Borrower and for the employees of one or more other Persons
or (ii) was so maintained and in respect of which the Borrower or any
ERISA Affiliate of the Borrower would have liability under Section 4064 or
4069 of ERISA in the event such plan has been or were to be terminated.

 

“Net Proceeds”
means, with respect to any Prepayment Event, (i) the cash proceeds
received in respect of such Prepayment Event including any cash received by way
of deferred payment of principal pursuant to a note or installment receivable
or purchase price adjustment receivable or otherwise, but only as and when
received, and, in the case of a condemnation or similar event, cash
condemnation awards and similar cash payments, in each case net of (ii) the
sum of (A) all fees and expenses paid or reasonably estimated by the
Borrower to be payable by the Borrower or any of its Subsidiaries to third
parties (other than Affiliates of the Borrower) in connection with such
Prepayment Event (including customary legal, accounting and investment banking
fees, commissions, discounts, relocation fees and expenses, and any actual
liabilities or losses in respect of any condemnation or similar event or to pay
amounts required to be paid with such condemnation or similar payments under
the terms of contractual obligations then in effect), (B) in the case of a
sale of an asset (including pursuant to a sale and leaseback transaction) or a
condemnation or similar proceeding, the amount of all payments required to be
made by the Borrower or any of its Subsidiaries as a result of such event to
repay Indebtedness (other than the Advances) secured by such asset or otherwise
subject to mandatory prepayment as a result of such event, (C) the amount
of all taxes paid (or reasonably estimated to be payable within the 12 months
following such Prepayment Event) by the Borrower and its Subsidiaries in
connection 

 

12

 

with such Prepayment
Event, and (D) any amount remitted in an escrow or any reserves
established by the Borrower and its Subsidiaries against liabilities under any
indemnification obligation or purchase price adjustment or otherwise associated
with such Prepayment Event, including pension and post-employment benefit
liabilities and liabilities related to environmental laws or against any other
contingent obligation related to such Prepayment Event, that, in each case, are
reasonably estimated to be payable within the 12 months following such
Prepayment Event (as determined in good faith by the chief financial officer or
treasurer of the Borrower).

 

“Non-U.S.
Payee” shall have the meaning specified in Section 2.16(f).

 

“Note”
shall mean a promissory note of the Borrower issued pursuant to Section 2.05(e) at
the request of a Lender, evidencing the Advances and in form satisfactory to
the Administrative Agent, as such promissory note may be amended, modified,
supplemented or replaced from time to time.

 

“Notice
of Conversion” shall have the meaning assigned to that term in Section 2.03(b).

 

“Off-Balance
Sheet Liability” of a Person shall mean any of the following
obligations not appearing on such Person’s balance sheet (i) all lease
obligations, leveraged leases, sale and leasebacks and other similar lease
arrangements of such Person, (ii) any liability under any so called “synthetic lease”
transaction entered into by such Person, and (iii) any obligation arising
with respect to any other transaction if and to the extent that such obligation
is the functional equivalent of borrowing but that does not constitute a
liability on the balance sheet of such Person.

 

“Outstanding
Credits” shall mean, on any date of determination, an amount
equal to the aggregate principal amount of all Advances outstanding on such
date.

 

“Patriot Act”
shall mean the USA Patriot Act (title III of Pub. L. 107-56 (signed into law October 26,
2001)), as amended or otherwise modified from time to time.

 

“Patriot Act Disclosures”
shall mean all documentation and other information that the Administrative
Agent or any Lender reasonably requests in order to comply with its ongoing
obligations under applicable “know your customer” and anti-money laundering rules and
regulations, including the Patriot Act.

 

“PBGC”
shall mean the Pension Benefit Guaranty Corporation or any entity succeeding to
any or all of its functions under ERISA.

 

“Permitted
Securitization” shall mean (i) the transfer of the rights
of BGE under a qualified rate order to an Affiliate, (ii) the issuance of
rate stabilization bonds by an Affiliate of the BGE and (iii) the creation
of Liens on rate stabilization property to secure the payment of the rate
stabilization bonds by an Affiliate of BGE, as contemplated by Sections 7-520
et. seq. of the Public Utility Companies Article of the Annotated Code of
Maryland or any successor provision of Maryland law.

 

13

 

“Person”
shall mean any natural person, corporation, limited liability company, business
trust, joint venture, joint stock company, trust, association, company,
partnership or government, or any agency or political subdivision thereof.

 

“Plan”
shall mean any material “employee benefit plan” (as defined in Section 3(3) of
ERISA) maintained by the Borrower or any ERISA Affiliate of the Borrower.

 

“Prepayment Event”
means:

 

(i)            (a) the
issuance by the Borrower or any of its Subsidiaries (other than  BGE) of any equity, equity hybrid or
equity-linked securities (including, without limitation, Equity-Preferred
Securities), other than any such securities (1)  issued to the Borrower or
a Subsidiary of the Borrower by a Subsidiary of the Borrower, or (2) issued
in connection with any employee benefit or long-term equity plan or any
shareholder investment plan, or (b) the receipt by the Borrower or any
Subsidiary of the Borrower of any capital contribution, other than any such
capital contribution by the Borrower or a Subsidiary of the Borrower to a
Subsidiary of the Borrower;

 

 (ii)          the incurrence by the Borrower or any of its Subsidiaries
(other than BGE) of any Indebtedness described in clause (i) or (iv) of
the definition thereof, other than (A) Indebtedness under commercial paper
programs and credit facilities (including this Agreement) in existence on the
date hereof and in a principal amount under each such program or facility not
in excess of the principal amount provided thereunder on the date hereof,
including tax-exempt financings, (B) extensions or refinancings of any
Indebtedness outstanding on the date hereof or otherwise described in clause
(A), provided that the principal amount of
any such extended or refinanced Indebtedness shall not exceed the principal
amount of the Indebtedness so extended or refinanced plus the amount of any
prepayment premium, accrued or accreted amounts paid in respect of such
Indebtedness and customary fees and expenses related to such refinancing, (C) Indebtedness
secured by gas reserves not in excess of $80 million aggregate principal amount
outstanding at any time, and (D) any other Indebtedness described in
clause (i) or (iv) of the definition thereof not in excess of $100
million in aggregate principal amount outstanding at any time; or

 

(iii)          any sale (including
pursuant to a sale and leaseback transaction) of any property of the Borrower
or any of its Subsidiaries (other than BGE) not in the ordinary course of
business (including, without limitation, the sale of the Borrower’s global
commodities business, London-based operations and power generating facilities
but excluding any sale of assets pursuant to the Put Agreements), other than (A) sales
of commodity contracts and similar rights and (B) dispositions of assets
resulting in aggregate Net Proceeds from all asset dispositions after the date
hereof not exceeding $200,000,000; and

 

(iv)          any taking of any
property of the Borrower or any of its Subsidiaries (other than BGE) under
power of eminent domain or by condemnation or similar proceeding, or any
transfer of any such property in lieu of a condemnation or similar taking
thereof.

 

14

 

“Put Agreements” shall  mean (i) the
Put Agreement, dated as of November 6, 2008, among MidAmerican Energy
Holdings Company, the Borrower, MEHC Merger Sub Inc. and Constellation Power
Source Generation Inc. and (ii) the Put Agreement, dated as of November 6,
2008, among MidAmerican Energy Holdings Company, the Borrower, MEHC Merger Sub
Inc. and CER Generation II, LLC.

 

“RBS”
shall have the meaning given such term in the preamble hereto.

 

“RBS
GC” shall mean RBS Securities Corporation d/b/a RBS Greenwich
Capital.

 

“Reference
Banks” shall mean RBS and such other Lenders as are designated by
the Borrower.

 

“Reference
Rating” by S&P or Moody’s shall mean, on any date of
determination, the most recently announced long-term, senior unsecured
non-credit enhanced debt rating of the Borrower issued by S&P or Moody’s,
respectively.

 

“Register”
shall have the meaning assigned to such term in Section 8.04(d).

 

“Reportable
Event” shall mean any event described in Section 4043(c) of
ERISA, other than an event (excluding an event described in Section 4043(c)(1) relating
to tax disqualification) with respect to which the thirty (30) day notice
requirement of such section has been waived.

 

“S&P”
shall mean Standard & Poor’s Rating Services, a division of the
McGraw-Hill Companies, Inc. or any successor thereto.

 

“Single
Employer Plan” shall mean a single employer plan, as defined in Section 4001(a)(15)
of ERISA, that (i) is maintained for employees of the Borrower or any
ERISA Affiliate of the Borrower and for no employees of any Person other than
the Borrower or such ERISA Affiliate or (ii) was so maintained and in
respect of which the Borrower or any ERISA Affiliate of the Borrower would have
liability under Section 4069 of ERISA in the event such plan has been or
were to be terminated.

 

“Solvent”
shall mean, with respect to any Person as of a particular date, that on such
date (i) such Person is able to pay its debts and contingent obligations
as they mature in the normal course of business, (ii) Person does not
intend to, and does not believe that it will, incur debts or liabilities beyond
such Person’s ability to pay as such debts and liabilities mature in their
ordinary course and (iii) such Person is not engaged in a business or a
transaction, and is not about to engage in a business or a transaction, for
which such Person’s assets would constitute unreasonably small capital after
giving due consideration to the prevailing practice in the industry in which
such Person is engaged or is to engage. 
In computing the amount of contingent liabilities at any time, it is intended
that such liabilities will be computed at the amount that, in light of all the
facts and circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.

 

“Specified
Indebtedness” of any Person shall mean all Indebtedness of such
Person and its Subsidiaries, excluding, however, (i) Indebtedness incurred
in connection with any Permitted Securitization, (ii) Equity-Preferred
Securities of such Person and its Subsidiaries not to exceed 

 

15

 

20% of Capitalization of
such Person (calculated for purposes of this definition without regard to any
Equity-Preferred Securities of such Person and its Subsidiaries) and (iii) commercial
paper issued by such Person or such Subsidiary and outstanding on any date of
determination in an aggregate face amount not exceeding the lesser of
$1,000,000,000 and the sum of (x) cash and (y) the value of Cash
Equivalents, in each case, owned free and clear of any Lien by such Person or
Subsidiary on such date.

 

“Subsidiary”
shall mean, with respect to any Person, any corporation or other entity of
which more than 50% of (i) the outstanding capital stock having ordinary
voting power to elect a majority of the board of directors of such corporation
(irrespective of whether or not at the time capital stock of any other class or
classes of such corporation shall or might have voting power upon the
occurrence of any contingency) or (ii) other equity interest comparable to
that described in the preceding clause (i) is at the time directly or
indirectly owned by such Person, by such Person and one or more other
Subsidiaries, or by one or more other Subsidiaries.

 

“Termination
Date” means the earlier to occur of (i) November 12,
2009 and (ii) the date of termination or reduction in whole of the
Commitments in accordance with this Agreement.

 

“Title
IV Plan” shall mean a Single Employer Plan, Multiemployer Plan
or Multiple Employer Plan.

 

“Type”,
when used in respect of any Advance or Borrowing, shall refer to the Rate by
reference to which interest on such Advance or on the Advances comprising such
Borrowing is determined.  For purposes
hereof, “Rate” shall mean the Eurodollar Rate or the Base Rate.

 

“Unmatured
Default” shall mean the occurrence and continuance of an event
that, with the giving of notice or lapse of time, or both, would constitute an
Event of Default.

 

“Unused
Commitment” shall mean, for any period from the date hereof to
the Termination Date, the amount by which (i) the sum of the aggregate
Commitments exceeds (ii) the daily average sum for such period of the
aggregate principal amount of Outstanding Credits.

 

“Withdrawal
Liability” shall have the meaning specified in Part 1 of
Subtitle E of Title IV of ERISA.

 

Section 1.02.  Terms
Generally.

 

The definitions in Section 1.01 shall apply
equally to both the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms.  The words “include”, “includes” and
“including” shall be deemed to be followed by the phrase “without
limitation”.  All references herein to
Articles, Sections, Exhibits and Schedules shall be deemed references to
Articles and Sections of, and Exhibits and Schedules to, this Agreement unless
the context shall otherwise require. 
Except as otherwise expressly provided herein, all terms of an
accounting or financial nature shall be construed in accordance with GAAP, as
in effect from time to time; provided,
however, that for purposes of determining compliance with any
covenant set forth in Article V, such terms shall be construed in
accordance with GAAP as in effect on the date hereof applied 

 

16

 

on a basis consistent
with the application used in preparing the audited financial statements
referred to in Section 4.01(f).

 

Section 1.03.  Time.

 

All references to time herein shall be references to
Eastern Standard Time or Eastern Daylight Time, as the case may be, unless
specified otherwise.

 

ARTICLE II

THE ADVANCES

 

Section 2.01.  Making
the Advances.

 

(a)           Subject to the terms and conditions
herein set forth, each Lender agrees, severally and not jointly, to make
Advances, at any time and from time to time until the Termination Date, to the
Borrower in an aggregate principal amount at any time outstanding not to exceed
such Lender’s Commitment minus an amount equal to such Lender’s Commitment
Percentage multiplied by the Outstanding Credits at such time.

 

(b)           At no time shall the Outstanding Credits
exceed the aggregate Commitments.  The
Borrower agrees to prepay Advances (subject to payment of the breakage fee
required pursuant to clause (ii) of Section 8.05(b) to the
extent required to ensure compliance with this provision at all times.

 

(c)           No more than ten Eurodollar
Borrowings shall be outstanding at any one time.

 

(d)           Within the foregoing limits, the
Borrower may borrow, pay or prepay, subject to the limitations set forth in Section 2.10(a),
and reborrow Advances hereunder, on and after the date hereof and prior to the
Termination Date, subject to the terms, conditions and limitations set forth
herein.

 

Section 2.02.  The
Advances.

 

(a)           Each Advance shall be made as part of
a Borrowing consisting of Advances made by the Lenders ratably in accordance
with their respective Commitments; provided,
however, that the failure of any Lender to make any Advance shall
not in itself relieve any other Lender of its obligation to lend hereunder (it
being understood, however, that no Lender shall be responsible for the failure
of any other Lender to make any Advance required to be made by such other
Lender).  The Advances comprising any
Borrowing shall be in an aggregate principal amount that is an integral
multiple of $1,000,000 and not less than $5,000,000 (or an aggregate principal
amount equal to the remaining balance of the available Commitments).

 

(b)           Each Borrowing shall be comprised
entirely of Eurodollar Advances or Base Rate Advances, as the Borrower may
request pursuant to Section 2.03. 
Each Lender may at its option make any Eurodollar Advance by causing any
domestic or foreign branch or Affiliate of such Lender to make such Advance; provided that any exercise of such option
shall not affect the obligation of the Borrower to repay such Advance in accordance
with the terms of this 

 

17

 

Agreement. 
Subject to Section 2.01(c), Borrowings of more than one Type may be
outstanding at the same time.

 

(c)           Each Lender shall make each Advance
to be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds to the Administrative Agent in New York, New York,
not later than 12:00 noon, and the Administrative Agent shall, by 2:00 P.M.,
credit the amounts so received to the account or accounts specified from time
to time in one or more notices delivered by the Borrower to the Administrative
Agent or, if a Borrowing shall not occur on such date because any condition
precedent herein specified shall not have been met, return the amounts so
received to the respective Lenders. 
Unless the Administrative Agent shall have received notice from a Lender
prior to the time of any Borrowing that such Lender will not make available to
the Administrative Agent such Lender’s portion of such Borrowing, the
Administrative Agent may assume that such Lender has made such portion
available to the Administrative Agent on the date of such Borrowing in
accordance with this subsection (c) and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount.  If and to the
extent that such Lender shall not have made such portion available to the
Administrative Agent, such Lender and the Borrower (without waiving any claim
against such Lender for such Lender’s failure to make such portion available)
severally agree to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to the Borrower until the date such amount is
repaid to the Administrative Agent at (i) in the case of the Borrower, the
interest rate applicable at the time to the Advances comprising such Borrowing
and (ii) in the case of such Lender, the Federal Funds Effective Rate; provided, however, that should both the
Borrower and such Lender repay the Administrative Agent in accordance with this
sentence, the Administrative Agent will forthwith return the amount in excess
of the portion due to it under this sentence to the Borrower.  If such Lender shall repay to the
Administrative Agent such corresponding amount, such amount shall constitute
such Lender’s Advance as part of such Borrowing for purposes of this Agreement.

 

Section 2.03.  Borrowing
and Conversion Procedures.

 

(a)           In order to request a Borrowing, the
Borrower shall hand deliver or telecopy to the Administrative Agent a duly
completed Borrowing Request (a) in the case of a Eurodollar Borrowing, not
later than 10:00 A.M. three Business Days before such Borrowing, and (b) in
the case of a Base Rate Borrowing, not later than 10:00 A.M. on the
Business Day of such Borrowing.  Such
notice shall be irrevocable and shall in each case specify (i) whether the
Borrowing then being requested is to comprise Eurodollar Advances or Base Rate
Advances; (ii) the date of such Borrowing (which shall be a Business Day)
and the amount thereof; and (iii) if such Borrowing is to be a Eurodollar
Borrowing, the Interest Period with respect thereto, which shall not end after
the Termination Date.  If no election as
to the Type of Borrowing is specified in any such notice, then the requested
Borrowing shall be a Base Rate Borrowing. 
If no Interest Period with respect to any Eurodollar Borrowing is
specified in any such notice, then the Borrower shall be deemed to have
selected an Interest Period of one month’s duration.

 

(b)           The Borrower may on any Business Day,
by delivering a notice of conversion (a “Notice of Conversion”) to the Administrative
Agent not later than 10:00 A.M. on the third 

 

18

 

Business Day prior to the date of the proposed
Conversion, and subject to the provisions of Sections 2.08 and 2.12, Convert
any Borrowing of one Type or for one Interest Period into a Borrowing of another
Type or for another Interest Period; provided,
however, that any Conversion of any Eurodollar Borrowing shall be
made on, and only on, the last day of an Interest Period.  Each such Notice of Conversion shall be in
substantially the form of Exhibit C hereto and shall, within the
restrictions specified above, specify (i) the date of such Conversion, (ii) the
Borrowings to be Converted, (iii) if such Conversion will result in a
Eurodollar Borrowing, the duration of the Interest Period for such Eurodollar
Borrowing, and (iv) the aggregate amount of Borrowings proposed to be
Converted.  If the Borrower shall not
have provided a Notice of Conversion with respect to any Eurodollar Borrowing
on or prior to 10:00 A.M. on the third Business Day prior to the last day
of the Interest Period applicable thereto, in the case of a Conversion to or in
respect of Eurodollar Advances, or if an Event of Default shall have occurred
and be continuing on the third Business Day prior to the last day of the
Interest Period with respect to any Eurodollar Borrowing, the Administrative
Agent will forthwith so notify the Borrower and the Lenders and such Borrowing
will automatically, on the last day of the then existing Interest Period
therefor, Convert into a Base Rate Borrowing.

 

(c)           Notwithstanding any other provision
of this Agreement to the contrary, no Borrowing shall be requested or Converted
if the Interest Period with respect thereto would end after the Termination
Date.  The Administrative Agent shall
promptly advise the Lenders of any notice given pursuant to this Section 2.03
and of each Lender’s portion of the requested Borrowing or Conversion.

 

Section 2.04.  Fees

 

(a)           Commitment Fee.  The Borrower agrees to pay to the
Administrative Agent, for the pro rata benefit of the Lenders, a commitment fee
equal to the Commitment Fee Rate in effect from time to time multiplied by the
aggregate amount of the Unused Commitments from time to time, payable in
arrears on the last day of each March, June, September and December during
the term of such Lender’s Commitment (commencing on December 31, 2008) and
on the Termination Date.  The commitment
fee shall be computed on the basis of the actual number of days elapsed over a
year of 360 days.

 

(b)           Step-Up Fee.  The Borrower shall pay to the Administrative
Agent, for the pro rata benefit of the Lenders, a fee equal to 0.25% of the
Commitments (regardless of usage) on December 31, 2008, March 31,
2009, June 30, 2009 and September 30, 2009, payable on each such
date.

 

(c)           Year-End 2008 Funding Fee.  The Borrower shall pay to the Administrative
Agent, for the pro rata benefit of the Lenders, a fee equal to 2.0% of the
largest principal amount of Outstanding Credits on any day during the period
from the date hereof through (and including) December 31, 2008, payable on
December 31, 2008.

 

(d)           Additional Fees.  The Borrower shall pay to the Administrative
Agent, for its own account, such other fees as are required to be paid to it
under the Fee Letter.

 

19

 

(e)           Nonrefundable.  Once paid, none of the commitment fees or
other fees provided for in this Section 2.04 shall be refundable under any
circumstances.

 

Section 2.05.  Repayment
of Advances; Evidence of Indebtedness.

 

(a)           The outstanding principal balance of
each Advance, together with accrued and unpaid interest thereon, shall be due
and payable on the Termination Date.

 

(b)           Each Lender shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness to such Lender resulting from each Advance made by such Lender
from time to time, including the amounts of principal and interest payable and
paid to such Lender from time to time under this Agreement.

 

(c)           The Administrative Agent shall
maintain accounts in which it will record (i) the amount of each Advance
made hereunder, the Type of each Advance made and the Interest Period
applicable thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder
and (iii) the amount of any sum received by the Administrative Agent
hereunder from the Borrower and each Lender’s share thereof.

 

(d)           The entries made in the accounts
maintained pursuant to subsections (b) and (c) of this Section 2.05
shall, to the extent permitted by applicable law, be prima facie evidence of
the existence and amounts of the obligations therein recorded; provided, however, that the failure of any
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligations of the Borrower to repay
the Advances and interest thereon in accordance with their terms.

 

(e)           Any Lender may request that its
Advances be evidenced by a Note.  In such
event, the Borrower shall prepare, execute and deliver to such Lender a Note
payable to the order of such Lender. 
Thereafter, the Advances evidenced by such Note and interest thereon
shall at all times (including after any assignment pursuant to Section 8.04)
be represented by one or more Notes payable to the order of the payee named
therein or any assignee pursuant to Section 8.04, except to the extent
that any such Lender or assignee subsequently returns any such Note for
cancellation and requests that such Advances once again be evidenced as described
in subsections (a) and (b) above.

 

Section 2.06.  Interest.

 

(a)           Subject to the provisions of
subsection (d) below and Sections 2.07, 2.08 and 2.12, the Advances
comprising each Eurodollar Borrowing shall bear interest (computed on the basis
of the actual number of days elapsed over a year of 360 days) at a rate per annum equal to the Eurodollar Rate for
the Interest Period in effect for such Borrowing plus
the greater of the Applicable Margin and the LIBOR Market Rate Spread.

 

(b)           Subject to the provisions of Section 2.07,
the Advances comprising each Base Rate Borrowing shall bear interest (computed
on the basis of the actual number of days elapsed over a year of 365/366 days,
as the case may be, for periods during which the Base Rate is 

 

20

 

determined by reference to RBS’s prime rate and 360
days for other periods) at a rate per annum
equal to the Base Rate plus the
Applicable Margin.

 

(c)           Interest on each Advance shall be
payable in arrears on each Interest Payment Date applicable to such Advance
except as otherwise provided in this Agreement.

 

(d)           The Borrower shall pay to the
Administrative Agent for the account of each Lender any costs actually incurred
by such Lender that are attributable to such Lender’s compliance with
regulations of the Board requiring the maintenance of reserves with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities.  Such costs shall be paid to the Administrative
Agent for the account of such Lender in the form of additional interest on the
unpaid principal amount of each Eurodollar Advance of such Lender, from the
date such Advance is made until such principal amount is paid in full, at an
interest rate per annum equal at
all times to the remainder obtained by subtracting (i) the Eurodollar Rate
for the Interest Period for such Advance from (ii) the rate obtained by
dividing such Eurodollar Rate by a percentage equal to 100% minus the
Eurodollar Reserve Percentage of such Lender for such Interest Period, payable
on each Interest Payment Date for such Advance. 
Such additional interest shall be determined by such Lender and notified
to the Borrower through the Administrative Agent at least two Business Days
prior to the relevant Interest Payment Date, provided,
that failure to so notify the Borrower shall not constitute a waiver of such
Lender’s right to request and receive additional interest under this subsection
(d).  A certificate as to the amount of
such additional interest, submitted to the Borrower and the Administrative
Agent by such Lender, shall be conclusive and binding for all purposes, absent
manifest error.  Each Lender claiming any
additional interest payable pursuant to this subsection shall use reasonable
efforts (consistent with legal and regulatory restrictions) to file any
certificate or document reasonably requested in writing by the Borrower or to
change the jurisdiction of its Applicable Lending Office if the making of such
a filing or change would avoid the need for or reduce the amount of any such
additional interest that may thereafter be due and payable and would not, in
the good faith determination of such Lender, be otherwise disadvantageous to
such Lender.

 

Section 2.07.  Default
Interest.

 

If and for so long as an Event of Default shall have
occurred and be continuing, each Advance outstanding hereunder shall bear
interest at the rate otherwise applicable to such Advance plus 2%. 
Without limiting the foregoing, if the Borrower shall default in the
payment of any amount becoming due hereunder (other than the principal amount
of any Advance), whether by scheduled maturity, notice of prepayment,
acceleration or otherwise, the Borrower shall on demand from time to time from
the Administrative Agent pay interest, to the extent permitted by law, on such
defaulted amount up to (but not including) the date of actual payment (after as
well as before judgment) at a rate per annum (computed as provided in Section 2.06(b))
equal to the Base Rate plus 2%.

 

Section 2.08.  Alternate
Rate of Interest.

 

In the event, and on each occasion, that on the day
two Business Days prior to the commencement of any Interest Period for a
Eurodollar Borrowing the Administrative Agent shall have determined (i) that
dollar deposits in the principal amounts of the Eurodollar Advances 

 

21

 

comprising such Borrowing
are not generally available in the London interbank market or (ii) that
reasonable means do not exist for ascertaining the Eurodollar Rate, the
Administrative Agent shall, as soon as practicable thereafter, give telecopy
notice of such determination to the Borrower and the Lenders.  In the event of any such determination under
clause (i) or (ii) above, until the Administrative Agent shall have advised
the Borrower and the Lenders that the circumstances giving rise to such notice
no longer exist, (x) any request by the Borrower for a Eurodollar
Borrowing pursuant to Section 2.03 shall be deemed to be a request for a
Base Rate Borrowing and (y) each Eurodollar Advance then outstanding will
automatically, on the last day of the then applicable Interest Period therefor,
Convert into a Base Rate Advance.  In the
event the Majority Lenders notify the Administrative Agent that the rates at
which dollar deposits are being offered will not adequately and fairly reflect
the cost to such Lenders of making or maintaining Eurodollar Advances during
any Interest Period, the Administrative Agent shall notify the Borrower of such
notice and until the Majority Lenders shall have advised the Administrative
Agent that the circumstances giving rise to such notice no longer exist, (A) any
request by the Borrower for a Eurodollar Borrowing shall be deemed a request
for a Base Rate Borrowing and (B) each Eurodollar Advance then outstanding
will automatically, on the last day of the then applicable Interest Period
therefor, Convert into a Base Rate Advance. 
Each determination by the Administrative Agent hereunder shall be made
in good faith and shall be conclusive absent manifest error; provided that the Administrative Agent
shall, upon request, provide to the Borrower a certificate setting forth in
reasonable detail the basis for such determination.

 

Section 2.09.  Termination
and Reduction of Commitments; Commitment Increase.

 

(a)           The Commitments shall automatically
terminate on the Termination Date.  In
addition, the Commitments shall automatically and permanently reduce by an
amount equal to the principal amount of any prepayment required under Section 2.10(c)
or (d) on the date specified for such prepayment (regardless of whether
any Advances are outstanding on such date).

 

(b)           Upon at least three Business Days’
prior irrevocable written notice to the Administrative Agent, the Borrower may
at any time in whole permanently terminate, or from time to time in part
permanently reduce, the Commitments; provided,
however, that (i) each partial reduction of the Commitments
shall be in an integral multiple of $1,000,000 and in a minimum principal
amount of $5,000,000 and (ii) no such termination or reduction shall be
made that would reduce the aggregate Commitments to an amount (A) less
than the Outstanding Credits on the date of such termination or reduction
(after giving effect to Sections 2.10(b), (c) and (d)) or (B) less
than $25,000,000, unless the result of such termination or reduction referred
to in this clause (B) is to reduce the aggregate Commitments to $0.  The Administrative Agent shall advise the
Lenders of any notice given pursuant to this Section 2.09(b) and of
each Lender’s portion of any such termination or reduction of the aggregate
Commitments.

 

(c)           Each reduction in the Commitments
hereunder shall be made ratably among the Lenders in accordance with their
respective Commitments.  The Borrower
shall pay to the Administrative Agent for the account of the Lenders, on the
date of each termination or reduction of the Commitments, the commitment fee
payable on the Unused Commitments (if any) under 

 

22

 

Section 2.04(a) so terminated or reduced
accrued through the date of such termination or reduction.

 

(d)           The Borrower may terminate in full
the Commitment of any Designated Lender by giving notice of such termination to
such Designated Lender and the Administrative Agent; provided
that (i) at the time of such termination, (x) no Event of Default or
Unmatured Default shall have occurred and be continuing (or the Majority
Lenders shall have consented to such termination), and (y) no Advances
shall be outstanding, and (ii) concurrently with any subsequent payment of
interest or of fees under Section 2.04(a) to the Lenders with respect
to any period before the termination of the Commitment of such Designated
Lender, the Borrower shall pay to such Designated Lender its ratable share
(based upon its pro rata share before giving effect to such termination) of
such interest or fees, as applicable. 
The termination of the Commitment of a Defaulting Lender pursuant to
this Section 2.09(d) shall not be deemed to be a waiver of any right
that the Borrower, the Administrative Agent or any other Lender may have
against such Defaulting Lender.

 

Section 2.10.  Prepayment.

 

(a)           Optional Prepayment.  The
Borrower shall have the right at any time and from time to time to prepay any
Borrowing, in whole or in part, upon giving telecopy notice (or telephone
notice promptly confirmed by telecopy) to the Administrative Agent: (i) before
10:00 A.M. three Business Days prior to prepayment, in the case of
Eurodollar Advances, and (ii) before 10:00 A.M. one Business Day
prior to prepayment, in the case of Base Rate Advances; provided, however, that each partial
prepayment shall be in an amount that is an integral multiple of $1,000,000 and
not less than $5,000,000.  Each notice of
prepayment under this subsection (a) shall specify the prepayment date and
the principal amount of each Borrowing (or portion thereof) to be prepaid,
shall be irrevocable and shall commit the Borrower to prepay such Borrowing (or
portion thereof) by the amount stated therein on the date stated therein.

 

(b)           Mandatory Prepayment of
Excess Outstanding Credits.  If at any time the
aggregate Outstanding Credits exceed the aggregate Commitments, the Borrower
shall pay or prepay so much of the Borrowings as shall be necessary in order that
the Outstanding Credits will not exceed the Commitments.

 

(c)           Mandatory Prepayment Upon
Asset Dispositions. Within two Business Days after Net Proceeds are
received by or on behalf of the Borrower or any Subsidiary of the Borrower in
respect of any Asset Disposition, the Borrower shall prepay Advances in an
aggregate principal amount equal to 25% of such Net Proceeds; provided, however, that
the Borrower may defer prepayments under this subsection (c) until the
Borrower and its Subsidiaries have received Net Proceeds in respect of Asset
Dispositions that would result in a prepayment of Advances under this
subsection (c) in a principal amount of at least $5,000,000.

 

(d)           Other Prepayment Events.
Within two Business Days after any Net Proceeds are received by or on behalf of
the Borrower or any Subsidiary of the Borrower in respect of any Prepayment
Event (except an Asset Disposition), the Borrower shall prepay Advances in an
aggregate principal amount equal to such Net Proceeds.

 

23

 

(e)           General.  All prepayments under this Section 2.10
shall be subject to Section 8.05(b) but otherwise without premium or
penalty.  All prepayments under this Section 2.10
shall be accompanied by accrued interest on the principal amount being prepaid
to the date of payment.

 

Section 2.11.  Reserve
Requirements; Change in Circumstances.

 

(a)           Notwithstanding any other provision
herein, if after the date of this Agreement the enactment of any new law or
regulation, or any change in applicable existing law or regulation, or in the
interpretation or administration of the foregoing by any governmental authority
charged with the interpretation or administration thereof (whether or not
having the force of law), shall change the basis of taxation of payments to any
Lender hereunder (except for changes in respect of taxes on the overall net
income of such Lender or its lending office imposed by the jurisdiction in
which such Lender’s principal executive office or lending office is located), or
shall result in the imposition, modification or applicability of any reserve,
special deposit or similar requirement against assets of, deposits with or for
the account of or credit extended by any Lender, or shall result in the
imposition on any Lender or the London interbank market of any other condition
affecting this Agreement, such Lender’s Commitment or any Advance made by such
Lender, and the result of any of the foregoing shall be to increase the cost to
such Lender of making or maintaining any Advance or to reduce the amount of any
sum received or receivable by such Lender hereunder (whether of principal,
interest or otherwise) by an amount deemed in good faith by such Lender to be
material, then the Borrower shall, upon receipt of the notice and certificate
provided for in Section 2.11(c), promptly pay to such Lender such
additional amount or amounts as will compensate such Lender for such additional
costs incurred or reduction suffered.

 

(b)           If any Lender shall have determined
that the adoption after the date hereof of any law, rule, regulation or
guideline arising out of the July 1988 report of the Basel Committee on
Banking Regulations and Supervisory Practices entitled “International Convergence of Capital
Measurement and Capital Standards,” or the adoption after the date
hereof of any other law, rule, regulation or guideline regarding capital
adequacy, or any change in any of the foregoing or in the interpretation or
administration of any of the foregoing by any governmental authority, central bank
or comparable agency charged with the interpretation or administration thereof,
or compliance by any Lender (or any lending office of such Lender) or any
Lender’s holding company with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, has the effect of reducing the rate of
return on such Lender’s capital or on the capital of such Lender’s holding
company, if any, as a consequence of this Agreement, such Lender’s Commitment
or the Advances made by such Lender pursuant hereto to a level below that which
such Lender or such Lender’s holding company could have achieved but for such
adoption, change or compliance (taking into consideration such Lender’s policies
and the policies of such Lender’s holding company with respect to capital
adequacy) by an amount deemed in good faith by such Lender to be material, then
from time to time such additional amount or amounts as will compensate such
Lender for any such reduction suffered will be paid by the Borrower to such
Lender.

 

(c)           A certificate of each Lender setting
forth such amount or amounts as shall be necessary to compensate such Lender or
its holding company as specified in subsection (a) or (b) 

 

24

 

above, as the case may be, and containing an
explanation in reasonable detail of the manner in which such amount or amounts
shall have been determined, shall be delivered to the Borrower and shall be
conclusive absent manifest error.  The
Borrower shall pay each Lender the amount shown as due on any such certificate
delivered by it within 10 days after its receipt of the same.  Each Lender shall give prompt notice to the
Borrower of any event of which it has knowledge, occurring after the date
hereof, that it has determined will require compensation by the Borrower
pursuant to this Section 2.11.  If
any such law, rule, regulation, guideline or other change or condition
described in this Section 2.11 shall later be held by a court of competent
jurisdiction to be invalid or inapplicable to the Borrower or such Lender, such
Lender shall promptly refund to the Borrower any amounts previously paid by the
Borrower to such Lender pursuant to this Section 2.11.

 

(d)           Failure on the part of any Lender to
demand compensation for any increased costs or reduction in amounts received or
receivable or reduction in return on capital with respect to any period shall
not constitute a waiver of such Lender’s right to demand compensation with
respect to such period or any other period; provided
that such Lender shall not be entitled to demand compensation hereunder if such
demand is made more than 90 days following the later of such Lender’s
incurrence or sufferance thereof and such Lender’s actual knowledge of the
event giving rise to such Lender’s rights under this Section.  The protection of this Section shall be
available to each Lender regardless of any possible contention of the
invalidity or inapplicability of the law, rule, regulation, guideline or other
change or condition that shall have occurred or been imposed.

 

(e)           Each Lender agrees that it will
designate a different lending office if such designation will avoid the need
for, or reduce the amount of, such compensation and will not, in the reasonable
judgment of such Lender, be disadvantageous to such Lender.

 

Section 2.12.  Change
in Legality.

 

(a)           Notwithstanding any other provision
herein, if the introduction of, or any change in, any law or regulation or in
the interpretation thereof by any governmental authority charged with the
administration or interpretation thereof shall make it unlawful for any Lender
to make or maintain any Eurodollar Advance or to give effect to its obligations
as contemplated hereby with respect to any Eurodollar Advance, then, by written
notice to the Borrower and to the Administrative Agent, such Lender may:

 

(i)                            declare that
Eurodollar Advances will not thereafter be made by such Lender hereunder,
whereupon any request for a Eurodollar Borrowing shall, as to such Lender only,
be deemed a request for a Base Rate Advance unless such declaration shall be
subsequently withdrawn (any Lender delivering such a declaration hereby
agreeing to withdraw such declaration promptly upon determining that such event
of illegality no longer exists); and

 

(ii)                           require that all
outstanding Eurodollar Advances made by it be Converted to Base Rate Advances,
in which event all such Eurodollar Advances shall be automatically Converted to
Base Rate Advances as of the effective date of such notice as provided in
subsection (b) below.

 

25

 

Prior to any
Lender giving notice to the Borrower under this Section 2.12, such Lender
shall use reasonable efforts to change the jurisdiction of its Applicable
Lending Office, if such change would avoid such event of illegality and would
not, in the sole reasonable determination of such Lender, be otherwise
disadvantageous to such Lender.  In the
event any Lender shall exercise its rights under (i) or (ii) above,
all payments and prepayments of principal that would otherwise have been
applied to repay the Eurodollar Advances that would have been made by such
Lender or the Converted Eurodollar Advances of such Lender shall instead be
applied to repay the Base Rate Advances made by such Lender in lieu of, or
resulting from the Conversion of, such Eurodollar Advances.

 

(b)           For purposes of this Section 2.12,
a notice by any Lender shall be effective as to each Eurodollar Advance, if
lawful, on the last day of the Interest Period currently applicable to such
Eurodollar Advance; in all other cases such notice shall be effective on the
date of receipt.

 

Section 2.13.  Pro
Rata Treatment.

 

Except as required under Section 2.09(d), 2.12 or
2.16, each Borrowing, each payment or prepayment of principal of any Borrowing,
each payment of interest on the Advances, each payment of commitment fees, each
reduction of the Commitments and each Conversion of any Advance shall be
allocated pro rata among the Lenders in accordance with their respective
Commitments (or, if such Commitments shall have expired or been terminated, in
accordance with the respective Outstanding Credits of the Lenders).  Each Lender agrees that in computing such
Lender’s portion of any Borrowing to be made hereunder, the Administrative
Agent may, in its discretion, round each Lender’s percentage of such Borrowing
to the next higher or lower whole dollar amount.

 

Section 2.14.  Sharing
of Setoffs.

 

Each Lender agrees that if it shall, through the exercise
of a right of banker’s lien, setoff or counterclaim, or pursuant to a secured
claim under Section 506 of Title 11 of the United States Code or other
security or interest arising from, or in lieu of, such secured claim, received
by such Lender under any applicable bankruptcy, insolvency or other similar law
or otherwise, or by any other means, obtain payment (voluntary or involuntary)
in respect of any Advance, in any case as a result of which the unpaid
principal portion of its Advances shall be proportionately less than the unpaid
principal portion of the Advances of any other Lender, it shall be deemed
simultaneously to have purchased from such other Lender at face value, and
shall promptly pay to such other Lender the purchase price for, a participation
in the Advances of such other Lender, so that the aggregate unpaid principal
amount of the Advances and participations in the Advances held by each Lender
shall be in the same proportion to the aggregate unpaid principal amount of all
Advances then outstanding as the principal amount of its Advances prior to such
exercise of banker’s lien, setoff or counterclaim or other event was to the
principal amount of all Advances outstanding prior to such exercise of banker’s
lien, setoff or counterclaim or other event; provided,
however, that, if any such purchase or purchases or adjustments
shall be made pursuant to this Section 2.14 and the payment giving rise
thereto shall thereafter be recovered, such purchase or purchases or
adjustments shall be rescinded to the extent of such recovery and the purchase
price or prices or adjustment restored without interest.  The Borrower expressly consents to the
foregoing arrangements and agrees that any Lender holding a participation in an

 

26

 

Advance deemed to have
been so purchased may exercise any and all rights of banker’s lien, setoff or
counterclaim with respect to any and all moneys owing by the Borrower to such
Lender by reason thereof as fully as if such Lender had made an Advance in the
amount of such participation.

 

Section 2.15.  Payments.

 

(a)           The Borrower shall make each payment
(including principal of or interest on any Borrowing, any fees or other
amounts) hereunder without setoff, counterclaim, defense, recoupment or other
deduction from an account in the United States not later than 12:00 noon on the
date when due in dollars to the Administrative Agent at its offices specified
in Section 8.01, in immediately available funds.

 

(b)           Whenever any payment (including
principal of or interest on any Borrowing, any fees or other amounts) hereunder
shall become due, or otherwise would occur, on a day that is not a Business
Day, such payment may be made on the next succeeding Business Day, and such
extension of time shall in such case be included in the computation of interest
or fees, if applicable.

 

Section 2.16.  Taxes.

 

(a)           Any and all payments of principal and
interest on any Outstanding Credit, or of any fees or indemnity or expense
reimbursements by the Borrower hereunder (“Borrower Payments”) shall be made, in
accordance with Section 2.15, free and clear of and without deduction for
any and all current or future United States Federal, state and local taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect to such Borrower Payments, but only to the extent reasonably
attributable to such Borrower Payments, excluding (i) income taxes imposed
on the net income of the Administrative Agent or any Lender and (ii) franchise
taxes imposed on the net income of the Administrative Agent or any Lender, in
each case by the jurisdiction under the laws of which the Administrative Agent
or such Lender is organized or doing business through offices or branches
located therein, or any political subdivision thereof (all such nonexcluded
taxes, levies, imposts, deductions, charges, withholdings and liabilities,
collectively or individually, “Taxes”).  If the
Borrower shall be required to deduct any Taxes from or in respect of any sum
payable hereunder to the Administrative Agent or any Lender, (i) the sum
payable shall be increased by the amount (an “additional amount”) necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.16), the Administrative Agent
or such Lender (as the case may be) shall receive an amount equal to the sum it
would have received had no such deductions been made, (ii) the Borrower
shall make such deductions and (iii) the Borrower shall pay the full amount
deducted to the relevant governmental authority in accordance with applicable
law.

 

(b)           In addition, the Borrower shall pay
to the relevant governmental authority in accordance with applicable law any
current or future stamp or documentary taxes or any other excise or property
taxes, charges or similar levies that arise from any payment made hereunder or
from the execution, delivery or registration of, or otherwise with respect to,
this Agreement or the Fee Letter (such taxes being “Other Taxes”).

 

27

 

(c)           The Borrower shall indemnify the
Administrative Agent and each Lender (as the case may be) for the full amount
of Taxes and Other Taxes with respect to Borrower Payments paid by such person,
and any liability (including penalties, interest and expenses (including
reasonable attorney’s fees and expenses)) arising therefrom or with respect
thereto, whether or not such Taxes or Other Taxes were correctly or legally
asserted by the relevant United States governmental authority.  A certificate setting forth and containing an
explanation in reasonable detail of the manner in which such amount shall have
been determined and the amount of such payment or liability prepared by a
Lender or the Administrative Agent on their behalf, absent manifest error,
shall be final, conclusive and binding for all purposes.  Such indemnification shall be made within 30
days after the date the Administrative Agent or the Lender, as the case may be,
makes written demand therefor.  If any
Taxes or Other Taxes for which the Administrative Agent or any Lender has
received indemnification from the Borrower hereunder shall be finally
determined to have been incorrectly or illegally asserted and are refunded to
the Administrative Agent or such Lender, the Administrative Agent or such Lender,
as the case may be, shall promptly forward to the Borrower any such refunded
amount.

 

(d)           As soon as practicable, but in any
event within 30 days, after the date of any payment of Taxes or Other Taxes by
the Borrower to the relevant United States governmental authority, the Borrower
will deliver to the Administrative Agent, at its address referred to in Section 8.01,
the original or a certified copy of a receipt issued by such United States
governmental authority evidencing payment thereof.

 

(e)           Without prejudice to the survival of
any other agreement contained herein, the agreements and obligations contained
in this Section 2.16 shall survive the payment in full of the principal of
and interest on all Advances made hereunder.

 

(f)            Each of the Administrative Agent and
each Lender that is organized under the laws of a jurisdiction other than the
United States, any State thereof or the District of Columbia (a “Non-U.S. Payee”)
shall deliver to the Borrower and the Administrative Agent two copies of either
United States Internal Revenue Service Form W-8BEN or Form W-8ECI, or
applicable successor forms, properly completed and duly executed by such
Non-U.S. Payee claiming complete exemption from, or reduced rate of, United
States Federal withholding tax on payments by the Borrower under this
Agreement.  Such forms shall be delivered
by each Non-U.S. Payee on or before the date it becomes a party to this
Agreement (or, in the case of any Lender that becomes a party to this Agreement
pursuant to an Assignment and Acceptance (a “Transferee”), on or prior to the
effective date of such Assignment and Acceptance) and on or before the date, if
any, such Non-U.S. Payee changes its Applicable Lending Office by designating a
different lending office (a “New Lending Office”). 
In addition, each Non-U.S. Payee shall deliver such forms promptly upon
the obsolescence or invalidity of any form previously delivered by such
Non-U.S. Payee.  Notwithstanding any
other provision of this Section 2.16(f), a Non-U.S. Payee shall not be
required to deliver any form pursuant to this Section 2.16(f) that
such Non-U.S. Payee is not legally able to deliver.

 

(g)           The Borrower shall not be required to
indemnify any Non-U.S. Payee, or to pay any additional amounts to any Non-U.S.
Payee, in respect of United States Federal, state or local withholding tax
pursuant to subsection (a) or (c) above to the extent that (i) the
obligation to withhold amounts with respect to United States Federal, state or
local withholding tax existed on 

 

28

 

the date such Non-U.S. Payee became a party to this
Agreement (or, in the case of a Transferee, on the effective date of the
Assignment and Acceptance pursuant to which such Transferee becomes a Lender)
or, with respect to payments to a New Lending Office, the date such Non-U.S.
Payee designated such New Lending Office with respect to an Advance; provided, however, that this clause (i) shall
not apply to any Lender that becomes a Lender or New Lending Office that becomes
a New Lending Office as a result of an assignment or designation made at the
request of the Borrower; and provided
further, however, that this clause (i) shall not apply to the
extent the indemnity payment or additional amounts any Lender, the Administrative
Agent or any Lender through a New Lending Office would be entitled to receive
(without regard to this clause (i)) do not exceed the indemnity payment or
additional amounts that the person making the assignment or transfer to such
Lender, the Administrative Agent or such Lender making the designation of such
New Lending Office would have been entitled to receive in the absence of such
assignment, transfer or designation or (ii) the obligation to pay such
additional amounts or such indemnity payments would not have arisen but for a
failure by such Non-U.S. Payee to comply with the provisions of subsection (g) above
or (i) below.

 

(h)           Any of the Administrative Agent or
any Lender claiming any indemnity payment or additional amounts payable
pursuant to this Section 2.16 shall use reasonable efforts (consistent
with legal and regulatory restrictions) to file any certificate or document
reasonably requested in writing by the Borrower or to change the jurisdiction
of its Applicable Lending Office if the making of such a filing or change would
avoid the need for or reduce the amount of any such indemnity payment or
additional amounts that may thereafter accrue and would not, in the good faith
determination of the Administrative Agent or such Lender (as the case may be),
be otherwise disadvantageous to such person. 
Subject always to Section 2.16(i), any of the Administrative Agent
or any Lender claiming any indemnity payment or additional amount payable
pursuant to this Section 2.16 shall, upon request of the Borrower, use
reasonable efforts (consistent with legal and regulatory restrictions) to
obtain a refund of any Tax or Other Tax giving rise to such indemnity payment
or additional amount payable and shall pay any refund (after deduction of any
Tax or Other Tax paid or payable by the Administrative Agent or such Lender as
a result of such refund), not exceeding the increased amount paid by the
Borrower pursuant to this Section 2.16, to the Borrower, provided, however, that (i) the
Administrative Agent or Lender, as the case may be, shall not be obligated to
disclose to the Borrower any information regarding its tax affairs or
computations and (ii) nothing in this Section 2.16(h) shall
interfere with the right of the Administrative Agent or such Lender to arrange
its tax affairs as it deems appropriate.

 

(i)            Nothing contained in this Section 2.16
shall require the Administrative Agent or any Lender to make available to the
Borrower any of its tax returns (or any other information) that it deems to be
confidential or proprietary.

 

Section 2.17.  Assignment
of Commitments Under Certain Circumstances.

 

In the event that any Lender shall have delivered a
notice or certificate pursuant to Section 2.11 or 2.12, or the Borrower
shall be required to make additional payments to the Administrative Agent or
any Lender under Section 2.16, or any Lender shall become a Designated
Lender, the Borrower shall have the right, at its own expense, upon notice to
the Administrative Agent and such Lender, to require such Lender to transfer
and assign without 

 

29

 

recourse (in accordance
with and subject to the restrictions contained in Section 8.04) all such
Lender’s interests, rights and obligations under this Agreement and the other
Credit Documents to another financial institution approved by the
Administrative Agent (which approval shall not be unreasonably withheld. and
such approval is not required by the Borrower if an Event of Default has
occurred and is continuing), which financial institution shall assume such
obligations; provided that (i) at
the time of such assignment no Event of Default and no Unmatured Default shall
have occurred and be continuing, (ii) the Borrower shall pay to the
assigning Lender all amounts (if any) then due and payable to such Lender under
Sections 2.11 and 2.16, (iii)  no such assignment shall conflict with any
law, rule or regulation or order of any governmental authority and (iv) the
assignee or the Borrower, as the case may be, shall pay to the assignor in
immediately available funds on the date of such assignment the principal of and
interest accrued to the date of payment on the Advances made by such assignor
hereunder and all other amounts accrued for its account or owed to it
hereunder.

 

ARTICLE III

CONDITIONS OF LENDING

 

Section 3.01.  Conditions
Precedent to Effectiveness of this Agreement.

 

This Agreement shall not be effective, and the Lenders
shall have no obligation to make the Advances in connection with the Initial
Borrowing, unless and until the following conditions precedent shall have been
satisfied:

 

(a)           The Borrower shall have paid all fees
payable hereunder or under the Fee Letter to the extent due and payable
incurred through (and for which statements have been provided prior to) the date
of the initial Borrowing.

 

(b)           The representations and warranties
set forth in Section 4.01 shall be true and correct on and as of such date
with the same effect as though made on such date.

 

(c)           The Administrative Agent shall have
received the following, each dated the same day, in form and substance
reasonably satisfactory to the Administrative Agent and (except in the case of
the Notes) in sufficient copies for each Lender:

 

(i)                            Duly executed copies
of (A) this Agreement executed by the Borrower and the Lenders and (B) any
Note requested by a Lender duly executed by the Borrower in favor of such
Lender.

 

(ii)                           Certified copies of
the articles or certificate of incorporation and bylaws of the Borrower,
together with all amendments and modifications thereto as of the date of
delivery and a certificate of good standing for the Borrower issued by the
Secretary of State of the state of its incorporation.

 

(iii)                          Certified copies (A) of
the resolutions of the Board of Directors of the Borrower granting authority to
the Borrower’s officers to execute financing or credit arrangements, (B) of
all documents evidencing other necessary corporate action and governmental
approvals with respect to the execution, delivery and performance by the
Borrower 

 

30

 

of the Credit Documents and (C) true and correct
copies of the Put Agreements, which shall be in full force and effect.

 

(iv)                          A certificate of the
Secretary or an Assistant Secretary of the Borrower certifying the names and
true signatures of the officers of the Borrower authorized to sign this
Agreement and the other documents to be delivered by the Borrower hereunder.

 

(v)                           A solvency
certificate of the Chief Financial Officer or Treasurer of the Borrower,
substantially in the form of Exhibit F hereto.

 

(vi)                          Copies of the
financial statements referred to in Section 4.01(f).

 

(vii)                         An opinion or opinions
from counsel for the Borrower, substantially in the form of Exhibit D
hereto, and such other opinions as any Lender, through the Administrative
Agent, may reasonably request.

 

(d)           The Administrative Agent shall have
received evidence satisfactory to it that the Reference Rating by S&P is
not lower than BBB (on “CreditWatch” with developing implications) and the
Reference Rating by Moody’s is not lower than Baa2 (under review for possible
downgrade).

 

(e)           The Administrative Agent shall have
received all Patriot Act Disclosures requested by the Administrative Agent or
any Lender no fewer than three Business Days prior to the date hereof.

 

(f)            The Administrative Agent shall have
received such other approvals, opinions and documents as the Administrative
Agent may reasonably request as to the legality, validity, binding effect or
enforceability of this Agreement or the financial condition, properties,
operations or prospects of the Borrower.

 

Section 3.02.  Conditions
Precedent to Each Borrowing.

 

The obligation of each Lender to make Advances to be
made by it (including the initial Advance to be made by it) in connection with
any Borrowing shall be subject to the further conditions precedent that on the
date of such Borrowing:

 

(a)           The following statements shall be
true (and each of the giving of the applicable notice or request by the
Borrower with respect to such Borrowing and the acceptance of such Borrowing
shall constitute a representation and warranty by the Borrower that, on the
date of such Borrowing, such statements are true):

 

(i)                            The representations
and warranties contained in Section 4.01 (other than those set forth in
the last sentence of subsection (f) and in subsection (m) thereof)
are correct on and as of the date of such Borrowing, before and after giving
effect to such Borrowing and to the application of the proceeds therefrom, as
though made on and as of such date; and

 

(ii)                           No event has occurred
and is continuing or would result from such Borrowing, or from the application
of the proceeds therefrom, that constitutes an Event of 

 

31

 

Default or, except in the case of a Borrowing that
would not increase the aggregate principal amount of Outstanding Credits, an
Unmatured Default.

 

(b)           The Borrower shall have furnished to
the Administrative Agent such other approvals, opinions or documents as any
Lender, through the Administrative Agent, may reasonably request as to the
legality, validity, binding effect or enforceability of this Agreement or the
financial condition, properties, operations or prospects of the Borrower and
its Subsidiaries.

 

Section 3.03.  Reliance
on Certificates.

 

The Lenders and the Administrative Agent shall be
entitled to rely conclusively upon the certificates delivered from time to time
by officers of Borrower as to the names, incumbency, authority and signatures
of the respective Persons named therein until such time as the Administrative
Agent may receive a replacement certificate, in form acceptable thereto, from
an officer of the Borrower identified to the Administrative Agent as having
authority to deliver such certificate, setting forth the names and true
signatures of the officers and other representatives of the Borrower thereafter
authorized to act on behalf of the Borrower.

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

 

Section 4.01.  Representations
and Warranties of the Borrower.

 

The Borrower represents and warrants as follows:

 

(a)           The Borrower (i) is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Maryland (ii) is duly qualified and in good standing
as a foreign corporation authorized to do business in every jurisdiction where
the failure to so qualify results in a Material Adverse Change and (iii) has
the requisite corporate power and authority to own its properties and to carry
on its business as now conducted and as proposed to be conducted.

 

(b)           The execution, delivery and
performance by the Borrower of this Agreement and the other Credit Documents to
which it is a party are within the Borrower’s corporate powers, have been duly
authorized by all necessary corporate action, and do not contravene (i) the
Borrower’s charter or by-laws or (ii) any law or any material contractual
restriction binding on or affecting the Borrower or its Subsidiaries, and do
not result in or require the creation of any Lien upon or with respect to any
of the Borrower’s properties.

 

(c)           The Borrower (i) possesses good
and marketable title to all of its properties and assets, and (ii) owns or
possesses all licenses and permits necessary for the operation by it of its
business as currently conducted.

 

(d)           No authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery or performance by
the Borrower of this Agreement and the other Credit Documents to which it is a
party.

 

32

 

(e)           This Agreement and the other Credit
Documents to which it is a party have been duly executed and delivered by the
Borrower and are the legal, valid and binding obligations of the Borrower,
enforceable against the Borrower in accordance with their respective terms,
except to the extent that enforcement may be limited by bankruptcy, insolvency
or similar laws affecting the enforcement of creditors’ rights generally and by
general principles of equity.

 

(f)            The (i) audited consolidated
balance sheet of the Borrower and its Subsidiaries as at December 31,
2007, and the related audited consolidated statements of income and cash flows
of the Borrower and its Subsidiaries for the fiscal year then ended (copies of
which have been furnished to each Lender), (ii) unaudited consolidated
balance sheet of the Borrower and its Subsidiaries as of September 30,
2008 and the related unaudited consolidated statements of income and cash flows
for the nine months then ended (copies of which have been furnished to each
Lender) and (iii) each of the financial statements delivered by the
Borrower pursuant to Section 5.03(b) and Section 5.03(c) hereof
fairly present (subject, in the case of such unaudited financial statements, to
year-end adjustments) the financial condition of Borrower and its Subsidiaries
as at such dates and the results of the operations of Borrower and its
Subsidiaries for the periods ended on such dates, all in accordance with GAAP.  Since December 31, 2007, there has been
no Material Adverse Change.

 

(g)           The Borrower is not engaged in the
business of extending credit for the purpose of buying or carrying Margin
Stock, and no proceeds of any Advance will be used to buy or carry any Margin
Stock or to extend credit to others for the purpose of buying or carrying any
Margin Stock.  After the making of each
Advance, Margin Stock will constitute less than 25 percent of the assets of the
Borrower and its Subsidiaries on a consolidated basis.

 

(h)           The Borrower is not in violation of,
and no condition exists that with notice or lapse of time or both would
constitute a violation by the Borrower of, the Margin Regulations.

 

(i)            The Borrower has filed or caused to
be filed all material Federal, state and local tax returns that to its
knowledge are required to be filed by it, and has paid or caused to be paid all
material taxes shown to be due and payable on such returns or on any
assessments received by it.

 

(j)            The Borrower is in compliance with
all laws (including ERISA and environmental laws), rules, regulations and
orders of any governmental authority applicable to it, except to the extent
that the Borrower’s failure to so comply does not result in a Material Adverse
Change.

 

(k)           Except as does not result in a
Material Adverse Change, the Borrower and each ERISA Affiliate of the Borrower (i) have
not incurred any liability to the PBGC (other than for the payment of current
premiums that are not past due) with respect to any Title IV Plan, (ii) have
not incurred any Withdrawal Liability, and (iii) have not been notified by
the sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or has been terminated within the meaning of Title IV of ERISA.

 

(l)            Except as does not result in a Material
Adverse Change, no ERISA Event has occurred.

 

33

 

(m)          Except as disclosed in the Borrower’s
Annual Report on Form 10-K for the fiscal year ended December 31,
2007, its Quarterly Report on Form 10-Q for the fiscal quarter ended September 30,
2008, and all Periodic Reports on Form 8-K filed with the Securities and
Exchange Commission prior to the date hereof, copies of each of which have been
delivered to the Administrative Agent, there is no pending or, to the
Borrower’s knowledge, threatened action or proceeding affecting the Borrower or
any of its Subsidiaries before any court, governmental agency or arbitrator,
which materially adversely affects the financial condition of the Borrower and
its Subsidiaries taken as a whole, or the enforceability against the Borrower
of this Agreement and the other Credit Documents to which it is a party.

 

(n)           The Borrower is not an “investment
company” or a company “controlled” by an “investment company”, within the meaning
of the Investment Company Act of 1940, as amended.

 

(o)           The proceeds of the Advances
hereunder will be used in accordance with Section 5.01(h).

 

(p)           The Borrower has no secured
Indebtedness.

 

(q)           The Borrower is not in default in any
respect under any contract, lease, loan agreement, indenture, mortgage,
security agreement or other agreement or obligation to which it is a party or
by which any of its properties is bound, which default results in a Material
Adverse Change.  No Unmatured Default or
Event of Default presently exists and is continuing.

 

(r)            The Borrower is, and on and after
the consummation of the transactions contemplated by this Agreement will be,
Solvent.

 

(s)           Neither this Agreement nor any
financial statements delivered to the Lenders nor any other document,
certificate or statement furnished to the Lenders by or on behalf of the
Borrower in connection with the transactions contemplated hereby contains any
untrue statement of a material fact or omits to state a material fact necessary
in order to make the statements contained therein or herein, taken as a whole,
not misleading.

 

(t)            Since the date hereof there has been
no change to the charter or by-laws of the Borrower that materially adversely
affects the rights of the Lenders.

 

ARTICLE V

COVENANTS OF THE BORROWER

 

Section 5.01.  Affirmative
Covenants.

 

The Borrower covenants that it will, and, other than
in subsections (f) and (h) below, will cause each Material Subsidiary
to, so long as any amount owing hereunder shall remain unpaid or any Lender
shall have any Commitment hereunder, unless the Majority Lenders shall
otherwise consent in writing:

 

(a)           Payment of Taxes, Etc. 
Pay and discharge all taxes, assessments and governmental
charges or levies imposed upon it or upon its income or profits, or upon any 

 

34

 

properties belonging to it, prior to the date on which
penalties attach thereto, and all lawful claims that, if unpaid, might become a
Lien upon any of its properties or result in a Material Adverse Change;
provided it shall not be required to pay any such tax, assessment, charge, levy
or claim that is being contested in good faith and by proper proceedings.

 

(b)           Performance and Compliance with Other Agreements.  Perform and comply with each of the material
provisions of each material indenture, credit agreement, contract or other
agreement by which it is bound, non-performance or non-compliance with which
results in a Material Adverse Change, except material contracts or other agreements
being contested in good faith.

 

(c)           Preservation of Corporate Existence, Conduct of Business,
Etc.  Preserve and
maintain its corporate existence in the jurisdiction of its incorporation, and
qualify and remain qualified as a foreign corporation in good standing in each
jurisdiction in which such qualification is necessary or desirable in view of
its business and operations or the ownership of its properties, except where
the failure to be so qualified does not result in a Material Adverse Change.

 

(d)           Compliance with Laws, Business and Properties.  Comply with the requirements of all
applicable laws (including ERISA and environmental laws), rules, regulations
and orders of any governmental authority, non-compliance with which results in
a Material Adverse Change, except laws, rules, regulations and orders being
contested in good faith.  At all times
maintain and preserve all property material to the conduct of its business and
keep such property in good repair, working order and condition and from time to
time make, or cause to be made, all needful and proper repairs, renewals,
additions, improvements and replacements thereto necessary in order that the
business carried on in connection therewith may be properly conducted at all
times as currently conducted.

 

(e)           Maintenance of Insurance.  Maintain insurance in effect at all times in
such amounts and covering such risks as are usually carried by companies of a
similar size, engaged in similar businesses and owning similar properties in
the same general geographical area in which the Borrower or such Material
Subsidiary operates, either with responsible and reputable insurance companies
or associations, or, in whole or in part, by establishing reserves of one or
more insurance funds, either alone or with other corporations or associations.

 

(f)            Maintenance of Licenses, Permits and Registrations.  Maintain, and cause each of its Subsidiaries
to maintain, in effect at all times all licenses and permits from, and
registrations with, any governmental authority or any other Person necessary
for the operation by the Borrower and its Subsidiaries of their business as
currently conducted.

 

(g)           Books and Records; Inspection Rights.  Keep proper books of record and account in
which entries shall be made of all financial transactions and assets and
business of the Borrower and the Material Subsidiaries in accordance with
GAAP.  At any reasonable time and from
time to time, permit the Administrative Agent or any Lender or any agents or
representatives thereof to examine and take down in writing any information
contained in the records and books of account of, and visit the properties of,
the Borrower or any Material 

 

35

 

Subsidiary and to discuss the affairs, finances and
accounts of the Borrower or any Material Subsidiary with any of their
respective officers.

 

(h)           Use of Proceeds.  Use the proceeds of Advances for (i) working
capital purposes, including capital expenditures, for the Borrower and its
Subsidiaries, specifically excluding use of such proceeds for any Hostile
Acquisition, (ii) as credit support for the Borrower’s commercial paper
and (iii) for general corporate purposes.

 

Section 5.02.  Negative
Covenants.

 

The Borrower covenants that it will not, nor will it
permit any Material Subsidiary to, so long as any amount owing hereunder shall
remain unpaid or any Lender shall have any Commitment hereunder, without the
prior written consent of the Majority Lenders:

 

(a)           Liens, Etc.  Create,
incur, assume or suffer to exist any mortgage, deed of trust, pledge, lien,
security interest or other charge or encumbrance, or any other type of
preferential arrangement, upon or with respect to any of its properties or
rights, whether now owned or hereafter acquired, or assign any right to receive
income, services or property (any of the foregoing being referred to herein as
a “Lien”),
except that the foregoing restrictions shall not apply to Liens:

 

(i)                            on the property of
BGE, at any time that BGE is a Material Subsidiary, securing an aggregate
principal amount of up to $500,000,000 of the obligations of BGE;

 

(ii)                           for taxes,
assessments or governmental charges or levies on property of the Borrower or
any Material Subsidiary if the same shall not at the time be delinquent or
thereafter can be paid without penalty, or are being contested in good faith
and by appropriate proceedings;

 

(iii)                          imposed by law, such
as carriers’, warehousemen’s and mechanics’ Liens and other similar Liens
arising in the ordinary course of business;

 

(iv)                          arising out of pledges
or deposits under worker’s compensation laws, unemployment insurance, or other
social security or similar legislation;

 

(v)                           to secure the
performance of bids, tenders, contracts (other than contracts for the payment
of money), leases, surety or similar bonds or other similar obligations made in
the ordinary course of business;

 

(vi)                          arising out of
purchase money mortgages or other Liens on property acquired by the Borrower or
any Material Subsidiary in the ordinary course of business to secure the
purchase price of such property or to secure Indebtedness incurred solely for
the purpose of financing the acquisition of any such property to be subject to
such Liens, or Liens existing on any such property at the time of acquisition,
or extensions, renewals or replacements of any of the foregoing for the same or
a lesser amount; provided that no such Lien shall exceed the fair market value
of the property acquired (as determined at the time of purchase), or extend to
or cover any property other than the property being acquired, and no such
extension, renewal or 

 

36

 

replacement shall extend to or cover any property not
theretofore subject to the Lien being extended, renewed or replaced;

 

(vii)                         constituting
attachment, judgment and other similar Liens arising in connection with court
proceedings; provided that the execution or other enforcement of such Liens is
effectively stayed and the claims secured thereby are being actively contested
in good faith by proper proceedings or the payment of which is covered in full
(subject to customary deductible amounts) by insurance maintained with
responsible and reputable insurance companies or associations;

 

(viii)                        constituting easements,
restrictions and other similar encumbrances arising in the ordinary course of
business, which in the aggregate do not materially adversely affect the
Borrower’s or any Material Subsidiary’s use of its properties; or

 

(ix)                           on cash collateral
accounts established by the Borrower to secure investments and guarantees.

 

(b)           Mergers, Etc.  Merge
or consolidate with any Person, unless:

 

(i)                            in the case of any
such merger or consolidation involving the Borrower, the surviving or resulting
entity is (A) the Borrower or (B) with the written consent of all of
the Lenders, a Subsidiary of the Borrower; provided that such Subsidiary of the
Borrower expressly assumes in writing all of the obligations of the Borrower
under this Agreement and the other documents executed and delivered in connection
therewith and executes and delivers such other documents, instruments,
certificates and opinions as the Administrative Agent may reasonably request;

 

(ii)                           in the case of any
such merger or consolidation involving a Material Subsidiary, the surviving or
resulting entity is a wholly-owned Subsidiary of the Borrower; and

 

(iii)                          immediately after
giving effect thereto no Event of Default or Unmatured Default shall have
occurred and be continuing.

 

(c)           Sale of Assets, Etc.  Sell,
transfer, lease, assign or otherwise convey or dispose of assets (whether now
owned or hereafter acquired) to an unrelated third party, in any single or
series of transactions, whether or not related, except:

 

(i)                            the sale of
electricity or natural gas and related and ancillary services, other
commodities, and any other assets in the ordinary course of business;

 

(ii)                           the sale or other
disposition of obsolete or worn out property and other assets (including
inventory) in the ordinary course of business;

 

(iii)                          the sale of any
investment in any security with a maturity of less than one year;

 

37

 

(iv)                          the abandonment or
disposition of patents, trademarks or other intellectual property that are, in
the Borrower’s reasonable judgment, no longer economically practicable to
maintain or useful in the conduct of the business of the seller;

 

(v)                           the sale or other
disposition of the following assets: all international assets, all non-core
real estate assets, and the investment portfolio of Constellation Investments, Inc.,
a Maryland corporation;

 

(vi)                          sales or other
dispositions of assets not in the ordinary course of business, the value of
which, individually, or in the aggregate, does not exceed 25% of the
consolidated assets of the Borrower and its subsidiaries, as reflected on the
then-most-recent quarterly balance sheet, where the value of the assets being
sold or disposed of is the book value of such assets;

 

(vii)                         any disposition of a
leasehold interest (in the capacity of lessee) in any real or personal property
in the ordinary course of business; or

 

(viii)                        any license or
sublicense of intellectual property that does not interfere with the business
of the Borrower or any Material Subsidiary.

 

(d)           Plans.

 

(i)                            Engage in any
“prohibited transaction,” as such term is defined in Section 4975 of the
Code or Section 406 of ERISA (other than transactions that are exempt by
ERISA, its regulations or its administrative exemptions), with respect to any
Plan that results in a Material Adverse Change;

 

(ii)                           Incur or permit any
ERISA Affiliate of the Borrower to fail to satisfy the minimum funding standard
(within the meaning of Section 412 of the Code) for a Title IV Plan that
results in a Material Adverse Change;

 

(iii)                          Terminate, or permit
any ERISA Affiliate of the Borrower to terminate, any Title IV Plan, or permit
the occurrence of any event or condition that would cause a termination by the
PBGC of any Title IV Plan that results in a Material Adverse Change;

 

(iv)                          Withdraw or effect a
partial withdrawal from or permit any ERISA Affiliate of the Borrower to
withdraw or effect a partial withdrawal from, a Multiemployer Plan that results
in a Material Adverse Change;

 

(v)                           Permit any lien upon
the property or rights to property of the Borrower or any ERISA Affiliate of
the Borrower under Section 303(k) of ERISA or Section 430 of the
Code that results in a Material Adverse Change; or

 

(vi)                          Incur any liability
under ERISA, the Code or other applicable law in respect of any Plan maintained
for the benefit of employees or former employees of the Borrower or an ERISA
Affiliate of the Borrower (other than liability to pay benefits, contributions,
premiums or expenses when due in the ordinary course of the operation of such
Plan) that results in a Material Adverse Change.

 

38

 

(e)           Nature of Business.  Alter
the character of its business from that of being predominantly in the energy
business.

 

Section 5.03.  Reporting
Requirements.

 

The Borrower covenants that it will, so long as any
amount owing hereunder shall remain unpaid or any Lender shall have any
Commitment hereunder, unless the Majority Lenders shall otherwise consent in
writing, furnish to each Lender:

 

(a)           as soon as possible and in any event
within three Business Days after the occurrence of each Event of Default and
each Unmatured Default continuing on the date of such statement, the statement
of the chief financial officer or treasurer and assistant secretary of the
Borrower setting forth details of such Event of Default or Unmatured Default
and the action that the Borrower proposes to take with respect thereto;

 

(b)           as soon as practicable and in any
event within 60 days after the end of each quarterly period in each fiscal
year, (i) other than for the last quarterly period, a statement of income
and statement of retained earnings and a statement of changes in financial
position of the Borrower and its consolidated Subsidiaries for such period and
(if different) for the period from the beginning of the current fiscal year to
the end of such quarterly period, and a balance sheet of the Borrower and its
consolidated Subsidiaries as at the end of such quarterly period, setting forth
in each case in comparative form figures for the corresponding periods in the
preceding fiscal year with respect to said statements and as at the end of such
periods with respect to said balance sheet, all in reasonable detail and
certified by a financial officer of the Borrower as having been prepared in
accordance with generally accepted accounting principles consistently applied,
except as stated in such certification, subject to changes resulting from
year-end adjustments; provided
that the Borrower may satisfy its obligation under this subsection (b)(i) by
delivering a copy of its report on Form 10-Q for the applicable quarter
and (ii) a certificate of the Borrower, in the form of Exhibit E,
setting forth compliance with the financial covenant in Section 5.04
hereof and, if applicable, the financial covenant in Section 5.05 hereof
and stating that no Event of Default or Unmatured Default has occurred and is
continuing or a statement as to the nature thereof and the action that the
Borrower proposes to take with respect thereto;

 

(c)           as soon as practicable and in any
event within 120 days after the end of each fiscal year, (i) a statement
of income and statement of earnings reinvested and a statement of changes in
financial position of the Borrower and its consolidated Subsidiaries for each
year, and a balance sheet of the Borrower and its consolidated Subsidiaries as
at the end of such year, setting forth in each case in comparative form corresponding
figures from the preceding annual audit, all in reasonable detail and reported
on to the Borrower by independent public accountants of recognized standing
selected by the Borrower whose report shall not reflect any scope limitation
imposed by the Borrower and who shall have authorized the Borrower to deliver
such report thereof; provided that the Borrower may satisfy its obligation
under this subsection (c) by delivering a copy of its Form 10-K for
the applicable year and (ii) a certificate of the chief financial officer,
or treasurer and assistant secretary of the Borrower stating that said officer
has no knowledge that an Event of Default or an Unmatured Default applicable to
the Borrower has occurred and is continuing or, if an Event of Default or an
Unmatured Default applicable to the 

 

39

 

Borrower has occurred and is continuing, a statement
as to the nature thereof and the action that the Borrower proposes to take with
respect thereto;

 

(d)           as soon as possible and in any event
within three Business Days of the occurrence of a Material Adverse Change, the
statement of the chief financial officer or treasurer and assistant secretary
of the Borrower setting forth the details of such change, the anticipated
effects thereof and the action that the Borrower proposes to take with respect
thereto;

 

(e)           promptly and in any event within ten
Business Days after receipt thereof by the Borrower or any ERISA Affiliate of
the Borrower, copies of each written statement or each notice received by the
Borrower or its ERISA Affiliate describing an ERISA Event and the action, if
any, that the Borrower or such ERISA Affiliate has taken and proposes to take
with respect thereto;

 

(f)            promptly and in any event within ten
Business Days after receipt thereof by the Borrower or any ERISA Affiliate of
the Borrower, copies of each notice from the PBGC stating its intention to
terminate any Title IV Plan or to have a trustee appointed to administer any
such Title IV Plan;

 

(g)           promptly and in any event within ten
Business Days after receipt thereof by the Borrower or any ERISA Affiliate of
the Borrower from the sponsor of a Multiemployer Plan, copies of each notice
concerning (i) the imposition of Withdrawal Liability by any such
Multiemployer Plan; provided that such Withdrawal Liability is at least
$25,000,000, (ii) the reorganization or termination, within the meaning of
Title IV of ERISA, of any such Multiemployer Plan; provided that the amount of
any resulting liability to the Borrower or any ERISA Affiliate of the Borrower
is at least $25,000,000, or (iii) the amount of liability incurred, or
that may be incurred, by the Borrower or any ERISA Affiliate of the Borrower in
connection with any event described in clause (i) or (ii); provided that the amount of such liability
is at least $25,000,000;

 

(h)           promptly upon request of the Lenders,
copies of each Schedule B (actuarial information) to the annual report (form
5500 Series) with respect to each Title IV Plan maintained by the Borrower or
any of its ERISA Affiliates that have been filed with the U.S. Department of
Labor; and

 

(i)            such other information respecting
the business and the financial condition of the Borrower as any Lender may
through the Administrative Agent from time to time reasonably request.

 

Section 5.04.  Specified
Indebtedness to Capitalization.

 

The ratio of (i) Specified Indebtedness of the
Borrower and its Subsidiaries taken as a whole to (ii) Capitalization of
the Borrower and its Subsidiaries taken as a whole shall at all times be less
than or equal to .65 to 1.0.

 

40

 

Section 5.05.  Consolidated
EBITDA to Consolidated Interest Expense.

 

As of the last day of any fiscal quarter of the
Borrower on which both (x) the Reference Rating by S&P is BBB- or
lower (or does not exist) and (y) the Reference Rating by Moody’s is Baa3
or lower (or does not exist), the ratio of (i) Consolidated EBITDA to (ii) Consolidated
Interest Expense, in each case, for the four-quarter fiscal period ending on
such day shall be at least 2.75 to 1.0.

 

ARTICLE VI

EVENTS OF DEFAULT

 

Section 6.01.  Events
of Default.

 

As to the Borrower, any of the following events shall
constitute an Event of Default (“Event of Default”) if it occurs and is
continuing:

 

(a)           The Borrower shall fail to make (i) any
payment of principal of any Advance when due, or (ii) any payment of
interest thereon or any fees or other amounts payable under this Agreement
within 10 Business Days after such interest, fees or other amounts shall have
become due; or

 

(b)           Any representation or warranty or
written statement made by the Borrower (or any of its officers) in this
Agreement or in any schedule, certificate or other document delivered pursuant
to or in connection with this Agreement shall prove to have been incorrect in
any material respect when made; or

 

(c)           The Borrower shall (A) fail to
perform or observe the covenants set forth in Section 5.01, 5.02, 5.03 or
5.05 hereof provided that (x) in the case of covenants set forth in Section 5.01(b),
(g) and (h) (with the exception of the use of proceeds for any
Hostile Acquisition) such failure shall remain unremedied for 10 days after
written notice thereof given by the Administrative Agent or any Lender to the
Borrower and (y) in the case of covenants set forth in Section 5.01(a),
(d), (e) and (f) such failure shall remain unremedied for 30 days
after written notice thereof given by the Administrative Agent or any Lender to
the Borrower or (B) the Borrower shall fail to perform or observe any
other term, covenant or agreement contained herein on its part to be performed
or observed and any such failure shall remain unremedied for 30 days after
written notice thereof given by the Administrative Agent or any Lender to the Borrower
(and, in all cases set forth herein, if such notice was given by a Lender, to
the Administrative Agent); or

 

(d)           (i) The Borrower or any of its
Material Subsidiaries shall fail to pay any principal, premium or interest on
any Indebtedness having an outstanding principal amount in excess of
$75,000,000 in the aggregate for the Borrower and its Material Subsidiaries,
when due (whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise), and such failure shall continue after the applicable
grace period, if any, specified in the agreement or instrument relating to such
Indebtedness, or (ii) the Borrower or any of its Material Subsidiaries
shall fail to perform or observe any term, covenant or agreement on its part to
be observed under any agreement or instrument relating to any such
Indebtedness, when required to be performed or observed, and such failure shall
continue after the applicable grace period, if any, specified in 

 

41

 

the agreement or instrument, if the effect of such
failure to perform or observe is to accelerate, or to permit the acceleration
of, the maturity of such Indebtedness; or any such Indebtedness shall be
declared to be due and payable, or required to be prepaid (other than by a
regularly scheduled required prepayment or pursuant to any notice of optional
redemption with respect thereto), prior to the stated maturity thereof; or

 

(e)           The Borrower or any of its Material
Subsidiaries shall generally not pay its debts as such debts become due or
shall admit in writing its inability to pay its debts generally or shall make a
general assignment for the benefit of creditors or shall institute any
proceeding or voluntary case seeking to adjudicate it a bankrupt or insolvent
or seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors or seeking the
entry of an order for relief or the appointment of a receiver, trustee,
custodian or other similar official for it or for any substantial part of its
property or the Borrower or any of its Material Subsidiaries shall take any
corporate action to authorize any of the actions described in this subsection
(e); or

 

(f)            Any proceeding shall be instituted
against the Borrower or any of its Material Subsidiaries seeking to adjudicate
it as bankrupt or insolvent or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or relief of
debtors or seeking the entry of an order for relief or the appointment of a
receiver, trustee, custodian or other similar official for it or for any
substantial part of its property and such proceeding shall remain undismissed
or unstayed for a period of 120 days; or

 

(g)           A final judgment or order for the
payment of money of at least $75,000,000 shall be rendered against the Borrower
or any of its Material Subsidiaries and such judgment or order shall continue
unsatisfied and in effect for a period of 30 consecutive days (excluding
therefrom any period during which enforcement of such judgment or order shall
be stayed, whether by pendency of appeal, posting of adequate security or
otherwise); or

 

(h)           Any ERISA Event shall have occurred
with respect to a Title IV Plan that results in a Material Adverse Change, and,
30 days after notice thereof shall have been given by the Borrower to the
Administrative Agent or any Lender, such ERISA Event shall still exist; or

 

(i)            The Borrower shall own less than
100% of the then outstanding common stock, membership interests or other equity
interests of each Material Subsidiary, free and clear of any Liens other than
Liens permitted under Section 5.02(a), provided, that (A) the
Borrower may transfer any of its ownership interests in BGE if, after giving
effect to such transfer, (x) no Event of Default or Unmatured Default
shall have occurred and be continuing, and (y) the Reference Ratings of
S&P and Moody’s shall be at least BBB- and Baa3 (respectively), and (B) the
Borrower may dispose of the equity interests in any Material Subsidiary if the
Net Proceeds of such Asset Disposition are applied in accordance with Section 2.10(c);
or

 

(j)            This Agreement, any Note or any
other Credit Document shall fail to be in full force and effect or the Borrower
shall so assert or this Agreement, or Note shall fail to give the 

 

42

 

Administrative Agent or the Lenders the rights, powers
and privileges purported to be created thereby; or

 

(k)           A Change in Control shall have
occurred.

 

Section 6.02.  Remedies.

 

If any Event of Default shall occur and be continuing,
then, and in any such event, the Administrative Agent (i) shall at the
request, or may with the consent, of the Majority Lenders, by notice to the
Borrower, declare the obligation of each Lender to make Advances to be
terminated, whereupon the same shall immediately terminate; and/or (ii) shall
at the request, or may with the consent, of the Majority Lenders, by notice to
the Borrower, declare the Advances, all interest thereon and all other amounts
payable by the Borrower under this Agreement to be forthwith due and payable,
whereupon the Advances, all such interest and all such amounts shall become and
be immediately due and payable, without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by the Borrower.  If any Event of Default described in
subsection (e) or (f) of Section 6.01 shall occur and be
continuing with respect to the Borrower, then (A) the obligation of each
Lender to make Advances shall automatically immediately terminate and (B) the
Advances, all interest thereon and all other amounts payable by the Borrower
under this Agreement shall automatically become and be due and payable, without
presentment, demand, protest or any notice of any kind, all of which are hereby
expressly waived by the Borrower.

 

ARTICLE VII

THE ADMINISTRATIVE AGENT

 

Section 7.01.  Authorization
and Action.

 

In order to expedite the transactions contemplated by
this Agreement, RBS is hereby appointed to act as Administrative Agent on
behalf of the Lenders.  Each of the
Lenders hereby irrevocably authorizes the Administrative Agent to take such
actions on behalf of such Lender and to exercise such powers as are
specifically delegated to the Administrative Agent by the terms and provisions
of this Agreement, together with such actions and powers as are reasonably
incidental thereto.  The Administrative
Agent is hereby expressly authorized by the Lenders, without hereby limiting
any implied authority, (a) to receive on behalf of the Lenders all
payments of principal of and interest on the Outstanding Credits and all other
amounts due to the Lenders under this Agreement, and promptly to distribute to
each Lender its proper share of each payment so received; (b) to give
notice on behalf of each of the Lenders to the Borrower of any Event of Default
of which the Administrative Agent has actual knowledge acquired in connection
with its agency under this Agreement; and (c) to distribute to each Lender
copies of all notices, financial statements and other materials delivered by
the Borrower pursuant to this Agreement as received by the Administrative
Agent.  The Administrative Agent shall be
deemed to have exercised reasonable care in the administration and enforcement
of this agreement if it undertakes such administration and enforcement in a
manner substantially equal to that which RBS accords credit facilities similar
to the credit facility hereunder for which it is the sole lender.

 

43

 

Section 7.02.  Agent’s
Reliance, Etc.

 

Neither the Administrative Agent nor any of its
directors, officers, employees or agents shall be liable as such for any action
taken or omitted by any of them except for its or his or her own gross
negligence or willful misconduct, or be responsible for any statement, warranty
or representation in this Agreement or the contents of any document delivered
in connection therewith, or be required to ascertain or to make any inquiry
concerning the performance or observance by the Borrower of any of the terms,
conditions, covenants or agreements contained in this Agreement.  The Administrative Agent shall not be
responsible to the Lenders for the due execution, genuineness, validity,
enforceability or effectiveness of this Agreement or other instruments or
agreements.  The Administrative Agent may
consult with legal counsel (including counsel for the Borrower), independent
public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken in good faith by it in accordance with
the advice of such counsel, accountants or experts.  The Administrative Agent may deem and treat
the Lender that makes any Advance as the holder of the indebtedness resulting
therefrom for all purposes hereof until it shall have received notice from such
Lender, given as provided herein, of the transfer thereof.  The Administrative Agent shall in all cases
be fully protected in acting, or refraining from acting, in accordance with
written instructions signed by the Majority Lenders and, except as otherwise
specifically provided herein, such instructions and any action or inaction
pursuant thereto shall be binding on all the Lenders.  The Administrative Agent shall, in the
absence of knowledge to the contrary, be entitled to rely on any instrument or
document believed by it in good faith to be genuine and correct and to have
been signed or sent by the proper person or persons.  Neither the Administrative Agent nor any of
its directors, officers, employees or agents shall have any responsibility to
the Borrower on account of the failure of or delay in performance or breach by
any Lender of any of its obligations under this Agreement or to any Lender on
account of the failure of or delay in performance or breach by any other Lender
or the Borrower of any of their respective obligations under this Agreement or
in connection therewith.  The
Administrative Agent may execute any and all duties under this Agreement by or
through agents or employees and shall be entitled to rely upon the advice of
legal counsel selected by it with respect to all matters arising under this
Agreement and shall not be liable for any action taken or suffered in good
faith by it in accordance with the advice of such counsel.

 

Section 7.03.  Discretionary
Action.

 

The Lenders hereby acknowledge that the Administrative
Agent shall be under no duty to take any discretionary action permitted to be
taken by it pursuant to the provisions of this Agreement unless it shall be
requested in writing to do so by the Majority Lenders.

 

Section 7.04.  Successor
Agent.

 

The Administrative Agent may resign at any time by
notifying the Lenders and the Borrower. 
Upon any such resignation, the Majority Lenders shall have the right to
appoint a successor Administrative Agent acceptable to the Borrower.  If no successor shall have been so appointed
by the Majority Lenders and shall have accepted such appointment within 30 days
after the retiring Administrative Agent gives notice of its resignation, then
the retiring Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent, 

 

44

 

having a combined capital
and surplus of at least $500,000,000 or an Affiliate of any such bank, and
reasonably acceptable to the Borrower, provided
that (i) the Borrower shall be deemed to have accepted the appointment of
such successor Administrative Agent if it shall not have objected to such
appointment within five Business Days of notice, sent by overnight courier
service, of such appointment by the retiring Administrative Agent and (ii) if
no successor shall be appointed by the retiring Administrative Agent then the
Lenders shall perform all such duties and obligations until a successor is
appointed and has accepted such appointment. 
Upon the acceptance of any appointment as Administrative Agent under
this Agreement by a successor bank, such successor shall succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Administrative Agent and the retiring Administrative Agent shall be discharged
from its duties and obligations under this Agreement.  After any Administrative Agent’s resignation
under this Agreement, the provisions of this Article and Section 8.05
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as Administrative Agent.

 

Section 7.05.  RBS
and Affiliates.

 

RBS and its Affiliates (including, without limitation,
RBS GC) may make loans to, accept deposits from and generally engage in any
kind of business with the Borrower or any of its Subsidiaries as though the
Administrative Agent were not the Administrative Agent hereunder.  With respect to the Advances made and all
obligations owing to it, the Administrative Agent shall have the same rights
and powers under this Agreement as any Lender and may exercise the same as
though it were not the Administrative Agent, and the terms “Lender” and
“Lenders”
shall include RBS in its individual capacity.

 

Section 7.06.  Indemnification.

 

Each Lender agrees (i) to reimburse the
Administrative Agent, on demand, in the amount of its pro rata share (based on
its Commitments hereunder or, if the Commitments shall have been terminated,
the amount of its Outstanding Credits) of any expenses incurred for the benefit
of the Lenders in its role as Administrative Agent, including counsel fees and
compensation of agents paid for services rendered on behalf of the Lenders,
which shall not have been reimbursed by the Borrower and (ii) to indemnify
and hold harmless the Administrative Agent and any of its directors, officers,
employees or agents, on demand, in the amount of such pro rata share, from and
against any and all liabilities, taxes, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever that may be imposed on, incurred by or asserted
against it in any way relating to or arising out of this Agreement or any
action taken or omitted by it under this Agreement to the extent the same shall
not have been reimbursed by the Borrower; provided
that no Lender shall be liable to the Administrative Agent for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the gross negligence or
willful misconduct of such Agent or any of its directors, officers, employees
or agents.

 

Section 7.07.  Bank
Credit Decision.

 

Each Lender acknowledges that it has, independently
and without reliance upon the Administrative Agent or any other Lender and
based on such documents and information as it 

 

45

 

has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement.  Each Lender also acknowledges that it will,
independently and without reliance upon the Administrative Agent or any other
Lender and based on such documents and information as it shall from time to
time deem appropriate, continue to make its own decisions in taking or not taking
action under or based upon this Agreement or any related agreement or any
document furnished thereunder.

 

Section 7.08.  Relationship
with Lenders.

 

The Administrative Agent shall have no right, power,
obligation, liability, responsibility or duty under this Agreement other than
those applicable to all Lenders as such. 
Without limiting the foregoing, each Administrative Agent shall not have
and shall not be deemed to have any fiduciary relationship with any Lender.  Each Lender acknowledges that it has not
relied, and will not rely, on the Administrative Agent in deciding to enter
into this Agreement, or in taking or not taking any action hereunder.

 

Section 7.09.  Syndication
Agent and Arrangers.

 

Neither RBS GC nor UBS Securities LLC, by virtue of their
designation as “Co-Lead Arrangers and Co-Book Managers”, nor UBS Securities
LLC, by virtue of its designation as “Syndication Agent”, shall have any duties
hereunder or under the Notes.

 

ARTICLE VIII

MISCELLANEOUS

 

Section 8.01.  Notices.

 

Notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier
service, mailed or sent by telecopy, as follows:

 

(a)           if to the Borrower, Constellation
Energy Group, 750 E. Pratt Street, Baltimore, Maryland 21202, Attention:  Jonathan W. Thayer, Chief Financial Officer
and Senior Vice President, and Charles A. Berardesco, Senior Vice President and
General Counsel;

 

(b)           if to the Administrative Agent, to
Yolette Salnave, The Royal Bank of Scotland plc, RBS Global Banking &
Markets, 600 Steamboat Road, Greenwich, CT 06830, Fax: 203- 302-7800; and

 

(c)           if to an initial Lender, to it at its
Domestic Lending Office specified opposite its name on Schedule I hereto, and
if to any other Lender, to it at its Domestic Lending Office specified in the
Lender Assignment and Acceptance pursuant to which it became a Lender.

 

All notices and other communications given to any
party hereto in accordance with the provisions of this Agreement shall be
deemed to have been given on the date of receipt if delivered by hand or
overnight courier service or sent by telecopy or electronic/soft medium to such
party and received during the normal business hours of such party as provided
in this Section or Section 8.14 or in accordance with the latest
unrevoked direction from such party given in accordance with this Section or
Section 8.14.  If such notices and
communications are 

 

46

 

not received during the
normal business hours of such party, receipt shall be deemed to have been given
upon the opening of the recipient’s next Business Day.

 

Section 8.02.  Survival
of Agreement.

 

All covenants, agreements, representations and
warranties made by the Borrower in this Agreement and in the certificates or
other instruments prepared or delivered in connection with or pursuant to this
Agreement shall be considered to have been relied upon by the Lenders and shall
survive the making by the Lenders of all Advances regardless of any
investigation made by the Lenders or on their behalf, and shall continue in
full force and effect as long as the principal of or any accrued interest on
any Outstanding Credit or any fee or any other amount payable under this
Agreement is outstanding and unpaid or the Commitments have not been
terminated.

 

Section 8.03.  Binding
Effect.

 

Subject to the satisfaction of the conditions
precedent set forth in Section 3.01, this Agreement shall become effective
when it shall have been executed by the Borrower and the Administrative Agent
and when the Administrative Agent shall have received copies hereof (telecopied
or otherwise) which, when taken together, bear the signature of each Lender,
and thereafter shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns, except that the Borrower
shall not have the right to assign or delegate any rights or obligations
hereunder or any interest herein without the prior consent of all the Lenders,
except as a consequence of a transaction expressly permitted under Section 5.02(b).

 

Section 8.04.  Successors
and Assigns.

 

(a)           Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the
successors and assigns of such party; and all covenants, promises and
agreements by or on behalf of any party that are contained in this Agreement
shall bind and inure to the benefit of its successors and assigns.

 

(b)           Each Lender may assign to one or more
assignees all or a portion of its interests, rights and obligations under this
Agreement (including all or a portion of its Commitment and the Advances at the
time owing to it under such Commitment); provided,
however, that (i) the consent of the Borrower and the
Administrative Agent (such consent not to be unreasonably withheld or delayed)
shall be required unless such assignment is to a Lender, an Affiliate of a
Lender, an Approved Fund or a Federal Reserve Bank, (ii) the consent of
the Borrower is not required upon the occurrence and during the continuation of
an Event of Default, (iii) the amount of the Commitment of the assigning
Lender subject to each such assignment (determined as of the date the
Assignment and Acceptance with respect to such assignment is delivered to the
Administrative Agent or, if “Trade Date” is specified in the Assignment and
Acceptance, as of such Trade Date) shall be in a minimum amount of the lesser
of the amount of such Lender’s then remaining Commitment and $5,000,000 or an
integral multiple of $1,000,000 in excess thereof, unless otherwise agreed by
the Borrower and Administrative Agent (which agreement shall not be
unreasonably withheld), provided, however that in the case of an assignment (A) of
the entire remaining amount of the Lender’s Commitment and the Outstanding
Credits at the time owing to it or (B) to a Lender, an Affiliate of a
Lender or an Approved Fund, no minimum 

 

47

 

amount need be assigned, (iv) each such
assignment shall be of a constant, and not a varying, percentage of all the
assigning Lender’s rights and obligations under this Agreement, (v) no
such assignment shall be made to the Borrower, any of the Borrower’s Affiliates
or Subsidiaries or to a natural person, and (vi) the parties to each such
assignment shall execute and deliver to the Administrative Agent an Assignment
and Acceptance, and the assignor or assignee under each such assignment shall
pay to the Administrative Agent an administrative fee of $3,500.  Upon acceptance and recording pursuant to Section 8.04(e),
from and after the effective date specified in each Assignment and Acceptance,
which effective date shall be at least five Business Days after the execution
thereof unless otherwise agreed by the Administrative Agent (the Borrower to be
given reasonable notice of any shorter period), (A) the assignee
thereunder shall be a party hereto and, to the extent of the interest assigned
by such Assignment and Acceptance, have the rights and obligations of a Lender
under this Agreement and (B) the assigning Lender thereunder shall, to the
extent of the interest assigned by such Assignment and Acceptance, be released
from its obligations under this Agreement (and, in the case of an Assignment
and Acceptance covering all or the remaining portion of an assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party to this Agreement (but shall continue to be entitled to the benefits of
Sections 2.11 and 8.05 afforded to such Lender prior to its assignment as well
as to any fees accrued for its account hereunder and not yet paid)).  Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with provision
(b)(vi) of this Section shall be treated for purposes of this
Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with paragraph (f) of this Section.

 

(c)           By executing and delivering an
Assignment and Acceptance, the assigning Lender thereunder and the assignee
thereunder shall be deemed to confirm to and agree with each other and the
other parties hereto as follows: (i) such assigning Lender warrants that
it is the legal and beneficial owner of the interest being assigned thereby
free and clear of any adverse claim, (ii) except as set forth in (i) above,
such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement, or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement
or any other instrument or document furnished pursuant thereto or the financial
condition of the Borrower or the performance or observance by the Borrower of
any obligations under this Agreement or any other instrument or document
furnished pursuant thereto; (iii) such assignor and such assignee
represents and warrants that it is legally authorized to enter into such
Assignment and Acceptance; (iv) such assignee confirms that it has
received copies of this Agreement, together with copies of the most recent
financial statements delivered pursuant to Section 5.03 and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (v) such
assignee will independently and without reliance upon the Administrative Agent,
such assigning Lender or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement; (vi) such
assignee appoints and authorizes the Administrative Agent to take such action
as agent on its behalf and to exercise such powers under this Agreement as are
delegated to the Administrative Agent by the terms thereof, together with such
powers as are reasonably incidental thereto; and (vii) such assignee
agrees that it will perform in accordance with their terms all the obligations
that by the terms of this Agreement are required to be performed by it as a
Lender.

 

48

 

(d)           The Administrative Agent shall
maintain at one of its offices a copy of each Assignment and Acceptance
delivered to it and a register for the recordation of the names and addresses
of the Lenders, and the Commitments of, and the principal amount of Outstanding
Credits owing to, each Lender pursuant to the terms hereof from time to time
(the “Register”).  The entries in the Register shall be
conclusive in the absence of manifest error and the Borrower, the
Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary.  The Register shall be available for inspection
by each party hereto, at any reasonable time and from time to time upon
reasonable prior notice; provided, however that each Lender may inspect only
those entries related to such Lender.

 

(e)           Upon its receipt of a duly completed
Assignment and Acceptance executed by an assigning Lender and an assignee, the
processing and recordation fee referred to in subsection (b) above and, if
required, the written consent of the Borrower, the Administrative Agent to such
assignment, the Administrative Agent shall (i) accept such Assignment and
Acceptance and (ii) record the information contained therein in the
Register.

 

(f)            Each Lender may without the consent
of the Borrower or the Administrative Agent sell participations to one or more
banks or entities (other than the Borrower, the Borrower’s Affiliates, the
Borrower’s Subsidiaries or any natural person) in all or a portion of its
rights and/or obligations under this Agreement (including all or a portion of
its Commitment and the Outstanding Credits owing to it); provided, however, that (i) such Lender’s
obligations under this Agreement shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties to this Agreement for the
performance of such obligations, (iii) each participating bank or other
entity shall be entitled to the benefit of the cost protection provisions
contained in Sections 2.11 and 8.05 and of the tax provision contained in Section 2.16
to the same extent as if it were the selling Lender (and limited to the amount
that could have been claimed by the selling Lender had it continued to hold the
interest of such participating bank or other entity, unless the sale of the
participation is made with the Borrower’s prior written consent), except that
all claims made pursuant to such Sections shall be made through such selling
Lender, (iv) if a participant would be a Non-U.S. Payee if it were a
Lender, such participant shall not be entitled to the benefits of Section 2.16
unless the Borrower is notified of the participation sold to such participant
and such participant agrees, for the benefit of the Borrower, to comply with Section 2.16(f) as
though it were a Lender, and (v) the Borrower, the Administrative Agent
and the other Lenders shall continue to deal solely and directly with such
selling Lender in connection with such Lender’s rights and obligations under
this Agreement, and such Lender shall retain the sole right to enforce the
obligations of the Borrower under this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement (other than
amendments, modifications or waivers (x) decreasing any fees payable
hereunder or the amount of principal of, or the rate at which interest is
payable on, the Outstanding Credits, (y) extending any principal payment
date or date fixed for the payment of interest on the Outstanding Credits or (z) extending
the Commitments).  Such participations
shall not create any “security” (as the word “security” is defined under the
Securities Act of 1933, as amended) of the Borrower.

 

(g)           Any Lender or participant may, in
connection with any assignment or participation or proposed assignment or
participation pursuant to this Section, disclose to the assignee or participant
or proposed assignee or participant any information relating to the 

 

49

 

Borrower furnished to such Lender by or on behalf of
the Borrower; provided that, prior to any such disclosure, each such assignee
or participant or proposed assignee or participant shall execute an agreement
whereby such assignee or participant shall agree (subject to customary
exceptions) to preserve the confidentiality of any such information.

 

(h)           Any Lender may at any time pledge all
or any portion of its rights under this Agreement to a Federal Reserve Bank; provided that no such pledge shall release
any Lender from its obligations hereunder or substitute any such Bank for such
Lender as a party hereto.  In order to
facilitate such an assignment to a Federal Reserve Bank, the Borrower shall, at
the request of the assigning Lender, duly execute and deliver to the assigning
Lender a promissory note or notes evidencing the Advances made to the Borrower
by the assigning Lender hereunder.

 

Section 8.05.  Expenses; Indemnity.

 

(a)           The Borrower agrees to pay all reasonable
out-of-pocket expenses incurred by the Administrative Agent in connection with
entering into this Agreement and in connection with any amendments,
modifications or waivers of the provisions thereof (whether or not the
transactions hereby contemplated are consummated), or incurred by the
Administrative Agent or any Lender in connection with the enforcement of their
rights in connection with this Agreement or in connection with the Advances
made hereunder, including the reasonable fees and disbursements of counsel for
the Administrative Agent and, in the case of enforcement following an Event of
Default, counsel for the Lenders.

 

(b)           The Borrower agrees to indemnify each
Lender against any loss, calculated in accordance with the next sentence, or
reasonable expense that such Lender may sustain or incur as a consequence of (i) any
failure by the Borrower to borrow or to Convert any Advance hereunder
(including as a result of the Borrower’s failure to fulfill any of the
applicable conditions set forth in Article III) after irrevocable notice
of such borrowing or Conversion has been given pursuant to Section 2.03, (ii) any
payment, prepayment or Conversion, or assignment of a Eurodollar Advance or
Base Rate Advance of the Borrower required by any other provision of this
Agreement or otherwise made or deemed made on a date other than the last day of
the Interest Period, if any, applicable thereto, or (iii) any default in
payment or prepayment of the principal amount of any Outstanding Credit or any
part thereof or interest accrued thereon, as and when due and payable (at the
due date thereof, whether by scheduled maturity or otherwise) or (iv) the
occurrence of any Event of Default, including, in each such case, any loss or
reasonable expense sustained or incurred or to be sustained or incurred by such
Lender in liquidating or employing deposits from third parties, or with respect
to commitments made or obligations undertaken with third parties, to effect or
maintain any Advance hereunder or any part thereof as a Eurodollar Advance or a
Base Rate Advance.  Such loss shall
include an amount equal to the excess, if any, as reasonably determined by such
Lender, of (A) its cost of obtaining the funds for the Advance being paid,
prepaid, Converted or not borrowed (assumed to be, as applicable, the
Eurodollar Rate or the Base Rate applicable thereto) for the period from the
date of such payment, prepayment or failure to borrow or Convert to the last
day of the Interest Period for such Advance (or, in the case of a failure to
borrow or Convert the Interest Period for such Advance that would have
commenced on the date of such failure) over (B) the amount of interest (as
reasonably determined by such Lender) that would be realized by such Lender in 

 

50

 

re-employing the funds so paid, prepaid or not
borrowed or Converted for such period or Interest Period, as the case may be.

 

(c)           The Borrower agrees to indemnify the
Administrative Agent, each Lender, each of their Affiliates (including, in the
case of RBS, RBS GC) and the directors, officers, employees, advisors,
attorneys-in-fact and agents of the foregoing (each such person being called an
“Indemnitee”)
against, and to hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related costs and expenses, including reasonable
counsel fees and expenses, incurred by any Indemnitee arising out of (i) the
consummation of the transactions contemplated by this Agreement, (ii) the
use of the proceeds of the Advances, (iii) any documentary taxes,
assessments or charges made by any governmental authority by reason of the
execution and delivery of this Agreement, (iv) the utilization, storage,
disposal, treatment, generation, transportation, release or ownership of any
Hazardous Substance (A) at, upon, or under any property of the Borrower or
any of its Affiliates or (B) by or on behalf of the Borrower or any of its
Affiliates at any time and in any place, or (v) any claim, litigation,
investigation or proceeding relating to any of the foregoing, whether or not
any Indemnitee is a party thereto, including any of the foregoing arising from
the negligence, whether sole or concurrent, on the part of any Indemnitee; provided that such indemnity shall not, as
to any Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related expenses are determined by a final judgment of
a court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of such Indemnitee; provided,
further, that the Borrower agrees that it will not, nor will it
permit any Subsidiary to, without the prior written consent of each Indemnitee
(such consent not to be unreasonably withheld), settle, compromise or consent
to the entry of any judgment in any pending or threatened claim, action, suit
or proceeding in respect of which indemnification could be sought under the
indemnification provisions of this Section 8.05(c) (whether or not
any Indemnitee is an actual or potential party to such claim, action, suit or
proceeding), if such settlement, compromise or consent includes any statement
as to an admission of fault, culpability or failure to act by or on behalf of
any Indemnitee or involves any payment of money or other value by any Indemnitee
or any injunctive relief or factual findings or stipulations binding on any
Indemnitee.

 

(d)           The provisions of this Section shall
remain operative and in full force and effect regardless of the expiration of
the term of this Agreement, the consummation of the transactions contemplated
hereby, the termination of the Commitments, the repayment of any of the
Outstanding Credits, the invalidity or unenforceability of any term or
provision of this Agreement or any investigation made by or on behalf of the
Administrative Agent or any Lender.  All
amounts due under this Section shall be payable on written demand
therefor.

 

(e)           Three Business Days prior to the date
on which any amount or amounts due under this Section are payable in
accordance with a demand from a Lender or the Administrative Agent for such
amount or amounts, such Lender or the Administrative Agent will cause to be
delivered to the Borrower a certificate, which shall be conclusive absent
manifest error, setting forth any amount or amounts that such person is
entitled to receive pursuant to subsection (b) of this Section and
containing an explanation in reasonable detail of the manner in which such
amount or amounts shall have been determined.

 

51

 

Section 8.06.  Right of Setoff.

 

If (i) an Event of Default shall have occurred
and be continuing and (ii) the request shall have been made or the consent
granted by the Majority Lenders as specified by Section 6.02 to authorize
the Administrative Agent to declare the Advances of the Borrower due and
payable pursuant to the provisions of Section 6.02, each Lender is hereby
authorized at any time and from time to time, to the fullest extent permitted
by law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by such Lender to or for the credit or the account of the Borrower
against any of and all the obligations of the Borrower, irrespective of whether
or not such Lender shall have made any demand under this Agreement, and
although such obligations may be unmatured. 
The rights of each Lender under this Section are in addition to
other rights and remedies (including other rights of setoff) which such Lender
may have.

 

Section 8.07.  Applicable Law.

 

THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

 

Section 8.08.  Waivers; Amendment.

 

(a)           No failure or delay of the
Administrative Agent or any Lender in exercising any power or right under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power.  The rights and remedies of the Administrative
Agent and the Lenders under this Agreement are cumulative and are not exclusive
of any rights or remedies that they would otherwise have.  No waiver of any provision of this Agreement
or consent to any departure therefrom shall in any event be effective unless
the same shall be permitted by subsection (b) below, and then such waiver
or consent shall be effective only in the specific instance and for the purpose
for which given.  No notice or demand on
the Borrower or any Subsidiary in any case shall entitle such party to any
other or further notice or demand in similar or other circumstances.

 

(b)           No provision of this Agreement may be
waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by the Borrower and the Administrative Agent with the
consent of the Majority Lenders; provided,
however, that no such agreement shall (i) decrease the
principal amount of, or extend the maturity of or any scheduled principal
payment date or date for the payment of any interest on any Outstanding Credit,
or waive or excuse any such payment or any part thereof, or decrease the rate
of interest on any Outstanding Credit, without the prior written consent of
each Lender affected thereby, (ii) increase the Commitment of any Lender,
decrease the fees owing to any Lender or postpone the payment of any fee owing
to any Lender without the prior written consent of such Lender, (iii) amend,
waive or modify the provisions of Section 2.13 (or any other provision in
this Agreement that expressly provides for the pro rata treatment of the
Lenders), Section 2.14 or Section 8.04(h), the provisions of this Section or
the definition of the “Majority Lenders”, without the prior written consent of each
Lender, or (iv) release or permit the transfer of the obligations of 

 

52

 

the Borrower hereunder without the prior written
consent of each Lender, except as permitted by Section 5.02(b); provided further, however, that no such
agreement shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent hereunder without the prior written consent of the
Administrative Agent, provided, further
that this Agreement may be amended and restated without the consent of any
Lender or the Administrative Agent if, upon giving effect to such amendment and
restatement, such Lender or the Administrative Agent, as the case may be, shall
no longer be a party to this Agreement (as so amended and restated) or have any
Commitment or other obligation hereunder and shall have been paid in full all
amounts payable hereunder to such Lender or the Administrative Agent, as the
case may be.  Each Lender shall be bound
by any waiver, amendment or modification authorized by this Section and
any consent by any Lender pursuant to this Section shall bind any assignee
of its rights and interests hereunder.

 

Section 8.09.  ENTIRE AGREEMENT.

 

THIS AGREEMENT (INCLUDING THE SCHEDULES AND EXHIBITS
HERETO), THE NOTES AND THE FEE LETTER (COLLECTIVELY, THE “AGREEMENT DOCUMENTS”)
REPRESENT THE ENTIRE CONTRACT AMONG THE PARTIES RELATIVE TO THE SUBJECT MATTER
HEREOF AND THEREOF.  ANY PREVIOUS
AGREEMENT, WHETHER WRITTEN OR ORAL, AMONG THE PARTIES WITH RESPECT TO THE
SUBJECT MATTER HEREOF OR THEREOF IS SUPERSEDED BY THE AGREEMENT DOCUMENTS, IT
BEING FURTHER UNDERSTOOD THAT ALL COMMITMENTS TO LEND TO THE BORROWER SET FORTH
IN THE SECOND AMENDED AND RESTATED COMMITMENT LETTER, DATED AUGUST 26, 2008, AS
AMENDED AND RESTATED AS OF OCTOBER 16, 2008, AND AS AMENDED OCTOBER 31, 2008,
AMONG THE BORROWER, RBS, RBS GC, UBS LOAN FINANCE LLC AND UBS SECURITIES LLC
ARE HEREBY TERMINATED.  THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. 
NOTHING IN THIS AGREEMENT OR THE FEE LETTER, EXPRESSED OR IMPLIED, IS
INTENDED TO CONFER UPON ANY PARTY OTHER THAN THE PARTIES HERETO AND THERETO ANY
RIGHTS, REMEDIES, OBLIGATIONS OR LIABILITIES UNDER OR BY REASON OF THE
AGREEMENT DOCUMENTS.

 

Section 8.10.  Severability.

 

In the event any one or more of the provisions
contained in this Agreement should be held invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired
thereby.  The parties shall endeavor in
good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.

 

Section 8.11.  Counterparts/Telecopy.

 

This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but all of which when
taken together shall constitute but one contract, and shall become effective as
provided in Section 8.03.  Delivery
of executed counterparts by 

 

53

 

telecopy shall be
effective as an original and shall constitute a representation that an original
shall be delivered.

 

Section 8.12.  Headings.

 

Article and Section headings and the Table
of Contents used herein are for convenience of reference only, are not part of
this Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.

 

Section 8.13.  Jurisdiction; Venue; Waiver of Jury
Trial.

 

(a)           The Borrower, the Administrative
Agent and each Lender hereby irrevocably and unconditionally submits to the
nonexclusive jurisdiction of any Federal court, to the extent permitted by law,
of the United States of America sitting in the borough of Manhattan in New York
City or, if such Federal court is not available due to lack of jurisdiction,
any New York State court sitting in the borough of Manhattan in New York City,
and any appellate court from any thereof, in any action or proceeding arising
out of or relating to this Agreement, or for recognition or enforcement of any
judgment, and hereby irrevocably and unconditionally agrees that all claims in respect
of any such action or proceeding may be heard and determined in such Federal
Court, to the extent permitted by law, or in such New York State court.  The Borrower, the Administrative Agent and
each Lender each agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law.  Subject to the foregoing and to subsection (b) below,
nothing in this Agreement shall affect any right that any party thereto may
otherwise have to bring any action or proceeding relating to this Agreement
against any other party thereto in the courts of any jurisdiction.

 

(b)           The Borrower and each Lender each
hereby irrevocably and unconditionally waives, to the fullest extent it may
legally and effectively do so, any objection that it may now or thereafter have
to the laying of venue of any suit, action or proceeding arising out of or
relating to this Agreement in any New York State or Federal court.  The Borrower and each Lender each hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.

 

(c)           THE BORROWER, THE ADMINISTRATIVE
AGENT AND EACH LENDER EACH HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED ON THIS AGREEMENT, OR ARISING OUT OF, UNDER, OR IN CONNECTION
WITH, THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN), OR ACTIONS OF THE BORROWER.  THIS PROVISION IS A MATERIAL INDUCEMENT FOR
THE ADMINISTRATIVE AGENT, THE LENDERS AND THE BORROWER ENTERING INTO THIS
AGREEMENT.

 

Section 8.14.  Electronic Communications.

 

(a)           The Borrower hereby agrees that it
will provide to the Administrative Agent all information, documents and other
materials that it is obligated to furnish to the Administrative 

 

54

 

Agent pursuant to this Agreement, including, without
limitation, all notices, requests, financial statements, financial and other
reports, certificates and other information materials, but excluding any such
communication that (i) relates to a request for a new, or a conversion of
an existing, Borrowing (including any election of an interest rate or Interest
Period relating thereto), (ii) relates to the payment of any principal or
other amount due under this Agreement prior to the scheduled date therefor, (iii) provides
notice of any Unmatured Default or Event of Default or (iv) is required to
be delivered to satisfy any condition precedent to the effectiveness of this
Agreement and/or any Borrowing hereunder (all such non-excluded communications
being referred to herein collectively as “Communications”), by transmitting the
Communications in an electronic/soft medium in a format acceptable to the
Administrative Agent to gbmnaagency@rbs.com. 
In addition, the Borrower agrees to continue to provide the
Communications to the Administrative Agent in the manner otherwise specified
herein, but only to the extent requested by the Administrative Agent.

 

(b)           The Borrower further agrees that the
Administrative Agent may make the Communications available to the Lenders by
posting the Communications on Intralinks or a substantially similar electronic
transmission system (the “Platform”).  The Borrower acknowledges that the
distribution of material through an electronic medium is not necessarily secure
and that there are confidentiality and other risks associated with such
distribution.

 

(c)           THE PLATFORM IS PROVIDED “AS IS”
AND “AS AVAILABLE”.  THE AGENT PARTIES
(AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE
COMMUNICATIONS, OR THE ADEQUACY OF THE PLATFORM AND EXPRESSLY DISCLAIM
LIABILITY FOR ERRORS OR OMISSIONS IN THE COMMUNICATIONS.  NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR
STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR
FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY THE AGENT PARTIES IN
CONNECTION WITH THE COMMUNICATIONS OR THE PLATFORM.  IN NO EVENT SHALL THE ADMINISTRATIVE AGENT OR
ANY OF ITS AFFILIATES OR ANY OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES,
AGENTS, ADVISORS OR REPRESENTATIVES (COLLECTIVELY, “AGENT PARTIES”) HAVE ANY LIABILITY
TO THE BORROWER, ANY LENDER OR ANY OTHER PERSON OR ENTITY FOR DAMAGES OF ANY
KIND, INCLUDING, WITHOUT LIMITATION, DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES (WHETHER IN TORT, CONTRACT OR
OTHERWISE) ARISING OUT OF THE BORROWER’S OR THE ADMINISTRATIVE AGENT’S
TRANSMISSION OF THE COMMUNICATIONS THROUGH THE PLATFORM, EXCEPT TO THE EXTENT
THE LIABILITY OF ANY AGENT PARTY IS FOUND IN A FINAL NON-APPEALABLE JUDGMENT BY
A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED PRIMARILY FROM SUCH AGENT
PARTY’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

 

(d)           The Administrative Agent agrees that
the receipt of the Communications by the Administrative Agent at its e-mail
address set forth above shall constitute effective delivery of the
Communications to the Administrative Agent for purposes of this Agreement.  Each Lender 

 

55

 

agrees that notice to it (as provided in the next
sentence) specifying that the Communications have been posted to the Platform
shall constitute effective delivery of the Communications to such Lender for
purposes of this Agreement.  Each Lender
agrees to notify the Administrative Agent in writing (including by electronic
communication) from time to time of such Lender’s e-mail address to which the
foregoing notice may be sent by electronic transmission and that the foregoing
notice may be sent to such e-mail address.

 

(e)           Nothing herein shall prejudice the
right of the Administrative Agent or any Lender to give any notice or other
communication pursuant to this Agreement in any other manner specified herein.

 

Section 8.15.  Confidentiality.

 

(a)           Each Lender shall hold in confidence
all non-public, confidential or proprietary information, memoranda, or extracts
furnished to such Lender (directly or through the Administrative Agent) by the
Borrower under this Agreement or in connection with the negotiation thereof; provided that such Lender may disclose any
such information, memoranda or extracts (i) (A) to its directors,
officers, employees, agents, auditors, attorneys, consultants and advisors and,
(B) to the extent necessary for the administration of this Agreement, to
its Affiliates and the directors, officers and employees of its Affiliates, (ii) to
any regulatory or supervisory authority having authority to examine such Lender
or such Lender’s Affiliates, (iii) as required by any legal or
governmental process or otherwise by law (with such Lender providing details,
to the extent permitted by law, to the Borrower of the information, memoranda
or extracts disclosed pursuant to this clause (iii)), (iv) to any Person
to which such Lender sells or proposes to sell an assignment or a participation
in its Outstanding Credits hereunder, if such other Person agrees for the
benefit of the Borrower to comply with the provisions of this Section and (v) to
the extent that such information, memoranda or extracts shall be publicly
available or shall have become known to such Lender independently of any
disclosure by the Borrower under this Agreement or in connection with the
negotiation thereof.  Any Lender
disclosing information, memoranda or extracts pursuant to clause (i) or (iv) of
this Section 8.15 will take reasonable steps to ensure that the persons
receiving such information, memoranda or extracts pursuant to such Sections
will hold the same in confidence in accordance with this Section 8.15.  To the extent possible, any Lender disclosing
information, memoranda or extracts pursuant to clause (ii) or (iii) of
this Section 8.15 will take reasonable steps to ensure that the persons
receiving such information, memoranda or extracts pursuant to such Sections
will hold the same in confidence in accordance with this Section 8.15.

 

(b)           Notwithstanding the foregoing, any
Lender may disclose the provisions of this Agreement and the amounts,
maturities and interest rates of its Outstanding Credits to any purchaser or
potential purchaser of such Lender’s interest in any Outstanding Credits.  Notwithstanding anything to the contrary in
this Agreement, each party hereto shall not be limited from disclosing the US
tax treatment or US tax structure of the transactions contemplated by this
Agreement.  Each Lender and the
Administrative Agent (for itself and not on behalf of any Lender) hereby
notifies the Borrower that, pursuant to the requirements of the Patriot Act, it
is required to obtain, verify and record information that identifies the
Borrower, which information includes the name and address of the Borrower and
other information that will allow 

 

56

 

such Lender or the Administrative Agent, as
applicable, to identify the Borrower in accordance with the Patriot Act.

 

[Signatures to
Follow]

 

57

 

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

 

	
   

  	
  CONSTELLATION ENERGY
  GROUP, INC.,

  
	
   

  	
  as Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Jonathan W. Thayer

  
	
   

  	
   

  	
  Name: Jonathan W.
  Thayer

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President
  and

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  

 

Signature Page to
Constellation Energy Group, Inc. Credit Agreement

 

S-1

 

	
   

  	
  THE ROYAL BANK OF
  SCOTLAND PLC,

  
	
   

  	
  as Administrative Agent
  and Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ Belinda Tucker

  
	
   

  	
   

  	
  Name: Belinda Tucker

  
	
   

  	
   

  	
  Title: Senior Vice
  President

  

 

Signature Page to
Constellation Energy Group, Inc. Credit Agreement

 

S-2

 

	
   

  	
  UBS LOAN FINANCE LLC,
  as Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Irja R. Otsa

  
	
   

  	
   

  	
  Name: Irja R. Otsa

  
	
   

  	
   

  	
  Title: Associate
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Mary E. Evans

  
	
   

  	
   

  	
  Name: Mary E. Evans

  
	
   

  	
   

  	
  Title: Associate
  Director

  

 

Signature Page to
Constellation Energy Group, Inc. Credit Agreement

 

S-3

 

	
   

  	
  CREDIT SUISSE, CAYMAN
  ISLANDS 

  BRANCH, as Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Rianka Mohan

  
	
   

  	
   

  	
  Name: Rianka Mohan

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Nupur Kumar

  
	
   

  	
   

  	
  Name: Nupur Kumar

  
	
   

  	
   

  	
  Title: Associate

  

 

Signature Page to
Constellation Energy Group, Inc. Credit Agreement

 

S-4

 

	
   

  	
  THE BANK OF NOVA
  SCOTIA, as Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Thane Rattew

  
	
   

  	
   

  	
  Name: Thane Rattew

  
	
   

  	
   

  	
  Title: Managing
  Director

  

 

Signature Page to
Constellation Energy Group, Inc. Credit Agreement

 

S-5

 

	
   

  	
  BARCLAYS BANK PLC, as
  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Nicholas Bell

  
	
   

  	
   

  	
  Name: Nicholas Bell

  
	
   

  	
   

  	
  Title: Director

  

 

Signature Page to
Constellation Energy Group, Inc. Credit Agreement

 

S-6

 

	
   

  	
  BNP PARIBAS, as Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Denis O’Meara

  
	
   

  	
   

  	
  Name: Denis O’Meara

  
	
   

  	
   

  	
  Title: Managing
  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Francis J. Delaney

  
	
   

  	
   

  	
  Name: Francis J.
  Delaney

  
	
   

  	
   

  	
  Title: Managing Director

  

 

Signature Page to
Constellation Energy Group, Inc. Credit Agreement

 

S-7

 

	
   

  	
  MORGAN STANLEY BANK, as
  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Daniel Twenge

  
	
   

  	
   

  	
  Name: Daniel Twenge

  
	
   

  	
   

  	
  Title: Authorized
  Signatory

  

 

Signature Page to
Constellation Energy Group, Inc. Credit Agreement

 

S-8

 

	
   

  	
  MANUFACTURERS AND
  TRADERS TRUST 

  COMPANY, as Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ John H. Lewin III

  
	
   

  	
   

  	
  Name: John H. Lewin III

  
	
   

  	
   

  	
  Title: Vice President

  

 

Signature Page to
Constellation Energy Group, Inc. Credit Agreement

 

S-9

 

	
   

  	
  NATIONAL CITY BANK, as
  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Michael Leong

  
	
   

  	
   

  	
  Name: Michael Leong

  
	
   

  	
   

  	
  Title: Vice President

  

 

Signature Page to
Constellation Energy Group, Inc. Credit Agreement

 

S-10

 

	
   

  	
  UNION BANK OF
  CALIFORNIA, N.A., as Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Bryan Read

  
	
   

  	
   

  	
  Name: Bryan Read

  
	
   

  	
   

  	
  Title: Vice President

  

 

Signature Page to
Constellation Energy Group, Inc. Credit Agreement

 

S-11

 

SCHEDULE I

 

LENDERS
AND COMMITMENTS

Constellation
Energy Group, Inc. Credit Agreement

 

	
  Name of Lender

  	
   

  	
  Commitment

  	
   

  	
  Domestic Lending Office

  	
   

  	
  Eurodollar Lending Office

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The Royal Bank
  of Scotland PLC

  	
   

  	
  $

  	
  200,000,000

  	
   

  	
  600 Steamboat Road

  Greenwich, CT 06830

  	
   

  	
  Same as Domestic Lending Office

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  UBS Loan Finance
  LLC

  	
   

  	
  $

  	
  200,000,000

  	
   

  	
  677 Washington Boulevard

  Stamford, CT 06901

  Attn: Iris Choi

  Tel: 203-719-0678

  Fax: 203-719-3888

  Email: iris.choi@ubs.com

  	
   

  	
  Same as Domestic Lending Office

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Credit Suisse, Cayman Islands Branch

  	
   

  	
  $

  	
  250,000,000

  	
   

  	
  Eleven Madison Avenue

  New York, NY 10010

  Attn: Transaction
  Management Group

  Chevel Nelson

  Phone: 212-325-0880

  Fax: 212-743-2780

  Email: corpbanking.tmg@credit-suisse.com

  	
   

  	
  Same as Domestic Lending Office

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The Bank of Nova
  Scotia

  	
   

  	
  $

  	
  150,000,000

  	
   

  	
  One Liberty Plaza

  26th Floor

  New York, NY 10006

  	
   

  	
  Same as Domestic Lending Office

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Barclays Bank
  PLC

  	
   

  	
  $

  	
  100,000,000

  	
   

  	
  200 Park Avenue

  3rd Floor,

  New York, NY, 10166

  Attn: Jane Yoon

  Tel: 973-576-3267

  Fax: 973-576-3014

  Email:
  jane.yoon@barcap.com

  	
   

  	
  Same as Domestic Lending Office

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BNP Paribas

  	
   

  	
  $

  	
  100,000,000

  	
   

  	
  787 Seventh Avenue

  New York, NY 10019

  Attn : Project Finance & Utilities

  Telephone: 212-841-2000

  Fax: 212-841-2146

  	
   

  	
  Same as Domestic Lending Office

  	
   

  

 

I-1

 

	
  Name of Lender

  	
   

  	
  Commitment

  	
   

  	
  Domestic Lending Office

  	
   

  	
  Eurodollar Lending Office

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Morgan Stanley
  Bank, N.A.

  	
   

  	
  $

  	
  100,000,000

  	
   

  	
  One Utah Center

  201 South Main Street, 5th Floor

  Salt Lake City, UT 84111

  Attn: Documentation Team

  Telephone : 801-236-3655

  Fax: 718-233-0967

  Email: docs4loans@ms.com

  	
   

  	
  Same as Domestic Lending Office

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Manufacturers and Traders Trust Company

  	
   

  	
  $

  	
  50,000,000

  	
   

  	
  25 S. Charles Street, 19th Floor

  Baltimore, MD 21201

  	
   

  	
  Same as Domestic Lending Office

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  National City
  Bank

  	
   

  	
  $

  	
  40,000,000

  	
   

  	
  One N. Franklin, 20th Floor

  Chicago, IL 60606

  	
   

  	
  Same as Domestic Lending Office

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Union Bank of
  California, N.A.

  	
   

  	
  $

  	
  40,000,000

  	
   

  	
  Energy Capital Services

  445 S. Figueroa Street, 15th Floor

  Los Angeles, CA 90071

  	
   

  	
  Same as Domestic Lending Office

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AGGREGATE COMMITMENTS:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  1,230,000,000

  	
   

  
										

 

S-2

 

EXHIBIT
A

Form of
Assignment and Acceptance

 

ASSIGNMENT AND
ACCEPTANCE

 

Reference is made to the Credit Agreement, dated as of
November 13, 2008 (as amended, supplemented or otherwise modified from
time to time, the “Credit
Agreement”), among CONSTELLATION
ENERGY GROUP, INC., a Maryland corporation (the “Borrower”), the
lenders listed in Schedule I thereto (together with their successors and
assigns, the “Lenders”),
and THE ROYAL BANK OF SCOTLAND PLC,
as administrative agent for the Lenders (in such capacity, the “Administrative Agent”).  Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the meanings given
to them in the Credit Agreement.

 

The Assignor identified on Schedule 1 hereto (the “Assignor”) and the
Assignee identified on Schedule 1 hereto (the “Assignee”) agree as follows:

 

1.        The Assignor hereby irrevocably sells and assigns to the
Assignee without recourse to the Assignor, and the Assignee hereby irrevocably
purchases and assumes from the Assignor without recourse to the Assignor, as of
the Effective Date (as defined below), (i) the interest described in
Schedule 1 hereto in and to the Assignor’s interests, rights and obligations
under the Credit Agreement and any other documents or instruments delivered
pursuant thereto, in a principal amount as set forth on Schedule 1 hereto and (ii) to
the extent permitted to be assigned under applicable law, all claims, suits,
causes of action and any other right of the Assignor against any Person whether
known or unknown, arising under or in connection with the Credit Agreement, any
other documents or instruments delivered pursuant thereto or the loan
transactions governed thereby or in any way based on or related to any of the
foregoing, including but not limited to, contract claims, tort claims,
malpractice claims, statutory claims and all other claims at law or in equity
related to the rights and obligations sold and assigned pursuant to clause (i) above
(the rights and obligations sold and assigned by the Assignor to the Assignee
pursuant to clauses (i) and (ii) above being referred to herein
collectively as the “Assigned
Interest”).

 

2.        The Assignor (a) represents and warrants that (i) it
is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned
Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it
has full power and authority, and has taken all action necessary, to execute
and deliver this Assignment and Acceptance and to consummate the transactions
contemplated hereby; (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the
Credit Agreement or any Credit Document and (ii) the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement, any other Credit Document or any other instrument or document
furnished pursuant thereto or any collateral thereunder; (c) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower, any of its Subsidiaries or Affiliates or
any other obligor or the performance or observance by the Borrower, any of its
Subsidiaries or Affiliates or any other obligor of any of their respective
obligations under the Credit Agreement or any other Credit Document or any
other instrument or document furnished pursuant hereto or thereto; and (d) attaches
any Notes

 

A-1

 

held by it evidencing the
Assigned Interest and (i) requests that the Administrative Agent, upon
request by the Assignee, exchange the attached Notes for a new Note or Notes
payable to the Assignee and (ii) if the Assignor has retained any interest
under the Credit Agreement, requests that the Administrative Agent exchange the
attached Notes for a new Note or Notes payable to the Assignor, in each case in
amounts which reflect the assignment being made hereby (and after giving effect
to any other assignments which have become effective on the Effective Date).

 

3.        The Assignee represents and warrants that (a) it has
power and authority, and has taken all action necessary, to execute and deliver
this Assignment and Acceptance and to consummate the transactions contemplated
hereby and to become a Lender under the Credit Agreement; (b) it meets all
the requirements to be an assignee under Section 8.04(b)(i) and (iv) of
the Credit Agreement (subject to such consents, if any, as may be required
under Section 8.04(b)(i) of the Credit Agreement; (c) it has
received a copy of the Credit Agreement, together with copies of the financial
statements delivered pursuant to Section 5.03 thereof and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Acceptance; (d) it
is sophisticated with respect to decisions to acquire assets of the type
represented by the Assigned Interest and either it, or the person exercising
discretion in making its decision to acquire the Assigned Interest, is experienced
in acquiring assets of such type; (e) if it is a Non-U.S. Payee, attached
to the Assignment and Acceptance is any documentation required to be delivered
by it pursuant to the terms of the Credit Agreement, duly completed and
executed by such Assignee; (f) it will, independently and without reliance
upon the Assignor, the Administrative Agent or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Credit Agreement, the other Credit Documents or any other instrument or
document furnished pursuant hereto or thereto; (g) it appoints and
authorizes the Administrative Agent to take such action as agent on its behalf
and to exercise such powers and discretion under the Credit Agreement, the
other Credit Documents or any other instrument or document furnished pursuant
hereto or thereto as are delegated to the Administrative Agent by the terms
thereof, together with such powers as are incidental thereto; and (h) it
will be bound by the provisions of the Credit Agreement and will perform in
accordance with its terms all the obligations which by the terms of the Credit
Agreement are required to be performed by it as a Lender.

 

4.        The effective date of this Assignment and Acceptance shall be
the Effective Date of Assignment described in Schedule 1 hereto (the “Effective Date”).  Following the execution of this Assignment
and Acceptance, it will be delivered to the Administrative Agent for acceptance
by it and recording by the Administrative Agent pursuant to the Credit
Agreement, effective as of the Effective Date (which shall not, unless
otherwise agreed to by the Administrative Agent, be earlier than five Business
Days after the date of execution of this Assignment and Acceptance).

 

5.        Upon such acceptance and recording, from and after the
Effective Date, the Administrative Agent shall make all payments in respect of
the Assigned Interest (including payments of principal, interest, fees and
other amounts) [to the Assignor for amounts which have accrued to the Effective
Date and to the Assignee for amounts which have accrued subsequent to the
Effective Date] [to the Assignee whether such amounts have accrued prior to the
Effective Date or accrue subsequent to the Effective Date.  The Assignor and the Assignee shall make all

 

A-2

 

appropriate adjustments
in payments by the Administrative Agent for periods prior to the Effective Date
or with respect to the making of this assignment directly between themselves.]

 

6.        From and after the Effective Date, (a) the Assignee
shall be a party to the Credit Agreement and, to the extent provided in this
Assignment and Acceptance, have the rights and obligations of a Lender
thereunder and under the other Credit Documents and shall be bound by the
provisions thereof and (b) the Assignor shall, to the extent of the
interest assigned by this Assignment and Acceptance, relinquish its rights and
be released from its obligations under the Credit Agreement.

 

The Assignment and Acceptance shall be binding upon,
and inure to the benefit of, the parties hereto and their respective successors
and assigns.  This Assignment and
Acceptance may be executed in any number of counterparts, which together shall
constitute one instrument.  Delivery of
an executed counterpart of a signature page of this Assignment and
Acceptance by telecopy shall be effective as delivery of a manually executed
counterpart of this Assignment and Acceptance. 
This Assignment and Acceptance shall be governed by and construed in
accordance with the laws of the State of New York.

 

IN WITNESS WHEREOF, the parties hereto have caused
this Assignment and Acceptance to be executed as of the date first above
written by their respective duly authorized officers on Schedule 1 hereto.

 

A-3

 

Schedule
1

to Exhibit A

 

Schedule 1

 

to Assignment and
Acceptance

 

Name of Assignor:

 

Name of Assignee:

 

Effective Date of Assignment:

 

[Trade Date:                               ](1)

 

	
  Principal

  Amount Assigned

  	
   

  	
  Commitment

  Percentage Assigned

  	
   

  
	
  $                

  	
   

  	
          /                %

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

	
   

  	
   

  	
   

  
	
  [Name of Assignee]:

  	
   

  	
  [Name of Assignor]:

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
  By

  	
   

  
	
   

  	
  Name: 

  	
   

  	
   

  	
  Name:

  
	
   

  	
  Title:

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Accepted: 

  	
   

  	
  Consented to:

  
	
  THE ROYAL BANK OF SCOTLAND PLC, 

  	
   

  	
  CONSTELLATION ENERGY GROUP, INC.

  
	
  as Administrative Agent

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By 

  	
   

  	
   

  	
   

  	
  By 

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  	
  Name:

  
	
   

  	
  Title:

  	
   

  	
   

  	
  Title:

  
						

 

	
  (1)

  	
   

  	
  To be completed if the Assignor(s) and the Assignee(s)
  intend that the Principal Amount Assigned is to be determined as of the Trade
  Date.

  

 

A-4

 

EXHIBIT
B

Form of
Borrowing Request

 

The Royal Bank of
Scotland plc, as

administrative agent for the lenders parties

to the Credit Agreement referred to below

600 Steamboat Road

Greenwich, CT 06830

 

Attention: Loan
Administration

 

Reference is hereby made to the Credit Agreement,
dated as of November 13, 2008 (as amended, supplemented or otherwise
modified from time to time, the “Credit Agreement”), among CONSTELLATION ENERGY GROUP, INC., a
Maryland corporation (the “Borrower), the lenders
listed in Schedule I thereto (together with their successors and assigns, the “Lenders”),
and THE ROYAL BANK OF SCOTLAND PLC,
as administrative agent for the Lenders (in such capacity, the “Administrative Agent”).  Terms defined in the Credit Agreement and not
otherwise defined herein are used herein with the meanings so defined.

 

The Borrower hereby gives notice to the Administrative
Agent that Borrowings under the Credit Agreement, and of the type and amount
set forth below, are requested to be made on the date indicated below to the
Borrower:

 

	
  Type of Borrowings

  	
   

  	
  Interest

  Period

  	
   

  	
  Aggregate

  Amount

  	
   

  	
  Date of Borrowings

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Base Rate Borrowing

  	
   

  	
  N/A

  	
   

  	
   

  	
   

  	
   

  
	
  Eurodollar Borrowing

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

The Borrower hereby requests that the proceeds of the
Borrowings described in this Borrowing Request be made available to the
Borrower as follows:

 

[insert transmittal
instructions].

 

B-1

 

The Borrower hereby (i) certifies that all
conditions contained in the Credit Agreement to the making of any Borrowing
requested have been met or satisfied in full and (ii) acknowledges that
the delivery of this Borrowing Request shall constitute a representation and
warranty by the Borrower that, on the date of the proposed Borrowing, the
statements contained in Section 3.02 of the Credit Agreement are true and
correct.

 

	
   

  	
   

  	
  CONSTELLATION ENERGY
  GROUP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
  DATE:

  	
   

  	
   

  	
   

  
					

 

B-2

 

EXHIBIT
C

Form of
Notice of Conversion

 

The Royal Bank of
Scotland plc, as

administrative agent for the lenders parties

to the Credit Agreement referred to below

600 Steamboat Road

Greenwich, CT 06830

 

Attention: Loan
Administration

 

[Date]

 

Ladies and Gentlemen:

 

The undersigned, Constellation Energy Group, Inc.,
refers to the Credit Agreement, dated as of November 13, 2008 (as amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
among CONSTELLATION ENERGY GROUP, INC.,
a Maryland corporation (the “Borrower”), the lenders listed in Schedule I thereto
(together with their successors and assigns, the “Lenders”), and THE ROYAL BANK OF SCOTLAND PLC, as
administrative agent for the Lenders (in such capacity, the “Administrative Agent”),
and hereby gives you notice, irrevocably, pursuant to Section 2.03 of the
Credit Agreement, that the undersigned hereby requests a Conversion under the
Credit Agreement, and in that connection sets forth below the information
relating to such Conversion (the “Proposed Conversion”) as required by Section 2.03
of the Credit Agreement:

 

(i)            The Business Day of the Proposed
Conversion is                                ,
200   .

 

(ii)           The Type of Advances comprising the
Proposed Conversion is [Base Rate Advances] [Eurodollar Advances].

 

(iii)          The aggregate amount of the Proposed
Conversion is $                                    .

 

(iv)          The Type of Advances to which such
Advances are proposed to be Converted is [Base Rate Advances] [Eurodollar
Advances].

 

(v)           The Interest Period for each Advance
made as part of the Proposed Conversion is        
month(s).(1)

 

The undersigned hereby represents and warrants that
the following statements are true on the date hereof, and will be true on the
date of the Proposed Conversion:

 

	
  (1)

  	
   

  	
  Delete for Base
  Rate Advances.

  

 

C-1

 

	
  (A)

  	
   

  	
  The Borrower’s
  request for the Proposed Conversion is made in compliance with
  Section 2.03 of the Credit Agreement; 

  

and

	
   

  	
   

  	
   

  
	
  (B)

  	
   

  	
  The statements
  contained in Section 3.02 of the Credit Agreement are true and correct.

  

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CONSTELLATION ENERGY
  GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

C-2

 

EXHIBIT
D

Form of
Opinion of Counsel to Borrower

 

[Date]

 

To each of the lenders
party to the Credit

Agreement referred to
below and to

The Royal Bank of
Scotland plc, as

administrative agent for
such lenders

 

Ladies and Gentlemen:

 

This opinion is furnished to you pursuant to Section 3.01(c)(vi) of
the Credit Agreement dated as of November 13, 2008 (the “Credit Agreement”),
among Constellation Energy Group, Inc., a Maryland corporation (the “Company”), the
Lenders named therein (the “Lenders”), and The Royal Bank of Scotland plc, as Administrative
Agent (in such capacity, the “Administrative Agent”). 
Unless otherwise defined herein, terms defined in the Credit Agreement
are used herein as therein defined.

 

I am Senior Vice President and General Counsel for the
Company.  I am generally familiar with
the Company’s corporate history, properties, operations and charter (including
amendments, restatements and supplements thereto).  In connection with this opinion, I have
considered, among other things: (i) the charter of the Company; (ii) the
by-laws of the Company; (iii) the Credit Agreement; and (iv) such
other documents, transactions and matters of law as I deemed necessary in order
to render this opinion.

 

My opinions expressed below are specifically subject
to the following limitations, exceptions, qualifications and assumptions:

 

(a)           In
the examination of any and all documents, instruments, certificates and
agreements, I have assumed the genuineness of all signatures (other than those
of the Company), the authenticity of all documents submitted to me as originals
and the conformity to authentic, original documents of all documents submitted
to me as certified, conformed or photostatic copies.  I have also assumed that each natural person
executing any document, instrument, certificate or agreement that I have
reviewed in connection with this opinion was legally competent to do so.

 

(b)           As
to various questions of fact relevant to the opinions expressed herein, I have
relied upon, and assumed the accuracy of, certificates of public officials, the
representations and warranties contained in the Credit Agreement and other
information from responsible officers of the Company.

 

D-1

 

(c)           I have assumed that the Credit
Agreement has been duly executed and delivered by each Lender, and constitutes
the legal, valid and binding obligation of each such party, enforceable against
such party in accordance with its terms.

 

(d)           I have assumed that there have been
no oral or written amendments to the Credit Agreement or any documents,
instruments, certificates or agreements entered into in connection therewith,
and there has been no waiver of any of the provisions of any such documents,
instruments, certificates or agreements, by actions or conduct of the parties
or otherwise.

 

(e)           I express no opinion as to the
enforceability of any provisions indemnifying a party against, or requiring
contributions toward, that party’s liability for its own wrongful or negligent
acts, or where indemnification or contribution is contrary to public policy or
prohibited by law.

 

(f)            My
opinion expressed below regarding the enforceability of the Credit Agreement is
qualified by the following:

 

(i) such enforceability may be limited
by or subject to (x) bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium, or other laws and rules of law affecting the
enforcement generally of creditors’ rights and remedies, and (y) the
exercise of judicial discretion in accordance with general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law); and

 

(ii) certain provisions of the Credit
Agreement may be unenforceable in whole or in part (including, but not limited
to, the provisions concerning consent to jurisdiction and venue, and waivers of
rights to claim forum non conveniens),
although the inclusion of such provisions does not render the Credit Agreement
invalid as a whole.

 

(g)           In
basing the opinions and other matters set forth herein on “my knowledge,”
the words “my
knowledge” signify that, in the course of my representation of the
Company, no information has come to my attention that would give me actual
knowledge or actual notice that any such opinions or other matters are not
accurate or that any of the documents, certificates, reports, and information
on which I have relied are not accurate and complete.

 

Based on the foregoing, and subject to the
limitations, qualifications and assumptions set forth herein, I am of the
opinion that:

 

1.             The Company (a) is duly incorporated and validly
existing under the laws of the State of Maryland, (b) has the corporate
power and authority, and the legal right, to own and operate its property, to
lease the property it operates as lessee and to conduct the business in which
it is currently engaged and in which it proposes to be engaged after the date
hereof, (c) is duly qualified as a foreign corporation and is in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification, except any such jurisdiction where the failure to so qualify
does not, in the aggregate, result in a Material Adverse Change, (d) owns
or possesses all licenses and permits necessary for the operation by it of its
business, except to the extent that the failure to own or possess any such
license or permit would not result in a Material Adverse Change, and (e) is
in compliance with all Requirements of Law, except to the extent that the
failure to comply

 

D-2

 

therewith could not, in
the aggregate, result in a Material Adverse Change.  The term “Requirements of Law” means the law
of the State of Maryland and the law, rules and regulations of the United
States of America.

 

2.        The Company has the corporate power and authority, and the
legal right, to make, deliver and perform, and to borrow under, the Credit
Agreement.  The Company has taken all
necessary corporate action, as applicable, to authorize the borrowings on the
terms and conditions of the Credit Agreement, and to authorize the execution,
delivery and performance of the Credit Agreement, and the Credit Agreement has
been duly executed and delivered on behalf of the Company.

 

3.        I note that the Credit Agreement provides that it is to be
governed by the law of the State of New York. 
However, if a court of competent jurisdiction were to hold that the
Credit Agreement is to be governed by, and to be construed in accordance with,
the laws of the State of Maryland, the Credit Agreement would be, under the
laws of the State of Maryland, a legal, valid and binding obligation of the
Company enforceable against the Company in accordance with its terms.

 

4.        The execution, delivery and performance of the Credit
Agreement and the borrowings thereunder will not violate (a) the charter
and bylaws of the Company, (b) any law, rule or regulation
(including, without limitation, the Investment Company Act of 1940) or any
judgment, injunction, order, decree, franchise or permit applicable to the
Company, or (c) to my knowledge after appropriate inquiry, any material
contractual restriction binding on or affecting the Company, and will not
result in, or require, the creation or imposition of any Lien on any of its
properties or revenues pursuant to any such contractual restriction.

 

5.        No approval or authorization of, notice to, or filing with,
or other act by or in respect of, any governmental agency or, to my knowledge
after appropriate inquiry, any other person is required in connection with the
execution, delivery, performance, validity or enforceability of the Credit
Agreement or any of the documents referred to therein by the Company.

 

6.        To my knowledge after appropriate inquiry, no litigation,
investigation or proceeding of or before any court, arbitrator or government
agency is pending or threatened (a) with respect to the Credit Agreement
or any of the transactions contemplated thereby or (b) affecting the
Company, any of its subsidiaries, or any of its properties or assets except as
disclosed in the Company’s Form 10-K for the fiscal year ended December 31,
2007 and its Quarterly Report on Form 10-Q for the fiscal quarter ended March 31,
2008, in any case, which will result in a Material Adverse Change.

 

7.        To my knowledge, the Company is not in default under or with
respect to any material contractual restriction binding on or affecting the
Company in any respect which will result in a Material Adverse Change.

 

8.        The Company is not an “investment company,” or a company “controlled”
by an “investment
company,” within the meaning of the Investment Company Act of 1940, as
amended.

 

D-3

 

I express no opinion as to the law of any jurisdiction
other than the law of the State of Maryland and the law of the United States of
America.  I undertake no responsibility
to update or supplement this opinion in response to changes in law or future
events or circumstances.  The opinion
expressed herein concerns only the effect of the law (excluding the principles
of conflicts of law) of the State of Maryland and the United States of America
as currently in effect.

 

This opinion has been rendered solely for your benefit
in connection with the Credit Agreement and the transactions contemplated thereby
and may not be used, circulated, quoted, relied upon or otherwise referred to
by any other person (other than your respective counsel, auditors and any
regulatory agency having jurisdiction over you or as otherwise required
pursuant to legal process or other requirements of law and assignees that
become Lenders pursuant to the terms of the Credit Agreement) for any other
purpose without my prior written consent.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Charles A. Berardesco

  
	
   

  	
  Senior Vice President
  and

  
	
   

  	
  General Counsel

  

 

D-4

 

EXHIBIT
E

Form of
Compliance Certificate

 

COMPLIANCE
CERTIFICATE

 

This Compliance Certificate is delivered to you
pursuant to Section 5.03(b) of the Credit Agreement, dated as of November 13,
2008 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”),
among CONSTELLATION ENERGY GROUP, INC.,
a Maryland corporation (the “Borrower”), the lenders listed in Schedule I thereto
(together with their successors and assigns, the “Lenders”), and THE ROYAL BANK OF SCOTLAND PLC, as
administrative agent for the Lenders (in such capacity, the  “Administrative Agent”).  Terms defined in the Credit Agreement and not
otherwise defined herein are used herein with the meanings so defined.

 

1.        I am the duly elected, qualified and acting [Chief Financial
Officer] [Treasurer] of the Borrower.

 

2.        I have reviewed and am familiar with the contents of this
Certificate.

 

3.        Attached hereto as Attachment 1 (the “Financial Statements”)
are the financial statements required to be delivered under Section 5.03(b) which
I certify as having been prepared in accordance with generally accepted
accounting principles consistently applied [except as set forth below] and
subject to changes resulting from year end adjustments.  As of the date of this Certificate I have no
knowledge of the existence, of any condition or event which constitutes an
Unmatured Default or an Event of Default that has occurred and is continuing[,
except as set forth below].

 

4.        Attached hereto as Attachment 2 are the computations
showing compliance with the covenant[s] set forth in Section[s] 5.04 [and 5.05]
of the Credit Agreement.

 

IN WITNESS WHEREOF, I execute this Certificate this               
day of                      ,
200   .

 

	
   

  	
  CONSTELLATION ENERGY
  GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

Attachment
1

to
Exhibit E

 

[Set forth
Financial Statements]

 

 

Attachment
2

to
Exhibit E

 

The information described herein is as of            ,
200   , and pertains to the period from              ,
200    to              ,
200   .

 

[Set forth
Covenant Calculation]

 

 

EXHIBIT F

Form of
Solvency Certificate

 

SOLVENCY CERTIFICATE

 

THIS SOLVENCY CERTIFICATE (this “Certificate”)
is delivered to you pursuant to Section 3.01(b)(v) of the Credit
Agreement, dated as of November 13, 2008 (the “Credit Agreement”),
among CONSTELLATION ENERGY GROUP, INC.,
a Maryland corporation (the “Borrower”), the lenders listed in Schedule I thereto
(together with their successors and assigns, the “Lenders”) and THE ROYAL BANK OF SCOTLAND PLC, as administrative agent for
the Lenders (in such capacity, the  “Administrative Agent”).  Terms defined in the Credit Agreement and not
otherwise defined herein are used herein with the meanings so defined.

 

The undersigned hereby
certifies, to the best of his knowledge and belief and in his representative
capacity on behalf of the Borrower, and not in any individual capacity, to the
Administrative Agent and each Lender that, as of November 13, 2008, the
Borrower is, and on and after the consummation of the transactions contemplated
by the Credit Agreement will be, Solvent.

 

	
   

  	
  CONSTELLATION ENERGY GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
    Jonathan W.
  Thayer

  
	
   

  	
   

  	
    Chief
  Financial Officer and Senior Vice President

  

 

F-1Exhibit 10.1

 

FIRST
AMENDMENT TO LOAN AND SECURITY AGREEMENT

 

FIRST AMENDMENT TO LOAN AND
SECURITY AGREEMENT dated as of November 19, 2008 (this “Amendment”),
among InfoLogix, Inc., a Delaware corporation (“Parent Borrower”),
InfoLogix Systems Corporation, a Delaware corporation (“ISC”), Embedded
Technologies, LLC, a Delaware limited liability company (“Embedded”),
Opt Acquisition LLC, a Pennsylvania limited liability company (“Opt”) and
InfoLogix–DDMS, Inc., a Delaware corporation (“DDMS”) (Parent
Borrower, ISC, Embedded, Opt and DDMS are each referred to herein as a “Borrower”
and collectively as the “Borrowers”) and Hercules Technology Growth Capital, Inc.,
a Maryland corporation (“Lender”). 
Reference is made to that certain Loan and Security Agreement dated as
of May 1, 2008 by and among the Borrowers and the Lender (as amended and
in effect from time to time, the “Loan Agreement”).  Capitalized terms used herein and which are
not otherwise defined herein have the same meanings herein as specified in the
Loan Agreement.

 

RECITALS

 

WHEREAS, the
Borrowers and the Lender desire to amend the Loan Agreement as provided herein;

 

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

 

AGREEMENTS

 

§1.                               Amendments
to Loan Agreement.  The Loan
Agreement is hereby amended in the following respects:

 

(a)                                  Section 1.1
of the Loan Agreement is hereby amended by deleting the definition of “Consolidated
Total Leverage Ratio” in its entirety.

 

(b)                                 Section 1.1
of the Loan Agreement is hereby amended by adding the following definitions in
the appropriate alphabetical order:

 

“Amendment Effective Date” means November 19, 2008.”

 

“Cash Equivalents” means those items and accounts described in clause (ii) of
the definition of Permitted Investments.

 

“Fundamental Event Agreement” has the meaning given to it in the
definition of “Revolving Interest Rate”.

 

(c)                                  All
references to “cash equivalents” in each of the definitions of Cash, Permitted
Indebtedness and Permitted Liens, shall be deleted and replaced with the
defined term “Cash Equivalents”.

 

 

(d)                                 The
definition of “Permitted Acquisition” in Section 1.1 of the Loan Agreement
is hereby amending by inserting “of clause (i) and (ii)” immediately
following “in each case” within the second parenthetical of the first paragraph
of such definition.

 

(e)                                  Section 1.1
of the Loan Agreement is hereby amended by amending and restating the following
definitions in their entirety as follows:

 

“Average Total Enterprise Value Differential” shall mean the amount, if
any, by which (i) the average of the Parent Borrower’s market capitalization
for the 30-day period preceding any payments described in Section 2.7(b) exceeds
(ii) $50,000,000.  In the event such
market capitalization does not exceed $50,000,000, then the Average Total
Enterprise Value Differential shall be deemed to be zero (0).

 

“Consolidated Adjusted EBITDA” means, at any date of determination, an
amount equal to consolidated net income of Parent Borrower and its Subsidiaries
on a consolidated basis for the most recently completed applicable Measurement
Period, plus (a) the following to the extent deducted in calculating
such consolidated net income:  (i) Consolidated
Interest Expenses paid or accrued in such applicable Measurement Period, (ii) the
provision for Federal, state, local and foreign income taxes payable, (iii) depreciation
and amortization expense, (iv) other non-recurring expenses reducing such
consolidated net income which do not represent a cash item in such period or
any future period, in each case of or by Parent Borrower and its Subsidiaries
for such applicable Measurement Period, (v) non-cash charges for stock
based compensation, (vi) non-recurring cash fees, costs, charges and
expenses paid during such period incurred in connection with a Permitted
Acquisition or the transactions contemplated by this Agreement, (vii) non-recurring
non-cash write-offs or write-downs of demo Equipment not to exceed $750,000 in
the aggregate (in each case of or by the Parent Borrower and its Subsidiaries
for such applicable Measurement Period), (viii) cash severance expenses in
such amounts as are consistent with Parent Borrower’s severance plan as
approved by Parent Borrower’s board of directors and otherwise mutually agreed
upon by Parent Borrower and Lender, in the Lender’s reasonable discretion, (ix) cash
expenses described on Schedule 1.1 hereto for the fiscal quarter ending December 31,
2008, (x) fees, legal fees and expenses incurred and paid in connection
with the preparation and negotiation of the Amendment, but only to the extent
not paid or financed from proceeds of the Loans, (xi) fees and expenses of
professional advisers relating to structuring, negotiating and documenting a
proposed Fundamental Event Agreement and the transactions contemplated thereby,
and minus (b) the following, to the extent included in calculating
such consolidated net income:  (i) Federal,
state, local and foreign income tax credits and (ii) all non-cash items
increasing consolidated net income (in each case of or by Parent Borrower and
its Subsidiaries for such applicable Measurement Period).  For purposes of this calculation and without
duplication, with respect to any period of determination, the consolidated
adjusted EBITDA of a wholly-owned acquired Subsidiary acquired as a result of a
Permitted Acquisition, which shall be calculated in a manner consistent with
the methodology set forth for Consolidated Adjusted EBITDA herein, may be
included in the calculation of Consolidated Adjusted EBITDA as though such
Permitted Acquisition was consummated on the first day of the applicable
Measurement Period (the “Acquired Entity EBITDA”).  The Acquired Entity EBITDA shall be
calculated by reference to the 

 

 

audited financial results of the acquired entity, if available for such
applicable Measurement Period, or if such audited financial results are not
available for such Measurement Period, any unaudited financial results or
management-prepared results as are approved by Lender in respect of such
acquired entity.  Further for the
purposes of this calculation and without duplication, with respect to any Measurement
Period during which the fee contemplated by Section 2.7(b) is paid to
Lender, in respect of such payment, the Consolidated Adjusted EBITDA for such
period(s) shall be reduced by the amount by which such payment exceeds the
aggregate of all accruals for non-cash items that reduced Consolidated Adjusted
EBITDA in prior Measurement Periods.

 

“Consolidated Total Leverage Ratio” means, as of the date of
determination, the ratio of (a) Consolidated Funded Indebtedness as of
such date to (b) Consolidated EBITDA on a consolidated basis for the most
recently completed Twelve Month Measurement Period.

 

“Maximum Revolving Loan Amount” means Nine Million and no/100 Dollars
($9,000,000.00).

 

“Maximum Term Loan Amount” means Twelve Million and No/100 Dollars
($12,000,000.00).

 

“Refinancing Event” means the closing of a loan with a lender other
than the Lender, the proceeds of which are applied to payoff the Secured
Obligations in full.

 

“Revolving Interest Rate” means

 

(a) for the period commencing on the Amendment
Effective Date to and including February 14, 2009, the greater of (i) eleven
and one-quarter percent (11.25%), and (ii) the prime rate as reported in
The Wall Street Journal plus 6.75%;

 

(b) for the period commencing on February 15,
2009 to and including May 15, 2009, the greater of (i) twelve and
one-quarter percent (12.25%), and (ii) the prime rate as reported in The
Wall Street Journal plus 7.75%, and

 

(c) for the period commencing on May 16,
2009 and at all times thereafter, the greater of (i) thirteen and
one-quarter percent (13.25%), and (ii) the prime rate as reported in The
Wall Street Journal plus 8.75%;

 

provided, however, that the
rate increases set forth in clauses (b) and (c) of this definition
will not be implemented in the event that Parent Borrower enters into a
binding, definitive agreement prior to February 15, 2009 for (i) the
sale, transfer or conveyance or other disposition of all or substantially all
of the assets of the Parent Borrower or its direct and indirect Subsidiaries, (ii) the
sale of all or substantially all of the Capital Stock of the Parent Borrower or
its direct or indirect Subsidiaries, (iii) a cash infusion in an amount of
at least $5,000,000, or (iv) the incurrence of Subordinated Indebtedness
in an amount of at least $5,000,000, each on terms and in form and substance
satisfactory to Lender in its discretion (a “Fundamental Event Agreement”); and
further provided, that the rate increase set forth in clause (c) of this
definition will not be implemented in the event that Parent Borrower enters
into a Fundamental Event Agreement during the period commencing February 15,
2009 and ending May 15, 2009.  If
any such Fundamental Event Agreement described herein is not consummated prior
to the earlier of (x) May 16, 2009, or (y) the occurrence of an
Event of Default, then such rate increases will be implemented retrospectively
(and in the case of an Event of Default of the type described 

 

 

in Section 9.6, such rate increases shall automatically be
implemented retrospectively) as if such Fundamental Event Agreement was never
executed, and shall be in effect thereafter.

 

“Secured Obligations” means each Borrower’s obligations under this
Agreement and any Loan Document, including any obligation, of any kind or
nature, to pay any amount now owing or later arising to the Lender (whether or
not such performance is then required or contingent, or such amounts are
liquidated or determinable), whether or not evidenced by any note, agreement or
other instrument.  This term includes all
principal, interest (including all interest that accrues after the commencement
of any case or proceeding by or against any Borrower, in bankruptcy, whether or
not allowed in such case or proceeding), fees, attorneys’ fees and any other
sum chargeable to any Borrower under this Agreement or any of the other Loan
Documents.

 

“Term Loan Interest Rate” means

 

(a) for the period commencing on the Amendment
Effective Date to and including February 14, 2009, the sum of (i) the
greater of thirteen and one-quarter percent (13.25%), and the prime rate as reported
in The Wall Street Journal plus 8.75%; plus (ii) 1.75% per annum, with
respect to this clause (ii), payable in kind on the first business day of each
month, commencing December 1, 2008, by capitalizing the amount of such
interest accrued prior to such monthly payment date, and adding such amount to
the principal amount of the Term Loan;

 

(b) for the period commencing on February 15,
2009 to and including May 15, 2009, the sum of (i) the greater of
fourteen and one-quarter percent (14.25%), and the prime rate as reported in
The Wall Street Journal plus 9.75%, plus (ii) 1.75% per annum, with
respect to this clause (ii), payable in kind on the first business day of each
month by capitalizing the amount of such interest accrued prior to such monthly
payment date, and adding such amount to the principal amount of the Term Loan;
and

 

(c) for the period commencing on May 16,
2009 and at all times thereafter, the sum of (i) greater of fifteen and
one-quarter percent (15.25%), and the prime rate as reported in The Wall Street
Journal plus 10.75%; plus (ii) 1.75% per annum, with respect to this
clause (ii), payable in kind on the first business day of each month by
capitalizing the amount of such interest accrued prior to such monthly payment
date, and adding such amount to the principal amount of the Term Loan;

 

provided, however, that the
rate increases set forth in clauses (b) and (c) of this definition
will not be implemented in the event that Parent Borrower enters into a
Fundamental Event Agreement prior to February 15, 2009; and further
provided, that the rate increase set forth in clause (c) of this
definition will not be implemented in the event that Parent Borrower enters
into a Fundamental Event Agreement during the period commencing February 15,
2009 and ending May 15, 2009.  If
any such Fundamental Event Agreement described herein is not consummated prior
to the earlier of (x) May 16, 2009, or (y) the occurrence of an
Event of Default, then such rate increases will be implemented retrospectively
(and in the case of an Event of Default of the type described in Section 9.6,
such rate increases shall automatically be implemented retrospectively) as if
such Fundamental Event Agreement was never executed, and shall be in effect
thereafter.

 

 

(f)                                    Section 2.1(b) of
the Loan Agreement is hereby amended and restated as follows:

 

“(b)                           Advance
Request.  To obtain a Revolving Loan
Advance, Parent Borrower, on its own behalf and on behalf of each Borrower,
shall complete, sign and deliver an Advance Request and Borrowing Base
Certificate (with such Borrowing Base Certificate reflecting any adjustments in
eligibility criteria requested by Lender whether or not any notice period in
respect of such adjustment shall have then elapsed), provided, however that if
Borrowers have submitted a Borrowing Base Certificate dated as of a date not
more than 3 Business Days prior to the submission of the Advance Request, then
the Parent Borrower shall not be required to submit a new Borrowing Base
Certificate in connection with such Advance Request unless adjustments are
required pursuant to the parenthetical in the foregoing clause.  Lender shall fund the Revolving Advance in
the manner requested by the Advance Request, provided
that each of the conditions precedent to such Revolving Advance is satisfied as
of the requested Advance Date.”

 

(g)                                 Section 2.2(a) of
the Loan Agreement is hereby amended and restated as follows:

 

“(b)                           Advances.  Subject to the terms and conditions of this
Agreement, Lender will make, and Borrowers agree to draw, on a joint and
several basis, a Term Loan Advance of $9,000,000.00 on the Closing Date.  Beginning on the Closing Date, and continuing
until January 1, 2009, Borrowers may request additional Term Loan Advances
in an aggregate amount up to $3,000,000.00 in minimum increments of
$100,000.00, provided, however, that the making of such additional Term Loan
Advance(s) shall be subject to Borrowers delivering a Compliance
Certificate demonstrating Borrowers’ pro forma compliance with the financial
covenants set forth in Section 7.20 after giving effect to the making of
such proposed additional Term Loan Advance. 
The aggregate outstanding Term Loan Advances may be up to the Maximum
Term Loan Amount.”

 

(h)                                 Section 2.6
of the Loan Agreement is hereby amended by adding the words “or acceleration”
immediately after the word “prepayment “ in the first line thereof.

 

(i)                                     Section 2.7(b) of
the Loan Agreement is hereby amended and restated as follows:

 

“Upon the earliest to occur of (i) demand from the Lender at any time
between June 30, 2009 and April 30, 2012, (ii) the acceleration
of the Secured Obligations, (iii) the Term Loan Maturity Date, and (iv) a
prepayment in full of Secured Obligations, Borrowers shall pay to Lender an
amount equal to the greater, as of such date of determination, of (x) $900,000,
and (y) an amount equal to three percent (3.0%) of the Average Total
Enterprise Value Differential of Parent Borrower.  Notwithstanding anything herein to the
contrary, with respect to any demand for such payment pursuant to clause (i) of
this Section 2.7(b), so long as no other Event of Default has occurred and
is continuing, the failure of Borrowers to pay the fee required by clause (i) of
this Section 2.7(b) upon demand thereunder, shall not be deemed an
Event of Default under this Agreement, if and only if, the payment of such fees
at the time of demand could reasonably be expected to result in the occurrence
of an event that, with the passage of time or giving of notice, or both, would
constitute an Event of Default under Section 7.20 (a “Liquidity Event”); provided,
however, that the Borrowers shall pay such fee immediately after the
passage of such Liquidity Event and that the foregoing grace period shall in no
way be deemed a 

 

 

waiver of the payment of such fee, and in any event such required
payments under this Section 2.7 shall continue to be deemed a component of
Secured Obligations hereunder.”

 

(j)                                     Section 7.1
of the Loan Agreement is hereby amended by deleting the heading and lead
sentence thereof and replacing it with the following:

 

“Financial Reports and Compliance Certificate. Borrowers shall
furnish to Lender the financial reports listed hereinafter (the “Financial
Statements”), with delivery of the Financial Statements described in
subsections (a), (b) and (c), in each case to be accompanied by the
Compliance Certificate in the form attached as Exhibit F:”

 

(k)                                  Section 7.19
of the Loan Agreement is hereby amended and restated as follows:

 

“7.19  Notice of Defaults.  The Borrowers shall notify Lender promptly
upon the occurrence of an Event of Default, or upon the occurrence of any event
that, with the passage of time or the giving of notice, or both, would
constitute an Event of Default.”

 

(l)                                     Section 7.20
of the Loan Agreement is hereby amended and restated as follows:

 

“7.20 Financial Covenants.

 

(a)                                  Consolidated
Adjusted EBITDA.

 

(i)                                     The
Borrowers shall not permit the Consolidated Adjusted EBITDA for any Three Month
Measurement Period ending during any fiscal month, commencing with the month
ending October 31, 2008 and ending with the month ending December 31,
2010, to be less than the amount set forth below opposite such Three Month
Measurement Period ending date:

 

	
  Measurement Period Ending

  	
   

  	
  Consolidated

  Adjusted EBITDA

  	
   

  
	
  October 31, 2008

  	
   

  	
  $

  	
  (600,000

  	
  )

  
	
  November 30, 2008

  	
   

  	
  $

  	
  100,000

  	
   

  
	
  December 31, 2008

  	
   

  	
  $

  	
  100,000

  	
   

  
	
  January 31, 2009

  	
   

  	
  $

  	
  100,000

  	
   

  
	
  February 28, 2009

  	
   

  	
  $

  	
  100,000

  	
   

  
	
  March 31, 2009

  	
   

  	
  $

  	
  100,000

  	
   

  
	
  April 30, 2009

  	
   

  	
  $

  	
  100,000

  	
   

  
	
  May 31, 2009

  	
   

  	
  $

  	
  250,000

  	
   

  
	
  June 30, 2009

  	
   

  	
  $

  	
  250,000

  	
   

  
	
  July 31, 2009

  	
   

  	
  $

  	
  250,000

  	
   

  
	
  August 31, 2009

  	
   

  	
  $

  	
  500,000

  	
   

  
	
  September 30, 2009

  	
   

  	
  $

  	
  1,000,000

  	
   

  
	
  October 31, 2009

  	
   

  	
  $

  	
  2,500,000

  	
   

  
	
  November 30, 2009

  	
   

  	
  $

  	
  2,500,000

  	
   

  
	
  For each Three Month Measurement Period ending
  during any fiscal month commencing with the month ending on December 31,
  2009 to and including the month ending April 30, 2012

  	
   

  	
  $

  	
  3,000,000

  	
   

  

 

 

(b)                                 Consolidated
Total Adjusted Leverage Ratio.

 

(i)                                     The
Borrowers shall not permit the Consolidated Total Adjusted Leverage Ratio for
any Twelve Month Measurement Period ending during any fiscal month commencing
with the month ending December 31, 2009, to be greater than the amount set
forth below opposite such Measurement Period ending date:

 

	
  Measurement Period Ending

  	
   

  	
  Consolidated Total

  Adjusted Leverage

  Ratio

  	
   

  
	
  December 31, 2009

  	
   

  	
  3.0 to 1

  	
   

  
	
  January 30, 2010

  	
   

  	
  3.0 to 1

  	
   

  
	
  February 28, 2010

  	
   

  	
  3.0 to 1

  	
   

  
	
  March 31, 2010

  	
   

  	
  2.75 to 1

  	
   

  
	
  April 30, 2010

  	
   

  	
  2.75 to 1

  	
   

  
	
  May 31, 2010

  	
   

  	
  2.75 to 1

  	
   

  
	
  June 30, 2010

  	
   

  	
  2.5 to 1

  	
   

  
	
  July 31, 2010

  	
   

  	
  2.5 to 1

  	
   

  
	
  August 31, 2010

  	
   

  	
  2.5 to 1

  	
   

  
	
  September 30, 2010

  	
   

  	
  2.25 to 1

  	
   

  
	
  October 31, 2010

  	
   

  	
  2.25 to 1

  	
   

  
	
  November 30, 2010

  	
   

  	
  2.25 to 1

  	
   

  
	
  For each Twelve Month Measurement Period ending on
  during any fiscal month commencing with the month ending December 31,
  2010, to and including the month ending April 30, 2012

  	
   

  	
  2.0 to 1

  	
   

  

 

(c)                                  Minimum
Cash On Hand.  The Borrowers shall
not permit at any time its unrestricted Cash on hand to be less than
$2,500,000.

 

(m)                               Section 7.22(a) is
hereby amended and restated in its entirety as follows:

 

“(a)  Intellectual Property.  On or before the thirtieth (30th) day after
the Amendment Effective Date, Borrowers shall take all actions reasonably
necessary to provide Lender with a first priority security interest in the
Intellectual Property, free and clear of all liens 

 

 

and defects, and Borrowers shall provide to Lender a lien report
obtained by Borrowers and Borrowers’ expense, of the Intellectual Property
registered at the United States Patent and Trademark Office, United States
Copyright Office and Library of Congress, as applicable, which lien report
shall reflect the Lender’s first priority security interest in such Collateral,
free and clear of all liens and defects.”

 

(n)                                 Section 7.22(d) of
the Loan Agreement is hereby amended and restated in its entirety as follows:

 

“(d)  Securities Account Control Agreements.  On or before the thirtieth (30th) day after
the Amendment Effective Date, Borrowers shall deliver to Lender Account Control
Agreements with respect to each account holding Investment Property, in form and
substance reasonably satisfactory to the Lender.”

 

(o)                                 Section 7.22
of the Loan Agreement is hereby amended by adding the following subsection (h) immediately
following subsection (g) therein:

 

“(h) Commercial Finance Examination.  On or before December 30, 2008, Lender
shall have performed a completed commercial finance exam, the results of which
shall be satisfactory to the Lender in its sole discretion.  The performance of such an examination shall
not be counted as the collateral audit permitted for this calendar year
pursuant to Section 7.3(b).

 

(p)                                 Section 9.2
of the Loan Agreement is hereby amended and restated in its entirety as
follows:

 

“9.2  Covenants.  Any Borrower breaches or defaults in the
performance of any covenant or Secured Obligation under this Agreement, the
Notes, or any of the other Loan Documents, and (a) with respect to a
default under any covenant under this Agreement (other than under Sections 6,
7.5, 7.6, 7.7, 7.8, 7.9, 7.20, 7.21 or 7.22) such default continues for more
than fifteen (15) days after the earlier of the date on which (i) Lender
has given notice of such default to Parent Borrower and (ii) Parent
Borrower has actual knowledge of such default or (b) with respect to a
default under any of Sections 6, 7.5, 7.6, 7.7, 7.8, 7.9, 7.20, 7.21 or 7.22,
the occurrence of such default; or”

 

(q)                                 Exhibit B-2
of the Loan Agreement is hereby amended and restated in its entirety in the
form attached hereto as Exhibit B-2.

 

§2.                               Ratification
of Loan Documents, Etc.  Each
Borrower hereby adopts again, ratifies and confirms in all respects, as its own
act and deed: (i) each of the Loan Agreement and the other Loan Documents
to which such Borrower is a party; (ii) the grant of a security interest
under the Loan Agreement and the other Loan Document in the Collateral,
together with any and all UCC financing statements, United States Patent and
Trademark Office recordings, United States Copyright Office recordings, and
other instruments or documents previously executed in connection therewith to
create, evidence, perfect or preserve the priority of such security interest in
favor of the Lender; (iii) each of the other instruments or documents
delivered in connection with the Loan Agreement or any of the Loan Documents
and purported to be executed by it and acknowledges that all of the foregoing
Loan Documents and other instruments, documents, filings and recordings shall
continue in full force and effect.  Each
pledgor under a Pledge 

 

 

Agreement hereby adopts
again, ratifies and confirms in all respects, as its own act and deed, each
pledge granted by such pledgor thereunder. 
By its signature below, each Borrower hereby consents to this Amendment,
and after taking into account this Amendment, acknowledges that this Amendment
shall not alter, release, discharge or otherwise affect any of its obligations
under any Loan Document under which such Borrower acts as a secondary obligor,
if any.

 

§3.                               Representations
and Warranties.  Each Borrower hereby represents and warrants
to the Lender as follows:

 

(a)                                  Each
of the representations and warranties of such Borrower contained in the Loan
Agreement as modified hereby or in any document or instrument delivered
pursuant to or in connection with the Loan Agreement as modified hereby are
true as of the date hereof and, after taking into account this Amendment, no
Event of Default has occurred and is continuing, and no event has occurred and
is continuing that, with the passage of time or giving of notice, or both,
would constitute an Event of Default; and

 

(b)                                 The
execution, delivery and performance of this Amendment and the transactions
contemplated hereby (i) are within the corporate or company authority of
each Borrower, as applicable, (ii) have been duly authorized by all
necessary corporate and company proceedings, as applicable, (iii) do not
conflict with or result in any material breach or contravention of any
provision of law, statute, rule or regulation to which any Borrower is
subject or any judgment, order, writ, injunction, license or permit applicable
to any Borrower so as to materially adversely affect the assets, business or
any activity of the Borrowers, and (iv) do not conflict with any provision
of the corporate charter, bylaws, certificate of organization or operating
agreement of any Borrower or any agreement or other instrument binding upon
them.  The execution, delivery and
performance of this Amendment will result in valid and legally binding
obligations of each Borrower enforceable against each in accordance with the
respective terms and provisions hereof.

 

§4.                               Conditions
to Effectiveness.  This Amendment
shall become effective upon the receipt by the Lender of each of the following:

 

(a)                                  executed
originals of this Amendment, the Revolving Note, as amended hereby, in the form
attached hereto as Exhibit B-2, and all other documents and instruments
reasonably required by Lender to effectuate the transactions contemplated
hereby, in all cases in form and substance reasonably acceptable to Lender;

 

(b)                                 payment
of an Amendment Fee in an amount equal to $315,000.00;

 

(c)                                  certified
copy of resolutions of each Borrower’s board of directors or members or
managers as applicable evidencing approval of the Amendment and other
transactions evidenced by the Loan Documents, as amended;

 

(d)                                 results
of UCC and, except as set forth in Section 7.22(i), intellectual property
searches and with respect to the Collateral indicating no Liens other than
Permitted Liens and otherwise in form and substance satisfactory to the Lender;

 

(e)                                  such
other documents as Lender may reasonably request.

 

 

§5.                               Effect
of Amendment.  Except as
expressly set forth herein, this Amendment does not constitute an amendment or
waiver of any term or condition of the Loan Agreement or any other Loan
Document, and all such terms and conditions shall remain in full force and
effect and are hereby ratified and confirmed in all respects.  Nothing contained in this Amendment shall be
construed to imply a willingness on the part of the Lender to grant any similar
or other future waivers or amendments of any of the terms and conditions of the
Loan Agreement or the other Loan Documents. 
Nothing contained herein shall in any way prejudice, impair or otherwise
adversely affect any rights or remedies of the Lender under the Loan Agreement,
as amended, or any other Loan Document. 
This Amendment shall constitute a Loan Document.

 

§6.                               Waiver
of Existing Event of Default.  Subject to the terms and conditions set forth
herein and in reliance upon the representations and warranties of the Borrowers
in the Loan Agreement and in this Amendment, the Lender hereby waive the Event
of Default resulting from Borrowers’ violation of the financial covenant
contained in Section 7.20(a)(i) of the Loan Agreement for the Twelve
Month Measurement Period ending September 30, 2008 (the “Specified Event
of Default”).  The waiver shall not
extend to or affect any other obligations of the Borrowers contained in the
Loan Agreement or any other Loan Documents and shall not impair or prejudice
any rights consequent thereon.  Except to
the extent of the aforementioned waiver, the Lender hereby expressly reserves
all of its rights and remedies under the Loan Agreement, as amended hereby, the
other related Loan Documents and applicable law in respect of any and all
Events of Default, or events that, with the passage of time or giving of
notice, or both, would constitute Events of Default, under the Loan Agreement
and the related Loan Documents now existing or hereafter arising.  Failure of the Lender to exercise any right
or remedy shall not constitute a waiver of that or any other right or remedy.

 

§7.                               Governing
Law.  This Amendment shall be
governed by and construed in accordance with the laws of the State of
California.

 

§8.                               Counterparts.  This Amendment may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.  Delivery of an executed counterpart of a
signature page of this Amendment by telecopy shall be effective as delivery
of a manually executed counterpart of this Amendment.

 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

 

 

IN WITNESS WHEREOF, Borrowers and Lender have duly executed and
delivered this First Amendment to Loan and Security Agreement as of the day and
year first above written.

 

	
   

  	
  BORROWERS:

  
	
   

  	
   

  	
   

  
	
   

  	
  INFOLOGIX, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ John A
  Roberts

  
	
   

  	
   

  	
  John A. Roberts, Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INFOLOGIX
  SYSTEMS CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John A
  Roberts

  
	
   

  	
   

  	
  John A. Roberts,
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  OPT ACQUISITION
  LLC

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John A
  Roberts

  
	
   

  	
  John A. Roberts, Chief
  Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EMBEDDED
  TECHNOLOGIES, LLC

  
	
   

  	
  By: INFO LOGIX
  INC., its sole Member

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John A
  Roberts

  
	
   

  	
   

  	
  John A. Roberts,
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  INFOLOGIX –
  DDMS, INC.

  
	
   

  	
  By:

  	
  /s/ John A
  Roberts

  
	
   

  	
   

  	
  John A. Roberts,
  Chief Financial Officer

  

 

 

	
   

  	
  Accepted in Palo Alto, California:

  
	
   

  	
  LENDER:

  
	
   

  	
   

  	
   

  
	
   

  	
  HERCULES TECHNOLOGY
  GROWTH

  CAPITAL, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature:

  	
  /s/ K. Nicholas
  Martitsch

  
	
   

  	
   

  	
   

  
	
   

  	
  Print Name:

  	
  K. Nicholas Martitsch

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Associate General
  Counsel

  
				

 

 

EXHIBIT
B-2

 

SECURED
REVOLVING PROMISSORY NOTE

 

	
  $9,000,000

  	
   

  	
  Maturity Date:
  November 19, 2009

  

 

FOR VALUE RECEIVED, each of InfoLogix, Inc., a Delaware
corporation, InfoLogix System Corporation, a Delaware Corporation, Embedded
Technologies, LLC a Delaware Limited Liability Company, Opt Acquisition LLC a
Pennsylvania Limited Liability Company, and InfoLogix-DDMS, Inc, a Delaware
Corporation, jointly and severally (each a “Borrower” and collectively, the “Borrowers”)
hereby promises to pay to the order of Hercules Technology Growth Capital, Inc.,
a Maryland corporation or the holder of this Note (the “Lender”) at 400
Hamilton Avenue, Suite 310, Palo Alto, CA 94301 or such other place of
payment as the holder of this Secured Revolving Promissory Note (this “Promissory
Note”) may specify from time to time in writing, in lawful money of the United
States of America, the principal amount of Nine Million and No/100 Dollars
($9,000,000) or such other principal amount as Lender has advanced to
Borrowers, together with interest thereon, all as provided in the Loan
Agreement referred to below.

 

This Promissory Note is a Revolving Note referred to in, and is
executed and delivered in connection with, that certain Loan and Security
Agreement, by and among Borrowers and Lender, dated May 1, 2008, as
amended by First Amendment to Loan and Security Agreement dated November 19,
2008 (as the same may from time to time be amended, modified or supplemented in
accordance with its terms, the “Loan Agreement”), and is entitled to the
benefit and security of the Loan Agreement and the other Loan Documents (as
defined in the Loan Agreement), to which reference is made for a statement of
all of the terms and conditions thereof. 
All payments shall be made in accordance with the Loan Agreement.  All terms defined in the Loan Agreement shall
have the same definitions when used herein, unless otherwise defined
herein.  An Event of Default under the
Loan Agreement shall constitute a default under this Promissory Note.

 

Each Borrower waives presentment and demand for payment, notice of
dishonor, protest and notice of protest under the UCC or any applicable
law.  Each Borrower agrees to make all
payments under this Promissory Note without setoff, recoupment or deduction and
regardless of any counterclaim or defense. 
This Promissory Note has been negotiated and delivered to Lender and is
payable in the State of California.  This
Promissory Note shall be governed by and construed and enforced in accordance
with, the laws of the State of California, excluding any conflicts of law rules or
principles that would cause the application of the laws of any other
jurisdiction.

 

	
   

  	
  INFOLOGIX, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John A
  Roberts

  
	
   

  	
   

  	
  John A. Roberts, Chief Financial Officer

  

 

 

	
   

  	
  INFOLOGIX
  SYSTEMS CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John A
  Roberts

  
	
   

  	
   

  	
  John A. Roberts, Chief Financial Officer

  
	
   

  	
  OPT ACQUISITION
  LLC

   

   

  
	
   

  	
  By:

  	
  /s/ John A
  Roberts

  
	
   

  	
  John A. Roberts, Chief
  Financial Officer

  

 

 

	
   

  	
  EMBEDDED
  TECHNOLOGIES, LLC

  
	
   

  	
  By: INFO LOGIX
  INC., its sole Member

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ John A
  Roberts

  
	
   

  	
   

  	
  John A. Roberts, Chief Financial Officer

  
	
   

  	
  INFOLOGIX –
  DDMS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John A
  Roberts

  
	
   

  	
   

  	
  John A. Roberts,
  Chief Financial Officer

  

 

2

 

Schedule 1.1

 

Expenses Added
Back to Definition of Consolidated Adjusted EBITDA

 

Discontinued S-1
(secondary offering) in an aggregate amount not to exceed $200,000 Pre-paid
fees associated with acquisitions in an aggregate amount not to exceed $170,578
Severance expenses incurred prior to the Amendment Effective Date in the approximate
aggregate amount of $60,000.

 

3

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