Document:

Exhibit

Exhibit 10.20

THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND, EXCEPT AS SET FORTH IN SECTIONS 5.3 AND 5.4 BELOW, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND LAWS OR, IN THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER, SUCH OFFER, SALE, PLEDGE OR OTHER TRANSFER IS EXEMPT FROM SUCH REGISTRATION.
WARRANT TO PURCHASE STOCK
Company:  Health Catalyst, Inc., a Delaware corporation
Number of Shares:  As set forth in Paragraph A below
Type/Series of Stock:  Common Stock, $0,001 par value per share
Warrant Price:  $5.33 per Share, subject to adjustment
Issue Date:  October 6, 2017
Expiration Date:  October 5, 2027 See also Section 5.1(b).
Credit Facility:  This Warrant to Purchase Stock (“Warrant”) is issued in connection with that certain Mezzanine Loan and Security Agreement of even date herewith between Silicon Valley Bank and the Company (as amended and/or modified and in effect from time to time, the “Loan Agreement”) and the participation therein of WestRiver Mezzanine Loans - Loan Pool V, LLC pursuant to an arrangement among Silicon Valley Bank, Loan Manager, LLC and WestRiver Mezzanine Loans - Loan Pool V, LLC.
THIS WARRANT CERTIFIES THAT, for good and valuable consideration, WESTRIVER MEZZANINE LOANS - LOAN POOL V, LLC (together with any successor or permitted assignee or transferee of this Warrant or of any shares issued upon exercise hereof, “Holder”) is entitled to purchase up to such number of fully paid and non-assessable shares of the above-stated Type/Series of Stock (the “Class”) of the above-named company (the “Company”) as determined pursuant to Paragraph A below, at the above-stated Warrant Price, all as set forth above and as adjusted pursuant to Section 2 of this Warrant, subject to the provisions and upon the terms and conditions set forth in this Warrant.
A.    Number of Shares.  This Warrant shall be exercisable for the Initial Shares, plus the Additional Shares, if any (collectively, and as may be adjusted from time to time pursuant to the provisions of this Warrant, the “Shares”).
(1)    Initial Shares.  As used herein, “Initial Shares” means 127,669 shares of the Class, subject to adjustment from time to time pursuant to the provisions of this Warrant.
(2)    Additional Shares.  Subject to Paragraph A(4) below, upon the making of each Term Loan Advance (as defined in the Loan Agreement) to the Borrower, this Warrant automatically shall become exercisable for such number of additional shares of the Class as shall equal (a) the Additional Shares Pool, multiplied by (b) a fraction, the numerator of which shall equal the amount of such Term Loan Advance and the denominator of which shall equal $20,000,000, 

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subject to adjustment thereafter from time to time in accordance with the provisions of this Warrant.  All shares, if any, for which this Warrant becomes exercisable pursuant to this Paragraph A(2) are referred to herein cumulatively as the “Additional Shares.
(3)    Additional Shares Pool.  As used herein, “Additional Shares Pool” means 127,668 shares of the Class, as such number may be adjusted from time to time in accordance with the provisions of this Warrant (as if the Additional Shares Pool constituted “Shares” hereunder at all times from and after the Issue Date for such purpose).
(4)    Funding Milestone Event Shares.  Notwithstanding Paragraph A(3) above, if, upon the occurrence (if any) of the Funding Milestone Event (as defined in the Loan Agreement), less than all of the shares in the Additional Shares Pool shall theretofore have become Additional Shares pursuant to Paragraph A(2), then upon such occurrence this Warrant automatically shall become exercisable for 63,834 shares of the Additional Shares Pool (or, if less than 63,834 shares remain in the Additional Shares Pool, such remaining shares), as such number may have been adjusted from time to time prior to such extension in accordance with the provisions of this Warrant as if such shares constituted “Shares” at all times from and after the Issue Date for such purpose (the “Funding Milestone Event Shares”).  The Funding Milestone Event Shares shall be deemed to be and treated as Additional Shares for all purposes of this Warrant.  If this Warrant becomes exercisable for the Funding Milestone Event Shares pursuant to this Paragraph A(4)} then thereafter, for purposes of the calculations under Paragraph A(2) above in respect of Term Loan Advances made on or after the date thereof, (a) the Additional Shares Pool shall equal the Additional Shares Pool set forth in Paragraph A(3) above less (i) all Additional Shares for which this Warrant is exercisable as of immediately prior to such extension, and (ii) the Funding Milestone Event Shares, and (b) the denominator of the fraction described in clause (b) of Paragraph A(2) shall equal $20,000,000 less the aggregate of Term Loan Advances made to the Borrower on or before as of immediately prior to such occurrence.
SECTION 1.  EXERCISE.
1.1    Method of Exercise.  Holder may at any time and from time to time exercise this Warrant, in whole or in part, by delivering to the Company the original of this Warrant together with a duly executed Notice of Exercise in substantially the form attached hereto as Appendix 1 and, unless Holder is exercising this Warrant pursuant to a cashless exercise set forth in Section 1.2, a check, wire transfer of same-day funds (to an account designated by the Company), or other form of payment acceptable to the Company for the aggregate Warrant Price for the Shares being purchased.

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1.2    Cashless Exercise.  On any exercise of this Warrant, in lieu of payment of the aggregate Warrant Price in the manner as specified in Section 1.1 above, but otherwise in accordance with the requirements of Section 1.1, Holder may elect to receive Shares equal to the value of this Warrant, or portion hereof as to which this Warrant is being exercised.  Thereupon, the Company shall issue to the Holder such number of fully paid and non-assessable Shares as are computed using the following formula:
X = Y(A-B)/A
where:
X =    the number of Shares to be issued to the Holder;
		
	Y =
	the number of Shares with respect to which this Warrant is being exercised (inclusive of the Shares surrendered to the Company in payment of the aggregate Warrant Price);

		
	A=
	the Fair Market Value (as determined pursuant to Section 1.3 below) of one Share; and

		
	B =
	the Warrant Price.

1.3    Fair Market Value.  If shares of the Class are then traded or quoted on a nationally recognized securities exchange, inter-dealer quotation system or over-the-counter market (a “Trading Market”), the fair market value of a Share shall be the closing price or last sale price of a share of the Class reported for the Business Day immediately before the date on which Holder delivers this Warrant together with its Notice of Exercise to the Company.  If shares of the Class are not then traded in a Trading Market, the Board of Directors of the Company shall determine the fair market value of a Share in its reasonable good faith judgment.
1.4    Delivery of Certificate and New Warrant.  Within a reasonable time after Holder exercises this Warrant in the manner set forth in Section 1.1 or 1.2 above, the Company shall deliver to Holder a certificate representing the Shares issued to Holder upon such exercise and, if this Warrant has not been fully exercised and has not expired, a new warrant of like tenor representing the Shares not so acquired.
1.5    Replacement of Warrant.  On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form, substance and amount to the Company or, in the case of mutilation, on surrender of this Warrant to the Company for cancellation, the Company shall, within a reasonable time, execute and deliver to Holder, in lieu of this Warrant, a new warrant of like tenor and amount.
1.6    Treatment of Warrant Upon Acquisition of Company.
(a)    Acquisition.  For the purpose of this Warrant, “Acquisition” means any transaction or series of related transactions involving:  (i) the sale, lease, exclusive license, or 

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other disposition of all or substantially all of the assets of the Company; (ii) any merger or consolidation of the Company into or with another person or entity (other than a merger or consolidation effected exclusively to change the Company’s domicile), or any other corporate reorganization, in which the stockholders of the Company in their capacity as such immediately prior to such merger, consolidation or reorganization, own less than a majority of the Company’s (or the surviving or successor entity’s) outstanding voting power immediately after such merger, consolidation or reorganization (or, if such Company stockholders beneficially own a majority of the outstanding voting power of the surviving or successor entity as of immediately after such merger, consolidation or reorganization, such surviving or successor entity is not the Company); or (iii) any sale or other transfer by the stockholders of the Company of shares representing at least a majority of the Company’s then-total outstanding combined voting power.
(b)    Treatment of Warrant at Acquisition.  In the event of an Acquisition in which the consideration to be received by the Company’s stockholders consists solely of cash, solely of Marketable Securities or a combination of cash and Marketable Securities (a “Cash/Public Acquisition”), and the fair market value of one Share as determined in accordance with Section 1.3 above would be greater than the Warrant Price in effect on such date immediately prior to such Cash/Public Acquisition, and Holder has not exercised this Warrant pursuant to Section 1.1 above as to all Shares, then this Warrant shall automatically be deemed to be Cashless Exercised pursuant to Section 1.2 above as to all Shares effective immediately prior to and contingent upon the consummation of a Cash/Public Acquisition.  In connection with such Cashless Exercise, Holder shall be deemed to have restated each of the representations and warranties in Section 4 of the Warrant as of the date thereof and the Company shall promptly notify the Holder of the number of Shares (or such other securities) issued upon exercise.  In the event of a Cash/Public Acquisition where the fair market value of one Share as determined in accordance with Section 1.3 above would be less than the Warrant Price in effect immediately prior to such Cash/Public Acquisition, then this Warrant will expire immediately prior to the consummation of such Cash/Public Acquisition.
(c)    Upon the closing of any Acquisition other than a Cash/Public Acquisition, the acquiring, surviving or successor entity shall assume the obligations of this Warrant, and this Warrant shall thereafter be exercisable for the same securities and/or other property as would have been paid for the Shares issuable upon exercise of the unexercised portion of this Warrant as if such Shares were outstanding on and as of the closing of such Acquisition, subject to further adjustment from time to time in accordance with the provisions of this Warrant.
(d)    As used in this Warrant, “Marketable Securities” means securities meeting all of the following requirements:  (i) the issuer thereof is then subject to the reporting requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and is then current in its filing of all required reports and other information under the Act and the Exchange Act; (ii) the class and series of shares or other security of the issuer that would be received by Holder in connection with the Acquisition were Holder to exercise this Warrant on or prior to the closing thereof is then traded in a Trading Market, and (iii) following the closing of such Acquisition, Holder would not be restricted from publicly re-selling all of the issuer’s shares and/or other securities that would be received by Holder in such Acquisition were Holder to exercise this Warrant in full on or prior to the closing of such Acquisition, except to the extent that 

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any such restriction (x) arises solely under federal or state securities laws, rules or regulations, and (y) does not extend beyond six (6) months from the closing of such Acquisition.
1.7    Stockholders Agreement.  Following any exercise of this Warrant and solely with respect to the Shares issued thereupon, Holder shall, if the Company so requests in writing, become a “Key Holder” party to, by execution and delivery to the Company of a counterpart signature page, joinder agreement, instrument of accession or similar instrument, that certain Fourth Amended and Restated Stockholders Agreement dated February 9, 2016, among the Company and the other parties named therein, as amended and in effect from time to time (the “Stockholders Agreement”), only if (i) holders of not less than eighty percent (80%) of the then-outstanding shares of the Class are then parties thereto, and (ii) such agreement is then by its terms in force and effect.  Provided that the conditions described in the foregoing clauses (i) and (ii) are met as to the Stockholders Agreement at the time of any exercise of this Warrant, Holder shall, effective upon such exercise, automatically become bound by, and the Shares issued upon such exercise automatically become subject to, such agreement.
SECTION 2.  ADJUSTMENTS TO THE SHARES AND WARRANT PRICE.
2.1    Stock Dividends, Splits, Etc.  If the Company declares or pays a dividend or distribution on the outstanding shares of the Class payable in additional shares of the Class or other securities or property (other than cash), then upon exercise of this Warrant, for each Share acquired, Holder shall receive, without additional cost to Holder, the total number and kind of securities and property which Holder would have received had Holder owned the Shares of record as of the date the dividend or distribution occurred.  If the Company subdivides the outstanding shares of the Class by reclassification or otherwise into a greater number of shares, the number of Shares purchasable hereunder shall be proportionately increased and the Warrant Price shall be proportionately decreased.  If the outstanding shares of the Class are combined or consolidated, by reclassification or otherwise, into a lesser number of shares, the Warrant Price shall be proportionately increased and the number of Shares shall be proportionately decreased.
2.2    Reclassification, Exchange, Combinations or Substitution.  Upon any event whereby all of the outstanding shares of the Class are reclassified, exchanged, combined, substituted, or replaced for, into, with or by Company securities of a different class and/or series, then from and after the consummation of such event, this Warrant will be exercisable for the number, class and series of Company securities that Holder would have received had the Shares been outstanding on and as of the consummation of such event, and subject to further adjustment thereafter from time to time in accordance with the provisions of this Warrant.  The provisions of this Section 2.2 shall similarly apply to successive reclassifications, exchanges, combinations, substitutions, replacements or other similar events.
2.3    No Fractional Share.  No fractional Share shall be issuable upon exercise of this Warrant and the number of Shares to be issued shall be rounded down to the nearest whole Share.  If a fractional Share interest arises upon any exercise of the Warrant, the Company shall eliminate such fractional Share interest by paying Holder in cash the amount computed by multiplying the fractional interest by (i) the fair market value (as determined in accordance with Section 1.3 above) of a full Share, less (ii) the then-effective Warrant Price.

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2.4    Notice/Certificate as to Adjustments.  Upon each adjustment of the Warrant Price, Class and/or number of Shares, the Company, at the Company’s expense, shall notify Holder in writing within a reasonable time setting forth the adjustments to the Warrant Price, Class and/or number of Shares and facts upon which such adjustment is based.  The Company shall, upon written request from Holder, furnish Holder with a certificate of its Chief Financial Officer, including computations of such adjustment and the Warrant Price, Class and number of Shares in effect upon the date of such adjustment.
SECTION 3.  REPRESENTATIONS AND COVENANTS OF THE COMPANY.
3.1    Representations and Warranties.  The Company represents and warrants to, and agrees with, the Holder as follows:
(a)    The initial Warrant Price referenced on the first page of this Warrant is not greater than the fair market value of a share of the Class as determined by the most recently completed valuation, approved by the Company’s Board of Directors, of the Company’s stock for purposes of its compliance with Section 409A of the Internal Revenue Code of 1986, as amended.
(b)    The number of Initial Shares first set forth above together with the number of shares constituting the Additional Shares Pool first set forth above collectively represent not less than 0.4250% of the Company’s total issued and outstanding shares of common stock, calculated on and as of the Issue Date hereof on a fully-diluted, common stock-equivalent basis assuming (i) the conversion into common stock of all outstanding securities and instruments (including, without limitation, securities deemed to be outstanding pursuant to clause (ii) of this Section 3.1(b)) convertible by their terms into shares of common stock (regardless of whether such securities or instruments are by their terms now so convertible), (ii) the exercise in full of all outstanding options, warrants (including, without limitation, this Warrant) and other rights to purchase or acquire shares of common stock or securities exercisable for or convertible into shares of common stock (regardless of whether such options, warrants or other rights to purchase or acquire are by their terms now exercisable); and (iii) the inclusion of all shares of common stock reserved for issuance under all of the Company’s incentive stock and stock option plans and not now subject to outstanding grants or options.
(c)    All Shares which may be issued upon the exercise of this Warrant shall, upon issuance, be duly authorized, validly issued, fully paid and non-assessable, and free of any liens and encumbrances except for restrictions on transfer provided for herein or under applicable federal and state securities laws.  The Company covenants that it shall at all times cause to be reserved and kept available out of its authorized and unissued capital stock such number of shares of the Class and other securities as will be sufficient to permit the exercise in full of this Warrant.
(d)    The Company’s capitalization table attached hereto as Schedule 1 is true and complete, in all material respects, as of the Issue Date.

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3.2    Notice of Certain Events.  If the Company proposes at any time to:
(a)    declare any dividend or distribution upon the outstanding shares of the Class, whether in cash, property, stock, or other securities and whether or not a regular cash dividend;
(b)    offer for subscription or sale pro rata to the holders of the outstanding shares of the Class any additional shares of any class or series of the Company’s stock (other than pursuant to contractual pre-emptive rights);
(c)    effect any reclassification, exchange, combination, substitution, reorganization or recapitalization of the outstanding shares of the Class;
(d)    effect an Acquisition or to liquidate, dissolve or wind up; or
(e)    effect its initial, underwritten offering and sale of its securities to the public pursuant to an effective registration statement under the Act (the “IPO”); then, in connection with each such event, the Company shall give Holder:
(1)    in the case of the matters referred to in (a) and (b) above, at least seven (7) Business Days prior written notice of the earlier to occur of the effective date thereof or the date on which a record will be taken for such dividend, distribution, or subscription rights (and specifying the date on which the holders of outstanding shares of the Class will be entitled thereto) or for determining rights to vote, if any;
(2)    in the case of the matters referred to in (c) and (d) above at least seven (7) Business Days prior written notice of the date when the same will take place (and specifying the date on which the holders of outstanding shares of the Class will be entitled to exchange their shares for the securities or other property deliverable upon the occurrence of such event and such reasonable information as Holder may reasonably require regarding the treatment of this Warrant in connection with such event giving rise to the notice); and
(3)    with respect to the IPO, at least seven (7) Business Days prior written notice of the date on which the Company proposes to file its registration statement in connection therewith.
The Company will also provide information requested by Holder that is reasonably necessary to enable Holder to comply with Holder’s accounting or reporting requirements.
SECTION 4.  REPRESENTATIONS, WARRANTIES OF THE HOLDER.
The Holder represents and warrants to the Company as follows:
4.1    Purchase for Own Account.  This Warrant and the Shares to be acquired upon exercise of this Warrant by Holder are being acquired for investment for Holder’s account, not as a nominee or agent, and not with a view to the public resale or distribution within the meaning of 

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the Act.  Holder also represents that it has not been formed for the specific purpose of acquiring this Warrant or the Shares.
4.2    Disclosure of Information.  Holder is aware of the Company’s business affairs and financial condition and has received or has had full access to all the information it considers necessary or appropriate to make an informed investment decision with respect to the acquisition of this Warrant and its underlying securities.  Holder further has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of this Warrant and its underlying securities and to obtain additional information (to the extent the Company possessed such information or could acquire it without unreasonable effort or expense) necessary to verify any information furnished to Holder or to which Holder has access.
4.3    Investment Experience.  Holder understands that the purchase of this Warrant and its underlying securities involves substantial risk.  Holder has experience as an investor in securities of companies in the development stage and acknowledges that Holder can bear the economic risk of such Holder’s investment in this Warrant and its underlying securities and has such knowledge and experience in financial or business matters that Holder is capable of evaluating the merits and risks of its investment in this Warrant and its underlying securities and/or has a preexisting personal or business relationship with the Company and certain of its officers, directors or controlling persons of a nature and duration that enables Holder to be aware of the character, business acumen and financial circumstances of such persons.
4.4    Accredited Investor Status.  Holder is an “accredited investor” within the meaning of Regulation D promulgated under the Act.
4.5    The Act.  Holder understands that this Warrant and the Shares issuable upon exercise hereof have not been registered under the Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of the Holder’s investment intent as expressed herein.  Holder understands that this Warrant and the Shares issued upon any exercise hereof must be held indefinitely unless subsequently registered under the Act and qualified under applicable state securities laws, or unless exemption from such registration and qualification are otherwise available.  Holder is aware of the provisions of Rule 144 promulgated under the Act.
4.6    No Voting Rights.  Holder, as a Holder of this Warrant, will not have any voting rights until the exercise of this Warrant.
4.7    Market Stand-off Agreement.  The Holder agrees that the Shares shall be subject to the “holdback agreement” in Section 4 of the Stockholders Agreement.

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SECTION 5.  MISCELLANEOUS.
5.1    Term; Automatic Cashless Exercise Upon Expiration.
(a)    Term.  Subject to the provisions of Section 1.6 above, this Warrant is exercisable in whole or in part at any time and from time to time on or before 6:00 PM, Pacific time, on the Expiration Date and shall be void thereafter.
(b)    Automatic Cashless Exercise upon Expiration.  In the event that, upon the Expiration Date, the fair market value of one Share as determined in accordance with Section 1.3 above is greater than the Warrant Price in effect on such date, then this Warrant shall automatically be deemed on and as of such date to be exercised pursuant to Section 1.2 above as to all Shares for which it shall not previously have been exercised, and the Company shall, within a reasonable time, deliver a certificate representing the Shares issued upon such exercise to Holder.
5.2    Legends.  Each certificate evidencing Shares shall be imprinted with a legend in substantially the following form:
THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND, EXCEPT AS SET FORTH IN THAT CERTAIN WARRANT TO PURCHASE STOCK ISSUED BY THE ISSUER TO WESTRIVER MEZZANINE LOANS - LOAN POOL V, LLC DATED OCTOBER 6, 2017, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND LAWS OR, IN THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER, SUCH OFFER, SALE, PLEDGE OR OTHER TRANSFER IS EXEMPT FROM SUCH REGISTRATION.
5.3    Compliance with Securities Laws on Transfer.  This Warrant and the Shares issued upon exercise of this Warrant may not be transferred or assigned in whole or in part except in compliance with applicable federal and state securities laws by the transferor and the transferee (including, without limitation, the delivery of investment representation letters and legal opinions reasonably satisfactory to the Company, as reasonably requested by the Company).  The Company shall not require Holder to provide an opinion of counsel if the transfer is to an affiliate of Holder, provided that such affiliate is an “accredited investor” as defined in Regulation D promulgated under the Act.  Additionally, the Company shall also not require an opinion of counsel if there is no material question as to the availability of Rule 144 promulgated under the Act.
5.4    Transfer Procedure.  Subject to the provisions of Section 5.3 and upon providing the Company with written notice, Holder may transfer all or part of this Warrant or the Shares issued upon exercise of this Warrant to any transferee, provided, however, in connection with any such transfer, Holder will give the Company notice of the portion of the Warrant and/or Shares being transferred with the name, address and taxpayer identification number of the transferee 

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and Holder will surrender this Warrant to the Company for reissuance to the transferee(s) (and Holder if applicable); and provided further, that any transferee shall agree in writing with the Company to be bound by all of the terms and conditions of this Warrant.  Notwithstanding any contrary provision herein, at all times prior to the IPO, Holder may not, without the Company’s prior written consent, transfer this Warrant or any portion hereof, or any Shares issued upon any exercise hereof, to any person or entity who directly competes with the Company, except in connection with an Acquisition of the Company by such a direct competitor.
5.5    Notices.  All notices and other communications hereunder from the Company to the Holder, or vice versa, shall be deemed delivered and effective (i) when given personally, (ii) on the third (3rd) Business Day after being mailed by first-class registered or certified mail, postage prepaid, (iii) upon actual receipt if given by facsimile or electronic mail and such receipt is confirmed in writing by the recipient, or (iv) on the first Business Day following delivery to a reliable overnight courier service, courier fee prepaid, in any case at such address as may have been furnished to the Company or Holder, as the case may be, in writing by the Company or such Holder from time to time in accordance with the provisions of this Section 5.5.  All notices to Holder shall be addressed as follows until the Company receives notice of a change of address in connection with a transfer or otherwise:
WestRiver Mezzanine Loans - Loan Pool V, LLC
c/o Chief Financial Officer
3720 Carillon Point
Kirkland, Washington 98033-7455
Attention:  Trent Dawson
Telephone:  (425) 952-3951
Email:  tdawson@westrivermgmt.com
With a copy (which shall not constitute notice) to:
Perkins Coie LLP
1201 Third Avenue, Suite 4800
Seattle, Washington 98101-3099
Attention:  David C. Clarke
Telephone:  (206) 359-8612
Email:  dclarke@perkinscoie.com
Notice to the Company shall be addressed as follows until Holder receives notice of a change in address:
Health Catalyst, Inc.
Attn:  Chief Financial Officer
3165 Millrock Drive, Suite 400
Salt Lake City, UT 84121
Telephone:
Facsimile:
Email:

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With a copy (which shall not constitute notice) to:
LAW FIRM
Attn:
(ADDRESS)
Telephone:
Facsimile:
Email:
5.6    Waiver.  This Warrant and any term hereof may be changed, waived, discharged or terminated (either generally or in a particular instance and either retroactively or prospectively) only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought.
5.7    Attorneys’ Fees.  In the event of any dispute between the parties concerning the terms and provisions of this Warrant, the party prevailing in such dispute shall be entitled to collect from the other party all costs incurred in such dispute, including reasonable attorneys’ fees.
5.8    Counterparts; Facsimile/Electronic Signatures.  This Warrant may be executed in counterparts, all of which together shall constitute one and the same agreement.  Any signature page delivered electronically or by facsimile shall be binding to the same extent as an original signature page with regards to any agreement subject to the terms hereof or any amendment thereto.
5.9    Governing Law.  This Warrant shall be governed by and construed in accordance with the laws of the State of California, without giving effect to its principles regarding conflicts of law.
5.10    Headings.  The headings in this Warrant are for purposes of reference only and shall not limit or otherwise affect the meaning of any provision of this Warrant.
5.11    Business Days.  “Business Day” is any day that is not a Saturday, Sunday or a day on which banks in Washington are closed.
[Remainder of page left blank intentionally]
[Signature page follows]

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IN WITNESS WHEREOF, the parties have caused this Warrant to Purchase Stock to be executed by their duly authorized representatives effective as of the Issue Date written above.
	
		
	“COMPANY”

	 
	 

	HEALTH CATALYST, INC.

	 
	 

	By:
	/s/ Daniel Burton

	 
	 

	Name:
	Daniel Burton

	 
	(Print)

	Title:
	CEO

	
			
	"HOLDER"
	 

	 
	 
	 

	WESTRIVER MEZZANINE LOANS - LOAN POOL V, LLC

	 
	 
	 

	By:
	Loan Manager, LLC, its
	 

	 
	Managing Member
	 

	 
	 
	 

	By:
	/s/ Trent Dawson
	 

	 
	Trent Dawson, Chief Financial Officer
	 

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APPENDIX 1
NOTICE OF EXERCISE
1.    The undersigned Holder hereby exercises its right to purchase _________ shares of the Common/Series _______ Preferred [circle one] Stock of ______________ (the “Company”) in accordance with the attached Warrant To Purchase Stock, and tenders payment of the aggregate Warrant Price for such shares as follows:
		
	[   ]
	check in the amount of $_payable to order of the Company enclosed herewith

[   ]    Wire transfer of immediately available funds to the Company’s account
[   ]    Cashless Exercise pursuant to Section 1.2 of the Warrant
[   ]    Other [Describe]____________________________________________
2.    Please issue a certificate or certificates representing the Shares in the name specified below:
	
	
	 

	Holder’s Name

	 

	 

	 

	(Address)

3.    By its execution below and for the benefit of the Company, Holder hereby restates each of the representations and warranties in Section 4 of the Warrant to Purchase Stock as of the date hereof.
	
		
	HOLDER:

	 
	 

	 
	 

	By:
	 

	 
	 

	Name:
	 

	 
	 

	Title:
	 

	 
	 

	(Date):Exhibit

Exhibit 4.1

	
										
	 

	 

EXEMPT FACILITIES LOAN AGREEMENT

Between

MARYLAND ECONOMIC DEVELOPMENT CORPORATION
And
POTOMAC ELECTRIC POWER COMPANY

Dated as of June 1, 2019

	
										
	 

	 

	
				
	TABLE OF CONTENTS

	 
	 

	 
	 

	 
	Page

	 
	 

	ARTICLE I
	 

	BACKGROUND, REPRESENTATIONS AND FINDINGS
	 

	 
	 

	Section 1.01    Background
	1

	Section 1.02    Company Representations
	2

	Section 1.03    Issuer Findings and Representations
	3

	 
	 

	ARTICLE II
	 

	USE OF PROCEEDS OF BONDS
	 

	 
	 

	Section 2.01    Project Facilities
	4

	Section 2.02    Bonds Not to Become Arbitrage Bonds
	4

	Section 2.03    Restriction on Use of Proceeds of Bonds
	4

	Section 2.04    Rebate Fund
	4

	 
	 

	ARTICLE III
	 

	LOAN AND REPAYMENT
	 

	 
	 

	Section 3.01    Amount and Source of Loan
	5

	Section 3.02    Repayment of Loan
	5

	Section 3.03    The Note
	5

	Section 3.04    Redemption of Bonds
	5

	Section 3.05    No Defense or Set‐Off
	5

	Section 3.06    Assignment of Issuer’s Rights
	6

	 
	 

	ARTICLE IV
	 

	COVENANTS OF THE COMPANY
	 

	 
	 

	Section 4.01    Existence
	6

	Section 4.02    Payment of Issuer’s Fees and Expenses
	6

	Section 4.03    Payment of Trustee’s Compensation and Expenses
	6

	Section 4.04    Indemnification
	7

	Section 4.05    Limitation of Liability of the Issuer
	8

	Section 4.06    Default, Etc
	8

	Section 4.07    Tax Covenants of Company and Issuer
	9

	Section 4.08    Further Tax Covenants of Company
	9

	Section 4.09    Deficiencies in Revenues
	10

	 
	 

	ARTICLE V
	 

	MISCELLANEOUS
	 

	 
	 

	Section 5.01    Notices
	11

	Section 5.02    Assignment
	11

	Section 5.03    Illegal, Etc. Provisions Disregarded
	12

i

	
				
	Section 5.04    Applicable Law
	12

	Section 5.05    Amendments
	12

	Section 5.06    Term of Agreement
	12

	Section 5.07    Counterparts
	12

	Section 5.08    Further Assurances
	12

	 
	 

	SCHEDULE A   ‐    Description of Project
	A-1

	SCHEDULE B   -    Form of Exempt Facilities Note
	B-1

	 
	 

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EXEMPT FACILITIES LOAN AGREEMENT dated as of June 1, 2019 (the “Agreement”), between the MARYLAND ECONOMIC DEVELOPMENT CORPORATION (the “Issuer”) and POTOMAC ELECTRIC POWER COMPANY, a District of Columbia and Virginia Corporation (the “Company”).
Capitalized terms not otherwise defined herein shall be attributed the meanings set forth in the Indenture.
ARTICLE I
BACKGROUND, REPRESENTATIONS AND FINDINGS
Section 1.01  Background.  The Issuer is a body politic and corporate and a public instrumentality of the State of Maryland.  Pursuant to Sections 10-101 through 10-132, inclusive, of the Economic Development Article of the Annotated Code of Maryland, as amended (the “Act”) and a resolution adopted by the Board of Directors of the Issuer, the Issuer is authorized and empowered to issue its $109,500,000 Pollution Control Revenue Refunding Bonds (Potomac Electric Power Company Project) Series 2019 (the “Bonds”).
Under the Act, the Issuer may extend credit or make loans to any person (1) to finance or refinance, in whole or in part, the acquisition, construction, reconstruction, equipping, expansion, extension, improvement, rehabilitation or remodeling of a project and (2) to refund outstanding bonds, mortgages, loans or other obligations made or given by the person for the purpose of financing or refinancing, in whole or in part, the acquisition, construction, reconstruction, equipping, expansion, extension, improvement, rehabilitation or remodeling of a project.
The Company has requested the Issuer to undertake the financing of the costs of a project (the “Project”) to refinance the cost of certain air pollution control facilities.
The Issuer has authorized the issuance of the Bonds for the purpose of refunding its $109,500,000 Pollution Control Revenue Refunding Bonds (Potomac Electric Project) Series 2006 (the “Prior Bonds”).  The Issuer authorized the issuance of the Prior Bonds for the purpose of refunding (1) the $30,000,000 Prince George’s County, Maryland Pollution Control Revenue Refunding Bonds (Potomac Electric Project) 1992 Series, (2) the $37,000,000 Prince George’s County, Maryland Pollution Control Revenue Refunding Bonds (Potomac Electric Project) 1993 Series and (3) the $42,500,000 Montgomery County, Maryland Pollution Control Revenue Refunding Bonds (Potomac Electric Project) 1994 Series, the proceeds of which were used to refund bonds previously issued to refinance the cost of certain air pollution control facilities as generally described in Schedule A to this Agreement (the “Chalk Point Facilities”) at the Chalk Point Generating Station in Prince George’s County, Maryland (the “Chalk Point Plant”) and certain air and water pollution control facilities as generally described in Schedule A to this Agreement (the “Dickerson Facilities” and, together with the Chalk Point Facilities, the “Project Facilities”) at the Dickerson Generating Station in Montgomery County, Maryland (the “Dickerson Plant” and, together with the Chalk Point Plant, the “Plants”).  The Company has heretofore transferred ownership of the Plants pursuant to an Asset Purchase and Sale Agreement by and between the Company and Southern Energy, Inc., dated June 7, 2000.

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The Bonds are being issued under a Trust Indenture dated as of the date hereof (the “Indenture”) between the Issuer and The Bank of New York Mellon, as trustee (the “Trustee”).  The Company and the Issuer are entering into this Agreement in order to provide for the issuance of the Bonds to refund the Prior Bonds and the loan of the proceeds of the Bonds to the Company.
The Issuer and the Company intend that substantially all of the Project Facilities constitute a “project” for purposes of the Act and air and water pollution control facilities for the purposes of the Internal Revenue Code of 1986, as amended (the “Code”), so that interest on the Bonds will not be included in gross income of the holders thereof for federal income tax purposes under the Code (except for holders who are “substantial users” of the Project Facilities or “related persons” as provided in Section 147(a) of the Code).
Section 1.02  Company Representations.  The Company represents that:
(a)It is a corporation duly organized and existing in good standing under the laws of the District of Columbia and the Commonwealth of Virginia, with full power and legal right to enter into this Agreement and perform its obligations hereunder.  The Company is duly qualified to do business as a foreign corporation in the State of Maryland (the “State”).  The making and performance of this Agreement on the Company’s part have been duly authorized by all necessary corporate action.
(b)The financing, acquisition, construction, installation and equipping of the Project Facilities contributes to the prevention, avoidance, reduction, control and abatement of air or water pollution or contamination by removing, altering, disposing of or storing pollutants, contaminants, wastes or heat derived from the operation of the Plants.
(c)The Project Facilities consist of facilities of the type authorized and permitted by the Act.
(d)Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will conflict with or constitute a violation or breach of, or a default under, the Company’s articles of incorporation or by-laws, or any indenture, mortgage, deed of trust or other agreement or instrument to which the Company is a party or by which it or any of its property is bound.
(e)This Agreement and the Note (as defined below) have been duly authorized, executed and delivered by the Company and each is a valid instrument legally binding upon and enforceable against the Company (except as limited by bankruptcy, insolvency or other laws or equitable principles affecting creditors’ rights generally).
(f)There is no action, suit, proceeding, inquiry or investigation, at law or in equity, or before or by any court, public board or body, pending or, to the knowledge of the Company, threatened, wherein an unfavorable decision, ruling or finding would materially adversely affect the transactions contemplated by this Agreement.

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(g)The Company’s financing and refinancing of the Project Facilities facilitated compliance with federal, state and local laws and regulations governing the control, reduction and abatement of pollution of the environment and thus (1) encouraged the increase of business activity and commerce and a balanced economy in the State, (2) promoted economic development and (3) generally promoted the present and prospective health, happiness, safety, right of gainful employment and general welfare of the residents of Prince George’s County and Montgomery County, Maryland.
(h)The Issuer’s issuance, sale and delivery of the Bonds and its lending of the proceeds thereof to the Company will result in realized savings in the effective costs of the Company’s debt service related to the Prior Bonds, thereby promoting the purposes of the Act.
(i)All consents, approvals, authorizations, permits or licenses from any federal or state regulatory authority required by the Company have been obtained or will be obtained when required hereunder in connection with the making or performance of this Agreement.
(j)The Project Facilities will promote the public purposes of the Act and will not cause, directly or indirectly, the removal, either in whole or in part, of a plant, facility or establishment from one area of the State to another.  
(k)The Project Facilities qualify as a “project” for the purposes of the Act, and will promote the public purposes of the Act and the health, safety and general welfare of the people of the State by promoting a healthy environment through the abatement, safe storage, transport, elimination, remediation and disposal within the State of solid waste and other pollutants.
Section 1.03  Issuer Findings and Representations.  The Issuer hereby confirms its findings and represents that:
(a)The financing and refinancing of the facilities comprising the Project Facilities will promote the public purposes of the Act.
(b)The Issuer has the necessary power under the Act, and has duly taken all action required on its part, to execute and deliver this Agreement, to issue the Bonds and to cause the refunding of the Prior Bonds.  The execution, delivery and performance of this Agreement by the Issuer will not violate or conflict with any instrument to which the Issuer is a party or by which the Issuer or its properties are bound or any law to which the Issuer is subject.
(c)The Issuer is a public body corporate and politic established in the State pursuant to the laws of the State (including the Act).  Under the Act, the Issuer has the power to enter into the Indenture, the Purchase Agreement and this Agreement and to carry out its obligations thereunder and to issue the Bonds to finance the Project Facilities.

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(d)The Issuer has authorized, by all necessary corporate action, the execution, delivery and due performance of this Agreement, the Indenture and the Bonds and any and all such other agreements and documents as may be required to be executed and delivered by the Issuer in order to carry out, give effect to and consummate the transactions contemplated by this Agreement, the Indenture and the Bonds.  The Issuer has the necessary power under the Act and has duly taken all action required on its part, to execute and deliver this Agreement, the Indenture and to undertake the financing of the Project Facilities and to issue the Bonds.  The execution and performance of this Agreement and the Indenture by the Issuer will not violate or conflict with any instrument to which the Issuer is a party or by which the Issuer or its properties are bound or any law to which the Issuer is subject.
(e)Neither this Agreement nor any of the Revenues (as defined in the Indenture) have been pledged or hypothecated in any manner or for any purpose other than as provided in the Indenture as security for the payment of the Bonds.
ARTICLE II
USE OF PROCEEDS OF BONDS
Section 2.01  Project Facilities.  The Project Facilities, as described in Schedule A, were heretofore constructed by or on behalf of the Company.  The Issuer shall have no title to the Project Facilities.  
Section 2.02  Bonds Not to Become Arbitrage Bonds.  The Issuer and the Company hereby covenant for the benefit of the holders of the Bonds that, notwithstanding any other provision of this Agreement or any other instrument, they will neither make nor instruct the Trustee to make any investment or other use of moneys from the proceeds of the Bonds which would cause the Bonds to be arbitrage bonds under Section 148 of the Code and the regulations thereunder, including Section 148(f) which requires generally a rebate payment to the United States of arbitrage profit from investment of the proceeds of the Bonds, to the extent that the same are applicable at the time of such investment or use, and that they will comply with the requirements of such Section and regulations throughout the term of the Bonds.
Section 2.03  Restriction on Use of Proceeds of Bonds.  The Company hereby covenants that it shall not use or direct the use of moneys from the proceeds of the Bonds in any way, or take any other action or omit to take any action, which would cause the interest on the Bonds (other than the Bonds held by a “substantial user” of the Project Facilities or by a “related person” as such terms are defined in Section 147(a) of the Code) to be includable in gross income of the owners thereof for federal income tax purposes under the Code as in effect on the date the Bonds are issued.
  Section 2.04  Rebate Fund.  The Company does not expect to have earnings subject to rebate under the arbitrage rebate requirements of Section 148(f) of the Code.  Notwithstanding the foregoing, the Company hereby covenants to comply with the applicable federal requirements under the Code for rebate to the United States Treasury Department of certain profits, if any, from investment of proceeds of the Bonds.

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ARTICLE III
LOAN AND REPAYMENT 
Section 3.01  Amount and Source of Loan.  Concurrently with the delivery of the Bonds, the Issuer will, upon the terms and conditions of this Agreement, lend to the Company, by deposit of the proceeds thereof in accordance with the provisions of the Indenture, an amount equal to the aggregate principal amount of the Bonds.  To the extent that accrued interest on the Bonds is received by the Issuer upon the sale of the Bonds and is deposited into the Bond Fund under the Indenture, such accrued interest shall be applied to the first interest payment due on the Bonds with a corresponding credit on the amounts otherwise due under the Note (hereinafter defined).
Section 3.02  Repayment of Loan.  The Company agrees to repay the loan made by the Issuer under Section 3.01 in installments which, as to amount, shall correspond to the payments of principal on the Bonds and, if applicable, any redemption price and shall accrue interest at the rate or rates, at the interest rate and at the times payable on the Bonds, when such principal, redemption price, if applicable, or interest is due in accordance with the terms of the Indenture; provided that such amount shall be reduced to the extent that other moneys on deposit with the Trustee are available for such purpose, and a credit in respect thereof has been granted pursuant to the Indenture.  All such repayments made by the Company pursuant to this Agreement shall be made in funds that will be available to the Trustee no later than the corresponding principal or applicable redemption price or interest payment date on the Bonds.  To evidence its obligation to pay such amounts, the Company will deliver the Note, as described under Section 3.03.
Section 3.03  The Note.  Concurrently with the issuance by the Issuer of the Bonds, the Company will execute and deliver to the Trustee its Exempt Facilities Note (Maryland Economic Development Corporation), 2019 Series (the “Note”), substantially in the form, attached hereto as Schedule B.
  Section 3.04  Redemption of Bonds.  The Issuer will redeem any or all of the Bonds or portions thereof upon the occurrence of an event which gives rise to redemption specified in the Indenture and in accordance with the provisions thereof.  Upon any such redemption, the Company shall prepay the Note in full or in part, as and to the extent that all or a portion of the principal amount of the Bonds is then subject to redemption on such redemption date such partial redemption will preserve the exclusion from gross income for federal income tax purposes of interest on the Bonds remaining outstanding after such redemption).  
Section 3.05  No Defense or Set‐Off.  The obligations of the Company to make payments required under the Note shall be absolute and unconditional without defense or set‐off by reason of any default by the Issuer under this Agreement or under any other agreement between the Company and the Issuer, or for any other reason, including, without limitation, any acts or circumstances that may constitute failure of consideration, destruction of or damage to the Project Facilities, commercial impracticability or frustration of purpose, any loss of the proceeds of the Bonds or on any investment thereof, or failure of the Issuer to perform and observe any agreement, whether express or implied, or any duty, liability or obligation arising out of or connected with this Agreement, it being the intention of the parties that the payments required hereunder will be paid in full when due without any delay or diminution whatsoever.

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Section 3.06  Assignment of Issuer’s Rights.  As the source of payment for the Bonds, the Issuer will assign to the Trustee all the Issuer’s rights under this Agreement, including its rights to receive the Note and payments thereunder (except rights under Section 4.02, Section 4.04 and Section 4.05 hereof).  The Company consents to such assignment, agrees to deliver the Note to the Trustee and agrees to perform those covenants in the Indenture which either specifically recite that they are to be performed by the Company or which are otherwise, by their terms or by the assignment in this Section, contemplated to be undertaken by the Company.  
ARTICLE IV
COVENANTS OF THE COMPANY
Section 4.01  Existence.  So long as the Bonds are outstanding, the Company agrees to maintain its existence and its qualification to do business as a duly organized and subsisting limited liability company in the State, except that it may convert to a corporation, dissolve or otherwise dispose of all or substantially all of its assets and may consolidate with or merge into another corporation or entity or permit one or more corporations or entities to consolidate with or merge into it, (i) if the surviving, resulting or transferee corporation or entity, if other than the Company, is solvent and assumes in writing all of the obligations of the Company hereunder and under the Note and is a corporation or other entity duly organized under the laws of one of the states of the United States of America and is duly qualified to do business in the State and is not a Disqualified Contractor and (ii) immediately thereafter neither the Company nor its successor will be in default under this Agreement or the Note.
Section 4.02  Payment of Issuer’s Fees and Expenses.  The Company agrees to pay to the Issuer (i) an original administrative fee equal to seven and one-half basis points multiplied by the aggregate original principal amount of the Bonds upon delivery of the Bonds and (ii) an annual administrative fee equal to four and one-half basis points multiplied by the aggregate principal amount of the Bonds outstanding on the date such payment is due (together, the “Issuer’s Annual Fee”), together with all reasonable expenses, including legal and accounting fees and expenses, incurred by the Issuer in connection with the issuance of the Bonds and the performance by the Issuer of its functions and duties under this Agreement and the Indenture.  The Issuer’s Annual Fee shall be due and payable on the first anniversary of the Closing Date and on each such anniversary thereafter.  No refund of the Issuer’s Annual Fee will be made in the event that Bonds mature or are redeemed, accelerated or otherwise paid prior to the end of any 12-month period for which the Issuer’s Annual Fee has been paid. 
Section 4.03  Payment of Trustee’s Compensation and Expenses.  So long as any of the Bonds are outstanding, the Company agrees:
(a)to pay to the Trustee, the Registrar and ay Paying Agent for all services rendered thereby under the Indenture such compensation as has been agreed upon in writing (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); and
(b)except as otherwise expressly provided in the Indenture, to reimburse the Trustee, the Registrar and any Paying Agent upon its request for all reasonable expenses, 

6

disbursements and advances incurred or made thereby in the exercise and performance of its rights, powers and duties under the Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), including but not limited to all Ordinary Expenses and Extraordinary Expenses for which it is entitled to be reimbursed, except any such expense, disbursement or advance as may be attributable to its willful misconduct, gross negligence or bad faith.
Section 4.04  Indemnification.  The Company will indemnify and hold harmless the Issuer and each member, director, officer, employee, attorney and agent of the Issuer for and against any and all claims, losses, damages or liabilities (including the costs and expenses of defending against any such claims) to which the Issuer or any member, director, officer, employee or agent of the Issuer may become subject, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise directly or indirectly out of (a) any breach or default on the part of the Company in the performance of any covenant or agreement of the Company under this Agreement or the Note or any related document, or arising from any act or failure to act by the Company or any of its agents, contractors, servants, employees or licensees; (b) the authorization, issuance and sale of the Bonds, or the provision of any information or certification furnished in connection therewith concerning the Bonds, the Project Facilities or the Company (including, without limitation, any information furnished by the Company for inclusion in any certification made by the Issuer or for inclusion in, or as a basis for preparation of, the information statements furnished by the Issuer and any information or certification obtained from the Company) to assure the exclusion of the interest on the Bonds from the gross income of the holders thereof for federal income tax purposes; (c) the Company’s failure to comply with any requirements of this Agreement pertaining to compliance with the Code to assure such exclusion of the interest or the provisions set forth in Section 4.07; (d) any failure by the Company to comply with the provisions of the Act; and (e) any claim, action or proceeding brought with respect to any matter set forth in clause (a), (b), (c) or (d) above.
The Company will indemnify and hold the Trustee and its directors, officers, agents, attorneys and employees (collectively, the “Indemnitees”) harmless from and against any and all claims, liabilities, losses, damages, fines, penalties and expenses, including out-of-pocket expenses, incidental expenses, reasonable legal fees and expenses, and the reasonable costs and expenses of defending against any such claim (collectively, “Losses”) that may be imposed on, incurred by or asserted against, the Indemnitees or any of them for following any instruction or other direction upon which the Trustee is authorized to rely pursuant to the terms of this Agreement, the Bonds, the Note or the Indenture.  In addition to and not in limitation of the immediately preceding sentence, the Company also agrees to indemnify and hold the Indemnitees and each of them harmless from and against any and all Losses that may be imposed on, incurred by or asserted against the Indemnitees or any of them in connection with or arising out of the Trustee’s performance under this Agreement, the Bonds or the Indenture, or in collecting under the Note, except in any case as a result of the gross negligence or willful misconduct of the Trustee.
In case any action or proceeding is brought against the Issuer or the Trustee in respect of which indemnity may be sought hereunder, the party seeking indemnity promptly shall give notice of that action or proceeding to the Company, and the Company upon receipt of that notice shall have the obligation and the right to assume the defense of the action or proceeding; provided that 

7

failure of a party to give that notice shall not relieve the Company from any of its obligations under this Section unless (and then only to the extent) that failure prejudices the defense of the action or proceeding by the Company.  At its own expense, an indemnified party may employ separate counsel and participate in the defense.  The Issuer or the Trustee, as the case may be, will cooperate with the Company, at the Company’s expense, with respect to its assumption of the defense of any such action or proceeding, and will take such reasonable actions as are requested of it by the Company, at the Company’s expense, in connection therewith.  Company shall not be liable for any settlement made without its consent, which shall not be unreasonably withheld.  The Company shall not approve any settlement involving the Trustee without the Trustee’s prior written consent, which shall not be unreasonably withheld.
The indemnification set forth above is intended to and shall (i) include the indemnification of all affected directors, officers, agents, attorneys and employees of the Issuer and the Trustee, respectively, and (ii) be enforceable by the Issuer and the Trustee, respectively, to the full extent permitted by law.
The provisions of this Section 4.04 shall survive the termination of this Agreement and the Indenture, payment or defeasance of the Bonds and the removal or resignation of the Trustee in accordance with the Indenture for any reason.
Section 4.05  Limitation of Liability of the Issuer.  In the event of any default by the Issuer hereunder, under the Indenture or otherwise, the liability of the Issuer to the Company shall be enforceable only out of its interest under this Agreement and there shall be no other recourse by the Company against the Issuer, its members, officers, agents and employees, past, present or future, or any of the property now or hereafter owned by it or them.  The Bonds shall not be a debt or liability of the State and shall not create or constitute any indebtedness, liability or obligation of the State.  The Issuer shall be obligated to pay the principal of or the interest on the Bonds only from the Revenues.  Neither the State nor any political subdivisions are obligated to pay the principal of or interest on the Bonds, and neither the faith and credit nor the taxing power of the State nor any political subdivision thereof is pledged to the payment of the principal of or the interest on the Bonds.  It is expressly understood that the Issuer shall not otherwise be obligated and that none of its members, officers, agents and employees, past, present or future, shall be in any way obligated for any costs, expenses, fees or other obligations or liabilities incurred or imposed in connection with the Project Facilities.  The Issuer makes no warranty or representation, express or implied, as to title, condition, design, quality, durability, merchantability or fitness for use or purpose of the Project Facilities or the suitability of the Project Facilities for the purposes specified in this Agreement or for any other Company purposes or needs.
Section 4.06  Default, Etc.  In addition to all other rights of the Issuer granted herein, in the Note or otherwise by law, the Issuer shall have the right to specifically enforce the performance and observation by the Company of any of its obligations, agreements or covenants under this Agreement or under the Note and may take any actions at law or in equity to collect any payments due or to obtain other remedies.  If the Company shall default under any provisions of this Agreement or in any payment under the Note and the Issuer shall employ attorneys or incur other expenses for the collection of payments due or for the enforcement of the performance or observation of any 

8

obligation or agreement on the part of the Company contained herein, the Company will, on demand therefor, reimburse the reasonable fees of such attorneys and such reasonable expenses so incurred.
Section 4.07  Tax Covenants of Company and Issuer.  The Company covenants and represents that it will at all times do and perform all acts and things necessary or desirable and within its reasonable control in order to assure that interest paid on the Bonds shall not be includable in the gross income of any holder thereof for federal income tax purposes, unless such holder is a “substantial user” of the Project Facilities or a “related person” of such a user within the meaning of Section 147(a) of the Code.  The Company also covenants and represents that it shall not take or omit to take, or permit to be taken on its behalf, any actions which, if taken or omitted, would adversely affect the excludability from the gross income of the holder of interest paid on the Bonds for federal income tax purposes.  The Issuer and the Company mutually covenant for the benefit of the Bondholders that they will not use the proceeds of the Bonds, any moneys derived, directly or indirectly, from the use or investment thereof or any other moneys on deposit in any fund or account maintained in respect of the Bonds (whether such moneys were derived from the proceeds of the sale of the Bonds or from other sources) in a manner which would cause the Bonds to be treated as “arbitrage bonds” within the meaning of Section 148 of the Code.
Section 4.08  Further Tax Covenants of Company.  The Company further represents and covenants as follows:
(a)Action to Maintain Tax‐Exempt Status.  The Company will take such actions as shall be necessary or desirable, from time to time and within its reasonable control, to cause all of the representations and warranties in this Section to remain true and correct during such periods as shall be necessary to maintain the exclusion of interest paid on the Bonds from the gross income of the holders thereof for federal income tax purposes (other than a holder who is a “substantial user” of the Project Facilities or a “related person” as those terms are used in Section 147(a) of the Code), pursuant to the requirements of the Code.
(b)Operation as Solid Waste Disposal Facilities.  As long as the Company (or its lessee or transferee) is required to operate or cause to be operated the Project Facilities under Section 2.01, the Company (or its lessee or transferee) shall operate or cause to be operated the Project Facilities as “solid waste disposal facilities” within the meaning of Section 142(a)(6) of the Code.
(c)Ninety-five Percent Capital Costs Test.  The Company spent not less than 95% of the net proceeds of the Prior Bonds (taking into account for this purpose the expenditure of proceeds of the Prior Bonds) for capital costs of property of a character subject to allowance for depreciation under Section 167 of the Code and constituting “solid waste disposal facilities” for purposes of Section 142(a)(6) of the Code.
(d)Land Acquisition Limitation.  The Company did not use, directly or indirectly, 25% or more of the net proceeds of the Prior Bonds for the acquisition of land or an interest therein.

9

(e)Existing Facility and Rehabilitation Limitations.  The Company did not use any proceeds of the Prior Bonds to acquire any property of which the Company would not be the first user.  
(f)Limitation on Financing Certain Facilities.  The Company did not use more than 25% of the net proceeds of the Prior Bonds to provide any portion of the Project Facilities the primary purpose of which was to provide retail food or beverage services (exclusive of grocery stores), automobile sales or services, or the provision of recreation or entertainment.
(g)Prohibition on Financing Certain Facilities.  The Company did not use any portion of the proceeds of the Prior Bonds to provide any portion of the Project Facilities to be used for a private or commercial golf course, country club, massage parlor, tennis club, skating facility (including roller skating, skateboard and ice skating), racquet sports facility (including any handball or racquetball court), hot tub facility, suntan facility or racetrack.  The Company did not use any proceeds of the Prior Bonds to provide any airplane, any sky box or other private luxury box, any health club facility, any facility primarily used for gambling, or any store the principal business of which is the sale of alcoholic beverages for consumption off premises.
At no time will any funds constituting gross proceeds of the Bonds be used to acquire investments at other than fair market value within the meaning of the applicable Treasury Regulations pertaining to, or in any other fashion as would constitute failure of compliance with, Section 148 of the Code.  Investments or deposits in certificates of deposit or pursuant to investment contracts shall not be made without compliance, at or prior to such investment or deposit, with the requirements of Treasury Regulations Section 1.148-5(d)(6)(ii) and (iii), respectively, or with any successor provisions thereto.
The terms “proceeds”, “gross proceeds”, and “higher yielding investments” have the meanings assigned to them for purposes of Section 148 of the Code.
(h)Notice.  The Company shall provide a written statement signed by its Authorized Representative to the Issuer and the Trustee reasonably promptly upon the Company’s becoming aware of a violation of any of the covenants set forth in this Section 4.08, setting forth in detail the facts, nature and scope of such violation.
(i)Arbitrage Rebate.  As required by Section 2.04, the Company will pay to or for the account of the Issuer all amounts needed to comply with the requirements of Section 148 of the Code, concerning arbitrage bonds, including Section 148(f), which requires generally a rebate payment to the United States of America of arbitrage profit from investment of the proceeds of the Bonds in obligations other than tax‐exempt obligations.  The obligation of the Company to make such payments is unconditional and is not limited to funds representing the proceeds of the Bonds or income from the investment thereof or any other particular source.
Section 4.09  Deficiencies in Revenues.  If for any reason, including the Company being required to withhold or pay any tax imposed by reason of its obligations evidenced by the Note, 

10

amounts paid to the Trustee by the Company on the Note would not be sufficient to make the payments of the principal of, premium, if any, and interest on the Bonds when such payments become due, the Company will pay the amounts required from time to time to make up any such deficiency.
ARTICLE V
MISCELLANEOUS
Section 5.01  Notices.  Notices hereunder shall be given in writing and shall be deemed to have been duly given (a) as of the same day if delivered personally or by telecopy, telegram or telephone, confirmed in writing; or (b) as of the next business day if sent by nationally recognized express courier service or express mail, addressed as follows:
		
	The Issuer:
	Maryland Economic Development Corporation

300 E. Lombard Street, Suite 1000
Baltimore, Maryland 21202
Attention: Executive Director
		
	The Company:
	Potomac Electric Power Company

10 South Dearborn Street - 52nd Floor
P.O. Box 805398
Chicago, IL  60680-5398
Attention: Treasurer and Assistant Treasurer
		
	The Trustee:
	The Bank of New York Mellon

385 Rifle Camp Road, Third Floor
Woodland Park, New Jersey 07424
Attention:  Corporate Trust Administration
or such other addresses as may be filed in writing with the parties to this Agreement.
Section 5.02  Assignment.  Except as otherwise provided in this Section 5.02, the Company shall not assign this Agreement or any interest of the Company herein, either in whole or in part, without the prior written consent of the Trustee, which consent shall be given if the following conditions are fulfilled:  (i) the assignee assumes in writing all of the obligations of the Company hereunder; (ii) the assignee provides the Trustee with an opinion of Counsel satisfactory to the Trustee to the effect that neither the validity nor the enforceability of this Agreement shall be adversely affected by such assignment; (iii) the Project Facilities shall continue in the opinion of Bond Counsel to be a “project” as such term is defined in the Act after such assignment; (iv) such assignment shall not, in the opinion of Bond Counsel, have an adverse effect on the exclusion from gross income for federal income tax purposes of interest on the Bonds; (v) the assignee shall not be a Disqualified Contractor and shall provide a written certification to such effect to the Trustee and the Issuer; and (vi) if the assignee is other than an affiliate of the Company, consent by the Issuer, which consent shall not be unreasonably withheld.  Subject to the foregoing, the terms “Authority,” “Company,” “Trustee” and “Underwriter” shall, where the context requires, include the respective successors and assigns of such persons.

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Section 5.03  Illegal, Etc. Provisions Disregarded.  In case any provision of this Agreement shall for any reason be held invalid, illegal or unenforceable in any respect, this Agreement shall be construed as if such provision had never been contained herein.
Section 5.04  Applicable Law.  This Agreement shall be governed by, and interpreted under, the laws of the State, without regard to conflict of law principles.
Section 5.05  Amendments.  This Agreement may not be amended except by an instrument in writing signed by all of the parties hereto and, if such amendment occurs after the issuance of the Bonds, in accordance with the terms of the Indenture.
Section 5.06  Term of Agreement.  This Agreement shall become effective upon its delivery and shall continue in effect until all Bonds have been paid in full or provision for such payment has been made in accordance with the Indenture.
Section 5.07  Counterparts.  This Agreement may be executed in several counterparts, all or any of which shall be regarded for all purposes as one original and shall constitute and be but one and the same instrument.
Section 5.08  Further Assurances.  Each of the Company and the Issuer will do all acts and execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, any and all further instruments and documents, as may be necessary, desirable or expedient to more fully effectuate and carry out the intent and purposes of this Agreement and the transactions contemplated hereby.

12

IN WITNESS WHEREOF, the parties hereto, in consideration of the mutual covenants set forth herein and intending to be legally bound, have caused this Agreement to be executed and delivered as of the date first written above.
	
					
	[SEAL]
	 
	 
	   MARYLAND ECONOMIC DEVELOPMENT

	 
	 
	 
	  CORPORATION

	 
	 
	 
	 
	 

	Attest:
	 
	 
	By:
	 

	 
	 
	 
	 
	Robert C. Brennan, Executive Director

	 
	 
	 
	 
	 

	         Witness
	 
	 
	 
	 

    
	
					
	 
	 
	 
	POTOMAC ELECTRIC POWER COMPANY

	 
	 
	 
	 
	 

	 
	 
	 
	By:
	 

	 
	 
	 
	 
	Elisabeth Graham, Assistant Treasurer

[SEAL]

	
			
	Attest:
	 
	 

	 
	 
	 

	 
	 
	 

	         (Assistant) Secretary
	 
	 

S-1

SCHEDULE A
DESCRIPTION OF PROJECT FACILITIES

The Project Facilities consist of the Chalk Point Facilities and the Dickerson Facilities.
Chalk Point Facilities
The Chalk Point Facilities are located at the Chalk Point Generating Station in Prince George’s County, Maryland. The Chalk Point Facilities consist of a particulate precipitator for Units Nos. 1 and 2 designed to remove particulates after the flue gases have passed through the existing precipitators, including induced draft fans, ash storage and unloading facilities, instrumentation, controls and related items and relocation of existing equipment necessitated by installation and location of these facilities. The Chalk Point Facilities include land or interest in land, buildings, structures, machinery, equipment, furnishings or other real or personal property necessary or desirable in connection with the acquisition of the foregoing.
The Dickerson Facilities
The Dickerson Facilities are located at the Dickerson Generating Station in Montgomery County, Maryland. The Dickerson Facilities are composed of the air pollution control facilities described in Chapter 39 of the Laws of Montgomery County of 1976 (the “1976 Facilities”) and the water pollution control facilities described in Chapter 36 of the Laws of Montgomery County of 1977 (the “1977 Facilities”). The 1976 Facilities and 1977 Facilities consist of the following pollution control projects:
		
	1.
	THE 1976 FACILITIES:

The 1976 Facilities consist of the following air pollution control systems:
(a)For each of two generating units - a new single stage scrubber designed to remove particulates from 50% of each unit’s flue gases, a mist eliminator and an induced draft fan;
(b)Modifications of the existing two-stage scrubber on one generating unit designed to remove flue gas particulates;
(c)Recirculating water systems, thickener tanks and drying equipment to dewater particulates, and ash storage and loading facilities; and
(d)Modifications of the three existing particulate precipitators designed to improve particulate removal from the remaining 50% of the flue gases from each unit.

		
	2.
	THE 1977 FACILITIES:

The 1977 Facilities consist of treatment systems installed to collect and treat waters from various plant operations and facilities (including run-off and boiler blowdown) prior to release into the Potomac River. These systems include a surge tank, sedimentation basin, clarifier, filters, sumps, 

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pumps, chemical addition and agitation equipment, sludge dewatering facilities, piping, instrumentation and controls and related items.

A-2

SCHEDULE B
POTOMAC ELECTRIC POWER COMPANY
EXEMPT FACILITIES NOTE
(MARYLAND ECONOMIC DEVELOPMENT CORPORATION)
2019 SERIES
POTOMAC ELECTRIC POWER COMPANY (the “Company”), a District of Columbia and Virginia corporation, for value received, promises to pay to THE BANK OF NEW YORK MELLON, as trustee (the “Trustee”) under the Trust Indenture dated as of June 1, 2019 (the “Indenture”), of the MARYLAND ECONOMIC DEVELOPMENT CORPORATION (the “Issuer”) securing the Issuer’s Pollution Control Revenue Refunding Bonds (Potomac Electric Power Company Project) Series 2019 (the “Bonds”), the principal sum of $109,500,000 on September 1, 2022 and, to the extent that moneys are not otherwise available therefore, to pay (i) interest thereon from the date hereof until the payment of said principal sum has been made or provided for at a rate at all times equal to the interest rate from time to time borne by the Bonds and payable on each date that interest is payable on the Bonds, and (ii) interest on overdue principal, and to the extent permitted by law, on overdue interest, at the rate borne by the Bonds.
This Note is issued pursuant to an Exempt Facilities Loan Agreement dated as of June 1, 2019 (the “Agreement”), by and between the Issuer and the Company, relating to the refinancing of certain air pollution control facilities (the “Project Facilities”) at the Chalk Point Generating Station in Prince George’s County, Maryland and certain air and water pollution control facilities at the Dickerson Generating Station in Montgomery County, Maryland.  This Note is being issued concurrently with the Bonds.  The obligations of the Company to make the payments required hereunder shall be absolute and unconditional without defense or set-off by reason of any default by the Issuer under the Agreement or under any other agreement between the Company and the Issuer or for any other reason, including, without limitation, any acts or circumstances that may constitute failure of consideration, destruction or damage to the Project Facilities, commercial frustration of purpose, or failure of the Issuer to perform and observe any agreement, whether express or implied, or any duty, liability or obligation arising out of or connected with the Agreement or any other agreement, it being the intention of the Company and the Issuer that the payments hereunder will be paid in full when due without any delay or diminution whatsoever.
If the Trustee notifies the Company that the Bonds are being called for redemption as provided in Section 4.02 of the Indenture, the Company shall, on or before the proposed redemption date for the Bonds, pay to the Trustee the whole or a portion of the unpaid principal amount of this Note equal to the principal amount of the Bonds being called for redemption.  In the event the Company receives notice that a proceeding or litigation has been instituted against the Issuer, the Company or a bondholder which could lead to a final determination that interest on the Bonds is taxable, the Company shall promptly notify the Trustee and the Issuer whether or not it intends to contest such proceeding.  In the event that the Company chooses to so contest, it will use its best efforts to obtain a prompt final determination or decision in such proceeding or litigation and will keep the Trustee and the Issuer informed of the progress of any such proceeding or litigation.

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Upon giving notice of a mandatory prepayment, the Trustee shall take all action necessary under the Indenture to redeem the Bonds in an amount corresponding to that specified in the notice.
Whenever payment or provision therefor has been made in respect of the principal or redemption price of all or any portion of the Bonds and interest on all or any portion of the Bonds, together with all other sums payable by the Issuer under the Indenture, in accordance with Article IX of the Indenture, this Note shall be deemed paid to the extent such payment or provision therefor has been made, and if thereby deemed paid in full, this Note shall be canceled and returned to the Company.  Notwithstanding the foregoing, if, for any reason, the amounts specified above are not sufficient to make corresponding payments of the principal or redemption price of the Bonds and interest on the Bonds, when such payments are due, the Company shall pay as additional amounts due hereunder, the amounts required from time to time to make up any such deficiency.
All payments of principal, prepayment price and interest hereunder shall be made to the Trustee at its corporate trust office in Woodland Park, New Jersey in immediately available funds in such currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts.
The occurrence and continuation of one or more of the following shall constitute an Event of Default hereunder:
(a)    default in the payment of any installment of principal or redemption price in respect of this Note as and when the same shall become due and payable; or
(b)    if payment of any interest on the Note is not made within five days of when it becomes due and payable; or
(c)    failure on the part of the Company duly to perform any other of the covenants on the part of the Company contained in this Note or in the Agreement for a period of 60 days after the date on which written notice of such failure, requiring the Company to remedy the same, shall have been given to the Company by the Trustee; provided that, to the extent permitted by this Note, the Agreement and the Indenture, if the prepayment of this Note is made and the special mandatory redemption of the Bonds is effected as required under the Indenture, a failure by the Company to observe a covenant, agreement or representation in the Agreement, which failure is determined to have resulted in the interest on the Bonds becoming includable for federal income tax purposes in the gross income of any holder of such Bonds, shall not, in and of itself, constitute an “event of default” hereunder or under the Indenture; or
(e)    if the Company shall
(1)    admit in writing its inability to pay its debts generally as they become due, or
(2)    file a petition in bankruptcy to be adjudicated a voluntary bankrupt or file a similar petition under any insolvency act, or

B-2

(3)    make an assignment for the benefit of its creditors, or
(4)    consent to the appointment of a receiver of itself or of the whole or any substantial part of its property; or
(f)    if the Company shall file a petition or answer seeking reorganization or arrangement of the Company under the federal bankruptcy laws or any other applicable law or statute of the United States of America or any state thereof; or
(g)    if the Company shall, on a petition in bankruptcy filed against it, be adjudicated a bankrupt or if a court of competent jurisdiction shall enter an order or decree appointing, without the consent of the Company, a receiver or trustee of the Company or of the whole or substantially all of its property, or approving a petition filed against it seeking reorganization or arrangement of the Company under the federal bankruptcy laws or any other applicable law or statute of the United States of America or any state thereof, and such adjudication, order or decree shall not be vacated or set aside or stayed within 90 days from the date of the entry thereof; or
(h)    acceleration of maturity of the Bonds under Section 7.03 of the Indenture, which acceleration shall not have been rescinded under Section 7.03 of the Indenture, then and in each and every such case and during the continuance thereof, the Trustee, by notice in writing to the Company, may declare the unpaid balance of this Note to be due and payable immediately if concurrently with or prior to such notice the unpaid principal amount of the Bonds has been declared due and payable, and upon any such declaration the same shall become and shall be immediately due and payable, anything in this Note to the contrary notwithstanding.
In case the Trustee shall have proceeded to enforce any right under this Note and such proceedings shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Trustee, then and in every such case the Company and the Trustee shall be restored to their respective positions and rights hereunder, and all rights, remedies and powers of the Company and the Trustee shall continue as though no such proceeding had been taken, but subject to the limitations of any such adverse determination.
The Company covenants that, in case default shall be made in the payment of any installment of principal, prepayment price or interest in respect of this Note, whether at maturity or by acceleration or otherwise, then, upon demand of the Issuer or the Trustee, the Company will pay to the Trustee the whole amount that then shall have become due and payable on this Note for principal, prepayment price and/or interest with interest on the overdue principal and prepayment price, and (to the extent enforceable under applicable law) on the overdue installments of interest at the rate or rates borne by this Note; and, in addition thereto, such further amount as shall be sufficient to cover the reasonable costs and expenses of collection, including a reasonable compensation to the Trustee, its agents, attorney and counsel, and any expenses or liabilities incurred by the Trustee other than through its negligence or bad faith.
In case the Company shall fail forthwith to pay such amounts upon such demand, the Trustee shall be entitled and empowered to institute any actions or proceedings at law or in equity for the collection of the sums so due and unpaid, and may prosecute any such action or proceeding to 

B-3

judgment or final decree, and may enforce any such judgment or final decree against the Company and collect in the manner provided by law out of the property of the Company the moneys adjudged or decreed to be payable.
In case there shall be pending proceedings for the bankruptcy or for the reorganization of the Company under the U.S. Bankruptcy Code or any other applicable law, or in case a receiver or trustee shall have been appointed for the property of the Company or in the case of any other similar judicial proceedings relative to the Company, or to the creditors or property of the Company, the Trustee shall be entitled and empowered, by the intervention in such proceedings or otherwise, to file and prove a claim or claims for the whole amount of the Note and interest owing and unpaid in respect thereof and, in case of any judicial proceedings, to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee allowed in such judicial proceedings relative to the Company, its creditors, or its property, and to collect and receive any moneys or other property payable or deliverable on any such claims, and to distribute the same after the deduction of its charges and expenses; and any receiver, assignee or trustee in bankruptcy or reorganization is hereby authorized to make such payments to the Trustee, and to pay to the Trustee any amount due it for compensation and expenses, including counsel fees incurred by it up to the date of such distribution.
No remedy herein conferred is intended to be exclusive of any other remedy or remedies.
No recourse shall be had for the payment due on this Note, or for any claim based hereon or on the Agreement, against any officer, director or stockholder, past, present or future, of the Company as such, either directly or through the Company, under any constitutional provision, statute or rule of law, or by the enforcement of any assessment or by any legal or equitable proceeding or otherwise.
Each capitalized term used in this Note and not defined herein shall have the meaning given to such term in the Indenture.
This Note shall at all times be and remain part of the trust estate under the Indenture, and no assignment or transfer by the Trustee of its rights hereunder, other than (i) a transfer made after an Event of Default under the Indenture in the course of the Trustee’s exercise of its rights and remedies consequent upon such Event of Default, (ii) a transfer required in the performance of the Trustee’s duties under the Indenture, or (iii) a transfer to a successor trustee under the Indenture, shall be effective.

B-4

IN WITNESS WHEREOF, the Company has caused this Note to be duly executed, sealed and delivered.
	
					
	Dated: 
	 
	 
	 
	 

	 
	 
	 
	POTOMAC ELECTRIC POWER COMPANY

	 
	 
	 
	 
	 

	 
	 
	 
	By:
	 

	 
	 
	 
	 
	Elisabeth Graham, Assistant Treasurer

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

B-5

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