Document:

Unassociated Document

     

    Exhibit
      10.1

     

    
      EXECUTION
        COPY

       

       

      RATE
        STABILIZATION PROPERTY PURCHASE AND SALE AGREEMENT

       

      by
        and between

       

      RSB
        BONDCO LLC,

       

      Issuer

       

      and

       

      BALTIMORE
        GAS AND ELECTRIC COMPANY,

       

      Seller

       

       

      Dated
        as of June 29, 2007

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      TABLE
        OF CONTENTS

       

      Page

       

      
        	
                ARTICLE
                  I

              	 
	
                DEFINITIONS

              	 
	 	 	 
	
                SECTION
                  1.01.

              	
                Definitions

              	
                1

              
	
                SECTION
                  1.02.

              	
                Other
                  Definitional Provisions.

              	
                1

              
	 	 	 
	
                ARTICLE
                  II

              	 
	
                CONVEYANCE
                  OF RATE STABILIZATION PROPERTY

              	 
	 	 	 
	
                SECTION
                  2.01.

              	
                Conveyance
                  of Initial Rate Stabilization Property

              	
                2

              
	
                SECTION
                  2.02.

              	
                Conveyance
                  of Subsequent Rate Stabilization Property

              	
                2

              
	
                SECTION
                  2.03.

              	
                Conditions
                  to Conveyance of Rate Stabilization Property

              	
                3

              
	 	 	 
	
                ARTICLE
                  III

              	 
	
                REPRESENTATIONS
                  AND WARRANTIES OF SELLER

              	 
	 	 	 
	
                SECTION
                  3.01.

              	
                Organization
                  and Good Standing

              	
                4

              
	
                SECTION
                  3.02.

              	
                Due
                  Qualification

              	
                5

              
	
                SECTION
                  3.03.

              	
                Power
                  and Authority

              	
                5

              
	
                SECTION
                  3.04.

              	
                Binding
                  Obligation

              	
                5

              
	
                SECTION
                  3.05.

              	
                No
                  Violation

              	
                5

              
	
                SECTION
                  3.06.

              	
                No
                  Proceedings

              	
                5

              
	
                SECTION
                  3.07.

              	
                Approvals

              	
                6

              
	
                SECTION
                  3.08.

              	
                The
                  Rate Stabilization Property.

              	
                6

              
	
                SECTION
                  3.09.

              	
                Limitations
                  on Representations and Warranties

              	
                10

              
	 	 	 
	
                ARTICLE
                  IV

              	 
	
                COVENANTS
                  OF THE SELLER

              	 
	 	 	 
	
                SECTION
                  4.01.

              	
                Existence

              	
                10

              
	
                SECTION
                  4.02.

              	
                No
                  Liens

              	
                10

              
	
                SECTION
                  4.03.

              	
                Delivery
                  of Collections

              	
                10

              
	
                SECTION
                  4.04.

              	
                Notice
                  of Liens

              	
                11

              
	
                SECTION
                  4.05.

              	
                Compliance
                  with Law

              	
                11

              
	
                SECTION
                  4.06.

              	
                Covenants
                  Related to Rate Stabilization Bonds and Rate Stabilization
                  Property.

              	
                11

              
	
                SECTION
                  4.07.

              	
                Protection
                  of Title

              	
                12

              
	
                SECTION
                  4.08.

              	
                Nonpetition
                  Covenants

              	
                13

              
	
                SECTION
                  4.09.

              	
                Taxes

              	
                13

              
	
                SECTION
                  4.10.

              	
                Issuance
                  Advice Letter

              	
                13

              
	
                SECTION
                  4.11.

              	
                Tariff

              	
                13

              

      

       

      
        
          
          

        

        
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                SECTION
                  4.12.

              	
                Notice
                  of Breach to Rating Agencies, Etc

              	
                14

              
	
                SECTION
                  4.13.

              	
                Use
                  of Proceeds

              	
                14

              
	
                SECTION
                  4.14.

              	
                Further
                  Assurances

              	
                14

              
	 	 	 
	
                ARTICLE
                  V

              	 
	
                THE
                  SELLER

              	 
	 	 	 
	
                SECTION
                  5.01.

              	
                Liability
                  of Seller; Indemnities.

              	
                14

              
	
                SECTION
                  5.02.

              	
                Merger,
                  Conversion or Consolidation of, or Assumption of the Obligations
                  of,
                  Seller

              	
                16

              
	
                SECTION
                  5.03.

              	
                Limitation
                  on Liability of Seller and Others

              	
                17

              
	 	 	 
	
                ARTICLE
                  VI

              	 
	
                MISCELLANEOUS
                  PROVISIONS

              	 
	 	 	 
	
                SECTION
                  6.01.

              	
                Amendment

              	
                17

              
	
                SECTION
                  6.02.

              	
                Reserved

              	
                17

              
	
                SECTION
                  6.03.

              	
                Notices

              	
                17

              
	
                SECTION
                  6.04.

              	
                Assignment

              	
                18

              
	
                SECTION
                  6.05.

              	
                Limitations
                  on Rights of Third Parties

              	
                18

              
	
                SECTION
                  6.06.

              	
                Severability

              	
                18

              
	
                SECTION
                  6.07.

              	
                Separate
                  Counterparts

              	
                19

              
	
                SECTION
                  6.08.

              	
                Headings

              	
                19

              
	
                SECTION
                  6.09.

              	
                Governing
                  Law

              	
                19

              
	
                SECTION
                  6.10.

              	
                Assignment
                  to Indenture Trustee

              	
                19

              
	
                SECTION
                  6.11.

              	
                Limitation
                  of Liability

              	
                19

              
	
                SECTION
                  6.12.

              	
                Waivers

              	
                19

              

      

      

      

      EXHIBITS

       

      
        	
                Exhibit
                  A

              	
                Form
                  of Bill of Sale

              

      

      

      
        
          
          

        

        
          ii

          
            

          

        

        
          
          

        

      

       

      This
        RATE
        STABILIZATION PROPERTY PURCHASE AND SALE AGREEMENT (this “Agreement”),
        dated as of June 29, 2007, is between RSB BONDCO LLC, a Delaware limited
        liability company (the “Issuer”), and BALTIMORE GAS AND ELECTRIC COMPANY,
        a Maryland corporation (together with its successors in interest to the extent
        permitted hereunder, the “Seller”).

       

      RECITALS

       

      WHEREAS,
        the Issuer desires to purchase from time to time the Rate Stabilization Property
        created pursuant to the Rate Stabilization Law;

       

      WHEREAS,
        the Seller is willing to sell from time to time the Rate Stabilization Property
        to the Issuer;

       

      WHEREAS,
        the Issuer, in order to finance the purchase of the Transferred Rate
        Stabilization Property, will from time to time issue one or more Series of
        Rate
        Stabilization Bonds under the Indenture; and

       

      WHEREAS,
        the Issuer, to secure its obligations under the Rate Stabilization Bonds
        of each
        Series and the Indenture, will pledge, among other things, all right, title
        and
        interest of the Issuer in and to the Transferred Rate Stabilization Property
        and
        this Agreement to the Indenture Trustee for the benefit of the Secured
        Parties.

       

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

       

      ARTICLE
        I

      DEFINITIONS

       

      SECTION
        1.01.    Definitions.  Unless
        otherwise defined herein, capitalized terms used herein shall have the meanings
        assigned to them in that certain Indenture (including Appendix A thereto)
        dated as of the date hereof between the Issuer and Deutsche Bank Trust Company
        Americas, a New York banking corporation, in its capacity as indenture trustee
        (the “Indenture Trustee”) and in its separate capacity as a securities
        intermediary (the “Securities Intermediary”), as the same may be amended,
        restated, supplemented or otherwise modified from time to time.

       

      SECTION
        1.02.    Other Definitional
        Provisions.

       

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

       

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

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

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

       

      ARTICLE
        II

      CONVEYANCE
        OF RATE STABILIZATION PROPERTY

       

      SECTION
        2.01.    Conveyance of
        Initial Rate Stabilization Property.  (a)  In consideration
        of the Issuer’s delivery to or upon the order of the Seller of $618,783,994.00,
        subject to the conditions specified in Section 2.03, the Seller does
        hereby irrevocably sell, transfer, assign, set over and otherwise convey
        to the
        Issuer, without recourse or warranty, except as set forth herein, all right,
        title and interest of the Seller in and to the Initial Rate Stabilization
        Property (such sale, transfer, assignment, setting over and conveyance of
        the
        Initial Rate Stabilization Property includes, to the fullest extent permitted
        by
        the Rate Stabilization Law, the right to impose, collect and receive Qualified
        Rate Stabilization Charges and the assignment of all revenues, collections,
        claims, rights, payments, money or proceeds of or arising from the Qualified
        Rate Stabilization Charges related to the Initial Rate Stabilization Property,
        as the same may be adjusted from time to time).  Such sale, transfer,
        assignment, setting over and conveyance is hereby expressly stated to be
        a sale
        and, pursuant to Section 7-539 of the Rate Stabilization Law, shall be treated
        as an absolute transfer of all of the Seller’s right, title and interest in and
        to (as in a true sale), and not as a pledge or other financing of, the Initial
        Rate Stabilization Property. The Seller and the Issuer agree that after giving
        effect to the sale, transfer, assignment, setting over and conveyance
        contemplated hereby the Seller has no right, title or interest in or to the
        Initial Rate Stabilization Property to which a security interest could attach
        because (i) it has sold, transferred, assigned, set over and conveyed all
        right,
        title and interest in and to the Initial Rate Stabilization Property to the
        Issuer, and (ii) as provided in Section 7-542 of the Rate Stabilization Law,
        appropriate notice has been filed and such transfer is perfected against
        all
        third parties, including subsequent judicial or other lien
        creditors.  If such sale, transfer, assignment, setting over and
        conveyance is held by any court of competent jurisdiction not to be a true
        sale
        as provided in Section 7-539 of the Rate Stabilization Law, then such sale,
        transfer, assignment, setting over and conveyance shall be treated as a pledge
        of such Initial Rate Stabilization Property and as the creation of a security
        interest (within the meaning of the Rate Stabilization Law and the UCC) in
        the
        Initial Rate Stabilization Property and, without prejudice to its position
        that
        it has absolutely transferred all of its rights in the Initial Rate
        Stabilization Property to the Issuer, the Seller hereby grants a security
        interest in the Initial Rate Stabilization Property to the Issuer (and, to
        the
        extent necessary to qualify the grant as a security interest under the Rate
        Stabilization Law and the UCC, to the Indenture Trustee for the benefit of
        the
        Secured Parties to secure the right of the Issuer under the Basic Documents
        to
        receive the Qualified Rate Stabilization Charges and all other Initial Rate
        Stabilization Property).

       

      (b)           Subject
        to Section 2.03, the Issuer does hereby purchase the Initial Rate
        Stabilization Property from the Seller for the consideration set forth in
        Section 2.01(a).

       

      SECTION
        2.02.    Conveyance of
        Subsequent Rate Stabilization Property.  The Seller may from time
        to time offer to sell, transfer, assign, set over and convey Subsequent Rate
        Stabilization Property to the Issuer, subject to the conditions specified
        in
Section 2.03.  If any such offer is accepted by the Issuer,
        such Subsequent Rate Stabilization Property shall be, subject to the
        satisfaction or waiver of the conditions specified in Section 2.03, sold,
        transferred,

       

      
        
          
          

        

        
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      assigned,
        set over and conveyed to the Issuer effective on the Subsequent Transfer
        Date
        specified in the related Addition Notice.  The terms of the Bill of
        Sale with respect to such Subsequent Rate Stabilization Property shall be
        binding as if set forth herein.

       

      SECTION
        2.03.    Conditions to
        Conveyance of Rate Stabilization Property.  The obligation of the
        Issuer to purchase Rate Stabilization Property on any Transfer Date shall
        be
        subject to the satisfaction or waiver by the Issuer of each of the following
        conditions:

       

      (i)           on
        or prior to such Transfer Date, the Seller shall have delivered to the Issuer
        a
        duly executed Bill of Sale identifying the Rate Stabilization Property to
        be
        conveyed on that Transfer Date;

       

      (ii)           on
        or prior to such Transfer Date, the Seller shall have received a Qualified
        Rate
        Order creating the Transferred Rate Stabilization Property;

       

      (iii)           as
        of such Transfer Date, the Seller is not insolvent and will not have been
        made
        insolvent by such sale and the Seller is not aware of any pending insolvency
        with respect to itself;

       

      (iv)           as
        of such Transfer Date, the representations and warranties of the Seller set
        forth in this Agreement shall be true and correct with the same force and
        effect
        as if made on such Transfer Date (except to the extent that they relate to
        an
        earlier date); on and as of such Transfer Date, no breach of any covenant
        or
        agreement of the Seller contained in this Agreement has occurred and is
        continuing; and no Servicer Default shall have occurred and be
        continuing;

       

      (v)           as
        of such Transfer Date, (A) the Issuer shall have sufficient funds available
        to
        pay the purchase price for the Transferred Rate Stabilization Property to
        be
        conveyed on such date and (B) all conditions to the issuance of one or more
        Series of Rate Stabilization Bonds intended to provide such funds set forth
        in
        the Indenture shall have been satisfied or waived;

       

      (vi)           on
        or prior to such Transfer Date, the Seller shall have taken all action required
        to transfer to the Issuer ownership of the Rate Stabilization Property to
        be
        conveyed on such date, free and clear of all Liens other than Liens created
        by
        the Issuer pursuant to the Basic Documents and to perfect such transfer,
        including, without limitation, filing any statements or filings under the Rate
        Stabilization Law or the UCC; and the Issuer or the Servicer, on behalf of
        the
        Issuer, shall have taken any action required for the Issuer to grant the
        Indenture Trustee a first priority perfected security interest in the Rate
        Stabilization Bond Collateral and maintain such security interest as of such
        date;

       

      (vii)           in
        the case of a sale of Subsequent Rate Stabilization Property only, on or
        prior
        to the Subsequent Transfer Date, the Seller shall have provided the Issuer
        and
        the Rating Agencies with a timely Addition Notice;

       

      (viii)    the
        Seller
        shall have delivered to the Rating Agencies and the Issuer any Opinions of
        Counsel required by the Rating Agencies;

       

      
        
          
          

        

        
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      (ix)           the
        Seller shall have received and delivered to the Issuer and the Indenture
        Trustee:  (i) an opinion of outside tax counsel (as selected by the
        Seller, and in form and substance reasonably satisfactory to the Issuer and
        the
        Indenture Trustee) to the effect that the Issuer will not be subject to United
        States federal income tax as an entity separate from its sole owner and that
        the
        Rate Stabilization Bonds will be treated as debt of the Issuer's sole owner
        for
        United States federal income tax purposes, (ii) an opinion of outside tax
        counsel (as selected by the Seller, and in form and substance reasonably
        satisfactory to the Issuer and the Indenture Trustee) or, if the Seller so
        chooses, a ruling from the Internal Revenue Service (unless the Internal
        Revenue
        Service has announced that it will not rule on the issues described in this
        paragraph), in either case to the effect that, for United States federal
        income
        tax purposes, the issuance of the Rate Stabilization Bonds will not result
        in
        gross income to the Seller and (iii) in the case of a subsequent issuance
        of
        Rate Stabilization Bonds only, an opinion of outside tax counsel (as selected
        by
        the Seller, and in form and substance reasonably satisfactory to the Issuer
        and
        the Indenture Trustee) to the effect that such issuance will not adversely
        affect the characterization of any then outstanding Rate Stabilization Bonds
        as
        obligations of the Issuer's sole owner.  The opinion of outside tax
        counsel described above may, if the Seller so chooses, be conditioned on
        the
        receipt by the Seller of one or more letter rulings from the Internal Revenue
        Service (unless the Internal Revenue Service has announced that it will not
        rule
        on the issues described in this paragraph) and in rendering such opinion
        outside
        tax counsel shall be entitled to rely on the rulings contained in such letter
        rulings and to rely on the representations made, and information supplied,
        to
        the Internal Revenue Service in connection with such letter
        rulings;

       

      (x)           on
        and as of such Transfer Date, each of the LLC Agreement, the Servicing
        Agreement, the Administration Agreement, this Agreement, the Indenture, any
        issued Qualified Rate Order, any issued Tariff and the Rate Stabilization
        Law
        shall be in full force and effect;

       

      (xi)           the
        Rating Agency Condition shall have been satisfied with respect to any
        outstanding Rate Stabilization Bonds; and

       

      (xii)           the
        Seller shall have delivered to the Indenture Trustee and the Issuer an Officers’
Certificate confirming the satisfaction of each condition precedent specified
        in
        this Section 2.03.

       

      ARTICLE
        III

      REPRESENTATIONS
        AND WARRANTIES OF SELLER

       

      Subject
        to Section 3.10, the Seller makes the following representations and
        warranties, as of each Transfer Date, and the Seller acknowledges that the
        Issuer has relied thereon in acquiring the Transferred Rate Stabilization
        Property.  The Seller agrees that (i) the Issuer may assign the right
        to enforce the following representations and warranties to the Indenture
        Trustee
        and (ii) the representations and warranties inure to the benefit of the Issuer
        and the Indenture Trustee.

       

      SECTION
        3.01.    Organization and
        Good Standing.  The Seller is duly organized and validly existing
        and is in good standing under the laws of the state of its organization,
        with
        the requisite corporate or other power and authority to own its properties
        as
        such properties are currently owned and to conduct its business as such business
        is now conducted by it, and has the

       

      
        
          
          

        

        
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      requisite
        corporate or other power and authority to obtain Qualified Rate Orders and
        own,
        sell, assign and transfer the rights and interests under such Qualified Rate
        Orders to the Issuer whereupon (subject to the effectiveness of the related
        Issuance Advice Letter) such rights and interests will become Rate Stabilization
        Property.

       

      SECTION
        3.02.    Due
        Qualification.  The Seller is duly qualified to do business and is
        in good standing, and has obtained all necessary licenses and approvals,
        in all
        jurisdictions in which the ownership or lease of property or the conduct
        of its
        business shall require such qualifications, licenses or approvals (except
        where
        the failure to so qualify or obtain such licenses and approvals would not
        be
        reasonably likely to have a material adverse effect on the Seller’s business,
        operations, assets, revenues or properties).

       

      SECTION
        3.03.    Power and
        Authority.  The Seller has the requisite corporate or other power
        and authority to execute and deliver this Agreement and to carry out its
        terms;
        and the execution, delivery and performance of this Agreement have been duly
        authorized by all necessary action on the part of the Seller under its
        organizational or governing documents and laws.

       

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

       

      SECTION
        3.05.    No
        Violation.  The consummation of the transactions contemplated by
        this Agreement and the fulfillment of the terms hereof do not and will not:
        (i)
        conflict with or result in any breach of any of the terms and provisions
        of, nor
        constitute (with or without notice or lapse of time) a default under, the
        Seller’s organizational documents, or any indenture or other agreement or
        instrument to which the Seller is a party or by which it or any of its
        properties is bound; (ii) result in the creation or imposition of any Lien
        upon
        any of the Seller’s properties pursuant to the terms of any such indenture,
        agreement or other instrument (other than any Lien that may be granted in
        the
        Issuer’s favor or any Lien created by the Issuer pursuant to Section 7-542 of
        the Rate Stabilization Law); or (iii) violate any existing law or any existing
        order, rule or regulation applicable to the Seller of any Governmental Authority
        having jurisdiction over the Seller or its properties.

       

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

       

      
        
          
          

        

        
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      its
        obligations under, or the validity or enforceability of, the Rate Stabilization
        Law, any Qualified Rate Order, this Agreement, any of the other Basic Documents
        or the Rate Stabilization Bonds of any Series or (iv) seeking to adversely
        affect the federal income tax or state income or franchise tax classification
        of
        the Rate Stabilization Bonds of any Series as debt.  No petition for a
        referendum seeking to prevent the Rate Stabilization Law from becoming effective
        or seeking to repeal the Rate Stabilization Law has been filed.

       

      SECTION
        3.07.    Approvals.  Except
        for UCC financing statement filings and other filings under the UCC and the
        Rate
        Stabilization Law, including filings with the Maryland State Department of
        Assessments and Taxation, no approval, authorization, consent, order or other
        action of, or filing with, any Governmental Authority is required in connection
        with the execution and delivery by the Seller of this Agreement, the performance
        by the Seller of the transactions contemplated hereby or the fulfillment
        by the
        Seller of the terms hereof, except those that have been obtained or made
        and
        those that the Seller, in its capacity as Servicer under the Servicing
        Agreement, is required to make in the future pursuant to the Servicing
        Agreement.

       

      SECTION
        3.08.    The Transferred
        Rate Stabilization Property.

       

      (a)           Information.  Subject
        to subsection (f) below, at each Transfer Date, all written information,
        as amended or supplemented from time to time, provided by the Seller to the
        Issuer with respect to the Transferred Rate Stabilization Property (including
        the Expected Amortization Schedule, the Qualified Rate Order and the final
        Issuance Advice Letter relating thereto) is true and correct in all material
        respects.

       

      (b)           Title.  It
        is the intention of the parties hereto that (other than for federal income
        tax
        purposes and, to the extent consistent with applicable state tax law, state
        income and franchise tax purposes) the transfers and assignments herein
        contemplated each constitute a sale and absolute transfer of the Transferred
        Rate Stabilization Property from the Seller to the Issuer and that no interest
        in, or right or title to, the Transferred Rate Stabilization Property shall
        be
        part of the Seller’s estate in the event of the filing of a bankruptcy petition
        by or against the Seller under any bankruptcy law.  No portion of the
        Transferred Rate Stabilization Property has been sold, transferred, assigned
        or
        pledged or otherwise conveyed by the Seller to any Person other than the
        Issuer,
        and no security agreement, financing statement or equivalent security or
        lien
        instrument listing the Seller as debtor covering all or any part of the
        Transferred Rate Stabilization Property is on file or of record in any
        jurisdiction, except such as may have been filed, recorded or made in favor
        of
        the Issuer or the Secured Parties in connection with the Basic
        Documents.  The Seller has not authorized the filing of and is not
        aware (after due inquiry) of any financing statement against it  that
        includes a description of collateral including the Transferred Rate
        Stabilization Property other than any financing statement filed, recorded
        or
        made in favor of the Issuer or the Secured Parties in connection with the
        Basic
        Documents.  The Seller is not aware (after due inquiry) of any
        judgment or tax lien filings against either the Seller or the
        Issuer.  At each applicable Transfer Date, immediately prior to the
        sale of such Transferred Rate Stabilization Property hereunder, the Seller
        is
        the original and the sole owner of such Transferred Rate Stabilization Property
        free and clear of all Liens and rights of any other Person, and no offsets,
        defenses or counterclaims exist or have been asserted with respect
        thereto.

       

      
        
          
          

        

        
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      (c)           Transfer
        Filings.  On such Transfer Date, immediately upon the sale
        hereunder, the Transferred Rate Stabilization Property shall be validly
        transferred and sold to the Issuer, the Issuer shall own all such Transferred
        Rate Stabilization Property free and clear of all Liens (except for any Lien
        created in favor of the Secured Parties pursuant to Section 7-542 of the
        Rate
        Stabilization Law or any Lien that may be granted under the Basic Documents)
        and
        all filings and action to be made or taken by the Seller (including, without
        limitation, filings with the Maryland State Department of Assessments and
        Taxation under the Rate Stabilization Law) necessary in any jurisdiction
        to give
        the Issuer a perfected ownership interest (subject to any Lien created in
        favor
        of the Secured Parties pursuant to Section 7-542 of the Rate Stabilization
        Law
        and any Lien that may be granted under the Basic Documents) in the Transferred
        Rate Stabilization Property have been made or taken.  No further
        action is required to maintain such ownership interest (subject to any Lien
        created in favor of the Secured Parties pursuant to Section 7-542 of the
        Rate
        Stabilization Law and any Lien that may be granted under the Basic Documents)
        and to give the Indenture Trustee a first priority perfected security interest
        in the Transferred Rate Stabilization Property.  All filings and
        action have also been made or taken to perfect the security interest in the
        Transferred Rate Stabilization Property granted by the Seller to the Issuer
        (subject to any Lien created in favor of the Secured Parties pursuant to
        Section
        7-542 of the Rate Stabilization Law and any Lien that may be granted under
        the
        Basic Documents) and, to the extent necessary, the Indenture Trustee pursuant
        to
Section 2.01, in the case of the Initial Rate Stabilization Property, or
Section 2.02, in the case of Subsequent Rate Stabilization
        Property.

       

      (d)           Qualified
        Rate Order, Issuance Advice Letter and Tariff; Other
        Approvals.  On each Transfer Date, under the laws of the State of
        Maryland (including the Rate Stabilization Act) and the United States in
        effect
        on such Transfer Date, (i) the Rate Stabilization Law is in full force and
        effect; (ii) the Qualified Rate Order pursuant to which the rights and interests
        of the Seller, including the right to impose, collect and receive the Qualified
        Rate Stabilization Charges and, in and to the Rate Stabilization Property
        transferred on such date, have been created, is Final and non-appealable
        and is
        in full force and effect; (iii) as of the issuance of the Rate Stabilization
        Bonds, the Rate Stabilization Bonds are entitled to the protection provided
        in
        the Rate Stabilization Law and, accordingly, the Qualified Rate Order, the
        Qualified Rate Stabilization Charges and the Issuance Advice Letter are not
        revocable by the PSC; (iv) as of the issuance of the Rate Stabilization Bonds,
        the Tariff is in full force and effect and is not subject to modification
        by the
        PSC except as provided under Sections 7-531, 7-533 and 7-534 of the Rate
        Stabilization Law; (v) the process by which the Qualified Rate Order creating
        the Rate Stabilization Property transferred on such date was adopted and
        approved, and such Qualified Rate Order, Issuance Advice Letter and Tariff
        themselves, comply with all applicable laws, rules and regulations; (vi)
        the
        Issuance Advice Letter and the Tariff relating to the Rate Stabilization
        Property transferred on such date have been filed in accordance with the
        Qualified Rate Order creating the Rate Stabilization Property transferred
        on
        such date and an officer of the Seller has provided the certification to
        the PSC
        required by the Issuance Advice Letter; and (vii) no other approval,
        authorization, consent, order or other action of, or filing with, any
        Governmental Authority, is required in connection with the creation of the
        Rate
        Stabilization Property transferred on such date, except those that have been
        obtained or made.

       

      (e)           State
        Action.  Under the Rate Stabilization Law, the State of Maryland
        has pledged, for the benefit and protection of financing parties and BGE,
        that
        it will not take or allow

       

      
        
          
          

        

        
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      any
        action that would impair the value of the Rate Stabilization Property
        transferred on such date, or, except as allowed in accordance with Sections
        7-531, 7-533 and 7-534 of the Rate Stabilization Law, reduce, alter or impair
        the Qualified Rate Stabilization Charges to be imposed, collected, and remitted
        to financing parties until the principal, interest and premium and any other
        charges incurred and contracts to be performed in connection with the Rate
        Stabilization Bonds of such Series relating to such Rate Stabilization Property
        have been paid and performed in full.  Under the laws of the United
        States, neither the State of Maryland nor the PSC could constitutionally
        take
        any action of a legislative character including the repeal or amendment of
        the
        Rate Stabilization Law, which would substantially limit, alter or impair
        the
        Rate Stabilization Property or other rights vested in the Holders pursuant
        to
        the Qualified Rate Order or substantially limit, alter or reduce the value
        or
        amount of the Rate Stabilization Property, unless such action is a reasonable
        exercise of the sovereign powers of the State of Maryland and of a character
        reasonable and appropriate to further a significant and legitimate public
        purpose, and, under the takings clauses of the United States and Maryland
        Constitutions, the State of Maryland could not repeal or amend the Rate
        Stabilization Law, and neither the State of Maryland nor the PSC could take
        any
        other action in contravention of the pledge quoted above without paying just
        compensation to the Holders, as determined by a court of competent jurisdiction,
        if doing so would constitute a permanent appropriation of a substantial property
        interest of the Holders in the Rate Stabilization Property and deprive the
        Holders of their reasonable expectations arising from their investments in
        the
        Rate Stabilization Bonds.  The Seller, however, does not represent or
        warrant that, even if a court were to award just compensation, it would be
        sufficient to pay the full amount of principal and interest on the Rate
        Stabilization Bonds.

       

      (f)           Assumptions.  On
        each Transfer Date, based upon the information available to the Seller on
        such
        date, the assumptions used in calculating the Qualified Rate Stabilization
        Charges are reasonable and are made in good faith.  Notwithstanding
        the foregoing, the Seller makes no representation or warranty, express or
        implied, that amounts actually collected arising from those Qualified Rate
        Stabilization Charges will in fact be sufficient to meet the payment obligations
        on the related Rate Stabilization Bonds or that the assumptions used in
        calculating such Qualified Rate Stabilization Charges will in fact be
        realized.

       

      (g)           Creation
        of Rate Stabilization Property.  Upon the effectiveness of the
        Qualified Rate Order, the Issuance Advice Letter and the Tariff with respect
        to
        the Transferred Rate Stabilization Property and the transfer of such Rate
        Stabilization Property pursuant to this Agreement: (i) the rights and interests
        of the Seller under the Qualified Rate Order, including the right to impose,
        collect and receive the Qualified Rate Stabilization Charges established
        in the
        Qualified Rate Order, become Rate Stabilization Property; (ii) the Transferred
        Rate Stabilization Property constitutes a present property right vested in
        the
        Issuer; (iii) the Transferred Rate Stabilization Property
        includes  (A) the right, title and interest of the Seller in the
        Qualified Rate Order and the Qualified Rate Stabilization Charges and (B)
        the
        right to impose, collect and obtain periodic adjustments (with respect to
        adjustments, in the manner and with the effect provided in Section
        4.01(b) of the Servicing Agreement) of such Qualified Rate Stabilization
        Charges, and the rates and other charges authorized by the Qualified Rate
        Order
        and all revenues, collections, claims, payments, money or proceeds of or
        arising
        from the Qualified Rate Stabilization Charges; (iv) the owner of the Transferred
        Rate Stabilization Property is legally entitled to bill Qualified Rate
        Stabilization Charges and collect payments in respect of the Qualified Rate
        Stabilization Charges in the aggregate sufficient to pay the interest on
        and

       

      
        
          
          

        

        
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      principal
        of the Rate Stabilization Bonds of such Series in accordance with the Indenture,
        to pay the fees and expenses of servicing the Rate Stabilization Bonds of
        such
        Series, to replenish the Capital Subaccount to the Required Capital Level
        until
        the Rate Stabilization Bonds of such Series are paid in full or until the
        last
        date permitted for the collection of payments in respect of the Qualified
        Rate
        Stabilization Charges under the Qualified Rate Order, whichever is earlier,
        and
        the other provisions of the Qualified Rate Order do not prohibit the owner
        of
        the Transferred Rate Stabilization Property from obtaining adjustments and
        effecting allocations to the Qualified Rate Stabilization Charges in order
        to
        collect payments of such amounts; and (v) the Transferred Rate Stabilization
        Property is not subject to any Lien other than the Lien created by the Basic
        Documents.

       

      (h)           Nature
        of Representations and Warranties.  The representations and
        warranties set forth in this Section 3.08, insofar as they involve
        conclusions of law, are made not on the basis that the Seller purports to
        be a
        legal expert or to be rendering legal advice, but rather to reflect the parties’
good faith understanding of the legal basis on which the parties are entering
        into this Agreement and the other Basic Documents and the basis on which
        the
        Holders are purchasing the Rate Stabilization Bonds, and to reflect the parties’
agreement that, if such understanding turns out to be incorrect or inaccurate,
        the Seller will be obligated to indemnify the Issuer and its permitted assigns
        (to the extent required by and in accordance with Section 5.01), and that
        the Issuer and its permitted assigns will be entitled to enforce any rights
        and
        remedies under the Basic Documents, on account of such inaccuracy to the
        same
        extent as if the Seller had breached any other representations or warranties
        hereunder.

       

      (i)           Prospectus.  As
        of the date hereof, the information describing the Seller under the caption
“The
        Initial Servicer, Depositor and Sponsor” in the prospectus dated June 15, 2007
        relating to the Rate Stabilization Bonds is true and correct in all material
        respects.

       

      (j)           Solvency.  After
        giving effect to the sale of the Rate Stabilization Property hereunder, the
        Seller:

       

      (i)           is
        solvent and expects to remain solvent;

       

      (ii)           is
        adequately capitalized to conduct its business and affairs considering its
        size
        and the nature of its business and intended purpose;

       

      (iii)           is
        not engaged in nor does it expect to engage in a business for which its
        remaining property represents an unreasonably small portion of its
        capital;

       

      (iv)           reasonably
        believes that it will be able to pay its debts as they come due;
        and

       

      (v)           is
        able to pay its debts as they mature and does not intend to incur, or believes
        that it will not incur, indebtedness that it will not be able to repay at
        its
        maturity.

       

      (k)           No
        Court Order.  There is no order by any court providing for the
        revocation, alteration, limitation or other impairment of the Rate Stabilization
        Law, the Qualified Rate Order, the Issuance Advice Letter, the Transferred
        Rate
        Stabilization Property or the Qualified

       

      
        
          
          

        

        
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      Rate
        Stabilization Charges or any rights arising under any of them or that seeks
        to
        enjoin the performance of any obligations under the Qualified Rate
        Order.

       

      SECTION
        3.09.    Survival of
        Representations and Warranties  The representations and warranties
        set forth in this Article III shall survive the execution and delivery of
        this Agreement, shall be deemed re-made on each Transfer Date and may not
        be
        waived by any party hereto except pursuant to a written agreement executed
        in
        accordance with Article VI and as to which the Rating Agency Condition
        has been satisfied.

       

      SECTION
        3.10.    Limitations on
        Representations and Warranties.  Without prejudice to any of the
        other rights of the parties, the Seller will not be in breach of any
        representation or warranty, as a result of a change in law by means of any
        legislative enactment, constitutional amendment, voter initiative or
        referendum.  THE SELLER MAKES NO REPRESENTATION OR WARRANTY, EXPRESS
        OR IMPLIED, THAT BILLED QUALIFIED RATE STABILIZATION CHARGES WILL BE ACTUALLY
        COLLECTED FROM CUSTOMERS.

       

      ARTICLE
        IV

      COVENANTS
        OF THE SELLER

       

      SECTION
        4.01.    Existence.  Subject
        to its rights and obligations under Section 5.02, so long as any of the
        Rate Stabilization Bonds of any Series are Outstanding, the Seller (a) will
        keep
        in full force and effect its existence and remain in good standing under
        the
        laws of the jurisdiction of its organization, (b) will obtain and preserve
        its
        qualification to do business, in each case to the extent that in each such
        jurisdiction such existence or qualification is or shall be necessary to
        protect
        the validity and enforceability of this Agreement, the other Basic Documents
        to
        which the Seller is a party and each other instrument or agreement necessary
        or
        appropriate to the proper administration of this Agreement and the transactions
        contemplated hereby or to the extent necessary for the Seller to perform
        its
        obligations hereunder or thereunder and (c) will continue to operate its
        electric transmission and distribution system to provide electric delivery
        service to Customers located within its service territory, as such service
        territory was defined at the time of issuance of the Qualified Rate Order
        (or,
        if transmission and distribution are split, to provide distribution service
        directly to such Customers).

       

      SECTION
        4.02.    No
        Liens.  Except for the conveyances hereunder or any Lien under
        Section 7-542 of the Rate Stabilization Law for the benefit of the Issuer
        (as
        the Issuer) and the Secured Parties, the Seller will not sell, pledge, assign
        or
        transfer, or grant, create, incur, assume or suffer to exist any Lien on,
        any of
        the Transferred Rate Stabilization Property, or any interest therein, and
        the
        Seller shall defend the right, title and interest of the Issuer and the
        Indenture Trustee, on behalf of the Secured Parties, in, to and under the
        Transferred Rate Stabilization Property against all claims of third parties
        claiming through or under the Seller.  BGE, in its capacity as Seller,
        will not at any time assert any Lien against, or with respect to, any of
        the
        Transferred Rate Stabilization Property.

       

      SECTION
        4.03.    Delivery of
        Collections.  In the event that the Seller receives Collections in
        respect of the Qualified Rate Stabilization Charges or the proceeds thereof
        other than in its capacity as the Servicer, the Seller agrees to remit to
        the
        Servicer, on behalf of the

       

      
        
          
          

        

        
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      Issuer,
        all payments received by it in respect thereof as soon as practicable after
        receipt thereof.  Prior to such remittance to the Servicer by the
        Seller, the Seller agrees that such amounts are held by it in trust for the
        Issuer and the Indenture Trustee.  If the Seller becomes a party to
        any future trade receivables purchase and sale arrangement or similar
        arrangement under which it sells all or any portion of its accounts receivables,
        the Seller and the other parties to such arrangement shall enter into an
        intercreditor agreement in connection therewith and the terms of the
        documentation evidencing such trade receivables purchase and sale arrangement
        or
        similar arrangement shall expressly exclude Qualified Rate Stabilization
        Charges
        from any receivables or other assets pledged or sold under such
        arrangement.

       

      SECTION
        4.04.    Notice of
        Liens.  The Seller shall notify the Issuer and the Indenture
        Trustee promptly after becoming aware of any Lien on any of the Transferred
        Rate
        Stabilization Property, other than the conveyances hereunder, any Lien under
        the
        Basic Documents or any Lien under Section 7-542 of the Rate Stabilization
        Law or
        the UCC for the benefit of the Issuer or the Secured Parties.

       

      SECTION
        4.05.    Compliance with
        Law.  The Seller hereby agrees to comply with its organizational
        or governing documents and all laws, treaties, rules, regulations and
        determinations of any Governmental Authority applicable to it, except to
        the
        extent that failure to so comply would not materially adversely affect the
        Issuer’s or the Indenture Trustee’s interests in the Transferred Rate
        Stabilization Property or under any of the other Basic Documents to which
        the
        Seller is party or the Seller’s performance of its obligations hereunder or
        under any of the other Basic Documents to which it is party.

       

      SECTION
        4.06.    Covenants Related
        to Rate Stabilization Bonds and Rate Stabilization Property.

       

      (a)           So
        long as any of the Rate Stabilization Bonds are outstanding, the Seller shall
        treat the Rate Stabilization Bonds as debt for all purposes and specifically
        as
        debt of the Issuer, other than for financial reporting, state or federal
        regulatory or tax purposes or as required under the Public Utility Holding
        Company Act of 2005 and the Federal Power Act.

       

      (b)           Solely
        for the purposes of federal taxes and, to the extent consistent with applicable
        state, local and other tax law, for purposes of state, local and other taxes,
        so
        long as any of the Rate Stabilization Bonds are outstanding, the Seller agrees
        to treat the Rate Stabilization Bonds as indebtedness of the Seller (as the
        sole
        owner of the Issuer) secured by the Rate Stabilization Bond Collateral unless
        otherwise required by appropriate taxing authorities.

       

      (c)           So
        long as any of the Rate Stabilization Bonds are outstanding, the Seller shall
        disclose in its financial statements that the Issuer and not the Seller is
        the
        owner of the Transferred Rate Stabilization Property and that the assets
        of the
        Issuer are not available to pay creditors of the Seller or its Affiliates
        (other
        than the Issuer).

       

      (d)           So
        long as any of the Rate Stabilization Bonds are outstanding, the Seller shall
        not own or purchase any Rate Stabilization Bonds.

       

      
        
          
          

        

        
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      (e)           So
        long as the Rate Stabilization Bonds are outstanding, the Seller shall disclose

        the effects of all transactions between the Seller and the Issuer in accordance
        with generally accepted accounting principles.

       

      (f)           The
        Seller agrees that, upon the sale by the Seller of the Transferred Rate
        Stabilization Property to the Issuer pursuant to this Agreement, (i) to the
        fullest extent permitted by law, including applicable Requirements of Law,
        the
        Issuer shall have all of the rights originally held by the Seller with respect
        to the Transferred Rate Stabilization Property, including the right (subject
        to
        the terms of the Servicing Agreement) to exercise any and all rights and
        remedies to collect any amounts payable by any Customer or Third-Party Collector
        in respect of the Transferred Rate Stabilization Property, notwithstanding
        any
        objection or direction to the contrary by the Seller (and the Seller agrees
        not
        to make any such objection or to take any such contrary action) and (ii)
        any
        payment by any Customer or Third-Party Collector directly to the Issuer shall
        discharge such Customer’s or Third-Party Collector’s obligations, if any, to the
        Seller in respect of the Transferred Rate Stabilization Property to the extent
        of such payment, notwithstanding any objection or direction to the contrary
        by
        the Seller.

       

      (g)           So
        long as any of the Rate Stabilization Bonds are outstanding, (i) in all
        proceedings relating directly or indirectly to the Transferred Rate
        Stabilization Property, the Seller shall affirmatively certify and confirm
        that
        it has sold all of its rights and interests in and to such property (other
        than
        for financial reporting or tax purposes), (ii) the Seller shall not make
        any
        statement or reference in respect of the Transferred Rate Stabilization Property
        that is inconsistent with the ownership interest of the Issuer (other than
        for
        financial accounting or tax purposes or as required under the Public Utility
        Holding Company Act of 2005 and the Federal Power Act), (iii) the Seller
        shall
        not take any action in respect of the Transferred Rate Stabilization Property
        except solely in its capacity as the Servicer thereof pursuant to the Servicing
        Agreement or as otherwise contemplated by the other Basic Documents, (iv)
        the
        Seller shall not sell Rate Stabilization Property under a separate Qualified
        Rate Order in connection with the issuance of additional Rate Stabilization
        Bonds unless the Rating Agency Condition shall have been satisfied, and (v)
        neither the Seller nor the Issuer shall take any action, file any tax return,
        or
        make any election inconsistent with the treatment of the Issuer, for purposes
        of
        federal taxes and, to the extent consistent with applicable state, local
        and
        other tax law, for purposes of state, local and other taxes, as a disregarded
        entity that is not separate from the Seller (or, if relevant, from another
        sole
        owner of the Issuer).

       

      SECTION
        4.07.    Protection of
        Title.  The Seller shall execute and file such filings, including,
        without limitation, filings with the Maryland State Department of Assessments
        and Taxation pursuant to the Rate Stabilization Law and filings required
        under
        the UCC, and cause to be executed and filed such filings, all in such manner
        and
        in such places as may be required by law to fully preserve, maintain, protect
        and perfect the ownership interest of the Issuer and the Indenture Trustee
        in
        the Transferred Rate Stabilization Property, including, without limitation,
        all
        filings required under the Rate Stabilization Law and the UCC relating to
        the
        transfer of the ownership of the rights and interest in the Transferred Rate
        Stabilization Property by the Seller to the Issuer or the pledge of the Issuer’s
        interest in such Transferred Rate Stabilization Property to the Indenture
        Trustee. The Seller shall deliver or cause to be delivered to the Issuer
        and the
        Indenture Trustee file-stamped copies of, or filing receipts for, any document
        filed as provided above, as soon as available following such filing. The
        Seller
        shall institute any action or

       

      
        
          
          

        

        
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      proceeding
        necessary to compel performance by the PSC, the State of Maryland or any
        of
        their respective agents, of any of their obligations or duties under the
        Rate
        Stabilization Law, any Qualified Rate Order or any Issuance Advice Letter,
        and
        the Seller agrees to take such legal or administrative actions, including
        defending against or instituting and pursuing legal actions and appearing
        or
        testifying at hearings or similar proceedings, as may be reasonably necessary
        (i) to protect the Issuer and the Secured Parties from claims, state actions
        or
        other actions or proceedings of third parties which, if successfully pursued,
        would result in a breach of any representation set forth in Article III
        or any covenant set forth in Article IV and (ii) to block or overturn any
        attempts to cause a repeal, modification or amendment of the Rate Stabilization
        Law, the Qualified Rate Order, any Issuance Advice Letter or the rights of
        Holders by legislative enactment or constitutional amendment that would be
        materially adverse to the Issuer or the Secured Parties or which would otherwise
        cause an impairment of the rights of the Issuer or the Secured
        Parties.  The costs of any action described in this Section
        4.07 shall be payable from the Collection Account as an Operating Expense
        in
        accordance with Section 8.02(e) of the Indenture.  The Seller’s
        obligations pursuant to this Section 4.07 shall survive and continue
        notwithstanding that payment of such Operating Expense may be delayed pursuant
        to the terms of the Indenture (it being understood that the Seller may be
        required initially to advance its own funds to satisfy its obligations
        hereunder).  

       

      SECTION
        4.08.    Nonpetition
        Covenants.  Notwithstanding any prior termination of this
        Agreement or the Indenture, the Seller, solely in its capacity as a creditor
        of
        the Issuer, shall not, prior to the date which is one year and one day after
        the
        termination of the Indenture and payment in full of the Rate Stabilization
        Bonds
        or any other amounts owed under the Indenture, petition or otherwise invoke
        or
        cause the Issuer to invoke the process of any Government Authority for the
        purpose of commencing or sustaining an involuntary case against the Issuer
        under
        any federal or state bankruptcy, insolvency or similar law, appointing a
        receiver, liquidator, assignee, trustee, custodian, sequestrator or other
        similar official of the Issuer or any substantial part of the property of
        the
        Issuer, or ordering the winding up or liquidation of the affairs of the
        Issuer.

       

      SECTION
        4.09.    Taxes.  So
        long as any of the Rate Stabilization Bonds are outstanding, the Seller shall,
        and shall cause each of its subsidiaries to, pay all taxes, assessments and
        governmental charges imposed upon it or any of its properties or assets or
        with
        respect to any of its franchises, business, income or property before any
        penalty accrues thereon if the failure to pay any such taxes, assessments
        and
        governmental charges would, after any applicable grace periods, notices or
        other
        similar requirements, result in a Lien on the Transferred Rate Stabilization
        Property; provided that no such tax need be paid if the Seller or one of
        its
        subsidiaries is contesting the same in good faith by appropriate proceedings
        promptly instituted and diligently conducted and if the Seller or such
        subsidiary has established appropriate reserves as shall be required in
        conformity with generally accepted accounting principles.

       

      SECTION
        4.10.    Issuance Advice
        Letter.  The Seller hereby agrees not to withdraw the filing of
        any Issuance Advice Letter with the PSC.

       

      SECTION
        4.11.    Tariff.  The
        Seller hereby agrees to make all reasonable efforts to keep each Tariff in
        full
        force and effect at all times.

       

      
        
          
          

        

        
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      SECTION
        4.12.    Notice of Breach
        to Rating Agencies, Etc.  Promptly after obtaining knowledge
        thereof, in the event of a breach in any material respect (without regard
        to any
        materiality qualifier contained in such representation, warranty or covenant)
        of
        any of the Seller’s representations, warranties or covenants contained herein,
        the Seller shall promptly notify the Issuer, the Indenture Trustee and the
        Rating Agencies of such breach.  For the avoidance of doubt, any
        breach which would adversely affect scheduled payments on the Rate Stabilization
        Bonds will be deemed to be a material breach for purposes of this Section
        4.12.

       

      SECTION
        4.13.    Use of
        Proceeds.  The Seller shall use the proceeds of the sale of the
        Rate Stabilization Property in accordance with the Qualified Rate Order and
        the
        Rate Stabilization Law.

       

      SECTION
        4.14.    Further
        Assurances.  Upon the request of the Issuer, the Seller shall
        execute and deliver such further instruments and do such further acts as
        may be
        reasonably necessary to carry out more effectually the provisions and purposes
        of this Agreement.

       

      ARTICLE
        V

      THE
        SELLER

       

      SECTION
        5.01.    Liability of
        Seller; Indemnities.

       

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

       

      (b)           The
        Seller shall indemnify the Issuer and the Indenture Trustee (for the benefit
        of
        the Secured Parties) and each of their respective officers, directors,
        employees, trustees, managers and agents for, and defend and hold harmless
        each
        such Person from and against, any and all taxes (other than taxes imposed
        on
        Bondholders as a result of their ownership of a Rate Stabilization Bond)
        that
        may at any time be imposed on or asserted against any such Person as a result
        of
        the sale of the Transferred Rate Stabilization Property to the Issuer, including
        any franchise, sales, gross receipts, general corporation, tangible personal
        property, privilege or license taxes but excluding any taxes imposed as a
        result
        of a failure of such Person to withhold or remit taxes with respect to payments
        on any Rate Stabilization Bond.

       

      (c)           The
        Seller shall indemnify the Issuer and the Indenture Trustee (for the benefit
        of
        the Secured Parties) and each of their respective officers, directors,
        employees, trustees, managers, and agents for, and defend and hold harmless
        each
        such Person from and against, any and all taxes (other than taxes imposed
        on
        Bondholders as a result of their ownership of a Rate Stabilization Bond)
        that
        may at any time  be imposed on or asserted against any such Person as
        a result of the Issuer’s ownership and assignment of the Transferred Rate
        Stabilization Property, the issuance and sale by the Issuer of the Rate
        Stabilization Bonds or the other transactions contemplated in the Basic
        Documents, including any franchise, sales, gross receipts, general corporation,
        tangible personal property, privilege or license taxes but excluding any
        taxes
        imposed as a result of a failure of such Person to withhold or remit taxes
        with
        respect to payments on any Rate Stabilization Bond.

       

      (d)           The
        Seller shall indemnify the Issuer, the Indenture Trustee (for the benefit
        of the
        Secured Parties) and each of their respective officers, directors, employees
        and
        agents for, and

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

       

      defend
        and hold harmless each such Person from and against all Losses that may be
        imposed on, incurred by or asserted against each such Person, in each such
        case,
        as a result of the Seller’s breach of any of its representations, warranties or
        covenants contained in this Agreement.

       

      (e)           Indemnification
        under Sections 5.01(b), 5.01(c), 5.01(d) and 5.01(f)
        shall include reasonable out-of-pocket fees and expenses of investigation
        and
        litigation (including reasonable attorney’s fees and expenses), except as
        otherwise expressly provided in this Agreement.

       

      (f)           The
        Seller shall indemnify the Indenture Trustee (for itself) and the Independent
        Managers, and any of their respective affiliates, officers, directors, employees
        and agents (each, an “Indemnified Person”) for, and defend and hold
        harmless each such Person from and against, any and all Losses incurred by
        any
        of such Indemnified Persons as a result of the Seller’s breach of any of its
        representations and warranties or covenants contained in this Agreement,
        except
        to the extent of Losses either resulting from the willful misconduct, bad
        faith
        or gross negligence of such Indemnified Person or resulting from a breach
        of a
        representation or warranty made by such Indemnified Person in any of the
        Basic
        Documents that gives rise to the Seller’s breach. The Seller shall not be
        required to indemnify an Indemnified Person for any amount paid or payable
        by
        such Indemnified Person in the settlement of any action, proceeding or
        investigation without the prior written consent of the Seller which consent
        shall not be unreasonably withheld. Promptly after receipt by an Indemnified
        Person of notice of the commencement of any action, proceeding or investigation,
        such Indemnified Person shall, if a claim in respect thereof is to be made
        against the Seller under this Section 5.01(f), notify the Seller in
        writing of the commencement thereof. Failure by an Indemnified Person to
        so
        notify the Seller shall relieve the Seller from the obligation to indemnify
        and
        hold harmless such Indemnified Person under this Section 5.01(f) only to
        the extent that the Seller suffers actual prejudice as a result of such failure.
        With respect to any action, proceeding or investigation brought by a third
        party
        for which indemnification may be sought under this Section 5.01(f), the
        Seller shall be entitled to conduct and control, at its expense and with
        counsel
        of its choosing that is reasonably satisfactory to such Indemnified Person,
        the
        defense of any such action, proceeding or investigation (in which case the
        Seller shall not thereafter be responsible for the fees and expenses of any
        separate counsel retained by the Indemnified Person except as set forth below);
        provided that the Indemnified Person shall have the right to participate
        in such
        action, proceeding or investigation through counsel chosen by it and at its
        own
        expense. Notwithstanding the Seller’s election to assume the defense of any
        action, proceeding or investigation, the Indemnified Person shall have the
        right
        to employ separate counsel (including local counsel), and the Seller shall
        bear
        the reasonable fees, costs and expenses of such separate counsel if (i) the
        defendants in any such action include both the Indemnified Person and the
        Seller
        and the Indemnified Person shall have reasonably concluded that there may
        be
        legal defenses available to it that are different from or additional to those
        available to the Seller, (ii) the Seller shall not have employed counsel
        reasonably satisfactory to the Indemnified Person to represent the Indemnified
        Person within a reasonable time after notice of the institution of such action,
        (iii) the Seller shall authorize the Indemnified Person to employ separate
        counsel at the expense of the Seller or (iv) in the case of the Indenture
        Trustee, such action exposes the Indenture Trustee to a material risk of
        criminal liability or forfeiture or a Servicer Default has occurred and is
        continuing.  Notwithstanding the foregoing, the Seller shall not be
        obligated to pay for the fees, costs and expenses of more than one separate
        counsel for the Indemnified Persons collectively other than one local counsel,
        if appropriate.

       

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

       

      (g)           The
        Seller shall indemnify the Servicer (if the Servicer is not the Seller) for
        the
        costs of any action instituted by the Servicer pursuant to Section
        5.02(d) of the Servicing Agreement which are not paid as Operating Expenses
        in accordance with the priorities set forth in Section 8.02(e) of the
        Indenture.

       

      (h)           The
        remedies provided in this Agreement are the sole and exclusive remedies against
        the Seller for breach of its representations and warranties in this
        Agreement.

       

      (i)           Indemnification
        under this Section 5.01 shall survive any repeal of, modification of, or
        supplement to, or judicial invalidation of, the Rate Stabilization Law or
        any
        Qualified Rate Order and shall survive the resignation or removal of the
        Indenture Trustee or the termination of this Agreement and will rank in priority
        with other general, unsecured obligations of the Seller.

       

      SECTION
        5.02.    Merger, Conversion
        or Consolidation of, or Assumption of the Obligations of,
        Seller.  Any Person (a) into which the Seller may be merged,
        converted or consolidated and which is a Permitted Successor, (b) that may
        result from any merger, conversion or consolidation to which the Seller shall
        be
        a party and which is a Permitted Successor, (c) that may succeed to the
        properties and assets of the Seller substantially as a whole and which is
        a
        Permitted Successor, (d) which is a successor entity resulting from the division
        of the Seller into two or more Persons and which is a Permitted Successor,
        or
        (e) which otherwise succeeds to all or substantially all of the electric
        transmission and distribution business of the Seller (or, if transmission
        and
        distribution are not provided by a single entity, which provides electric
        delivery service directly to Customers located in BGE’s  service
        territory as it existed on the date of adoption of the Qualified Rate Order)
        (a
“Permitted Successor”) and which Person in any of the foregoing cases
        executes an agreement of assumption to perform all of the obligations of
        the
        Seller hereunder (including the Seller’s obligations under Section 5.01
        incurred at any time prior to or after the date of such assumption), shall
        be
        the successor to the Seller under this Agreement without further act on the
        part
        of any of the parties to this Agreement; provided, however, that
        (i) immediately after giving effect to such transaction, no representation,
        warranty or covenant made pursuant to Article III or Article
        IVshall be breached and no Servicer Default, and no event which, after
        notice or lapse of time, or both, would become a Servicer Default shall have
        occurred and be continuing, (ii) the Seller shall have delivered to the Issuer,
        the Indenture Trustee and each Rating Agency an Officer’s Certificate and an
        Opinion of Counsel from external counsel stating that such consolidation,
        merger, division or succession and such agreement of assumption comply with
        this
Section 5.02 and that all conditions precedent, if any, provided for in
        this Agreement relating to such transaction have been complied with, (iii)
        the
        Seller shall have delivered to the Issuer, the Indenture Trustee and each
        Rating
        Agency an Opinion of Counsel from external counsel of the Seller either (A)
        stating that, in the opinion of such counsel, all filings to be made by the
        Seller and the Issuer, including filings with the PSC pursuant to the Rate
        Stabilization Law, have been authorized, executed and filed that are necessary
        to fully preserve and protect the respective interest of the Issuer and the
        Indenture Trustee in all of the Transferred Rate Stabilization Property and
        reciting the details of such filings, or (B) stating that, in the opinion
        of
        such counsel, no such action shall be necessary to preserve and protect such
        interests, (iv) the Seller shall have delivered to the Issuer, the Indenture
        Trustee, the Rating Agencies and the PSC an Opinion of Counsel from independent
        tax counsel stating that, for federal income tax purposes, such consolidation,
        conversion, merger, division or succession and such agreement of assumption
        will
        not result in a material federal income tax

       

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

       

      consequence
        to the Issuer or the Holders of Rate Stabilization Bonds and (v) the Seller
        shall have given the Rating Agencies prior written notice of such transaction.
        When any Person (or more than one Person) acquires the properties and assets
        of
        the Seller substantially as a whole or otherwise becomes the successor, whether
        by merger, conversion, consolidation, sale, transfer, lease, management contract
        or otherwise, to all or substantially all of the electric transmission and
        distribution business of the Seller (or, if transmission and distribution
        are
        not provided by a single entity, provides electric delivery service directly
        to
        Customers located in BGE’s service territory as it existed on the date of
        issuance of the Qualified Rate Order) in accordance with the terms of this
        Section 5.02, then upon satisfaction of all of the other conditions of
        this Section 5.02, the preceding Seller shall automatically and without
        further notice be released from all of its obligations hereunder.

       

      SECTION
        5.03.    Limitation on
        Liability of Seller and Others.  The Seller and any director,
        officer, employee or agent of the Seller may rely in good faith on the advice
        of
        counsel or on any document of any kind, prima facie properly executed and
        submitted by any Person, respecting any matters arising
        hereunder.  Subject to Section 4.07, the Seller shall not be
        under any obligation to appear in, prosecute or defend any legal action that
        is
        not incidental to its obligations under this Agreement, and that in its opinion
        may involve it in any expense or liability.

       

      ARTICLE
        VI

      MISCELLANEOUS
        PROVISIONS

       

      SECTION
        6.01.    Amendment.  This
        Agreement may be amended in writing by the Seller and the Issuer, with (i)
        the
        prior written consent of the Indenture Trustee, (ii) the satisfaction of
        the
        Rating Agency Condition and (iii) if any amendment would adversely affect
        in any
        material respect the interest of any Holder of the Rate Stabilization Bonds,
        the
        consent of a majority of the Holders of each affected Tranche or Series of
        Rate
        Stabilization Bonds.  Promptly after the execution of any such
        amendment or consent, the Issuer shall furnish written notification of the
        substance of such amendment or consent to each of the Rating
        Agencies.

       

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

       

      SECTION
        6.02.    Reserved.   

       

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

       

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

       

      (a)           in
        the case of the Seller, to Baltimore Gas and Electric Company, at 750 E.
        Pratt
        Street, 16th
        Floor, Baltimore, Maryland 21202, Attention: Treasurer, Telephone: (410)
        685-0123, Facsimile:  (410) 783-3619;

       

      (b)           in
        the case of the Issuer, to RSB BondCo LLC at Suite 202, 103 Foulk Road,
        Wilmington, Delaware 19803, Attention: Manager, Telephone: (302) 691-6409,
        Facsimile:  (302) 652-8667;

       

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

       

      (d)           in
        the case of the PSC, William D. Schaefer Tower, 6 St. Paul Street, 12th Floor,
        Baltimore, Maryland 21202,  Attention: Executive Secretary, Telephone:
        (410) 767-8000, Facsimile: (410) 333-6495;

       

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

       

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

       

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

       

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

       

      SECTION
        6.04.    Assignment.  Notwithstanding
        anything to the contrary contained herein, except as provided in Section
        5.02, this Agreement may not be assigned by the Seller.

       

      SECTION
        6.05.    Limitations on
        Rights of Third Parties.  The provisions of this Agreement are
        solely for the benefit of the Seller, the Issuer, the Indenture Trustee (for
        the
        benefit of the Secured Parties) and the other Persons expressly referred
        to
        herein, and such Persons shall have the right to enforce the relevant provisions
        of this Agreement. Nothing in this Agreement, whether express or implied,
        shall
        be construed to give to any other Person any legal or equitable right, remedy
        or
        claim in the Rate Stabilization Property or under or in respect of this
        Agreement or any covenants, conditions or provisions contained
        herein.

       

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

       

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

       

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

       

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

       

      SECTION
        6.09.    Governing
        Law.  THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE
        LAWS OF THE STATE OF MARYLAND, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
        PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
        SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

       

      SECTION
        6.10.    Assignment to
        Indenture Trustee.  The Seller hereby acknowledges and consents to
        any mortgage, pledge, assignment and grant of a security interest by the
        Issuer
        to the Indenture Trustee pursuant to the Indenture for the benefit of the
        Secured Parties of all right, title and interest of the Issuer in, to and
        under
        this Agreement, the Transferred Rate Stabilization Property and the proceeds
        thereof and the assignment of any or all of the Issuer’s rights hereunder to the
        Indenture Trustee for the benefit of the Secured Parties.

       

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

       

      SECTION
        6.12.    Waivers.  Any
        term or provision of this Agreement may be waived, or the time for its
        performance may be extended, by the party or parties entitled to the benefit
        thereof; provided, however, that no such waiver delivered by the
        Issuer shall be effective unless the Indenture Trustee has given its prior
        written consent thereto.  Any such waiver shall be validly and
        sufficiently authorized for the purposes of this Agreement if, as to any
        party,
        it is authorized in writing by an authorized representative of such
        party.  The failure of any party hereto to enforce at any time any
        provision of this Agreement shall not be construed to be a waiver of such
        provision, nor in any way to affect the validity of this Agreement or any
        part
        hereof or the right of any party thereafter to enforce each and every such
        provision.  No waiver of any breach of this Agreement shall be held to
        constitute a waiver of any other or subsequent breach.

       

      [REMAINDER
        OF
        PAGE INTENTIONALLY LEFT BLANK]

       

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

       

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

       

       

      
        	 	
                RSB
                  BONDCO LLC, as Issuer

                 

                 

              
	 	
                By:

              	/s/
                Charles A. Berardesco 
	 	 	
                Name: 
                  Charles A. Berardesco

                Title:   
                  Secretary

              
	 	 	
                 

                 

              
	 	
                BALTIMORE
                  GAS AND ELECTRIC COMPANY, as Seller

                 

                 

              
	 	
                By:

              	/s/
                Charles A. Berardesco
	 	 	
                Name: 
                  Charles A. Berardesco

                Title:   
                  Corporate Secretary

              

      

       

       

      
        
          Issuer
            and BGE Signature Page to Sale Agreement

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      
        	
                ACKNOWLEDGED
                  AND ACCEPTED:

                 

              	 
	
                DEUTSCHE
                  BANK TRUST COMPANY AMERICAS,

                not
                  in its individual capacity, but solely in its capacity as Indenture
                  Trustee

                 

                 

              	 
	
                By:

              	/s/
                Eileen Hughes	 
	
                 

              	
                Name: 
                  Eileen Hughes

                Title:   
                  Vice President

                 

              	 
	
                By:

              	/s/
                William Schwerdtman 	 
	
                 

              	
                Name: 
                  William Schwerdtman

                Title:   
                  Associate

              	 

      

       

       

      
        
          Trustee
            Signature Page to Sale Agreement

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
        A

       

      FORM
        OF
        BILL OF SALE

       

      This
        Bill
        of Sale is being delivered pursuant to the Rate Stabilization Property Purchase
        and Sale Agreement, dated as of June 29, 2007 (the “Sale Agreement”), by
        and between Baltimore Gas and Electric Company (the “Seller”) and RSB
        BondCo LLC (the “Issuer”).  All capitalized terms used but not
        otherwise defined herein shall have the respective meanings ascribed to such
        terms in the Sale Agreement.

       

      In
        consideration of the Issuer’s delivery to or upon the order of the Seller of
        $[_____],
        the Seller
        does hereby irrevocably sell, transfer, assign, set over and otherwise convey
        to
        the Issuer, without recourse or warranty, except as set forth in the Sale
        Agreement, all right, title and interest of the Seller in and to the [Initial][Subsequent]
        Rate
        Stabilization Property identified on Schedule 1 hereto (such sale,
        transfer, assignment, setting over and conveyance of the [Initial][Subsequent]
        Rate
        Stabilization Property includes, to the fullest extent permitted by the Rate
        Stabilization Law, the right to impose, collect and receive Qualified Rate
        Stabilization Charges and the assignment of all revenues, collections, claims,
        rights, payments, money or proceeds of or arising from the Qualified Rate
        Stabilization Charges related to the [Initial][Subsequent]
        Rate
        Stabilization Property, as the same may be adjusted from time to
        time).  Such sale, transfer, assignment, setting over and conveyance
        is hereby expressly stated to be a sale and, pursuant to Section 7-539 of
        the
        Rate Stabilization Law and other applicable law, shall be treated as an absolute
        transfer of all of the Seller’s right, title and interest in and to (as in a
        true sale), and not as a pledge or other financing of, the [Initial][Subsequent]
        Rate
        Stabilization Property. The Seller and the Issuer agree that after giving
        effect
        to the sale, transfer, assignment, setting over and conveyance contemplated
        hereby the Seller has no right, title or interest in or to the [Initial][Subsequent]
        Rate
        Stabilization Property to which a security interest could attach because
        (i) it
        has sold, transferred, assigned, set over and conveyed all right in and to
        the
[Initial][Subsequent]
        Rate
        Stabilization Property to the Issuer, and (ii) as provided in Section 7-542
        of
        the Rate Stabilization Law, appropriate notice has been filed and such transfer
        is perfected against all third parties, including subsequent judicial or
        other
        lien creditors.  If such sale, transfer, assignment, setting over and
        conveyance is held by any court of competent jurisdiction not to be a true
        sale
        as provided in Section 7-539 of the Rate Stabilization Law, then such sale,
        transfer, assignment, setting over and conveyance shall be treated as a pledge
        of such [Initial][Subsequent]
        Rate
        Stabilization Property and as the creation of a security interest (within
        the
        meaning of the Rate Stabilization Law and the UCC) in the [Initial][Subsequent]
        Rate
        Stabilization Property and, without prejudice to its position that it has
        absolutely transferred all of its rights in the [Initial][Subsequent]
        Rate
        Stabilization Property to the Issuer, the Seller hereby grants a security
        interest in the [Initial][Subsequent]
        Rate
        Stabilization Property to the Issuer (and, to the extent necessary to qualify
        the grant as a security interest under the Rate Stabilization Law and the
        UCC,
        to the Indenture Trustee for the benefit of the Secured Parties to secure
        the
        right of the Issuer under the Basic Documents to receive the Qualified Rate
        Stabilization Charges and all other [Initial][Subsequent]
        Rate
        Stabilization Property).

       

      
        
          
          

        

        
          
            EXHIBIT
              A

            1

          

          
            

          

        

        
          
          

        

      

       

      The
        Issuer does hereby purchase the [Initial][Subsequent]
        Rate
        Stabilization Property from the Seller for the consideration set forth in
        the
        preceding paragraph.

       

      The
        Seller and the Issuer each acknowledge and agree that the purchase price
        for the
[Initial][Subsequent]
        Rate
        Stabilization Property sold pursuant to this Bill of Sale and the Sale Agreement
        is equal to its fair market value at the time of sale.

       

      The
        Seller confirms that (i) each of the representations and warranties on the
        part
        of the Seller contained in the Sale Agreement are true and correct in all
        respects on the date hereof as if made on the date hereof and (ii) each
        condition precedent that must be satisfied under Section 2.03 of the Sale
        Agreement has been satisfied upon or prior to the execution and delivery
        of this
        Bill of Sale by the Seller.1

       

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

       

      THIS
        BILL
        OF SALE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF MARYLAND,
        WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS,
        RIGHTS
        AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
        SUCH LAW.

       

      
        
          

        
1           If
        any representations or warranties require modification with respect to
        Subsequent Rate Stabilization Property as a result of provisions in the
        Qualified Rate Order, then such modifications should be set forth in this
        Bill
        of Sale (it being understood that any such modifications must be agreed to
        by
        the parties and approved by the Rating Agencies prior to the time additional
        Rate Stabilization Bonds are issued).

       

      
        
          
          

        

        
          
            EXHIBIT
              A

            2

          

          
            

          

        

        
          
          

        

      

      

      IN
        WITNESS WHEREOF, the Seller and the Issuer have duly executed this Bill of
        Sale
        as of the ___ day of ___________, ______.

       

       

      
        	 	
                RSB
                  BONDCO LLC

                 

                 

              
	 	
                By:

              	 
	 	 	
                Name:

                Title:

              
	 	 	
                 

                 

              
	 	
                BALTIMORE
                  GAS AND ELECTRIC COMPANY

                 

                 

              
	 	
                By:

              	 
	 	 	
                Name:

                Title:

              

      

      

      
        
          
          

        

        
          
            EXHIBIT
              A

            3

          

          
            

          

        

        
          
          

        

      

      

      SCHEDULE
        1

      to

      BILL
        OF
        SALE

      
 

      [INITIAL][SUBSEQUENT]
        RATE
        STABILIZATION PROPERTY

       

      
        
          
          

        

        
          
            EXHIBIT
              A

            4Unassociated Document

    Exhibit
      10.2

     

    EXECUTION
      COPY

     

     

     

    
      RATE
        STABILIZATION PROPERTY SERVICING AGREEMENT

       

       

      by
        and between

       

      RSB
        BONDCO LLC,

       

      Issuer

      

       

      and

      

       

      BALTIMORE
        GAS AND ELECTRIC COMPANY,

       

      Servicer

       

      

       

      Dated
        as of June 29, 2007

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    
       

        
          	 	
                  ARTICLE
                    I

                  DEFINITIONS

                	 
	 	 	 
	
                  SECTION
                    1.01.

                	
                  Definitions.

                	
                  1

                
	 	 	 
	 	
                  ARTICLE
                    II

                  APPOINTMENT
                    AND AUTHORIZATION

                	 
	 	 	 
	
                  SECTION
                    2.01.

                	
                  Appointment
                    of Servicer; Acceptance of Appointment.

                	
                  2

                
	
                  SECTION
                    2.02.

                	
                  Authorization.

                	
                  2

                
	
                  SECTION
                    2.03.

                	
                  Dominion
                    and Control Over the Rate Stabilization Property.

                	
                  2

                
	 	 	 
	 	
                  ARTICLE
                    III

                  ROLE
                    OF SERVICER

                	 
	 	 	 
	
                  SECTION
                    3.01.

                	
                  Duties
                    of Servicer.

                	
                  3

                
	
                  SECTION
                    3.02.

                	
                  Servicing
                    and Maintenance Standards.

                	
                  5

                
	
                  SECTION
                    3.03.

                	
                  Annual
                    Reports on Compliance with Regulation AB.

                	
                  6

                
	
                  SECTION
                    3.04.

                	
                  Annual
                    Report by Independent Registered Public Accountants.

                	
                  6

                
	
                  SECTION
                    3.05.

                	
                  Monitoring
                    of Third-Party Collectors.

                	
                  7

                
	 	 	 
	 	
                  ARTICLE
                    IV

                   SERVICES
                    RELATED TO TRUE-UP ADJUSTMENTS

                	 
	 	 	 
	
                  SECTION
                    4.01.

                	
                  True-Up
                    Adjustments.

                	
                  9

                
	
                  SECTION
                    4.02.

                	
                  Limitation
                    of Liability.

                	
                  14

                
	 	 	 
	 	
                  ARTICLE
                    V

                  THE
                    RATE STABILIZATION PROPERTY

                	 
	 	 	 
	
                  SECTION
                    5.01.

                	
                  Custody
                    of Rate Stabilization Property Records.

                	
                  14

                
	
                  SECTION
                    5.02.

                	
                  Duties
                    of Servicer as Custodian.

                	
                  15

                
	
                  SECTION
                    5.03.

                	
                  Effective
                    Period and Termination.

                	
                  16

                
	 	 	 
	 	
                  ARTICLE
                    VI

                   THE
                    SERVICER

                	 
	 	 	 
	
                  SECTION
                    6.01.

                	
                  Representations
                    and Warranties of Servicer.

                	
                  16

                
	
                  SECTION
                    6.02.

                	
                  Binding
                    Effect of Servicing Obligations.

                	
                  18

                
	
                  SECTION
                    6.03.

                	
                  Limitation
                    on Liability of Servicer and Others.

                	
                  19

                
	
                  SECTION
                    6.04.

                	
                  BGE
                    Not to Resign as Servicer.

                	
                  20

                
	
                  SECTION
                    6.05.

                	
                  Servicing
                    Compensation.

                	
                  20

                
	
                  SECTION
                    6.06.

                	
                  Compliance
                    with Applicable Requirements of Law.

                	
                  21

                

        

         

        
          
            
            

          

          
            i

            
              

            

          

          
            
            

          

        

         

        
          	
                  SECTION
                    6.07.

                	
                  Access
                    to Certain Records and Information Regarding Rate Stabilization
                    Property.

                	
                  21

                
	
                  SECTION
                    6.08.

                	
                  Appointments.

                	
                  22

                
	
                  SECTION
                    6.09.

                	
                  No
                    Servicer Advances.

                	
                  22

                
	
                  SECTION
                    6.10.

                	
                  Remittances.

                	
                  22

                
	
                  SECTION
                    6.11.

                	
                  Maintenance
                    of Operations.

                	
                  23

                
	 	 	 
	 	
                  ARTICLE
                    VII

                  DEFAULT

                	 
	 	 	 
	
                  SECTION
                    7.01.

                	
                  Servicer
                    Default.

                	
                  23

                
	
                  SECTION
                    7.02.

                	
                  Appointment
                    of Successor.

                	
                  25

                
	
                  SECTION
                    7.03.

                	
                  Waiver
                    of Past Defaults.

                	
                  26

                
	
                  SECTION
                    7.04.

                	
                  Notice
                    of Servicer Default.

                	
                  26

                
	
                  SECTION
                    7.05.

                	
                  Cooperation
                    with Successor.

                	
                  26

                
	 	 	 
	 	
                  ARTICLE
                    VIII

                  INDEMNIFICATION

                	 
	 	 	 
	
                  SECTION
                    8.01.

                	
                  Servicer’s
                    Indemnification; Release of Claims.

                	
                  26

                
	 	 	 
	 	
                  ARTICLE
                    IX

                   MISCELLANEOUS
                    PROVISIONS

                	 
	 	 	 
	
                  SECTION
                    9.01.

                	
                  Amendment.

                	
                  28

                
	
                  SECTION
                    9.02.

                	
                  Maintenance
                    of Accounts and Records.

                	
                  29

                
	
                  SECTION
                    9.03.

                	
                  Notices.

                	
                  29

                
	
                  SECTION
                    9.04.

                	
                  Assignment.

                	
                  30

                
	
                  SECTION
                    9.05.

                	
                  Limitations
                    on Rights of Others.

                	
                  30

                
	
                  SECTION
                    9.06.

                	
                  Severability.

                	
                  30

                
	
                  SECTION
                    9.07.

                	
                  Separate
                    Counterparts.

                	
                  30

                
	
                  SECTION
                    9.08.

                	
                  Headings.

                	
                  30

                
	
                  SECTION
                    9.09.

                	
                  GOVERNING
                    LAW.

                	
                  31

                
	
                  SECTION
                    9.10.

                	
                  Assignment
                    to Indenture Trustee.

                	
                  31

                
	
                  SECTION
                    9.11.

                	
                  Nonpetition
                    Covenants.

                	
                  31

                
	
                  SECTION
                    9.12.

                	
                  Limitation
                    of Liability.

                	
                  31

                

        

      

    

     

    
      
        
        

      

      
        ii

        
          

        

      

      
        
        

      

    

     

    
      
        
          	 	
                   EXHIBITS
                    AND SCHEDULES

                
	 	 
	
                  Exhibit
                    A

                	
                  Form
                    of Monthly Servicer’s Certificate

                
	
                  Exhibit
                    B

                	
                  Form
                    of Certificate of Compliance

                
	
                  Exhibit
                    C

                	
                  Form
                    of Servicer Certificate

                
	
                  Schedule
                    4.01(a)

                	
                  Expected
                    Amortization Schedule

                
	 	 
	 	
                   ANNEXES

                
	 	 
	 Annex
                  I	 Servicing
                  Procedures

        

         

      

    

    
      
        
        

      

      
        iii

        
          

        

      

      
        
        

      

    

     

    
      This
        RATE
        STABILIZATION PROPERTY SERVICING AGREEMENT (this “Agreement”), dated as
        of June 29, 2007, is between RSB BONDCO LLC, a Delaware limited liability
        company, as issuer (the “Issuer”), and BALTIMORE GAS AND ELECTRIC COMPANY
        (“BGE”), a Maryland corporation, as servicer (the
“Servicer”).

       

      RECITALS

       

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

       

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

       

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

       

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

       

      ARTICLE
        I

      DEFINITIONS

       

      SECTION
        1.01.  Definitions.

       

      (a)  Unless
        otherwise defined herein, capitalized terms used herein shall have the meanings
        assigned to them in that certain Indenture (including Appendix A thereto)
        dated as of the date hereof between the Issuer and Deutsche Bank Trust Company
        Americas, a New York banking corporation, in its capacity as the indenture
        trustee (the “Indenture Trustee”) and in its separate capacity as a
        securities intermediary (the “Securities Intermediary”), as the same may
        be amended, restated, supplemented or otherwise modified from time to
        time.

       

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

       

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

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

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

       

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

       

      ARTICLE
        II 

      APPOINTMENT
        AND AUTHORIZATION

       

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

       

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

       

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

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      ARTICLE
        III

      ROLE
        OF
        SERVICER

       

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

       

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

       

      (b)  Reporting
        Functions.

       

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

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

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

       

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

       

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

       

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

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

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

       

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

       

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

       

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

       

      SECTION
        3.02.  Servicing
        and Maintenance Standards.

       

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

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

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

       

      SECTION
        3.03.  Annual
        Reports on Compliance with Regulation AB.

       

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

       

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

       

      SECTION
        3.04.  Annual
        Report by Independent Registered Public Accountants.

       

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

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

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

       

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

       

      SECTION
        3.05.  Monitoring
        of Third-Party Collectors.

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

      
        
          
          

        

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

       

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

       

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

       

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

       

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

       

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

       

      
        
          
          

        

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

       

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

       

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

       

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

       

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

       

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

       

      ARTICLE
        IV

      SERVICES
        RELATED TO TRUE-UP ADJUSTMENTS

       

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

       

      
        
          
          

        

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

       

      (b)  True-Up
        Adjustments.

       

          (i)  Semi-Annual
        True-Up Adjustments and Filings.  Prior to the Scheduled Final
        Payment Date of the last Tranche of a Series, during the term of the Rate
        Stabilization Bonds, no later than thirty (30) days before the rolling six
        month
        anniversary date of the Series Issuance Date for each Series, the Servicer
        shall:  (A) update the data and assumptions underlying the calculation
        of the Qualified Rate Stabilization Charges, including projected electricity
        usage during the next Calculation Period and interest and estimated expenses
        and
        fees of the Issuer to be paid during such period; (B) determine the Periodic
        Payment Requirement and Periodic Billing Requirement for the next 12 Collection
        Periods based on such updated data and assumptions; (C) calculate the
        undercollections or overcollections for the previous Calculation Period,
        including without limitation any undercollections or overcollections caused
        by
        Third-Party Collector defaults, by subtracting the Estimated QRSC Collections
        for such previous Calculation Period from the Periodic Billing Requirement
        for
        such previous Calculation Period; (D) taking into account the then-current
        Collections Curve and Charge-Offs, calculate the amount needed to correct
        such
        undercollections or overcollections during the forthcoming 12 Collection
        Periods; (E) sum the amount in step (D) with the scheduled Periodic Billing
        Requirement for the upcoming 12 Collection Periods to determine an adjusted
        Periodic Billing Requirement; (F) divide the amount calculated in step (E)
        by
        the appropriate forecasted Periodic Billing Requirement to determine the
        adjusted Qualified Rate Stabilization Charge rate for the upcoming 12 Collection
        Periods; (G) make all required notice and other filings with the PSC to reflect
        the revised Qualified Rate Stabilization Charges; and (H) take all reasonable
        actions and make all reasonable efforts to effect such Semi-Annual True-Up
        Adjustment on the Semi-Annual True-Up Adjustment Date  and to enforce
        the provisions of applicable Requirements of Law.

       

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

       

      
        
          
          

        

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

       

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

       

          (iv)  Quarterly
        True-Up Adjustments and Filings.  To the extent that Rate
        Stabilization Bonds of any Series remain Outstanding after the Scheduled
        Final
        Payment Date of the last Tranche of such Series, during the term of the Rate
        Stabilization Bonds, no later than thirty (30) days before the rolling three
        month anniversary date of the Series Issuance Date, the Servicer
        shall:  (A) update the data and assumptions underlying the calculation
        of the Qualified Rate Stabilization Charges, including projected electricity
        usage during the next Calculation Period and interest and estimated expenses
        and
        fees of the Issuer to be paid during such period; (B) determine the Periodic
        Payment Requirement and Periodic Billing Requirement for the next 12 Collection
        Periods based on such updated data and assumptions; (C) taking into account
        the
        then-current Collections Curve and Charge-Offs, calculate the undercollections
        or overcollections for the previous Calculation Period, including without
        limitation any undercollections or overcollections caused by Third-Party
        Collector defaults, by subtracting the Estimated QRSC Collections for such
        previous Calculation Period from the Periodic Billing Requirement for such
        previous Calculation Period; (D) calculate the amount needed to correct such
        undercollections or 

       

      
        
          
          

        

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

       

      (c)  Reports.

       

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

       

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

       

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

       

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

       

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

       

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

       

      
        
          
          

        

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

       

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

       

          (iii)  Reports
        to Customers.

       

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

       

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

       

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

       

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

       

      
        
          
          

        

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

       

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

       

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

       

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

       

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

       

      ARTICLE
        V

      THE
        RATE
        STABILIZATION PROPERTY

       

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

       

      
        
          
          

        

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

       

      SECTION
        5.02.  Duties
        of Servicer as Custodian.

       

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

       

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

       

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

       

      
        
          
          

        

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

       

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

       

      ARTICLE
        VI

      THE
        SERVICER

       

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

       

      
        
          
          

        

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

       

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

       

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

       

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

       

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

       

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

       

      
        
          
          

        

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

       

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

       

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

       

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

       

      
        
          
          

        

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

       

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

       

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

       

      
        
          
          

        

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

       

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

       

      SECTION
        6.05.  Servicing
        Compensation.

       

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

       

          (i)  for
        so
        long as BGE is the Servicer, 0.05% of the aggregate initial principal amount
        of
        all Outstanding Series of Rate Stabilization Bonds, provided that BGE may
        seek approval from the PSC to recover from Customers, through the Financing
        Credit Order in accordance with the Qualified Rate Order,
        any  incremental costs it incurs to service the Rate Stabilization
        Property to the extent such incremental costs exceed 0.05% of the aggregate
        initial principal amount of all Outstanding Series of Rate Stabilization
        Bonds,
        and furtherprovided that such excess amount shall neither be
        considered an Operating Expense nor be paid out of the Collection Account
        or
        included in the calculation of True-Up Adjustments.  In the event that
        the Servicing Fee exceeds the Servicer’s actual incremental costs to service the
        Rate Stabilization Property, then the Servicer will refund to Customers,
        in
        accordance with the Financing Credit Order, the difference between such
        incremental costs and the Servicing Fee.  The Servicing Fee shall be
        modified, and this Section 6.05(a) shall be deemed to have been amended,
        without further act or deed by any Person to reflect any such modification
        or
        amendment, to the extent provided in any Qualified Rate Order issued by the
        PSC
        providing for the issuance of an additional series of Rate Stabilization
        Bonds.

       

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

       

      
        
          
          

        

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

      

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

       

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

       

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

       

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

       

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

       

      
        
          
          

        

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

       

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

       

      SECTION
        6.10.  Remittances.

       

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

       

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

       

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

       

      
        
          
          

        

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

       

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

       

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

       

      ARTICLE
        VII

      DEFAULT

       

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

       

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

       

      
        
          
          

        

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

       

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

       

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

       

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

       

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

       

      
        
          
          

        

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

       

      SECTION
        7.02.  Appointment
        of Successor.

       

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

       

      (b)  Upon
        appointment, the Successor Servicer shall be the successor in all respects
        to
        the predecessor Servicer and shall be subject to all the responsibilities,
        duties and liabilities arising thereafter relating thereto placed on the
        predecessor Servicer and shall be entitled to the Servicing Fee and all the
        rights granted to the predecessor Servicer by the terms and provisions of
        this
        Agreement.

       

      
        
          
          

        

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

       

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

       

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

       

      ARTICLE
        VIII

       INDEMNIFICATION

       

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

       

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

       

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

       

      
        
          
          

        

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

       

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

       

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

       

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

       

      
        
          
          

        

        
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      to
        represent the Indemnified Person within a reasonable time after notice of
        the
        institution of such action, (iii) the Servicer shall authorize the Indemnified
        Person to employ separate counsel at the expense of the Servicer or (iv)
        in the
        case of the Indenture Trustee, such action exposes the Indenture Trustee
        to a
        material risk of criminal liability or forfeiture or a Servicer Default has
        occurred and is continuing.  Notwithstanding the foregoing, the
        Servicer shall not be obligated to pay for the fees, costs and expenses of
        more
        than one separate counsel for the Indemnified Persons other than one local
        counsel, if appropriate.

       

      ARTICLE
        IX

      MISCELLANEOUS
        PROVISIONS

       

      SECTION
        9.01.  Amendment.

       

      (a)  This
        Agreement may be amended in writing by the Servicer and the Issuer with the
        prior written consent of the Indenture Trustee and the satisfaction of the
        Rating Agency Condition.  Promptly after the execution of any such
        amendment or consent, the Issuer shall furnish written notification of the
        substance of such amendment or consent to each of the Rating
        Agencies.

       

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

      

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

       

      (c)  If
        the
        PSC adopts a rule or regulation the effect of which is to modify or supplement
        any provision of this Agreement related to the TPC Credit Requirements and
        the
        TPC Deposit Requirements, this Agreement will be deemed so modified or
        supplemented on the effective date of such rule or regulation in the manner
        necessary to comply therewith without the necessity of any further action
        by any
        party hereto; provided that (i) the Rating Agency Condition has been
        satisfied, (ii) the Servicer shall have notified the Issuer and the Indenture
        Trustee of such modification or supplement and delivered an Opinion of Counsel
        as described in the second paragraph of Section 9.01(a) and (iii) neither
        the Issuer nor the Indenture Trustee 

       

      
        
          
          

        

        
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      shall
        be
        bound by any such modification to the extent it affects their own rights,
        duties, indemnities or immunities under this Agreement or
        otherwise.

       

      SECTION
        9.02.  Maintenance
        of Accounts and Records.

       

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

       

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

       

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

       

      (a)  in
        the
        case of the Servicer, to Baltimore Gas and Electric Company, at 750 E. Pratt
        Street, 16th
        Floor, Baltimore, Maryland 21202, Attention: Treasurer, Telephone: (410)
        783-3620, Facsimile:  (410) 783-3619;

       

      (b)  in
        the
        case of the Issuer, to RSB BondCo LLC at Suite 202, 103 Foulk Road, Wilmington,
        Delaware 19803, Attention: Manager, Telephone: (302) 691-6409, Facsimile:
        (302)
        652-8667;

       

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

       

      (d)  in
        the
        case of the PSC, to William D. Schaefer Tower, 6 St. Paul Street, 12th Floor,
        Baltimore, Maryland 21202,  Attention: Executive Secretary, Telephone:
        (410) 767-8000, Facsimile: (410) 333-6495;

       

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

       

      (f)  in
        the
        case of Standard & Poor’s, to Standard & Poor’s Ratings Services, a
        division of The McGraw-Hill Companies, Inc., 55 Water Street, 41st Floor,
        New
        York, New

       

      
        
          
          

        

        
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      York
        10041, Attention: Asset Backed Surveillance Department, Telephone: (212)
        438-2000, Facsimile: (212) 438-2665;

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

      
        
          
          

        

        
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      SECTION
        9.09.  GOVERNING
        LAW.   THIS
        AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
        OF THE
        STATE OF MARYLAND, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND
        THE
        OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED
        IN
        ACCORDANCE WITH SUCH LAWS.

       

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

       

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

       

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

       

      [SIGNATURE
        PAGE
        FOLLOWS]

       

      
        
          
          

        

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

       

      
        
          	 	
                  RSB
                    BONDCO LLC, as Issuer

                
	 	 
	 	 
	 	
                  By:

                	/s/
                  Charles A. Berardesco 
	 	 	
                  Name: 
                    Charles A. Berardesco

                  Title:   
                    Secretary

                
	 	 
	 	 
	 	
                  BALTIMORE
                    GAS AND ELECTRIC COMPANY, as Servicer

                
	 	 
	 	 
	 	
                  By:

                	/s/
                  Charles A. Berardesco
	 	 	
                  Name: Charles
                    A. Berardesco

                  Title:   Corporate
                    Secretary

                

        

       

      
        
          
          

        

        
          
            Issuer
              and BGE Signature Page to Servicing Agreement

          

          
            

          

        

        
          
          

        

      

       

      
        
          	 	 
	 	 
	
                  ACKNOWLEDGED
                    AND ACCEPTED:

                	 
	
                   

                  DEUTSCHE
                    BANK TRUST 

                  COMPANY
                    AMERICAS, not in its

                   individual
                    capacity, but solely in its

                   capacity
                    as Indenture Trustee

                   

                   

                	 
	
                  By:

                	/s/
                  Eileen Hughes	 
	 	
                  Name: 
                    Eileen Hughes

                  Title:    Vice
                    President

                	 
	 	 	 
	 	 	 
	
                  By:

                	/s/
                  William Schwerdtman	 
	 	
                  Name: 
                    William Schwerdtman

                  Title:   
                    Associate

                	 

        

      

       

      
        
          
          

        

        
          
            Trustee
              Signature Page to Servicing Agreement

          

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
        A

       

      MONTHLY
        SERVICER’S CERTIFICATE

       

      

      See
        Attached.

       

       

      
        
          
          

        

        
          
            EXHIBIT
              A

            1

          

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
        A

       

      TO
        RATE STABILIZATION PROPERTY

       

      SERVICING
        AGREEMENT

       

      FORM
        OF
        MONTHLY SERVICER’S CERTIFICATE

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

      OF
        THE
        SERIES A RATE STABILIZATION PROPERTY SERVICING AGREEMENT)

       

      RSB
        BONDCO LLC,

      Series
        A
        Rate Stabilization Bonds

       

      Baltimore
        Gas and Electric Company, as Servicer

       

      Pursuant
        to the Series A Rate Stabilization Property Servicing Agreement dated as
        of June
        29, 2007 (the “Series A Rate Stabilization Property Servicing Agreement”)
        between Baltimore Gas and Electric Company, as Servicer, and RSB BondCo LLC,
        as
        Issuer, the Servicer does hereby certify as follows:

       

      
        	 	 	 	 	 
	
                SERIES
                  A COLLECTION PERIOD: ________

              	 	 
	
                Customer
                  Class

              	
                 

                 

                a.
                  Series A 

                Qualified
                  Rate

                 Stabilization

                 Charge
                  in Effect

              	
                b.
                  Series A

                 Billed

                 QRSCs

              	
                c.
                  Series A

                Estimated

                 QRSC

                 Collections

              	
                 

                 

                 

                d.
                  Series A

                 QRSC

                 Collections
                  

                Remitted
                  

                to
                  Trustee

              
	 	 	 	 	 
	
                Residential
                  Service

              	
                __
                  cents/kWh

              	 	 	 

      

      

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

       

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

       

      
        
          	 	
                  BALTIMORE
                    GAS AND ELECTRIC COMPANY,

                
	 	
                  as
                    Servicer

                
	 	 	 
	 	 	 
	 	
                  By

                	 
	 	
                  Title:

                	 

        

      

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
        B

       

      CERTIFICATE
        OF COMPLIANCE

       

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

       

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

       

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

       

      Executed
        as of this ______________ day of _________________, ____.

       

       

        
          	 	
                   

                  [NAME
                    OF
                    SERVICER]

                   

                
	 	 	 
	 	 	 
	 	
                  By

                	 
	 	 	
                  Name:

                
	 	 	
                  Title:

                

        

      

       

      

      
        
          
            EXHIBIT
              B

          

        

        
          
            1

          

          
            

          

        

        
          
          

        

      

       

      ANNEX
        A

      TO
        CERTIFICATE OF COMPLIANCE

       

      LIST
        OF SERVICER DEFAULTS

       

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

       

      
        	
                Nature
                  of Default

              	
                Status

              
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 

      

       

      
        
          
            
              EXHIBIT
                B

            

          

          
            
              2

            

            
              

            

          

          
            
            

          

        

         

      

      EXHIBIT
        C

       

      SERVICER’S
        CERTIFICATE

       

      

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

       

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

       

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

       

      

      
        
          	 	
                  Servicing
                    Criteria

                	
                  Applicable

                  Servicing
                    Criteria

                
	
                  Reference

                	
                  Criteria

                	 
	 	
                  General
                    Servicing Considerations

                	 
	
                  1122(d)(1)(i)

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

                	
                  Applicable;
                    assessment below.

                   

                
	
                  1122(d)(1)(ii)

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

                	
                  Not
                    applicable; no servicing activities were outsourced.

                
	
                  1122(d)(1)(iii)

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

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

                
	
                  1122(d)(1)(iv)

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

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

                

        
 

       

      
        
          EXHIBIT
            C

        

        
          
            1

          

          
            

          

        

        
          
          

        

      

       

      
        
          	 	
                  Servicing
                    Criteria

                	
                  Applicable

                  Servicing
                    Criteria

                
	
                  Reference

                	
                  Criteria

                	 
	 	
                  Cash
                    Collection and Administration

                	 
	
                  1122(d)(2)(i)

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

                	
                  Applicable;
                    assessment below.

                
	
                  1122(d)(2)(ii)

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

                	
                  Applicable;
                    assessment below.

                
	
                  1122(d)(2)(iii)

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

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

                
	
                  1122(d)(2)(iv)

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

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

                
	
                  1122(d)(2)(v)

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

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

                
	
                  1122(d)(2)(vi)

                	
                  Unissued
                    checks are safeguarded so as to prevent unauthorized
                    access.

                	
                  Not
                    applicable; all transfers made by wire transfer.

                
	
                  1122(d)(2)(vii)

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

                	
                  Applicable;
                    assessment below.

                

        

      

       

      
        
          
            EXHIBIT
              C

          

        

        
          
            2

          

          
            

          

        

        
          
          

        

      

       

      
        
          	 	
                  Servicing
                    Criteria

                	
                  Applicable

                  Servicing
                    Criteria

                
	
                  Reference

                	
                  Criteria

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

                	 
	 	
                  Investor
                    Remittances and Reporting

                	 
	
                  1122(d)(3)(i)

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

                	
                  Applicable;
                    assessment below.

                
	
                  1122(d)(3)(ii)

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

                	
                  Applicable;
                    assessment below.

                
	
                  1122(d)(3)(iii)

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

                	
                  Applicable

                
	
                  1122(d)(3)(iv)

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

                	
                  Applicable;
                    assessment below.

                
	 	
                  Pool
                    Asset Administration

                	 
	
                  1122(d)(4)(i)

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

                	
                  Applicable;
                    assessment below.

                
	
                  1122(d)(4)(ii)

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

                	
                  Applicable;
                    assessment below.

                
	
                  1122(d)(4)(iii)

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

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

                

        

      

       

      
        
          EXHIBIT
            C

        

        
          
            3

          

          
            

          

        

        
          
          

        

      

       

      
        
          	 	
                  Servicing
                    Criteria

                	
                  Applicable

                  Servicing
                    Criteria

                
	
                  Reference

                	
                  Criteria

                	 
	
                  1122(d)(4)(iv)

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

                	
                  Applicable;
                    assessment below.

                
	
                  1122(d)(4)(v)

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

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

                
	
                  1122(d)(4)(vi)

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

                	
                  Applicable;
                    assessment below

                
	
                  1122(d)(4)(vii)

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

                	
                  Applicable;
                    assessment below.

                
	
                  1122(d)(4)(viii)

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

                   

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

                
	
                  1122(d)(4)(ix)

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

                   

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

                

        

      

       

      
        
          
            EXHIBIT
              C

          

        

        
          
            4

          

          
            

          

        

        
          
          

        

      

       

      
        
          	 	
                  Servicing
                    Criteria

                	
                  Applicable

                  Servicing
                    Criteria

                
	
                  Reference

                	
                  Criteria

                	 
	
                  1122(d)(4)(iv)

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

                	
                  Applicable;
                    assessment below.

                
	
                  1122(d)(4)(v)

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

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

                
	
                  1122(d)(4)(vi)

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

                	
                  Applicable;
                    assessment below

                
	
                  1122(d)(4)(vii)

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

                	
                  Applicable;
                    assessment below.

                
	
                  1122(d)(4)(viii)

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

                   

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

                
	
                  1122(d)(4)(ix)

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

                   

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

                

        

      

       

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

       

      
        
          EXHIBIT
            C

        

        
          
            5

          

          
            

          

        

        
          
          

        

      

       

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

       

      Executed
        as of this ______________ day of _________________, ____.

      
         

         

          
            	 	
                    
                      BALTIMORE
                        GAS AND ELECTRIC COMPANY

                    

                  
	 	 	 
	 	 	 
	 	
                    By

                  	 
	 	 	
                    Name:

                  
	 	 	
                    Title:

                  

          

        

         

      

       

      
        
          EXHIBIT
            C

        

        
          
            6

          

          
            

          

        

        
          
          

        

      

       

      SCHEDULE
        4.01(a)

       

      EXPECTED
        AMORTIZATION SCHEDULE

      OUTSTANDING
        PRINCIPAL BALANCE PER TRANCHE

       

      
        	
                Payment
                  Date

                 

              	
                Tranche
                  A-1

                 

              	
                Tranche
                  A-2

                 

              	
                Tranche
                  A-3

                 

              
	
                Settlement
                  Date

              	
                $284,000,000

              	
                $220,000,000

              	
                $119,200,000

              
	
                4/1/2008

              	
                $250,741,286

              	
                $220,000,000

              	
                $119,200,000

              
	
                10/1/2008

              	
                $225,198,598

              	
                $220,000,000

              	
                $119,200,000

              
	
                4/1/2009

              	
                $198,590,708

              	
                $220,000,000

              	
                $119,200,000

              
	
                10/1/2009

              	
                $171,674,318

              	
                $220,000,000

              	
                $119,200,000

              
	
                4/1/2010

              	
                $143,549,922

              	
                $220,000,000

              	
                $119,200,000

              
	
                10/1/2010

              	
                $115,131,815

              	
                $220,000,000

              	
                $119,200,000

              
	
                4/1/2011

              	
                $85,457,334

              	
                $220,000,000

              	
                $119,200,000

              
	
                10/1/2011

              	
                $55,423,848

              	
                $220,000,000

              	
                $119,200,000

              
	
                4/1/2012

              	
                $24,142,900

              	
                $220,000,000

              	
                $119,200,000

              
	
                10/1/2012

              	
                $0

              	
                $212,419,156

              	
                $119,200,000

              
	
                4/1/2013

              	
                $0

              	
                $179,418,862

              	
                $119,200,000

              
	
                10/1/2013

              	
                $0

              	
                $145,855,662

              	
                $119,200,000

              
	
                4/1/2014

              	
                $0

              	
                $110,970,180

              	
                $119,200,000

              
	
                10/1/2014

              	
                $0

              	
                $75,433,398

              	
                $119,200,000

              
	
                4/1/2015

              	
                $0

              	
                $38,549,788

              	
                $119,200,000

              
	
                10/1/2015

              	
                $0

              	
                $925,060

              	
                $119,200,000

              
	
                4/1/2016

              	
                $0

              	
                $0

              	
                $81,127,235

              
	
                10/1/2016

              	
                $0

              	
                $0

              	
                $41,269,298

              
	
                4/1/2017

              	
                $0

              	
                $0

              	
                $0

              

      

       

       

      
        
          SCHEDULE
            4.01(A)

        

        
          
            1

          

          
            

          

        

        
          
          

        

      

       

      ANNEX
        I

       

      The
        Servicer agrees to comply with the following servicing procedures:

       

      SECTION
        1.  DEFINITIONS.

       

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

       

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

       

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

       

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

       

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

       

      SECTION
        2.  DATA
        ACQUISITION.

       

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

       

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

       

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

       

      
        
          ANNEX
            I

        

        
          1

          
            

          

        

        
          
          

        

      

       

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

       

      SECTION
        3.  USAGE
        AND BILL CALCULATION.

       

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

       

      SECTION
        4.  BILLING.

       

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

       

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

       

      (b)  Format.

       

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

       

      
        
          ANNEX
            I

        

        
          2

          
            

          

        

        
          
          

        

      

       

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

       

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

       

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

       

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

       

      SECTION
        5.  CUSTOMER
        SERVICE FUNCTIONS.

       

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

       

      SECTION
        6.  COLLECTIONS;
        PAYMENT PROCESSING; REMITTANCE.

       

      (a)  Collection
        Efforts, Policies, Procedures.

       

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

       

      
        	
                (A)  

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

              

      

       

      
        
          ANNEX
            I

        

        
          3

          
            

          

        

        
          
          

        

      

       

      
        	
                (B)  

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

              

      

       

      
        	
                (C)  

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

              

      

       

      
        	
                (D)  

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

              

      

       

      
        	
                (E)  

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

              

      

       

      
        	
                (F)  

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

              

      

       

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

       

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

       

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

       

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

       

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

       

       

      
        
          ANNEX
            I

        

        
          4

          
            

          

        

        
          
          

        

      

       

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

       

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

       

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

       

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

       

      (c)  Accounts;
        Records.

       

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

       

      (d)  Investment
        of QRSC Payments Received.

       

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

       

      (e)  Calculation
        Updates.

       

      (i)  Annually,
        on or before May 29th of each
        year,
        beginning on May 29, 2008, the Servicer shall update the Collections Curve
        and
        the Charge-Off percentage in order to be able to calculate the Periodic Billing
        Requirement and to calculate any change in the Daily Remittances.

       

       

      
        
          ANNEX
            I

        

        
          5

          
            

          

        

        
          
          

        

      

       

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

       

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

       

      (f)  Remittances.

       

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

       

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

       

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

       

       

      
        
          ANNEX
            I

        

        
          6

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