Document:

EX-10.3

Exhibit
10.3

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”),
AND MAY NOT BE OFFERED OR SOLD UNLESS REGISTERED PURSUANT TO SUCH ACT OR UNLESS AN EXEMPTION FROM
SUCH REGISTRATION IS AVAILABLE.

SENIOR PROMISSORY NOTE

			
	$1,000,000,000
	 	New York, New York
	R -                    
	 	                    1

     FOR VALUE RECEIVED, the undersigned, CONSTELLATION ENERGY GROUP, INC., a Maryland corporation
(the “Company”), hereby unconditionally promises to pay to the order of
                                        , a                                         
 corporation (the “Initial
Holder”), or its assigns (any such assigns, together with the Initial Holder, the
“Holder”), the principal sum of ONE BILLION DOLLARS ($1,000,000,000) on the date specified
herein, with interest on the unpaid balance of such amount from the date hereof at the rate of
interest specified herein.

1. DEFINITIONS

     Capitalized terms and other defined terms used in this Note shall (unless otherwise provided
elsewhere in this Note) have the meanings given to them in Annex 1 hereto.

     All references to Sections contained herein shall refer to Sections of this Note unless
otherwise stated or the context otherwise requires.

     Except as otherwise provided in this Note, all computations and determinations as to
accounting or financial matters (including financial covenants) shall be made in accordance with
GAAP consistently applied for all applicable periods, and all accounting or financial terms shall
have the meanings ascribed to such terms by GAAP. All financial statements to be delivered
pursuant to this Note shall be prepared in accordance with GAAP.

     All other undefined terms contained in this Note shall, unless the context indicates
otherwise, have the meanings provided for by the Code as in effect in the State of New York to the
extent the same are used or defined therein.

     The words “include,” “includes,” “including” and “such as”
shall be construed as if followed by the phrase “without limitation.”

 

			
	1	 	Insert issue date

 

 

     The words “herein,” “hereof” and “hereunder” and other words of
similar import refer to this Note as a whole, as the same may from time to time be amended,
modified or supplemented and not to any particular section, subsection or clause contained in this
Note.

     Unless the context otherwise requires, each term stated in either the singular or plural shall
include the singular and the plural, and pronouns stated in the masculine, feminine or neuter
gender shall include the masculine, the feminine and the neuter.

     In the computation of periods of time from a specified date to a later specified date, the
word “from” means “from and including” and the words “to” and “until” each mean “to but excluding”
and the word “through” means “to and including.”

2. TERMS OF PAYMENT

     2.1. Principal. The Company shall pay the entire unpaid principal amount of this
Note, together with accrued and unpaid interest thereon through the date of such payment, on the
Maturity Date.

     2.2. Optional Prepayment. The Company may, at any time, upon three days’ prior
written notice, prepay the outstanding principal amount of this Note, without premium or penalty,
in whole or ratably in part, together with accrued and unpaid interest thereon, through the date of
such prepayment on the principal amount prepaid. Any such prepayment by the Company shall be
applied in the following order: (i) then due and payable fees and expenses under the Note; (ii)
then due and payable interest payments on the Note; and (iii) the principal of the Note.

     2.3. Interest.

     (a) The Company shall pay interest on the unpaid principal amount of this Note commencing on
the date hereof until such principal amount shall be paid in full at the Applicable Rate. Interest
shall be payable monthly in arrears on the last Business Day of each month and on the date of each
payment or prepayment of the principal hereof. All payments of interest hereunder shall be
computed on the basis of a 360-day year and the number of days elapsed (including the first day but
excluding the last day).

     (b) If any payment on this Note becomes due and payable on a day other than a Business Day,
the maturity thereof shall be extended to the next succeeding Business Day and, with respect to
payments of interest thereon, shall be payable at the then Applicable Rate during such extension.

     (c) Notwithstanding the foregoing, if any Event of Default shall have occurred and be
continuing, the Company shall pay interest on (i) the unpaid principal amount hereof, payable on
demand, at a rate per annum equal to the Applicable Rate plus 3.0% per annum and (ii) the amount of
any cost, expense or other amount payable hereunder that is not paid when due, from the date such
amount shall be due until such amount shall be paid in full, payable on demand (and in any event in
arrears on the date such amount shall be paid in full), at a rate per annum equal to the Applicable
Rate plus 3.0% per annum.

-2-

 

     (d) Notwithstanding anything to the contrary set forth in this Section 2.3, if at any time
until the Maturity Date the Applicable Rate exceeds the highest rate of interest permissible under
any law which a court of competent jurisdiction shall, in a final determination, deem applicable
hereto (the “Maximum Lawful Rate”), then, in such event, and so long as the Maximum Lawful
Rate would be so exceeded, the rate of interest payable hereunder shall be equal to the Maximum
Lawful Rate; provided, however, that, to the extent permitted by applicable law, if
at any time thereafter the Applicable Rate is less than the Maximum Lawful Rate, the Company shall
continue to pay interest hereunder at the Maximum Lawful Rate until such time as the total interest
received by Holder hereunder is equal to the total interest which Holder would have received had
the Applicable Rate been (but for the operation of this paragraph) the interest rate payable since
the date hereof. Thereafter, the interest rate payable hereunder shall be the Applicable Rate
unless and until the Applicable Rate again exceeds the Maximum Lawful Rate, in which event this
paragraph shall again apply. In no event shall the total interest received by Holder pursuant to
the terms hereof exceed the amount which Holder could lawfully have received had the interest due
hereunder been calculated for the full term hereof at the Maximum Lawful Rate. If the Maximum
Lawful Rate is calculated pursuant to this paragraph, such interest shall be calculated at a daily
rate equal to the Maximum Lawful Rate divided by the number of days in the year in which such
calculation is made. If a court of competent jurisdiction, notwithstanding the provisions of this
Section 2.4(d), shall make a final determination that Holder has received interest hereunder in
excess of the Maximum Lawful Rate, Holder shall, to the extent permitted by applicable law,
promptly apply such excess first to any interest due and not yet paid under its Note, then to the
principal amount of its Note (without premium or penalty), then to other unpaid Obligations and
thereafter shall refund any excess to the Company or as a court of competent jurisdiction may
otherwise order.

     2.4. Receipt of Payment. The Company shall make each payment under this Note not
later than 12:00 noon (New York City time) on the Business Day when due, in lawful money of the
United States of America, in immediately available funds to Holder’s depository bank as designated
by Holder from time to time for deposit in Holder’s depositary account. For purposes only of
computing interest hereunder, all payments shall be applied by Holder to the Note on the day
payment has been received by Holder in immediately available funds as provided herein.

     2.5. Taxes, Etc.

     (a) Any and all payments by or on account of any obligation of the Company hereunder shall be
made without setoff, counterclaim or other defense and free and clear of and without deduction or
withholding for any and all Indemnified Taxes or Other Taxes; provided that if the Company
shall be required by applicable Requirements of Law to deduct any Indemnified Taxes or Other Taxes
from such payments, then (i) the sum payable shall be increased as necessary so that after making
all required deductions Holder receives an amount equal to the sum it would have received had no
such deductions or withholdings been made, (ii) the Company shall make such deductions or
withholdings and (iii) the Company shall timely pay the full amount deducted or withheld to the
relevant Governmental Authority in accordance with applicable Requirements of Law.

-3-

 

     (b) Status of Holders. The Initial Holder shall deliver a properly executed Form W-9 to the
Company prior to the date of any payment of interest hereunder. Any Foreign Holder that is
entitled to an exemption from or reduction of withholding tax under United States law (or any
treaty to which the United States is a party) with respect to payments hereunder shall deliver to
the Company, at the time or times prescribed by applicable law or reasonably requested by the
Company, such properly completed and executed documentation prescribed by applicable law as will
permit such payments to be made without withholding. In addition, any Holder, if requested by the
Company, shall deliver such other documentation prescribed by applicable law or reasonably
requested by the Company as will enable the Company to determine whether or not such Holder is
subject to withholding, backup withholding, or information reporting requirements.

     2.6. Setoff Right. In the event a court having valid jurisdiction over a claim or
dispute arising under the Merger Agreement determines by a final nonappealable judgment that Parent
or Merger Sub (as such terms are defined in the Merger Agreement) owes damages to the Company under
the Merger Agreement (the amount of such damages, the “recoverable amount”), the Company
shall have the right to setoff against Obligations then payable hereunder and (if no Obligations
are then payable) principal of this Note an amount equal to or less than the recoverable amount.
At the time of effecting any such setoff, the Company shall provide Holder notice describing in
reasonable detail the Obligations being set-off.

3. FINANCIAL STATEMENTS AND OTHER INFORMATION

     3.1. Financial Statements. The Company covenants and agrees that, from and after the
date hereof and until all the Obligations have been paid in full, it shall deliver to Holder:

     (a) within 45 days after the end of the first three fiscal quarters of each Fiscal Year, (i) a
copy of the unaudited balance sheets of the Company Parties as of the close of such quarter and
related statements of income and cash flows for that portion of the Fiscal Year ending as of the
close of such quarter, and (ii) a copy of the unaudited statements of income of the Company Parties
for such quarter, all prepared in accordance with GAAP (subject to normal year end adjustments) and
accompanied by the certification of the chief executive officer or chief financial officer of the
Company that all such financial statements present fairly in accordance with GAAP (subject to
normal year end adjustments) the financial position, the results of operations and the cash flows
of the Company Parties as of the end of such quarter and for the portion of the fiscal year then
ended; and

     (b) within 90 days after the close of each Fiscal Year, a copy of the annual audited financial
statements of the Company Parties, consisting of a balance sheet and statements of income and
retained earnings and cash flows, setting forth in comparative form in each case the figures for
the previous fiscal year, which financial statements shall be prepared in accordance with GAAP,
certified without a “going concern” or like qualification or exception, or qualification arising
out of the scope of the audit by PriceWaterhouseCoopers LLP or other firm of independent certified
public accountants of recognized national standing reasonably acceptable to the Holder;

all such financial statements to be complete and correct in all material respects.

-4-

 

     3.2. Reports, and Other Information. The Company covenants and agrees that, from and
after the date hereof and until all the Obligations have been paid in full, it shall deliver to
Holder:

     (a) concurrently with the delivery of the financial statements referred to in Sections 3.1(a)
and 3.1(b), a certificate of a Responsible Officer stating that, to the best of such Responsible
Officer’s knowledge, the Company during such period has observed or performed all of its covenants
and other agreements contained in this Note to be observed or performed by it, and that such
Responsible Officer has obtained no knowledge of any Event of Default, except as specified in such
certificate;

     (b) not later than 30 days after the end of each fiscal year of the Company, a copy of the
projections by the Company of the operating budget and cash flow budget of the Company and its
subsidiaries for the current fiscal year, such projections to be accompanied by a certificate of a
Responsible Officer to the effect that such projections have been prepared on the basis of sound
financial planning practice and that such responsible Officer has no reason to believe they are
incorrect or misleading in any material respect

     (c) at the same time the same are sent, copies of all financial statements and reports which
the Company sends to its stockholders, and at the same time the same are filed, copies of all
financial statements and reports which the Company may make to, or file with, the SEC unless such
material is available electronically at www.sec.gov.; and

     (d) promptly, such additional financial and other information as Holder from time to time may
reasonably request.

4. AFFIRMATIVE COVENANTS

     The Company covenants and agrees that from and after the date hereof and until all the
Obligations have been paid in full:

     4.1. Payment of Obligations. The Company shall, and shall cause each of the other
Company Parties to, pay, discharge or otherwise satisfy at or before maturity or before they become
delinquent, as the case may be, all its obligations of whatever nature, except where the amount or
validity thereof is currently being contested in good faith by appropriate proceedings and reserves
in conformity with GAAP with respect hereto have been provided on the books of the Company or the
Company Parties, as the case may be./

     4.2. Conduct of Business and Maintenance of Existence. The Company shall, and shall
cause each of the other Company Parties to, continue to engage in business of the same general type
as now conducted by it and preserve, renew and keep in full force and effect its corporate
existence and status (including, in the case of the Company, its good standing with the State
Department of Assessments and Taxation of Maryland) and take all reasonable action to maintain all
rights, privileges and franchises necessary or desirable in the normal conduct of business except
as otherwise permitted pursuant to Section 5.3; comply with all Contractual Obligations and
Requirements of Law except to the extent that failure to comply therewith could not, in the
aggregate, have a Material Adverse Effect.

-5-

 

     4.3. Maintenance of Property; Insurance. The Company shall, and shall cause each of
the other Company Parties to, keep all property useful and necessary in its business in good
working order and condition; maintain with financially sound and reputable insurance companies
insurance on all its property in at least such amounts and against at least such risks (but
including in any event public liability, product liability and business interruption) as are
usually insured against in the same general area by companies engaged in the same or similar
business; and furnish to Holder, upon request, full information as to the insurance carried.

     4.4. Inspection of Property; Books and Records. The Company shall keep adequate
records and books of account with respect to its business activities, in which proper entries,
reflecting all of the financial transactions of the Company Parties, are made in accordance with
GAAP and all requirements of law. The Company shall permit Holder, at Holder’s expense, to visit
and inspect the Company Parties’ properties, to examine their books of account and records and to
discuss their affairs, finances and accounts with their officers, all at such reasonable times as
may be requested by Holder; provided, however, that the Company shall not be
obligated pursuant to this Section 4.4 to provide access to any information which it reasonably
considers to be a trade secret or similar confidential information

     4.5. Notices. The Company shall promptly give notice to Holder of

     (a) the occurrence of any Default or Event of Default;

     (b) any litigation or proceeding affecting the Company or any Company Party in which the
amount involved is $20,000,000 or more and not covered by insurance or in which injunctive or
similar relief is sought; and

     (c) the occurrence of any event having or that could reasonably be expected to have a Material
Adverse Effect.

     Each notice pursuant to this Section 4.5 shall be accompanied by a statement of a Responsible
Officer setting forth details of the occurrence referred to therein and stating what action the
Company proposes to take with respect thereto.

5. NEGATIVE COVENANTS

     The Company covenants and agrees that from and after the date hereof and until all the
Obligations have been paid in full:

     5.1. Limitation on Indebtedness. The Company shall not, and shall not permit any
other Company Party to, create, incur or suffer to exist any Indebtedness except:

     (a) Indebtedness in respect of the Note and other obligations under this Note;

     (b) the Company (but not any other Company Party) may incur Indebtedness that is pari passu or
subordinated to the Obligations;

     (c) Indebtedness existing on the Issue Date that was allowed to be outstanding under, or
incurred in accordance with, the terms of the Preferred Stock;

-6-

 

     (d) Qualified Refinancing Indebtedness; and

     (e) BG&E and its Subsidiaries may incur and have outstanding Indebtedness consistent with past
practice and required regulatory approvals.

     5.2. Limitations on Liens. The Company shall not, and shall not permit any other
Company Party to, create, incur, assume or suffer to exist any Lien upon any of its property,
assets or revenues, whether now owned or hereafter acquired, to secure any Indebtedness or
Contingent Obligation except for:

     (a) (i) Liens securing Indebtedness of the Company Parties permitted under Section 5.1(c) if
and to the extent such Indebtedness was secured on September 19, 2008 and (ii) Liens securing
Qualified Refinancing Indebtedness in respect of Indebtedness referred to in Section 5.2(a)(i) but
only if and to the extent the refinanced debt was secured;

     (b) Liens on assets of BG&E and its Subsidiaries securing Indebtedness of BG&E and its
Subsidiaries permitted under Section 5.1(e); and

     (c) Permitted Liens.

     5.3. Limitations on Fundamental Changes. The Company shall not, and shall not permit
any Company Party to, enter into any merger, consolidation or amalgamation, or liquidate, wind up
or dissolve itself (or suffer any liquidation or dissolution), or convey, sell, lease, assign,
transfer or otherwise dispose of, all or substantially all of its property, business or assets, or
make any material change in its present method of conducting business, except:

     (a) any Subsidiary of the Company may be merged or consolidated with or into the Company
(provided that the Company shall be the continuing or surviving corporation) or with or into any
one or more wholly owned Subsidiaries of the Company (provided that the Wholly-Owned Subsidiary or
Subsidiaries shall be the continuing or surviving corporation) and after giving effect to any of
such transactions, no Default or Event of Default shall exist; and

     (b) any Wholly-Owned Subsidiary may sell, lease, transfer or otherwise dispose of any or all
of its assets (upon voluntary liquidation or otherwise) to the Company or any other Wholly-Owned
Subsidiary of the Company.

     5.4. Limitations on Sale of Assets. The Company shall not, and shall not permit any
other Company Party to, convey, sell, lease, assign, transfer or otherwise dispose of any of its
property, business or assets (including, without limitation, receivables and leasehold interests),
whether now owned or hereafter acquired, except:

     (a) obsolete or worn out property disposed of in the ordinary course of business;

     (b) as permitted by Section 5.3(b) and

     (c) Permitted Dispositions.

-7-

 

     5.5. Limitations on Restricted Payments. The Company shall not, and shall not permit
any other Company Party to, declare or pay any dividend (other than dividends payable solely in
common stock of the Company) on, or make any payment on account of, or set apart assets for a
sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other
acquisition of, any shares of any class of Stock of the Company or any of its Subsidiaries or any
warrants or options to purchase any such Stock, whether now or hereafter outstanding, or make any
other distribution in respect thereof, either directly or indirectly, whether in cash or property
or in obligations of the Company or any Subsidiary (such declarations, payments, setting apart,
purchases, redemptions and distributions being herein called “Restricted Payments”) except
that (i) any Wholly-Owned Subsidiary may declare and pay dividends to the Company or, in the case
of any Subsidiary that is wholly owned by any other Subsidiary, to such Subsidiary and (ii) (A) the
Company shall be permitted to continue to pay regular cash dividends on its common stock at the
rate per annum not to exceed the rate paid at the time of the issuance of this Note and (B) the
Company Parties shall be permitted to make Permitted Payments, to the extent applicable.

     5.6. Limitations on Investments, Loans and Advances. The Company shall not, and shall
not permit any Company Party to, purchase, hold or acquire beneficially any stock, other securities
or evidences of indebtedness of or make any loans or advances to, or make or permit to exist any
investment or acquire any interest whatsoever in, any other Person, except:

     (a) extensions of trade credit to customers in the ordinary course of business;

     (b) Permitted Investments;

     (c) loans and advances to officers and employees of the Company in the ordinary course of
business and consistent with applicable Requirements of Law;

     (d) Stock of any Subsidiary that is a Subsidiary of the Company on the Issue Date;

     (e) securities acquired in the ordinary course of the business of the Company Parties,
consistent with past practice; and

     (f) investments made pursuant to binding commitments existing on the Issue date.

     5.7. Acquisitions. The Company shall not, and shall not permit any other Company
Party to, purchase or otherwise acquire any part of the property of any Person (or agree to do any
of the foregoing at any time), except that the following shall be permitted:

     (a) capital expenditures in the ordinary course of business consistent with past practice;

     (b) purchases and other acquisitions of inventory, materials, equipment, intangible property
and other operating assets in the ordinary course of business consistent with past practice; and

-8-

 

     (c) leases, subleases or licenses of real or personal property in the ordinary course of
business.

     5.8. Limitation on Optional Payments and Modifications of Debt Instruments. The
Company shall not, and shall not permit any other Company Party to, make any optional payment or
prepayment on or redemption, defeasance or purchase of any Indebtedness (other than Indebtedness
under this Note), or amend, modify or change, or consent or agree to any amendment, modification or
change to any of the terms relating to the payment or prepayment or principal of or interest on,
any such Indebtedness, other than any amendment, modification or change which would extend the
maturity or reduce the amount of any payment of principal thereof or which would reduce the rate or
extend the date for payment of interest thereon.

     5.9. Transactions with Affiliates. The Company shall not, and shall not permit any
other Company Party to, enter into any transaction, including, without limitation, any purchase,
sale, lease or exchange of property or the rendering of any service, with any Affiliate unless such
transaction is (a) otherwise permitted under this Agreement, (b) in the ordinary course of the
Company’s or such Subsidiary’s business, (c) upon fair and reasonable terms no less favorable to
the Company or such Subsidiary, as the case may be, than it would obtain in a comparable arm’s
length transaction with a Person which is not an Affiliate, (d) the issuance of equity-based awards
to officers, directors, employees and consultants of the Company Parties consistent with past
practice, and (e) the entry into employment and compensation arrangements for officers, employee
and directors in the ordinary course of business..

     5.10. Fiscal Year. The Company shall not permit the fiscal year of the Company to end
on a day other than December 31.

     5.11. Limitation on Conduct of Business. The Company shall not, and shall not permit
any other Company Party to, enter into any business either directly or through any Subsidiary
except for businesses in which the Company Parties are engaged on the Issue Date and businesses
directly related to such existing businesses.

     5.12. Limitation on Issuance of Stock. The Company shall not permit any other Company
Party to issue any Stock (including by way of sales of treasury stock) or any options or warrants
to purchase, or securities convertible into, any Stock, except (i) for stock splits, stock
dividends and additional issuances of Stock which do not decrease the percentage ownership of the
Company or any of its Subsidiaries in any class of the Stock of such Subsidiary, and (ii) Company
Parties formed after the Issue Date may issue Stock to the Company or any Wholly-Owned Subsidiary
of the Company that is to own such Stock.

6. EVENTS OF DEFAULT; RIGHTS AND REMEDIES

     6.1. Events of Default. The occurrence of any one or more of the following events
(regardless of the reason therefor) shall constitute an “Event of Default” hereunder:

     (a) The Company shall fail to pay any principal of this Note when due in accordance with the
terms hereof.

-9-

 

     (b) The Company shall fail to pay any interest on this Note, or any other amount payable
hereunder (other than amounts in respect of principal), within three days after such interest or
other amount becomes due in accordance with the terms hereof.

     (c) The Company shall fail to perform, keep or observe (or fail to cause any other Company
Party to perform, keep or observe, as the case may be) any provision, covenant or agreement
contained in Section 3, Section 4.6 or Section 5 of this Note.

     (d) The Company shall fail to perform, keep or observe (or fail to cause any other Company
Party to perform, keep or observe, as the case may be) any other provision, covenant or agreement
of or contained in this Note (other than as provided in Sections 6.1 (a), (b) or (c) and the same
shall remain unremedied for a period of 30 days).

     (e) Any Company Party shall:

     (i) default in the payment of principal of or interest of any Indebtedness
(other than the Note) having an aggregate principal amount of $10,000,000 or more,
or in the payment of any Contingent Obligation in an amount of $10,000,000 or more,
beyond the period of grace (not to exceed 30 days), if any, provided in the
instrument or agreement under which such Indebtedness or Contingent Obligation was
created; or

     (ii) default in the observance or performance of any other agreement or
condition relating to any such Indebtedness or any such Contingent Obligation or
contained in any instrument or agreement evidencing, securing or relating thereto,
or any other event shall occur or condition exist, the effect of which default or
other event or condition is to cause, or to permit the holder or holders of such
Indebtedness or beneficiary or beneficiaries of such Contingent obligation (or a
trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, with the giving of notice if required, such Indebtedness to
become due prior to its stated maturity or such Contingent Obligation to become
payable.

     (f) (i) Any Company Party shall commence any case, proceeding or other action (A) under any
existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization, conservatorship or relief of debtors, seeking to have an order for
relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement adjustment, winding-up, liquidation, dissolution, composition or other
relief with respect to its debts, or (B) seeking appointment of a receiver, trustee, custodian,
conservator or other similar official for it or for all or any substantial part of its assets, or
any Company Party shall make a general assignment for the benefit of its creditors; or (ii) there
shall be commenced against any Company Party any case, proceeding or other action of a nature
referred to in clause (i) above which (A)results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed for a period of 60 days or (iii) there shall
be commenced against any Company Party any case, proceeding or other action seeking issuance of a
warrant of attachment, execution, distraint or similar process against all or any substantial part
of its assets which results in the entry of an order for any such relief which

-10-

 

shall not have been vacated, discharged or stayed or bonded pending appeal within 60 days from
the entry thereof; or (iv) any Company Party shall take any action in furtherance of, or
acquiescence in, any of the acts set forth in clauses (i),(ii), (iii) or (iv) above; or (v) any
Company Party shall generally not, or shall be unable to, or shall admit in writing its inability
to, pay its debts as they become due.

     (g) Any representation or warranty made by any Company Party in the Stock Purchase Agreement
or in any certificate, instrument or written statement contemplated by or made or delivered
pursuant to or in connection with this Note or the Stock Purchase Agreement, shall prove to have
been incorrect when made or deemed made in any material respect.

     (h) A Change of Control shall have occurred.

     (i) One or more judgments or decrees shall be entered against any Company Party involving in
the aggregate a liability (not paid or fully covered by insurance in respect of which a solvent and
unaffiliated insurance company has acknowledged coverage in writing) of $20,000,000 or more and all
such judgments or decrees shall not have been vacated, discharged, stayed or bonded pending appeal
within 30 days from the entry thereof.

     (j) This Note or any material provision hereof shall at any time and for any reason be
declared by a court of competent jurisdiction to be null and void, or a proceeding shall be
commenced by or on behalf of any company Party or any Governmental Authority seeking to establish
the invalidity or unenforceability hereof or thereof (exclusive of questions of interpretation of
any provision hereof or thereof), or the Company (directly or indirectly) shall repudiate, revoke,
terminate or rescind (or purport to do any of the foregoing) or deny any portion of its liability
or obligation for the Obligations.

     (k) One or more ERISA Events shall have occurred that, in the opinion of Holder, when taken
together with all other such ERISA Events that have occurred, could reasonably be expected to
result in a Material Adverse Effect (and such ERISA Event shall remain unremedied for a period of
10 Business Days).

     6.2. Remedies. If any Event of Default specified in Section 6.1 shall have occurred
and be continuing, the Holder may, by notice to the Company, declare all Obligations to be
forthwith due and payable, whereupon all such Obligations shall become and be due and payable,
without presentment, demand, protest or further notice of any kind, all of which are expressly
waived by the Company, anything contained in this Note to the contrary notwithstanding;
provided, however, that upon the occurrence of an Event of Default specified in
Section 6.1(f) hereof, all Obligations shall automatically become immediately due and payable
without declaration, notice or demand, without presentment, demand, protest or further notice of
any kind, all of which are expressly waived by the Company, anything contained in this Note to the
contrary notwithstanding. If a Change of Control has occurred and Holder has declared all
Obligations to be due and payable, the Company shall make an additional payment in an amount equal
to 1.0% of the outstanding principal balance of this Note at the time of such Change of Control
which amount shall be payable on demand by Holder and shall be payable in addition to all other
Obligations payable hereunder.

-11-

 

     6.3. Waivers by the Company. Except as otherwise provided for in this Note, the
Company waives presentment, demand and protest and notice of presentment, dishonor, notice of
intent to accelerate and notice of acceleration. The Company acknowledges that it has been advised
by counsel of its choice with respect to this Note and the transactions evidenced by this Note.

7. MISCELLANEOUS

     7.1. Complete Agreement; Modification of Note. This Note, the Stock Purchase
Agreement and the Merger Agreement constitute the complete agreement between the parties with
respect to the subject matter hereof. No amendment or waiver of any provision of this Note, nor
consent to any departure by the Company therefrom, shall in any event be effective unless the same
shall be in writing and signed by Holder, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.

     7.2. Assignment. (a) Holder may sell, assign, pledge, convey or transfer to any
other Person all or any portion of its rights under this Note without the consent of the Company.
The Company shall establish and maintain a register reflecting the name and address of Holder and
each subsequent assignee (excluding any person holding a security interest herein).

     (b) Under no circumstances shall the Company be permitted to assign any of its obligations
under this Note and any attempt by the Company to assign such obligations shall be null and void
except in connection with a merger permitted under Section 5.1 hereof.

     (c) In the event that this Note is assigned in whole or in part, then the Company, at the
request of any Holder, will at such time execute a new note or notes (all such notes, together with
this Note, the “New Notes”) substantially equivalent to this Note, payable to each Holder,
for a principal amount equal to the principal owing to each Holder (it being understood that the
aggregate principal amount of all Notes shall not exceed the aggregate principal amount of this
Note). Upon any such assignment, this “Note” shall be deemed to refer to all such New Notes, and
“Holder” shall refer to each and every Holder of the New Notes.

     (d) The Note may not be transferred or assigned by any Holder unless the transferee
acknowledges in writing reasonably satisfactory to the Company that such transferee understands and
agrees to Sections 2.6, 4.5 and 4.6 of the Stock Purchase Agreement. Any transfer absent such
acknowledgment shall be void ab initio.

     (e) At the time of each assignment to a Foreign Holder, such Foreign Holder shall provide to
the Company such properly completed and executed documentation as described in Section 2.5(b).

     7.3. Fees and Expenses. The Company agrees:

     (a) to pay or reimburse Holder for all its reasonable out-of-pocket costs and expenses
incurred in connection with the development, preparation, and execution of, and any amendment,
supplement or modification to, this Note and any other documents prepared in

-12-

 

connection herewith and therewith, and the consummation of the transactions contemplated
hereby and thereby, including, without limitation, the fees and disbursements of counsel for
Holder;

     (b) to pay or reimburse Holder for all its costs and expenses incurred in connection with the
enforcement or preservation of any rights under this Note and any such other documents, including,
without limitation, fees and disbursements of counsel for Holder;

     (c) to pay, indemnify and hold Holder harmless from, any and all recording and filing fees and
any and all liabilities with respect to, or resulting from any delay in paying, stamp, excise and
other taxes, if any, which may be payable or determined to be payable in connection with the
execution and delivery of, or consummation or administration of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver or consent under or
in respect of this Note and any such other documents (“Other Taxes”); and

     (d) to pay, indemnify and hold Holder harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions (whether in contract, in tort or on any other
ground), judgments, suits, costs, expenses, or disbursements of any kind or nature whatsoever with
respect to the execution, delivery, enforcement, performance and administration of, or in any other
way arising out of or relating to, the Note, or any other documents contemplated by or referred to
herein or therein or any action taken by Holder with respect to any of the foregoing (all of the
foregoing, collectively, the “indemnified liabilities”); provided, that the Company shall have no
obligation hereunder to Holder with respect to indemnified liabilities arising solely from the
gross negligence or willful misconduct of Holder, as determined by a court of competent
jurisdiction in a final nonappealable judgment.

     7.4. No Waiver by Holder. Holder’s failure, at any time or times, to require strict
performance by the Company of any provision of this Note shall not waive, affect or diminish any
right of Holder thereafter to demand strict compliance and performance therewith. Any suspension
or waiver by Holder of an Event of Default shall not suspend, waive or affect any other Event of
Default under this Note whether the same is prior or subsequent thereto and whether of the same or
of a different type. None of the undertakings, agreements, warranties, covenants and
representations of the Company contained in this Note and no Event of Default by the Company under
this Note shall be deemed to have been suspended or waived by Holder, unless such suspension or
waiver is by an instrument in writing signed by Holder (as such term is defined in the applicable
provision hereof) and directed to the Company specifying such suspension or waiver. The provisions
of the Note may be amended, modified or waived with the written consent of Holder.

     7.5. Remedies. Holder’s rights and remedies under this Note shall be cumulative and
non-exclusive of any other rights and remedies which Holder may have under any other agreement, by
operation of law or otherwise.

     7.6. WAIVER OF JURY TRIAL. THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS NOTE AND ANY COUNTERCLAIM RELATED
THERETO.

-13-

 

     7.7. Severability. Wherever possible, each provision of this Note shall be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Note shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Note.

     7.8. Parties. This Note shall be binding upon, and inure to the benefit of, the
successors of the Company and Holder and, the assigns of Holder.

     7.9. Authorized Signature. Until Holder shall be notified by the Company to the
contrary, the signature upon any document or instrument delivered pursuant hereto of any duly
elected officer of the Company shall bind the Company and be deemed to be the act of the Company.

     7.10. Governing Law. IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY
AND PERFORMANCE, THIS NOTE AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND PERFORMED IN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES THEREOF REGARDING
CONFLICT OF LAWS, AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. Holder and the Company
agree to submit to personal jurisdiction and to waive any objection as to venue in the federal and
state courts of the County of New York, State of New York. Service of process on the Company or
Holder in any action arising out of or relating to any of the Notes shall be effective if mailed to
such party in accordance with Section 7.11 hereof. Nothing herein shall preclude Holder or the
Company from bringing suit or taking other legal action in any other jurisdiction.

     7.11. Notices. All notices, requests, demands, approvals, consents, waivers and other
communications required or permitted to be given under this Note (each, a “Notice”) shall
be in writing and shall be (a) delivered personally, (b) mailed by first-class, registered or
certified mail, return receipt requested, postage prepaid, (c) sent by next-day or overnight mail
or delivery, or (d) sent by facsimile transmission, provided that the original copy thereof also is
sent by pre-paid, first class certified or registered mail or by next-day or overnight mail or
personal delivery:

     (i) if to the Company, to

Constellation Energy Group, Inc.

750 E. Pratt Street

Baltimore, Maryland 21202

Attention: Charles Berardesco

Fax: (410) 470-5741

     with a copy to (which shall not constitute notice):

Kirkland & Ellis LLP

Citigroup Center

-14-

 

153 East 53rd Street

New York, New York 10022-4611

Attention: George Stamas

                  Mark Director

Fax: (202) 879-5200

     (ii) if to Holder, to

[                                        ]

[                                        ]

Attention: [ ]

Fax: [ ]

Willkie Farr & Gallagher LLP

787 Seventh Avenue

New York, New York 10019

Attention: Peter Hanlon

Fax: (212) 728-8111

or, in each case at such other address as may be specified in a Notice to the Company or Holder, as
the case may be. Any Notice shall be deemed effective and given upon receipt (or intentional
refusal of receipt by the addressee of such Notice).

     7.12. Titles. The Section and paragraph titles contained in this Note are and shall
be without substantive meaning or content of any kind whatsoever and are not a part of the
agreement between the parties hereto.

     7.13. Exhibits, etc. All exhibits, schedules and annexes to this Note constitute part
of this Note and are hereby incorporated by this reference in this Note.

-15-

 

     IN WITNESS WHEREOF, this Note has been duly executed in New York, New York as of the date
first written above.

	 	 	 	 	 
	 	CONSTELLATION ENERGY GROUP, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

Acknowledged and Agreed:

                                        

	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

Name:

Title:
	 	 

-16-

 

Annex 1

Certain Definitions and Rules of Interpretation

     “Affiliate” shall mean, with respect to any Person, any other Person which directly or
indirectly controls, or is under common control with, or is controlled by, such Person; provided,
that the Company shall not be deemed to be an Affiliate of any Wholly-Owned Subsidiary of the
Company and no Wholly-Owned Subsidiary of the Company shall be deemed to be an Affiliate of any
other Wholly-Owned Subsidiary. As used in this definition, “control” (including, with its
correlative meanings, “controlled by” and “under common control with”) shall mean possession,
directly or indirectly, of power to direct or cause the direction of management or policies
(whether through ownership of securities or partnership or other ownership interests, by contract
or otherwise).

     “Applicable Rate” shall mean 14.0% per annum.

     “BG&E” shall mean Baltimore Gas and Electric Company, a Maryland corporation and a
Wholly-Owned Subsidiary of the Company.

     “Business Day” shall mean any day that is not a Saturday, a Sunday or a day on which banks are
required or permitted to be closed in the State of New York.

     “Capital Lease Obligation” shall mean, with respect to any Person, as of the date of
determination, the obligations of such Person to pay rent and other amounts under any lease of (or
other arrangement conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital leases on a balance
sheet of such Person under GAAP.

     “Change of Control” shall mean, at any time, the occurrence of any of the following: (i) the
Company at any time ceases to own directly or indirectly 100% of the Stock of each of BG&E,
Constellation Nuclear Group and Constellation Energy Commodities Group or ceases to have the power
to vote or direct the voting of such Stock, (ii) any “person” or “group”(as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in
Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of Voting Stock of the
Company representing more than 35% of the aggregate voting power and aggregate economic interests
represented by the total issued and outstanding Voting Stock beneficially owned by such person or
group which are represented by options, warrants or other convertibles securities); or (iii) during
any period of 12 consecutive months, a majority of the members of the Board of Directors of the
Company cease to be composed of individuals (A) who were members of that Board of Directors at the
commencement of such period, (B) whose election or nomination to that Board of Directors was
approved by individuals referred to in preceding clause (A) constituting at the time of such
election or nomination at least a majority of that Board of directors or (C) whose election or
nomination to that Board of Directors was approved by individuals referred to in preceding clauses
(A) and (B) constituting at the time of such election or nomination at least a majority of that
Board of Directors (excluding, in the case of both preceding clauses (A) and (B), any individual
whose initial nomination for, or assumption of office as, a member of that Board of Directors
occurs as a result of an actual (or

 

 

threatened) solicitation of proxies or consents for the election or removal of one or more
directors by any person or group other than a solicitation for the election of one or more
directors by or on behalf of the Board of Directors.

     “Code” shall mean the Uniform Commercial Code of the jurisdiction with respect to which such
term is used, as in effect from time to time.

     “Company” shall have the meaning ascribed thereto in the first paragraph of this Note,
together with its successors and assigns, including in connection with any permitted merger or
consolidation.

     “Company Party” shall mean the Company and its Subsidiaries, individually and, in the plural
usage, collectively.

     “Contingent Obligation” shall mean as to any Person any guarantee of payment or performance by
such Person of any Indebtedness or other obligation of any other Person, or any agreement to
provide financial assurance with respect to the financial condition, or the payment of the
obligations of, such other Person (including, without limitation, purchase or repurchase
agreements, reimbursement agreements with respect to letters of credit or acceptances, indemnity
arrangements, grants of security interests to support the obligations of another Person, keepwell
agreements and take-or-pay or through-put arrangements) which has the effect of assuring or holding
harmless any third person against loss with respect to one or more obligations of such third
Person; provided, however, that the term Contingent Obligations shall not include
endorsements of instruments for deposit or collection in the ordinary course of business. The
amount of any Contingent Obligation of any Person shall be deemed to be the lower of (i) an amount
equal to the stated or determinable amount of the primary obligation in respect of which such
Contingent Obligation is made and (ii) the maximum amount for which such contingently liable Person
may be liable pursuant to the terms of the instrument embodying such Contingent Obligation, unless
such primary obligation and the maximum amount for which such contingently liable Person may be
liable are not stated or determinable, in which case the amount of such Contingent Obligation shall
be such contingently liable Person’s maximum reasonably anticipated liability in respect thereof as
reasonably determined by the Company in good faith.

     “Contractual Obligation” shall mean, as to any Person, any provision of any security issued by
such Person or of any agreement, instrument or other undertaking to which such Person is a party or
by which it or any of its property is bound.

     “Default” shall mean any event or condition that constitutes an Event of Default or that would
become, with notice or lapse of time or both, an Event of Default.

     “ERISA” shall mean the Employee Retirement Income Security Act of 1974.

     “ERISA Affiliate” shall mean, with respect to any person, any trade or business (whether or
not incorporated) that, together with such person, is treated as a single employer under Section
414(b) or (c) of the Tax Code, or solely for purposes of Section 302 of ERISA and Section 412 of
the Tax Code, is treated as a single employer under Section 414 of the Tax Code.

A-2

 

     “ERISA Event” shall mean (i) a “reportable event” within the meaning of Section 4043 of ERISA
and the regulations issued thereunder with respect to any Pension Plan; (ii) the failure to meet
the minimum funding standard of Section 412 of the Tax Code with respect to any Pension Plan
(whether or not waived in accordance with Section 412(d) of the Tax Code) or the failure to make by
its due date a required installment under Section 412(m) of the Tax Code with respect to any
Pension Plan or the failure to make any required contribution to a Multiemployer Plan; (iii) the
provision by the administrator of any Pension Plan pursuant to Section 4041(a)(2) of ERISA of a
notice of intent to terminate such plan in a distress termination described in Section 4041(c) of
ERISA; (iv) the withdrawal by any Company Party or any of its ERISA Affiliates from any Pension
Plan with two or more contributing sponsors or the termination of any such Pension Plan resulting
in liability pursuant to Section 4063 or 4064 of ERISA; (v) the institution by the PBGC of
proceedings to terminate any Pension Plan, or the occurrence of any event or condition which could
reasonably be expected to constitute grounds under ERISA for the termination of, or the appointment
of a trustee to administer, any Pension Plan; (vi) the imposition of liability on any Company Party
or any of its ERISA Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason of the
application of Section 4212(c) of ERISA; (vii) the withdrawal of any Company Party or any of its
ERISA Affiliates in a complete or partial withdrawal (within the meaning of Sections 4203 and 4205
of ERISA) from any Multiemployer Plan if there is any potential liability therefor, or the receipt
by any Company Party or any of its ERISA Affiliates of notice from any Multiemployer Plan that it
is in reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA, or that it intends to
terminate or has terminated under Section 4041A or 4042 of ERISA; (viii) the assertion of a
material claim (other than routine claims for benefits) against any Employee Benefit Plan, or the
assets thereof, or against any Company Party or any of its ERISA Affiliates in connection with any
Employee Benefit Plan that could reasonably be expected in any case to result in material liability
to any Company Party or to any of its ERISA Affiliates; (ix) receipt from the Internal Revenue
Service of notice of the failure of any Pension Plan (or any other Employee Benefit Plan intended
to be qualified under Section 401(a) of the Tax Code) to qualify under Section 401(a) of the Tax
Code, or the failure of any trust forming part of any Pension Plan to qualify for exemption from
taxation under Section 501(a) of the Tax Code; (x) the imposition of a Lien pursuant to Section
401(a)(29) or 412(n) of the Tax Code or pursuant to ERISA with respect to any Pension Plan; or (xi)
the occurrence of a non-exempt prohibited transaction (within the meaning of Section 4975 of the
Tax Code or Section 406 of ERISA) which could reasonably be expected to result in material
liability to any Company Party or any of its ERISA Affiliates.

     “Event of Default” shall have the meaning assigned to it in Section 6.1 hereof.

     “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the SEC promulgated thereunder.

     “Excluded Taxes” shall mean, with respect to any Holder, (a) taxes imposed on or measured by
its overall net income or net profit (however denominated), and franchise taxes imposed on it (in
lieu of net income taxes or net profit), by the jurisdiction (or any political subdivision thereof)
under the laws of which such Holder is organized or in which its principal office is located or, in
the case of any Holder, in which its applicable lending office is located, (b) any branch profits
taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction
in which the Company is located and (c) in the case of a Foreign

A-3

 

Holder, any withholding tax that is imposed on amounts payable to such Foreign Holder at the
time such Foreign Holder becomes a party hereto (or designates a new lending office) or is
attributable to such Foreign Holder’s failure or inability (other than as a result of a change in
law) to comply with Section 2.5(b).

     “Fiscal Year” shall mean the fiscal year of the Company.

     “Foreign Holder” shall mean any Holder that is not a “United States person” within the meaning
of Section 7701(a)(30) of the Tax Code.

     “GAAP” shall mean generally accepted accounting principles in effect in the United States from
time to time.

     “Governmental Authority” shall mean any government or political subdivision of the United
States or any other country or any agency, authority, board, bureau, central bank, commission,
department or instrumentality thereof or therein, including, without limitation, any court,
tribunal, grand jury or arbitrator, in each case whether foreign or domestic, or any entity
exercising executive, legislative, judicial, regulatory or administrative functions of or
pertaining to such government or political subdivision.

     “Holder” shall, unless the context otherwise requires, mean, at any time, any holder of all or
any portion of the Note at such time.

     “Indebtedness” shall mean, with respect to any Person, at any date:

     (i) all indebtedness of such person for borrowed money or for the deferred
purchase price of property or services (other than current trade liabilities
incurred in the ordinary course of business and payable in accordance with customary
practice);

     (ii) any other indebtedness which is evidenced by a note, bond, debenture or
similar instrument;

     (iii) all Capital Lease Obligations of such person;

     (iv) all obligations of such person in respect of outstanding letters of
credit, acceptances and similar obligations created for the account of such Person;
all liabilities secured by a Lien on any property owned by such Person even though
such Person has not assumed or otherwise become liable for the payments thereto;

     (v) net liabilities of such Person under interest rate cap agreements, interest
rate swap agreements commodities hedging and other hedging agreements or
arrangements (calculated on a basis satisfactory to Holder and in accordance with
accepted practice); and

A-4

 

     (vi) all Contingent Obligations of such Person in respect of Indebtedness or
obligations of others of the kinds referred to in clauses (i) through (v) above.

The Indebtedness of any Person shall include any Indebtedness of any partnership in which such
Person is the general partner.

     “Indemnified Taxes” shall mean Taxes other than Excluded Taxes.

     “Initial Holder” shall have the meaning assigned to such term in paragraph 1 hereof.

     “Interest Payment Date” shall have the meaning assigned to such term in Section 2.3(a) hereof.

     “Issue
Date” shall mean [___].1

     “Laws” shall mean, collectively, all common law and all international, foreign, federal, state
and local statutes, treaties, rules, guidelines, regulations, ordinances, Tax Codes and
administrative or judicial precedents, including without limitation the interpretation thereof by
any Governmental Authority charged with the enforcement thereof.

     “Lien” shall mean any mortgage, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), other charge or security interest; or any preference,
priority or other agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention agreement, any
Capital Lease Obligations having substantially the same economic effect as any of the foregoing).

     “Material Adverse Effect” shall mean (i) a material adverse effect on, or material adverse
change in, the business, assets, liabilities, operations, results of operations or financial or
other condition of the Company Parties, taken as a whole, (ii) a material impairment of the ability
of the Company to fully and timely perform any of its material obligations under the Note or (iii)
a material impairment of the rights or benefits or remedies available to Holder under the Note.

     “Maturity Date” shall mean December 31, 2009.

     “Maximum Lawful Rate” shall have the meaning assigned to it in Section 2.3(d) hereof.

     “Merger Agreement” shall mean the Agreement and Plan of Merger dated as of September 19, 2008,
by and among Constellation Energy Group, Inc., MidAmerican Energy Holdings Company and MEHC Merger
Sub Inc. as amended, supplemented or otherwise modified from time to time hereafter.

 

			
	1	 	Insert issue date of Note.

A-5

 

     “Multiemployer Plan” shall mean a multiemployer plan within the meaning of Section 4001(a)(3)
or Section 3(37) of ERISA, (a) to which any Company or any ERISA Affiliate is then making or
accruing an obligation to make contributions, (b) to which any Company or any ERISA Affiliate has
within the preceding six plan years made or been obligated to make contributions, or (c) which
could reasonably be expected to result in liability of any Company.

     “New Notes” shall have the meaning assigned to such term in Section 8.2(c) hereof.

     “Note” shall have the meaning assigned to such term in the second paragraph hereof.

     “Notice” shall have the meaning assigned to such term in Section 7.12 hereof.

     “Obligations” shall mean all debts, liabilities, and obligations for monetary amounts (whether
or not such amounts are liquidated or determinable) owing by the Company to Holder and arising
under this Note, and all covenants and duties regarding such amounts, of any kind or nature,
present or future, whether or not evidenced by any note, agreement or other instrument, arising
under this Note. This term includes, without limitation, principal, all interest, charges,
expenses, attorneys’ fees and any other sum chargeable to the Company under this Note (including
interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding).

     “PBGC” shall mean the Pension Benefit Guaranty Corporation referred to and defined in ERISA.

     “Pension Plan” shall mean any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Tax Tax Code or Section 302 of
ERISA which is maintained or contributed to by any Company Party or any of its ERISA Affiliates or
which could reasonably be expected to result in liability (including under Section 4069 of ERISA)
of any Company Party if terminated.

     “Permitted Dispositions” shall mean:

     (i) any single transaction or series of related transactions that involves
assets having a fair market value of less than $10,000,000;;

     (ii) a transfer of assets between or among the Company and the other Company
Parties;

     (iii) an issuance of Stock by a Subsidiary to the Company or to another
Subsidiary;

     (iv) the sale or lease of inventory or other assets or licensing of
intellectual property in the ordinary course of business;

     (v) the sale or other disposition of cash or Permitted Investments;

A-6

 

     (vi) any Restricted Payment permitted under Section 5.5; and

     (vii) any foreclosure upon any assets of any Company Party.

     “Permitted Investments” shall mean (i) securities issued, or directly, unconditionally and
fully guaranteed or insured, by the United States or any agency or instrumentality thereof
(provided that the full faith and credit of the United States is pledged in support thereof) having
maturities of not more than one year from the date of acquisition by such person, (ii) time
deposits and certificates of deposit of any commercial bank having, or which is the principal
banking subsidiary of a bank holding company organized under the laws of the United States, any
state thereof or the District of Columbia having, capital and surplus aggregating in excess of
$500,000,000 and a rating of “A” (or such other similar equivalent rating) or higher by at least
one nationally recognized statistical rating organization (as defined in Rule 436 under the
Securities Act) with maturities of not more than one year from the date of acquisition by such
person, (iii) repurchase obligations with a term of not more than 30 days for underlying securities
of the types described in clause (i) above entered into with any bank meeting the qualifications
specified in clause (ii) above, which repurchase obligations are secured by a valid perfected
security interest in the underlying securities, (iv) commercial paper issued by any person
incorporated in the United States rated at least A-1 or the equivalent thereof by Standard & Poor’s
Rating Service or at least P-1 or the equivalent thereof by Moody’s Investors Service Inc., and in
each case maturing not more than one year after the date of acquisition by such person, and (v)
investments in money market funds at least 95% of whose assets are comprised of securities of the
types described in clauses (i) through (iv) above.

     “Permitted Liens” shall mean:

     (i) Liens in favor of the Company;

     (ii) Liens on the property or assets of any entity which becomes a Subsidiary
after the Issue Date securing Indebtedness permitted under Section 5.1 of the Note;
provided, that (A) such liens existed at the time such entity became a
Subsidiary of the Company and were not created in anticipation of the acquisition;
(B) any such Lien does not by its terms cover any property or assets after the time
such entity becomes a Subsidiary of the Company which were not covered immediately
prior thereto and (C) such Lien does not by its terms secure any Indebtedness other
than the Indebtedness existing immediately prior to the time such entity becomes a
Subsidiary of the Company;

     (iii) Liens existing on September 19, 2008 and any replacement Liens;

     (iv) Liens upon specific items of inventory or other goods and proceeds of any
entity securing such entity’s obligation in respect of bankers’ acceptances issued
or created in the ordinary course for the account of such entity to facilitate the
purchase, shipment, or storage of such inventory or other goods;;

     (v) Liens securing hedging obligations incurred in the ordinary course of
business;

A-7

 

     (vi) Liens to secure the performance of statutory obligations, surety or appeal
bonds, performance bonds or other obligations of a like nature incurred in the
ordinary course of business;

     (vii) Liens incurred or deposits made in the ordinary course of business in
connection with workers’ compensation, unemployment insurance and other types of
social security, including any Lien securing letters of credit issued in the
ordinary course or business consistent with past practice in connection therewith,
or to secure the performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, government contracts, performance and return-of-money bonds and
other similar obligations (exclusive of obligations for the payment of borrowed
money);

     (viii) Liens to secure obligations with respect to contracts for commercial and
trading activities for the purchase, transmission, distribution, sale, lease or
hedge of any energy related commodity or service in the ordinary course of business;

     (ix) survey exceptions, easements or reservations of, or rights of others for,
licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines, oil,
gas and other mineral interests and leases, and other similar purposes, or zoning or
other restrictions as to the use of real property that are incurred in accordance
with past practices; and

     (x) Liens for taxes, assessments or governmental charges or levies not yet due
and payable or delinquent and Liens for taxes, assessments or governmental charges
or levies, which are being contested in good faith by appropriate proceedings for
which adequate reserves have been established in accordance with GAAP, which
proceedings (or orders entered in connection with such proceedings) have the effect
of preventing the forfeiture or sale of the property subject to any such Lien;

“Permitted Payments” shall mean:

A-8

 

     (i) the payment of any dividend or distribution by a Subsidiary to the holders
of any class of its equity interests on a pro rata basis;

     (ii) the repurchase, redemption or other acquisition or retirement for value
pursuant to any management equity, subscription agreement, stock option agreement,
shareholders agreement or similar agreement entered into in the ordinary course of
business;

     (iii) repurchases of equity interests deemed to occur upon exercise of stock
options, warrants or vesting of restricted stock; and

     (iv) any other Restricted Payments not to exceed $5.0 million in the aggregate.

     “person” or “Person” shall mean any individual, corporation, company, voluntary association,
partnership, limited liability company, joint venture, trust, other entity, unincorporated
organization or government (or any agency, instrumentality or political subdivision thereof).

     “Preferred Stock” shall mean the Series A Convertible Preferred Stock, par value $.01 per
share, of the Company.

     “Qualified Refinancing Indebtedness” shall mean Indebtedness which represents a refinancing of
existing Indebtedness of the Company Parties; provided that: (i) any such refinancing Indebtedness
is in an aggregate principal amount not greater than the then aggregate principal amount of the
Indebtedness being refinanced, (ii) such refinancing Indebtedness has a later or equal final
maturity and longer or equal weighted average life to maturity than the Indebtedness being renewed
or refinanced, (iii) the covenants, events of default, subordination and other terms, conditions
and provisions thereof (including any guarantees thereof or security documents in respect thereof)
shall be, in the aggregate, no less favorable to Holder than those contained in the Indebtedness
being refinanced, and (iv) in the case of the refinancing of Indebtedness of the Company, the
scheduled final maturity date of the Indebtedness being refinanced is not more than six months
after the date such refinancing Indebtedness is incurred.

     “Requirement of Law” shall mean, as to any Person, the Certificate of Incorporation and
By-Laws or other organizational or governing documents of such Person, and any law, treaty, rule or
regulation or determination of any arbitrator or a court or other Governmental Authority, in each
case applicable to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.

     “Responsible Officer” shall mean the chief executive officer of the Company and the president
of the Company (if not the chief executive officer) and, with respect to financial matters, the
chief financial officer of the Company

     “SEC” shall mean the Securities and Exchange Commission.

A-9

 

     “Securities Act” shall mean the Securities Act of 1933, as amended, and all rules and
regulations of the SEC promulgated thereunder.

     “Stock Purchase Agreement” shall mean the Stock Purchase Agreement, dated as of September 19,
2008, between the Company and the Initial Holder, as amended, supplemented or otherwise modified
from time to time hereafter.

     “Stock” shall mean all shares, options, warrants, general or limited partnership interests,
limited liability company interests, participations or other equity securities or interests or
equivalents (regardless of how designated) of or in a corporation, partnership, limited liability
company or other entity, whether voting or nonvoting, including, without limitation, common stock,
preferred stock, or any other “equity security” (as such term is defined in Rule 311-1 of the
General Rules and Regulations promulgated by the SEC under the Exchange Act).

     “Subsidiary” shall mean, with respect to any person, any corporation, partnership or other
entity of which at least a majority of the securities or other ownership interests having by the
terms thereof ordinary voting power to elect a majority of the board of directors or other persons
performing similar functions of such corporation, partnership or other entity (irrespective of
whether or not at the time securities or other ownership interests of any other class or classes of
such corporation, partnership or other entity shall have or might have voting power by reason of
the happening of any contingency) is at the time directly or indirectly owned or controlled by such
person and/or one or more Subsidiaries of such person.

     “Tax Code” shall mean the Internal Revenue Tax Code of 1986, as amended.

     “Taxes” shall mean (i) any and all present or future taxes, duties, levies, imposts,
assessments, fees, deductions, withholdings or other similar charges, whether computed on a
separate, consolidated, unitary, combined or other basis and any and all liabilities (including
interest, fines, penalties or additions to tax) with respect to the foregoing, and (ii) any
transferee, successor, joint and several, contractual or other liability (including liability
pursuant to Treasury Regulation § 1.1502-6 (or any similar provision of state, local or non-U.S.
law)) in respect of any item described in clause (i).

     “Voting Stock” shall mean, with respect to any Person, the Stock of such Person that
ordinarily has voting power for the election of directors (or persons performing similar functions)
of such Person, whether at all times or only as long as no senior class of Stock has such voting
power by reason of any contingency.

     “Wholly-Owned Subsidiary” shall mean, (i) with respect to any person, any corporation,
partnership or other entity of which all of the Voting Stock (other than, in the case of a
corporation, directors’ qualifying shares or nominee shares required under applicable law) is
directly or indirectly owned or controlled by such person and/or one or more Wholly-Owned
Subsidiaries of such person and (ii) BG&E and its Wholly-Owned Subsidiaries.

A-10EX-10.4

Exhibit 10.4

CONSTELLATION ENERGY GROUP, INC.

INVESTOR RIGHTS AGREEMENT

SEPTEMBER 19, 2008

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	1.
	 	Registration Rights.  The Company covenants and agrees as follows:	 	 	1	 
	 
	 	1.1.                                        Definitions	 	 	1	 
	 
	 	1.2.                                       Request for Registration	 	 	2	 
	 
	 	1.3.                                        Company Registration	 	 	4	 
	 
	 	1.4.                                        Obligations of the Company	 	 	4	 
	 
	 	1.5.                                        Furnish Information	 	 	6	 
	 
	 	1.6.                                        Expenses of Demand Registration	 	 	6	 
	 
	 	1.7.                                        Expenses of Company Registration	 	 	6	 
	 
	 	1.8.                                       Underwriting Requirements	 	 	6	 
	 
	 	1.9.                                        Indemnification	 	 	7	 
	 
	 	1.10.                                     Reports Under Securities Exchange Act of 193	 	 	9	 
	 
	 	1.11.                                    Form S-3 Registration	 	 	10	 
	 
	 	1.12.                                     Assignment of Registration Rights	 	 	11	 
	 
	 	1.13.                                    Termination of Registration Rights	 	 	12	 
	 
	 	 	 	 	 	 
	2.
	 	Corporate Governance	 	 	12	 
	 
	 	2.1.                                        Preferred Director	 	 	12	 
	 
	 	2.2.                                        Board Observer	 	 	12	 
	 
	 	 	 	 	 	 
	3.
	 	Covenants of the Company	 	 	13	 
	 
	 	3.1.                                       Delivery of Financial Statements	 	 	13	 
	 
	 	3.2.                                        Inspection	 	 	14	 
	 
	 	 	 	 	 	 
	4.
	 	Miscellaneous	 	 	14	 
	 
	 	4.1.                                        Successors and Assigns	 	 	14	 
	 
	 	4.2.                                       Governing Law	 	 	15	 
	 
	 	4.3.                                        Counterparts	 	 	15	 
	 
	 	4.4.                                       Titles and Subtitles	 	 	15	 
	 
	 	4.5.                                        Notices	 	 	15	 
	 
	 	4.6.                                        Expenses	 	 	15	 
	 
	 	4.7.                                        Amendments and Waivers	 	 	15	 
	 
	 	4.8.                                        Severability	 	 	15	 
	 
	 	4.9.                                        Aggregation of Stock	 	 	15	 

i

 

INVESTOR RIGHTS AGREEMENT

     THIS INVESTOR RIGHTS AGREEMENT (this “Agreement”) is made as of the 19th day of
September 2008, by and between Constellation Energy Group, Inc., a Maryland corporation (the
“Company”) and Mid American Energy Holdings, Inc., an Iowa corporation (the “Investor”).

RECITALS

     WHEREAS, the Investor has, pursuant to that certain Series A Preferred Stock Purchase
Agreement dated as of the date hereof (the “Securities Purchase Agreement”) between the Company and
the Investor, agreed to purchase shares of the Company’s Series A Convertible Preferred Stock, par
value $0.01 per share (the “Series A Preferred Stock”);

     WHEREAS, the shares of Series A Preferred Stock are convertible into shares of the Company’s
Common Stock, without par value (the “Common Stock”);

     WHEREAS, in order to induce the Investor to invest funds in the Company, the Company agreed to
grant the Investor certain registration rights and other rights as set forth herein;

     NOW, THEREFORE, in consideration of the promises, covenants, and conditions set forth herein,
the parties hereto hereby agree as follows:

     1. Registration Rights. The Company covenants and agrees as follows:

          1.1. Definitions. For purposes of this Agreement:

               (a) The term “Act” means the Securities Act of 1933, as amended.

               (b) The term “Affiliate” means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by or under direct or indirect common control with such Person.
For the purposes of this definition, “control” when used with respect to any specified Person shall
mean the power to direct the management and policies of such Person, directly or indirectly,
whether through ownership of voting securities, by contract or otherwise; and the terms “controlled
by” and “controlled” have meanings correlative to the foregoing.

               (c) The term “Form S-3” means such form under the Act as in effect on the date hereof or any
registration form under the Act subsequently adopted by the SEC that permits inclusion or
incorporation of substantial information by reference to other documents filed by the Company with
the SEC.

               (d) The term “Holder” means any person owning Registrable Securities or any assignee thereof
in accordance with Section 1.13 hereof.

 

 

               (e) The term “1934 Act” shall mean the Securities Exchange Act of 1934, as amended.

               (f) The term “register,” “registered,” and “registration” refer to a registration effected by
preparing and filing a registration statement or similar document in compliance with the Act, and
the declaration or ordering of effectiveness of such registration statement or document.

               (g) The term “Registrable Securities” means (i) the Series A Preferred Stock, (ii) the Common
Stock issuable or issued upon conversion of the Series A Preferred Stock, (iii) the 14% Senior
Notes (as defined in the Securities Purchase Agreement) issued or issuable upon conversion of the
Series A Preferred Stock, (iv) any other shares of Common Stock acquired by the Investor and
(v) any Common Stock issued as (or issuable upon the conversion or exercise of any warrant, right
or other security that is issued as) a dividend or other distribution with respect to, or in
exchange for, or in replacement of, the shares referenced in (i), (ii) and (iv) above; provided,
however, that the term “Registrable Securities” shall exclude in all cases any Registrable
Securities sold by a person in a transaction in which such person’s rights under this Section 1 are
not assigned.

               (h) The number of shares of “Registrable Securities then outstanding” when referring to (i)
the Common Stock, shall be determined by the number of shares of Common Stock outstanding that are,
and the number of shares of Common Stock issuable pursuant to then exercisable or convertible
securities that are, Registrable Securities or (ii) the 14% Senior Notes, shall be determined by
the total aggregate principal amount of 14% Senior Notes outstanding at such time.

               (i) The term “SEC” shall mean the Securities and Exchange Commission.

          1.2. Request for Registration.

               (a) Subject to the conditions of this Section 1.2 if the Company shall receive at any time a
written request from the Investor, requesting that the Company file a registration statement under
the Act covering the registration of a portion of the Registrable Securities then outstanding
having an aggregate price to the public (net of any underwriter’s discounts or commissions) of not
less than $25,000,000, then the Company shall:

                    (i) within ten (10) days of the receipt thereof, give written notice of such request to all
Holders; and

                    (ii) effect as soon as practicable, and in any event within sixty (60) days of the receipt of
such request, the registration under the Act of all Registrable Securities that the Holders request
to be registered, together with all or such portion of the Registrable Securities of any Holder or
Holders joining in such request pursuant to the terms of this Agreement subject to the limitations
of subsection 1.2(b), within fifteen (15) days of the mailing of such notice by the Company in
accordance with Section 4.5.

-2-

 

               (b) If the Investor intends to distribute the Registrable Securities covered by its request by
means of an underwriting, it shall so advise the Company as a part of its request made pursuant to
subsection 1.2(a) and the Company shall include such information in the written notice referred to
in subsection 1.2(a)(i). The underwriter will be selected by the Investor and shall be reasonably
acceptable to the Company. In such event, the right of any Holder to include Registrable
Securities in such registration shall be conditioned upon such Holder’s participation in such
underwriting to the extent provided herein. All Holders proposing to distribute their securities
through such underwriting shall (together with the Company as provided in subsection 1.4(e)) enter
into an underwriting agreement in customary form with the underwriter or underwriters selected for
such underwriting. Notwithstanding any other provision of this Section 1.2, if the underwriter
advises the Investor in writing that marketing factors require a limitation of the number of shares
to be underwritten, then the Investor shall so advise all Holders of Registrable Securities that
would otherwise be underwritten pursuant hereto, and the number of shares of Registrable Securities
that may be included in the underwriting shall be allocated among all Holders electing to include
shares in the offering in proportion (as nearly as practicable) to the amount of Registrable
Securities of the Company owned by each Holder; provided, however, that the number of shares of
Registrable Securities to be included in such underwriting by the Investor shall not be reduced
unless all other securities are first entirely excluded from the underwriting.

               (c) Notwithstanding the foregoing, if the Company shall furnish to Holders requesting a
registration statement pursuant to this Section 1.2, a certificate signed by the President of the
Company stating that in the good faith judgment of a majority of the Board of Directors of the
Company it would require the disclosure of material nonpublic information concerning the Company,
its business or prospects and that such premature disclosure would be materially adverse to the
Company, and/or materially interfere with a pending transaction involving the Company or a
subsidiary or controlled Affiliate of the Company, the Company shall have the right to defer taking
action with respect to such filing for a period of not more than ninety (90) days after receipt of
the request of the Investor; provided, however, that the Company may not utilize this right more
than once in any twelve (12) month period.

               (d) In addition, the Company shall not be obligated to effect, or to take any action to
effect, any registration pursuant to this Section 1.2:

                    (i) after the Company has effected two (2) registrations pursuant to this Section 1.2 and such
registrations have been declared or ordered effective;

                    (ii) during the period starting with the date sixty (60) days prior to the Company’s good
faith estimate of the date of filing of, and ending on a date one hundred eighty (180) days after
the effective date of, a registration statement filed by the Company subject to Section 1.3 hereof;
provided that the Company is actively employing in good faith all reasonable efforts to cause such
registration statement to be effective; or

                    (iii) if the Investor proposes to dispose of shares of Registrable Securities that may be
immediately registered on Form S-3 pursuant to a request made pursuant to Section 1.12 below.

-3-

 

          1.3. Company Registration. If the Company proposes to register (including for this
purpose a registration effected by the Company for stockholders other than the Holders) any of its
stock or other securities under the Act in connection with the public offering of such securities
solely for cash (other than a registration relating solely to the sale of securities to
participants in an employee stock plan or with respect to corporate reorganizations or other
transactions under Rule 145 of the Securities Act, or a registration on any form that does not
include substantially the same information as would be required to be included in a registration
statement covering the sale of the Registrable Securities), the Company shall, at such time,
promptly give each Holder written notice of such registration at least ten (10) days prior to the
initial filing with the SEC of such registration statement. Upon the written request of each
Holder given within twenty (20) days after mailing of such notice, the Company shall, subject to
the provisions of Section 1.8, include in the registration statement all of the Registrable
Securities that each such Holder has requested to be registered; provided, that the Company may
limit, to the extent so advised by the underwriters, the amount of securities to be included in the
registration by the Company’s stockholders (including the Holders); provided, however, that the
aggregate value of securities (including Registrable Securities) to be included in such
registration by the Company’s stockholders (including the Holders) may not be so reduced to less
than twenty-five percent (25%) of the total value of all securities included in such registration.

          1.4. Obligations of the Company. Whenever required under this Section 1 to effect the
registration of any Registrable Securities, the Company shall, as expeditiously as reasonably
possible:

               (a) Prepare and file with the SEC a registration statement with respect to such Registrable
Securities and use its reasonable best efforts to cause such registration statement to become
effective, and, upon the request of the Holders of a majority of the Registrable Securities
registered thereunder, keep such registration statement effective for a period of up to one hundred
eighty (180) days;

               (b) Prepare and file with the SEC such amendments and supplements to such registration
statement and the prospectus used in connection with such registration statement as may be
necessary to comply with the provisions of the Act with respect to the disposition of all
securities covered by such registration statement until the earlier of;

                    (i) the time all of such securities have been disposed of; or

                    (ii) the expiration of one hundred eighty (180) days.

               (c) Furnish to the Holders such numbers of copies of a prospectus, including a preliminary
prospectus, in conformity with the requirements of the Act, and such other documents as they may
reasonably request in order to facilitate the disposition of Registrable Securities owned by them;

               (d) Use its reasonable best efforts to register and qualify the securities covered by such
registration statement under such other securities or blue sky laws of such jurisdictions as shall
be reasonably requested by the Holders; provided that the Company

-4-

 

shall not be required in connection therewith or as a condition thereto to qualify to do
business or to file a general consent to service of process in any such states or jurisdictions;

               (e) In the event of any underwritten public offering, enter into and perform its obligations
under an underwriting agreement, in usual and customary form, with the managing underwriter of such
offering (each Holder participating in such underwriting shall also enter into and perform its
obligations under such an agreement);

               (f) Notify each Holder of Registrable Securities covered by such registration statement at any
time when a prospectus relating thereto is required to be delivered under the Act of the happening
of any event as a result of which the prospectus included in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein not misleading in the
light of the circumstances then existing; and at the request of any such Holder promptly prepare
and furnish to such Holder a reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the purchaser of such shares
such prospectus shall not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements therein not
misleading or incomplete in light of the circumstances then existing;

               (g) Cause all such Registrable Securities registered pursuant hereunder to be listed on each
securities exchange or nationally recognized quotation system on which similar securities issued by
the Company are then listed;

               (h) Use its reasonable best efforts to furnish, at the request of any Holder requesting
registration of Registrable Securities pursuant to this Section 1, on the date that such
Registrable Securities are delivered to the underwriters for sale in connection with a registration
pursuant to this Section 1, if such securities are being sold through underwriters, (i) an opinion,
dated such date, of the counsel representing the Company for the purposes of such registration, in
substantially the form as may be given to the underwriters in such public offering, addressed to
the underwriters, if any, and to the Holders requesting registration of Registrable Securities
solely for the purpose of establishing a “due diligence” defense and (ii) a letter dated such date,
from the independent certified public accountants of the Company, in substantially the form as may
be given by independent certified public accountants to underwriters in such public offering,
addressed to the underwriters, if any, and to the Holders requesting registration of Registrable
Securities; provided in any such case, the Company is required to provide such opinion or letter,
as the case may be, to the underwriters in such offering;

               (i) Make available for inspection by any seller of Registrable Securities, any underwriter
participating in any disposition pursuant to such registration statement, and any attorney or
accountant retained by any such seller or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company’s officers and directors
to supply all information reasonably requested by any such seller, underwriter, attorney or
accountant in connection with such registration statement; provided, however, that such seller,
underwriter, attorney or accountant shall agree to hold in confidence and trust all information so
provided;

-5-

 

               (j) Furnish to each selling Holder a copy of all documents filed with and all correspondence
from or to the SEC in connection with any such offering other than non-substantive cover letters
and the like; and

               (k) Otherwise use its reasonable best efforts to comply with all applicable rules and
regulations of the SEC, and make available to its security holders, as soon as reasonably
practicable, an earnings statement covering the period of at least twelve (12) months, but not more
than eighteen (18) months, beginning with the first month after the effective date of the
registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of
the Act.

          1.5. Furnish Information.

     It shall be a condition precedent to the obligations of the Company to take any action
pursuant to this Section 1 with respect to the Registrable Securities of any selling Holder that
such Holder shall furnish to the Company such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such securities as shall be
required to effect the registration of such Holder’s Registrable Securities.

          1.6. Expenses of Demand Registration. All expenses (other than underwriting discounts
and commissions) incurred in connection with registrations, filings or qualifications pursuant to
Section 1.2, including (without limitation) all registration, filing and qualification fees,
printers’ and accounting fees, blue sky fees and expenses and fees and the reasonable disbursements
of counsel for the Company and one counsel for the Holders shall be borne by the Company; provided,
however, that the Company shall not be required to pay for any expenses of any registration
proceeding begun pursuant to Section 1.2 if the registration request is subsequently withdrawn at
the request of the Holders of a majority of the Registrable Securities to be registered (in which
case all participating Holders shall bear such expenses), unless the Holders of a majority of the
Registrable Securities agree to forfeit their right to one demand registration pursuant to
Section 1.2; provided further, however, that if at the time of such withdrawal, the Holders have
learned of an adverse change in the condition, business, or prospects of the Company from that
known to the Holders at the time of their request and have withdrawn the request with reasonable
promptness following disclosure by the Company of such adverse change, then the Holders shall not
be required to pay any of such expenses and shall not forfeit their right to one demand
registration pursuant to Section 1.2.

          1.7. Expenses of Company Registration. The Company shall bear and pay all expenses
incurred in connection with any registration, filing or qualification of Registrable Securities
with respect to the registrations pursuant to Section 1.3 for each Holder (which right may be
assigned as provided in Section 1.12), including (without limitation) all registration, filing, and
qualification fees, printers and accounting fees relating or apportionable thereto, blue sky fees
and expenses and the reasonable fees and disbursements of counsel for the Company and one counsel
for the selling Holders selected by them, but excluding underwriting discounts and commissions
relating to Registrable Securities.

          1.8. Underwriting Requirements. In connection with any offering involving an
underwriting of shares of the Company’s capital stock, the Company shall not be

-6-

 

required under Section 1.3 to include any of the Holders’ securities in such underwriting
unless they accept the terms of the underwriting reasonably necessary to effect the offer or sale
of the Registrable Securities and as agreed upon between the Company and the underwriters selected
by it (or by other persons entitled to select the underwriters), and then only in such quantity as
the underwriters determine in their sole discretion, in good faith, will not, jeopardize the
success of the offering by the Company or Holders requesting the offering. If the total amount of
securities, including Registrable Securities requested by stockholders to be included in such
offering, exceeds the amount of securities sold other than by the Company that the underwriters
determine in their sole discretion is compatible with the success of the offering, then the Company
shall be required to include in the offering only that number of such securities, including
Registrable Securities, which the underwriters determine in their sole discretion will not
jeopardize the success of the offering (the securities so included to be apportioned pro rata among
the selling stockholders according to the total amount of securities entitled to be included
therein owned by each selling stockholder or in such other proportions as shall mutually be agreed
to by such selling stockholders), but in no event shall (i) the amount of securities of the selling
Holders included in the offering be reduced unless securities of all other selling stockholders are
excluded entirely or (ii) notwithstanding (i) above, any shares being sold by a stockholder
exercising a demand registration right similar to that granted in Section 1.2 be excluded from such
offering. For purposes of the preceding parenthetical concerning apportionment, for any selling
stockholder which is a holder of Registrable Securities and which is a partnership or corporation,
the partners, retired partners and stockholders of such holder, or the estates and family members
of any such partners and retired partners and any trusts for the benefit of any of the foregoing
persons shall be deemed to be a single “selling stockholder,” and any pro-rata reduction with
respect to such “selling stockholder” shall be based upon the aggregate amount of shares carrying
registration rights owned by all entities and individuals included in such “selling stockholder,”
as defined in this sentence.

          1.9. Indemnification.

               (a) To the extent permitted by law, the Company will indemnify and hold harmless each Holder,
each of its officers, directors, Affiliates, any underwriter (as defined in the Act) for such
Holder and each person, if any, who controls such Holder or underwriter within the meaning of the
Act or the 1934 Act, against any losses, claims, damages, or liabilities (joint or several) to
which they may become subject under the Act, or the 1934 Act or other federal or state securities
law, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise
out of or are based upon any of the following statements, omissions or violations (collectively a
“Violation”): (i) any untrue statement or alleged untrue statement of a material fact contained in
such registration statement, including any preliminary prospectus or final prospectus, offering
circular or other documents contained therein or any amendments or supplements thereto, (ii) the
omission or alleged omission to state therein a material fact required to be stated therein, or
necessary to make the statements therein not misleading, or (iii) any violation or alleged
violation by the Company of the Act, the 1934 Act, any state securities law or any rule or
regulation promulgated under the Act, or the 1934 Act or any state securities law; and the Company
will pay to each such Holder, underwriter or controlling person, as incurred, any legal or other
expenses reasonably incurred by them in connection with investigating or defending any such loss,
claim, damage, liability, or action; provided, however, that the indemnity agreement contained in
this subsection 1.9(a) shall not

-7-

 

apply to amounts paid in settlement of any such loss, claim, damage, liability, or action if
such settlement is effected without the consent of the Company (which consent shall not be
unreasonably withheld), nor shall the Company be liable in any such case for any such loss, claim,
damage, liability, or action to the extent that it arises out of or is based upon a Violation that
occurs in reliance upon and in conformity with written information furnished expressly for use in
connection with such registration by any such Holder, underwriter or controlling person.

               (b) To the extent permitted by law, each selling Holder will indemnify and hold harmless the
Company, each of its directors, each of its officers who has signed the registration statement,
each person, if any, who controls the Company within the meaning of the Act, any underwriter, any
other Holder selling securities in such registration statement and any controlling person of any
such underwriter or other Holder, against any losses, claims, damages, or liabilities (joint or
several) to which any of the foregoing persons may become subject, under the Act, the 1934 Act or
other federal or state securities law, insofar as such losses, claims, damages, or liabilities (or
actions in respect thereto) arise out of or are based upon any Violation, in each case to the
extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with
written information furnished by such Holder expressly for use in connection with such
registration; and each such Holder will pay, as incurred, any legal or other expenses reasonably
incurred by any person intended to be indemnified pursuant to this subsection 1.9(b), in connection
with investigating or defending any such loss, claim, damage, liability, or action; provided,
however, that the indemnity agreement contained in this subsection 1.9(b) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement
is effected without the consent of the Holder, which consent shall not be unreasonably withheld;
provided, that, in no event shall any indemnity under this subsection 1.9(b) exceed the net
proceeds from the offering received by such Holder.

               (c) Promptly after receipt by an indemnified party under this Section 1.9 of notice of the
commencement of any action (including any governmental action), such indemnified party will, if a
claim in respect thereof is to be made against any indemnifying party under this Section 1.9,
deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying
party shall have the right to participate in, and, to the extent the indemnifying party so desires,
jointly with any other indemnifying party similarly noticed, to assume the defense thereof with
counsel mutually satisfactory to the parties; provided, however, that an indemnified party
(together with all other indemnified parties that may be represented without conflict by one
counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the counsel retained by
the indemnifying party would be inappropriate due to actual or potential differing interests
between such indemnified party and any other party represented by such counsel in such proceeding.
The failure to deliver written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if materially prejudicial to its ability to defend such action,
shall relieve such indemnifying party of any liability to the indemnified party under this
Section 1.9, but the omission so to deliver written notice to the indemnifying party will not
relieve it of any liability that it may have to any indemnified party otherwise than under this
Section 1.9.

               (d) If the indemnification provided for in this Section 1.9 is held by a court of competent
jurisdiction to be unavailable to an indemnified party with respect

-8-

 

to any loss, liability, claim, damage, or expense referred to therein, then the indemnifying
party, in lieu of indemnifying such indemnified party hereunder, shall, to the extent permitted by
applicable law, contribute to the amount paid or payable by such indemnified party as a result of
such loss, liability, claim, damage, or expense in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and of the indemnified party on the other
in connection with the statements or omissions that resulted in such loss, liability, claim,
damage, or expense as well as any other relevant equitable considerations; provided,
however, that in no event shall any Holder’s cumulative, aggregate liability under this
Section 1.9(d), or under Section 1.9(b), or under such sections together, exceed the net proceeds
from the offering received by such Holder. Notwithstanding anything to the contrary herein, no
party shall be liable for contribution under this Section 1.9(d), except to the extent and under
the circumstances as such party would have been liable to indemnity under Section 1.9(a) or
Section 1.9(b), as the case may be, if such indemnification were enforceable under applicable law.
No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The relative fault of the indemnifying party and of the indemnified party shall
be determined by reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access
to information, and opportunity to correct or prevent such statement or omission.

               (e) Notwithstanding the foregoing, to the extent that the provisions on indemnification and
contribution contained in the underwriting agreement entered into in connection with the
underwritten public offering are in conflict with the foregoing provisions, the provisions in the
underwriting agreement shall control with respect to the parties to such agreement.

               (f) The obligations of the Company and Holders under this Section 1.9 shall survive the
completion of any offering of Registrable Securities in a registration statement under this
Section 1, and otherwise.

          1.10. Reports Under Securities Exchange Act of 1934. With a view to making available
to the Holders the benefits of Rule 144 promulgated under the Act (“Rule 144”) and any other rule
or regulation of the SEC that may at any time permit a Holder to sell securities of the Company to
the public without registration or pursuant to a registration on Form S-3, the Company agrees to:

               (a) make and keep public information available, as those terms are understood and defined in
Rule 144, at all times after the effective date of the first registration statement filed by the
Company for the offering of its securities to the general public;

               (b) if required to file reports with the SEC under the Act, file with the SEC in a timely
manner all reports and other documents required of the Company under the Act and the 1934 Act; and

               (c) furnish to any Holder, so long as the Holder owns any Registrable Securities, forthwith
upon request (i) a written statement by the Company that it has

-9-

 

complied with the reporting requirements of Rule 144 (at any time after ninety (90) days after
the effective date of the first registration statement filed by the Company), the Act and the 1934
Act (at any time after it has become subject to such reporting requirements), or that it qualifies
as a registrant whose securities may be resold pursuant to Form S-3 (at any time after it so
qualifies), (ii) a copy of the most recent annual or quarterly report of the Company and such other
reports and documents so filed by the Company, and (iii) such other information as may be
reasonably requested in availing any Holder of any rule or regulation of the SEC that permits the
selling of any such securities without registration or pursuant to such form.

          1.11. Form S-3 Registration.

               (a) In case the Company shall receive from any Holder or Holders a written request or requests
that the Company effect a registration on Form S-3 and any related qualification or compliance with
respect to all or a part of the Registrable Securities owned by such Holder or Holders, the Company
will:

                           (i) promptly give written notice of the proposed registration, and any related qualification
or compliance, to all other Holders; and

                           (ii) as soon as practicable, effect such registration and all such qualifications and
compliances as may be so requested and as would permit or facilitate the sale and distribution of
all or such portion of such Holder’s or Holders’ Registrable Securities as are specified in such
request, together with all or such portion of the Registrable Securities of any other Holder or
Holders joining in such request as are specified in a written request given within fifteen (15)
days after receipt of such written notice from the Company; provided, however, that the Company
shall not be obligated to effect any such registration, qualification or compliance, pursuant to
this Section 1.12:

	 	(1)	 	if Form S-3 is not available
for such offering by the Holders;
	 
	 	(2)	 	if the Holders, together with
the holders of any other securities of the Company entitled to
inclusion in such registration, propose to sell Registrable
Securities and such other securities (if any) at an aggregate
price to the public (net of any underwriters’ discounts or
commissions) of less than $1,000,000;
	 
	 	(3)	 	if the Company shall furnish to
the Holders a certificate signed by the President of the
Company stating that in the good faith judgment of a majority
of the Board of Directors of the Company, it would require the
disclosure of material nonpublic information concerning the
Company, its business or prospects and that such premature
disclosure would be materially adverse to the Company, and/or
materially interfere with a pending transaction involving the
Company or a subsidiary or controlled Affiliate of the Company,
in which event the Company shall have the right to defer the
filing of the Form

-10-

 

	 	 	 	S-3 registration statement for a period of not more than ninety
(90) days after receipt of the request of the Holder or Holders
under this Section 1.12; provided, however, that the Company
shall not utilize this right more than once in any twelve (12)
month period;
	 
	 	(4)	 	if the Company has, within the
twelve (12) month period preceding the date of such request,
already effected two (2) registrations on Form S-3 for the
Holders pursuant to this Section 1.12;
	 
	 	(5)	 	in any particular jurisdiction
in which the Company would be required to qualify to do
business or to execute a general consent to service of process
in effecting such registration, qualification or compliance.

                    (iii) Subject to the foregoing, the Company shall file a registration statement covering the
Registrable Securities and other securities so requested to be registered as soon as practicable
after receipt of the request or requests of the Holders. All expenses incurred in connection with a
registration requested pursuant to Section 1.12 (other than underwriting discounts and commissions
and fees and disbursements of counsel for the Holders), including (without limitation) all
registration, filing, qualification, printer’s and accounting fees and counsel for the Company,
shall be borne by the Company. Registrations effected pursuant to this Section 1.12 shall not be
counted as demands for registration or registrations effected pursuant to Sections 1.2 or 1.3,
respectively.

               (b) Contemporaneously with the issuance of the Common Stock issuable upon the conversion of
the Series A Preferred Stock, the Company shall file and as promptly as practicable thereafter have
declared effective a registration statement on Form S-3 covering the newly issued Common Stock as
if a written request therefor had been made pursuant to Section 1.12(a).

          1.12. Assignment of Registration Rights. The rights to cause the Company to register
Registrable Securities pursuant to this Section 1 may be assigned by a Holder to a transferee or
assignee of such securities provided (a) the Company is, within a reasonable time after such
transfer, furnished with written notice of the name and address of such transferee or assignee and
the securities with respect to which such registration rights are being assigned; (b) such
transferee or assignee agrees in writing to be bound by and subject to the terms and conditions of
this Agreement, including without limitation the provisions of Section 1.14 below; and (c) such
assignment shall be effective only if immediately following such transfer the further disposition
of such securities by the transferee or assignee is restricted under the Act. For the purposes of
determining the number of shares of Registrable Securities held by a transferee or assignee, the
holdings of transferees and assignees of a partnership who are partners or retired partners of such
partnership (including spouses and ancestors, lineal descendants and siblings of such partners or
spouses who acquire Registrable Securities by gift, will or intestate succession) shall be
aggregated together and with the partnership; provided that all assignees and transferees who would
not qualify individually for assignment of registration

-11-

 

rights shall have a single attorney-in-fact for the purpose of exercising any rights,
receiving notices or taking any action under this Section 1.

          1.13. Termination of Registration Rights. No Holder shall be entitled to exercise any
right provided for in this Section 1 after the earlier of (i) three (3) years following the
consummation of the sale of securities pursuant to a registration statement filed by the Company
under the Act in connection with the initial firm commitment underwritten offering of its
securities to the general public or (ii) as to any Holder, such time at which all Registrable
Securities held by such Holder can be sold in any 90 day period without registration in compliance
with Rule 144 of the Act.

          1.14 Automatic Shelf Registration. To the extent the Company is a well-known seasoned
issuer (as defined in Rule 405 under the Act) (a “WKSI”) at the time any Registration
request is submitted to the Company, and such Registration request requests that the Company file
an automatic shelf registration statement (as defined in Rule 405 under the Act) (an “automatic
shelf registration statement”) on Form S-3, the Company shall file an automatic shelf
registration statement which covers those Registrable Securities which are requested to be
registered. Subject to Section 1.13, if the automatic shelf registration statement has been
outstanding for at least three years, at the end of the third year the Company shall, upon written
request by the Holders, refile a new automatic shelf registration statement covering the
Registrable Securities, if there are any remaining Registrable Securities covered thereunder. If
at any time when the Company is required to re-evaluate its WKSI status the Company determines that
it is not a WKSI, the Company shall use its commercially reasonable efforts to refile the shelf
registration statement on Form S-3 and keep such registration statement effective during the period
during which such registration statement is required to be kept effective.

     2. Corporate Governance

               (a) Investor Nominee. At any time following the conversion of the Preferred Stock into
Common Stock and Senior Notes, the Investor shall have the right to nominate one (1) individual
(herein referred to as the “Investor Nominee”) to the Board of Directors. The Board of
Directors shall cause the Company to include the Investor Nominee in the slate of nominees
recommended by the Board of Directors to the holders of Common Stock for election at the first
annual meeting of stockholders of the Company following the date the Preffered Stock is converted
into Common Stock and Senior Notes and for reelection at every meeting thereafter and shall use all
commercially reasonable efforts to cause the election of the Investor Nominee, including soliciting
proxies in favor of his or her election. In the event the Investor Nominee or the Preferred
Nominee (as defined in the Articles Supplementary designating the terms of the Preferred Stock)
resigns, is unable to serve as a member of the Board of Directors, is removed from the Board of
Directors or fails to be elected as a member of the Board of Directors at any annual stockholders
meeting, the Investor shall have the right to nominate another individual (a “Substitute
Nominee”) and the Board of Directors shall appoint such Substitute Nominee to fill the vacancy
created by the resignation or removal of the prior Investor Nominee or the Preferred Nominee, as
the case may be, at which point such Substitute Nominee shall be deemed to be the Investor Nominee.

-12-

 

               (b) Committees. For so long as such membership does not conflict with any applicable
law or regulation or listing requirement of the NYSE or any other Approved Market (as determined in
good faith by the Board of Directors of the Company) that the Common Stock is listed for trading,
the Investor Nominee shall be entitled to serve as a member of each committee of the Board of
Directors, except for any committee formed to consider a transaction between the Company and the
Investor, its Affiliates or any Holder that is Affiliated with the Investor Nominee or an Affiliate
of any Holder that is Affiliated with the Investor Nominee.

               (c) Board Observer. If the Investor has not exercised its right to nominate a
Investor Nominee but is entitled to do so pursuant to this Section 2(a), it may appoint a board
observer (the “Board Observer”) who shall have the right to attend and participate in all
meetings of, and receive all material distributed to, the Board of Directors, but shall not be
entitled to vote at meetings of the Board of Directors or any committees thereof. The Board
Observer shall be entitled to attend and participate in each committee of the Board of Directors,
except for any committee formed to consider a transaction between the Company and the Investor, its
Affiliates or any Holder that is Affiliated with the Investor Nominee or an Affiliate of any Holder
that is Affiliated with the Investor Nominee. The Company shall reimburse the Board Observer for
all costs and expenses reasonably incurred in connection with attending any meetings of the Board
of Directors or committees thereof. Notwithstanding the above, the Company has the right to
withhold any information from the Board Observer and to exclude the Board Observer from any meeting
or portion thereof if access to such information or attendance at such meeting, could:

                    (i) based on the advise of the Company’s outside counsel, adversely affect the attorney-client
privilege between the Company and its counsel;

                    (ii) cause the Board of Directors to breach its fiduciary duties; or

                    (iii) result in a conflict between interests of the Company, on the one hand, and those of the
Board Observer or its Affiliates, on the other hand.

     The Company will use its reasonable best efforts to ensure that any withholding of information
or any restriction on attendance is strictly limited only to the extent necessary set forth in the
preceding sentence.

                    (d) Limitations. Notwithstanding the foregoing, at such time as the outstanding
shares of Common Stock Beneficially Owned by the Investor and its Affiliates are less than 50% of
the shares of Common Stock issued to the Investor and its Affiliates upon the conversion of the
Series A Preferred Stock, the Investor shall not be entitled to nominate the Investor Nominee or
the Board Observer under this Section 2.

     3. Covenants of the Company.

          3.1. Delivery of Financial Statements. At any time that the Company is not required
to file periodic reports with the SEC, the Company shall deliver to the Investor:

-13-

 

               (a) as soon as practicable, but in any event within ninety (90) days after the end of each
fiscal year of the Company, an income statement for such fiscal year, a balance sheet of the
Company and statement of stockholder’s equity as of the end of such fiscal year, and a statement of
cash flows for such fiscal year, such year-end financial reports to be in reasonable detail,
prepared in accordance with generally accepted accounting principles (“GAAP”), and audited and
certified by (i) a “Big 4” independent (or its successor) accounting firm selected by the Company
or (ii) a Nationally recognized accounting firm reasonably acceptable to the Investor;

               (b) as soon as practicable, but in any event within thirty (30) days after the end of each of
the first three (3) quarters of each fiscal year of the Company, an unaudited income statement for
such quarter, statement of cash flows for such quarter and an unaudited balance sheet as of the end
of such quarter;

               (c) within thirty (30) days of the end of each month, an unaudited income statement and
statement of cash flows for such month, and a balance sheet for and as of the end of such month, in
reasonable detail;

               (d) with respect to the financial statements called for in subsections (b) and (c) of this
Section 2.1, an instrument executed by the Chief Financial Officer or President of the Company and
certifying that such financial statements were prepared in accordance with GAAP consistently
applied with prior practice for earlier periods (with the exception of footnotes that may be
required by GAAP) and fairly present the financial condition of the Company and its results of
operation for the period specified, subject to year-end audit adjustment;

               (e) notices of events that have or may have a material effect on the Company as soon as
practicable following the occurrence of any such event; and

               (f) such other information relating to the financial condition, business, prospects or
corporate affairs of the Company as the Investor or any assignee of the Investor may from time to
time reasonably request; provided, however, that the Company shall not be obligated under this
subsection (e) or any other subsection of Section 2.1 to provide information that it deems in good
faith to be a trade secret or similar confidential information.

          3.2. Inspection. The Company shall permit each Investor, at such Investor’s expense,
to visit and inspect the Company’s properties, to examine its books of account and records and to
discuss the Company’s affairs, finances and accounts with its officers, all at such reasonable
times as may be requested by the Investor; provided, however, that the Company shall not be
obligated pursuant to this Section 2.2 to provide access to any information which it reasonably
considers to be a trade secret or similar confidential information.

     4. Miscellaneous.

          4.1. Successors and Assigns. Except as otherwise provided herein, the terms and
conditions of this Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties (including transferees of any shares of Registrable
Securities). Nothing in this Agreement, express or implied, is intended to confer

-14-

 

upon any party other than the parties hereto or their respective successors and assigns any
rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.

          4.2. Governing Law. This Agreement shall be governed by and construed under the laws
of the State of New York without giving effect to any conflicts of laws that would apply the laws
of another jurisdiction.

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

          4.4. Titles and Subtitles. The titles and subtitles used in this Agreement are used
for convenience only and are not to be considered in construing or interpreting this Agreement.

          4.5. Notices. Unless otherwise provided, any notice required or permitted under this
Agreement shall be given in writing and shall be deemed effectively given upon personal delivery to
the party to be notified or upon delivery by confirmed facsimile transmission or nationally
recognized overnight courier service or upon deposit with the United States Post Office, by
registered or certified mail, postage prepaid and addressed to the party to be notified at the
address indicated for such party on the signature page hereof, or at such other address as such
party may designate by ten (10) days’ advance written notice to the other parties.

          4.6. Expenses. If any action at law or in equity is necessary to enforce or interpret
the terms of this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees,
costs and necessary disbursements in addition to any other relief to which such party may be
entitled.

          4.7. Amendments and Waivers. Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with the written consent of the Company
and the holders of at least a majority of the Registrable Securities then outstanding. Any
amendment or waiver effected in accordance with this paragraph shall be binding upon each holder of
Registrable Securities then outstanding, each future holder of all such Registrable Securities and
the Company.

          4.8. Severability. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provision shall be excluded from this Agreement, and the
balance of the Agreement shall be interpreted as if such provision were so excluded, and shall be
enforceable in accordance with its terms.

          4.9. Aggregation of Stock. All shares of Registrable Securities of the Company held
or acquired by a stockholder and its affiliates (as defined in Rule 144 of the Act) shall be
aggregated together for the purpose of determining the availability of any rights under this
Agreement.

-15-

 

          4.10. Termination. This agreement shall terminate with respect to any Holder when such
Holder Beneficially Owns no shares of Preferred Stock and less than 2% of the total outstanding
Common Stock.

          4.11. Confidentiality. The Investor agrees to keep any information obtained hereunder
confidential.

[Signature Page Follows]

-16-

 

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.

	 	 	 	 	 
	 	CONSTELLATION ENERGY GROUP, INC.

 	 
	 	By:  	/s/ Mayo A. Shattuck III
 	 
	 	 	Name:  	Mayo A. Shattuck III 	 
	 	 	Title:  	Chairman, President and Chief Executive Officer 	 
	 
	 	MIDAMERICAN ENERGY HOLDINGS COMPANY

 	 
	 	By:  	/s/ Gregory E. Abel
 	 
	 	 	Name:  	Gregory E. Abel  	 
	 	 	Title:  	President and Chief Executive Officer 	 
	 

S-1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00147-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00147-of-00352.parquet"}]]