form8-k.htm

EXECUTION COPY

RSB BONDCO LLC

BALTIMORE GAS AND ELECTRIC COMPANY

$623,200,000 RATE STABILIZATION BONDS

UNDERWRITING AGREEMENT

June 22, 2007

Barclays Capital Inc.

200 Park Avenue, 5^th Floor

New York, NY 10166

Citigroup Global Markets Inc.

388/390 Greenwich Street

New York, NY 10013

Greenwich Capital Markets, Inc.

600 Steamboat Road

Greenwich, CT 06830

Morgan Stanley & Co. Incorporated

1585 Broadway

New York, NY 10036

Ladies and Gentlemen:

1. Introduction. RSB BondCo LLC, a Delaware limited liability company (the “Issuer”), proposes to issue and sell $623,200,000 aggregate principal amount of its Rate Stabilization Bonds (the “Bonds”), identified in Schedule I hereto. The Issuer and Baltimore Gas and Electric Company, a Maryland corporation and the Issuer’s direct parent (“BGE”), hereby confirm their agreement with the several Underwriters (as defined below) as set forth herein.

The term “Underwriters” as used herein shall be deemed to mean the entity or several entities named in Schedule II hereto and any underwriter substituted as provided in Section 7 hereof and the term “Underwriter” shall be deemed to mean any one of such Underwriters. If the entity or entities listed in Schedule I hereto (the “Representatives”) are the same as the entity or entities listed in Schedule II hereto, then the terms “Underwriters” and “Representatives”, as used herein, shall each be deemed to refer to such entity or entities. All obligations of the Underwriters hereunder are several and not joint. If more than one entity is named in Schedule I hereto, any action under or in respect of this underwriting agreement (“Underwriting Agreement”) may be taken by such entities jointly as the Representatives or by one of the entities acting on behalf of the Representatives and such action will be binding upon all the Underwriters.

Capitalized terms used and not otherwise defined in this Underwriting Agreement shall have the meanings given to them in the Indenture (as defined below).

2. Description of the Bonds. The Bonds will be issued pursuant to an indenture to be dated as of June 29, 2007, as supplemented by one or more series supplements thereto (as so supplemented, the “Indenture”), between the Issuer and Deutsche Bank Trust Company Americas, as indenture trustee (the “Indenture Trustee”). The Bonds will be obligations of the Issuer and will be supported by rate stabilization property (as more fully described in the Qualified Rate Order relating to the Bonds, the “Rate Stabilization Property”), to be sold to the Issuer by BGE pursuant to the Rate Stabilization Property Purchase and Sale Agreement, to be dated on or about June 29, 2007, between BGE and the Issuer (the “Sale Agreement”). The Rate Stabilization Property securing the Bonds will be serviced pursuant to the Rate Stabilization Property Servicing Agreement, to be dated on or about June 29, 2007, between BGE, as servicer, and the Issuer, as owner of the Rate Stabilization Property sold to it pursuant to the Sale Agreement (the “Servicing Agreement”).

3. Representations and Warranties of the Issuer. The Issuer represents and warrants to each of the Underwriters that:

(a) The Issuer and the Bonds meet the requirements for the use of Form S-3 under the Securities Act of 1933, as amended (the “Securities Act”), and the Issuer, in its capacity as co-registrant and issuing entity with respect to the Bonds, and BGE, in its capacity as co-registrant, depositor and sponsor with respect to the Bonds, have filed with the Securities and Exchange Commission (the “Commission”) a registration statement on such form on March 16, 2007 (Registration Nos. 333-141366 and 333-141366-01), as amended by Amendment No. 1 thereto filed on May 7, 2007 and Amendment No. 2 thereto filed on June 14, 2007, including a prospectus and a form of prospectus supplement, for the registration under the Securities Act of up to $623,200,000 aggregate principal amount of the Bonds. Such registration statement, as so amended (“Registration Statement Nos. 333-141366 and 333-141366-01”), has been declared effective by the Commission and no stop order suspending such effectiveness has been issued under the Securities Act and no proceedings for that purpose have been instituted or are pending or, to the knowledge of the Issuer, threatened by the Commission. No rate stabilization bonds registered with the Commission under the Securities Act pursuant to Registration Statement Nos. 333-141366 and 333-141366-01 have been previously issued. References herein to the term “Registration Statement” shall be deemed to refer to Registration Statement Nos. 333-141366 and 333-141366-01, including any amendment thereto, all documents incorporated by reference therein pursuant to Item 12 of Form S-3 (“Incorporated Documents”) and any information in a prospectus or a prospectus supplement deemed or retroactively deemed to be a part thereof pursuant to Rule 430B (“Rule 430B”) or 430C (“Rule 430C”) under the Securities Act that has not been superseded or modified. References herein to the term “Registration Statement” without reference to a time means the Registration Statement as of the Applicable Time (as defined below), which the parties agree will be the time of the first “contract of sale” (within the meaning of Rule 159 under the Securities Act) for the Bonds and shall be considered the “Effective Date” of the Registration Statement relating to the Bonds. For purposes of this definition, information contained in a form of prospectus or prospectus

supplement that is deemed retroactively to be a part of the Registration Statement pursuant to Rule 430B or Rule 430C shall be considered to be included in the Registration Statement as of the time specified in Rule 430B or Rule 430C, as appropriate. The final prospectus and the final prospectus supplement relating to the Bonds, as filed with the Commission pursuant to Rule 424(b) under the Securities Act (“Rule 424(b)”), are referred to herein as the “Final Prospectus”; and the most recent preliminary prospectus and prospectus supplement that omitted information to be included upon pricing in a form of prospectus filed with the Commission pursuant to Rule 424(b) and that was used after the initial effectiveness of the Registration Statement and prior to the Applicable Time is referred to herein as the “Pricing Prospectus.”

(b) (i) At the earliest time after the filing of the Registration Statement that the Issuer or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) under the Securities Act) of the Bonds and (ii) at the date hereof, the Issuer was not and is not an “ineligible issuer,” as defined in Rule 405 under the Securities Act.

(c) At the time the Registration Statement initially became effective, at the time of each amendment thereto for the purposes of complying with Section 10(a)(3) of the Securities Act (whether by the filing of any post-effective amendment to the Registration Statement or form of prospectus or prospectus supplement deemed to be a part thereof or any Incorporated Documents) and, at the Effective Date, the Registration Statement and, at the Closing Date (as defined below), the Indenture fully complied and will fully comply in all material respects with the applicable requirements of the Securities Act, the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”), and, in each case, the applicable rules and regulations of the Commission thereunder; the Registration Statement, at each of the aforementioned dates, did not and will not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. At the Applicable Time and the Closing Date, (i) the Registration Statement and the Pricing Prospectus fully complied and will fully comply in all material respects with the applicable requirements of the Securities Act, the Trust Indenture Act and, in each case, the applicable rules and regulations of the Commission thereunder, (ii) the Registration Statement does not and will not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading and (iii) the Incorporated Documents, taken together as a whole, fully complied or will fully comply in all material respects with the applicable provisions of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the applicable rules and regulations of the Commission thereunder; and as of its date, and on the date of its filing and at the Closing Date, the Final Prospectus fully complied and will fully comply in all material respects with the applicable requirements of the Securities Act, the Trust Indenture Act and, in each case, the applicable rules and regulations of the Commission thereunder, and does not and will not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the foregoing representations and warranties in this paragraph (c) shall not apply to any Underwriter Information or to any statements in or omissions from any

Statements of Eligibility on Form T-1 (or amendments thereto) of the Indenture Trustee under the Indenture filed as exhibits to the Registration Statement or Incorporated Documents or to any statements or omissions made in or the Final Prospectus relating to The Depository Trust Company (“DTC”) Book-Entry-Only System that are based solely on information contained in published reports of the DTC. References herein to the term the “Underwriter Information” with respect to any Underwriter shall mean statements in or omissions from the Registration Statement, the Pricing Prospectus, the Pricing Term Sheet (as defined in Section 5(b) hereof), any Issuer Free Writing Prospectus (as defined in Section 3(e) hereof) or the Final Prospectus, as the case may be, as they may be amended or supplemented, made in reliance upon and in conformity with information furnished in writing to the Issuer or BGE by, or on behalf of, such Underwriter through the Representatives expressly for use in connection with the preparation thereof, it being understood and agreed that the only such information furnished by any Underwriter consists of the information set forth in Schedule IV hereto.

(d) As of its date, at the Applicable Time and on the date of its filing, if applicable, and at the Closing Date, the Pricing Prospectus and each Issuer Free Writing Prospectus (other than the Pricing Term Sheet), considered together, did not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading (except that (i) the principal amount of the Bonds, the tranches, the initial principal balances, the scheduled final payment dates, the final maturity dates, the expected average lives and the Expected Amortization Schedule described in the Pricing Prospectus supersede any previously issued descriptions of such information and (ii) the interest rate, price to the public and underwriting discounts and commissions for each tranche was not included in the Pricing Prospectus). The Pricing Term Sheet, as of its issue date and at all subsequent times through the completion of the public offer and sale of the Bonds, considered together with the Pricing Prospectus and each other Issuer Free Writing Prospectus, did not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The two preceding sentences do not apply to any Underwriter Information.

(e) References herein to the term “Issuer Free Writing Prospectus” shall mean any “issuer free writing prospectus,” as defined in Rule 433(h) under the Securities Act, relating to the Bonds, in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Issuer’s records pursuant to Rule 433(g) under the Securities Act. References herein to the term “Free Writing Prospectus” shall mean a free writing prospectus, as defined in Rule 405 under the Securities Act. References herein to the term “Applicable Time” shall mean 3:47 P.M., eastern time, on the date hereof, except that if, subsequent to such Applicable Time, the Issuer, BGE and the Underwriters have determined that the information contained in the Pricing Prospectus or any Issuer Free Writing Prospectus issued prior to such Applicable Time included an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading and have terminated their old purchase contracts and entered into new purchase contracts with purchasers of the Bonds, then “Applicable

Time” will refer to the first of such times when such new purchase contracts are entered into. The Issuer represents, warrants and agrees that it has treated and agrees that it will treat each of the free writing prospectuses listed on Schedule III hereto as an Issuer Free Writing Prospectus, and that each such Free Writing Prospectus has fully complied and will fully comply with the applicable requirements of Rules 164 and 433 under the Securities Act, including timely filing with the Commission where required, legending and record keeping.

(f) Each Issuer Free Writing Prospectus, as of its issue date and at all subsequent times through the Closing Date or until any earlier date that the Issuer notified or notifies the Representatives as described in the next sentence, did not, does not and will not include any information that conflicted, conflicts or will conflict with the information then contained in the Registration Statement. If at any time following issuance of an Issuer Free Writing Prospectus there occurred or occurs an event or development as a result of which such Issuer Free Writing Prospectus conflicted or would conflict with the information then contained in the Registration Statement or included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances prevailing at that subsequent time, not misleading, (i) BGE or the Issuer has promptly notified or will promptly notify the Representatives and (ii) BGE or the Issuer has promptly amended or will promptly amend or supplement such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission. The foregoing two sentences do not apply to any Underwriter Information.

(g) The Issuer has been duly formed and is validly existing as a limited liability company in good standing under the Limited Liability Company Act of the State of Delaware, as amended, with full limited liability company power and authority to execute, deliver and perform its obligations under this Underwriting Agreement, the Bonds, the Sale Agreement, the Servicing Agreement, the Indenture, the Amended and Restated Limited Liability Company Agreement, the Administration Agreement and the other agreements and instruments contemplated by the Pricing Prospectus or the Final Prospectus (collectively, the “Issuer Documents”) and to own its properties and conduct its business as described in the Pricing Prospectus or the Final Prospectus; the Issuer has been duly qualified as a foreign limited liability company for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties or conducts any business so as to require such qualification, except where failure to so qualify or to be in good standing would not have a material adverse effect on the business, properties or financial condition of the Issuer; the Issuer has conducted and will conduct no business in the future that would be inconsistent with the description of the Issuer’s business set forth in the Pricing Prospectus or the Final Prospectus; the Issuer is not a party to or bound by any agreement or instrument other than the Issuer Documents and other agreements or instruments incidental to its formation; the Issuer has no material liabilities or obligations other than those arising out of the transactions contemplated by the Issuer Documents and as described in the Pricing Prospectus or the Final Prospectus; BGE is the beneficial owner of all of the limited liability company interests of the Issuer; and based on current law, the Issuer is not

classified as an association taxable as a corporation for United States federal income tax purposes.

(h) The issuance and sale of the Bonds by the Issuer, the purchase of the Rate Stabilization Property by the Issuer from BGE and the consummation of the transactions herein contemplated by the Issuer, and the fulfillment of the terms hereof on the part of the Issuer to be fulfilled, will not (i) result in a breach of any of the terms or provisions of, or constitute a default under the Issuer’s Certificate of Formation or the Amended and Restated Limited Liability Company Agreement (collectively, the “Issuer Charter Documents”) or any indenture, mortgage, deed of trust or other agreement or instrument to which the Issuer is a party or (ii) violate any applicable law or any judgment, order or decree of any governmental body, agency or court to which the Issuer or its property may be subject.

(i) This Underwriting Agreement has been duly authorized, executed and delivered by the Issuer, which has the necessary limited liability company power and authority to execute, deliver and perform its obligations under this Underwriting Agreement, and constitutes a valid and binding agreement of the Issuer, enforceable against the Issuer in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium or other similar laws relating to or affecting creditors’ or secured parties’ rights generally and by general principles of equity (including concepts of materiality, reasonableness, good faith and fair dealing), regardless of whether considered in a proceeding in equity or at law; and limitations on enforceability of rights to indemnification or contribution by federal or state securities laws or regulations or by public policy.

(j) The Issuer (i) is not in violation of the Issuer Charter Documents, (ii) is not in default and no event has occurred which, with notice or lapse of time or both, would constitute such a default, in the due performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust or other agreement or instrument to which it is a party or by which it is bound or to which any of its properties is subject, except for any such defaults that would not, individually or in the aggregate, have a material adverse effect on its business, property or financial condition, and (iii) is not in violation of any applicable law or any judgment, order or decree of any governmental body, agency or court to which it or its property may be subject, except for any such violations that would not, individually or in the aggregate, have a material adverse effect on its business, property or financial condition.

(k) The Indenture has been duly authorized by the Issuer and, on the Closing Date, will have been duly executed and delivered by the Issuer and will be a valid and binding instrument, enforceable against the Issuer in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium or other similar laws relating to or affecting creditors’ or secured parties’ rights generally and by general principles of equity (including concepts of materiality, reasonableness, good faith and fair dealing), regardless of whether considered in a proceeding in equity or at law and subject to limitations on enforceability of rights to indemnification by federal or state securities laws or regulations or by public

policy. On the Closing Date, the Indenture will (i) comply as to form in all material respects with the requirements of the Trust Indenture Act and (ii) conform in all material respects to the description thereof in the Pricing Prospectus and the Final Prospectus.

(l) The Bonds have been duly authorized by the Issuer for issuance and sale to the Underwriters pursuant to this Underwriting Agreement and, when executed by the Issuer and authenticated by the Indenture Trustee in accordance with the Indenture and delivered to the Underwriters against payment therefor in accordance with the terms of this Underwriting Agreement, will constitute valid and binding obligations of the Issuer entitled to the benefits of the Indenture and enforceable against the Issuer in accordance with their terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium or other similar laws relating to or affecting creditors’ or secured parties’ rights generally and by general principles of equity (including concepts of materiality, reasonableness, good faith and fair dealing), regardless of whether considered in a proceeding in equity or at law and subject to limitations on enforceability of rights to indemnification by federal or state securities laws or regulations or by public policy, and the Bonds conform in all material respects to the description thereof in the Pricing Prospectus and the Final Prospectus. The Issuer has all requisite limited liability company power and authority to issue, sell and deliver the Bonds in accordance with and upon the terms and conditions set forth in this Underwriting Agreement and in the Pricing Prospectus and the Final Prospectus.

(m) Other than as set forth or contemplated in the Pricing Prospectus and the Final Prospectus, there is no litigation or governmental proceeding to which the Issuer is a party or to which any property of the Issuer is subject or which is pending or, to the knowledge of the Issuer, threatened against the Issuer that would reasonably be expected to, individually or in the aggregate, result in a material adverse effect on the Issuer’s business, property or financial condition.

(n) Other than any necessary action of the Public Service Commission of Maryland (the “PSC”), any filings required under the Rate Stabilization Law or the Initial Qualified Rate Order or as otherwise set forth or contemplated in the Pricing Prospectus and the Final Prospectus, no approval, authorization, consent or order of any public board or body (except such as have been already obtained and other than in connection or in compliance with the provisions of applicable blue-sky laws or securities laws of any state, as to which the Issuer makes no representations or warranties) is legally required for the issuance and sale by the Issuer of the Bonds.

(o) Neither the Issuer nor BGE is, and, after giving effect to the sale and issuance of the Bonds, will not be, an “investment company” within the meaning of the Investment Company Act of 1940, as amended (the “1940 Act”).

(p) PricewaterhouseCoopers LLP (“PwC”), who have performed certain agreed upon procedures with respect to certain statistical and structural information contained in the Pricing Prospectus and the Final Prospectus, are independent public accountants as required by the Securities Act and the applicable rules and regulations of the Commission thereunder.

(q) Each of the Sale Agreement, the Servicing Agreement, the Administration Agreement and LLC Agreement has been duly authorized by the Issuer, and when executed and delivered by the Issuer and the other parties thereto, will constitute a valid and legally binding agreement of the Issuer, enforceable against the Issuer in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium or other similar laws relating to or affecting creditors’ or secured parties’ rights generally and by general principles of equity (including concepts of materiality, reasonableness, good faith and fair dealing), regardless of whether considered in a proceeding in equity or at law, and subject to limitations on enforceability of rights to indemnification by federal or state securities laws or regulations or by public policy.

4. Representations and Warranties of BGE. BGE represents and warrants to each of the Underwriters that:

(a) BGE and the Bonds meet the requirements for the use of Form S-3 under the Securities Act, and the Issuer, in its capacity as co-registrant and issuing entity with respect to the Bonds, and BGE, in its capacity as co-registrant, depositor and sponsor with respect to the Bonds, have filed Registration Statement Nos. 333-141366 and 333-141366-01 with the Commission for the registration under the Securities Act of up to $623,200,000 aggregate principal amount of the Bonds. Registration Statement Nos. 333-141366 and 333-141366-01 has been declared effective by the Commission and no stop order suspending such effectiveness has been issued under the Securities Act and no proceedings for that purpose have been instituted or are pending or, to the knowledge of BGE, threatened by the Commission. No rate stabilization bonds registered with the Commission under the Securities Act pursuant to Registration Statement Nos. 333-141366 and 333-141366-01 have been previously issued.

(b) At the earliest time after the filing of the Registration Statement that the Issuer or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) under the Securities Act) of the Bonds and (ii) at the date hereof, BGE was not and is not an “ineligible issuer,” as defined in Rule 405 under the Securities Act.

Securities Act, the Trust Indenture Act and, in each case, the applicable rules and regulations of the Commission thereunder, (ii) the Registration Statement does not and will not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading and (iii) the Incorporated Documents, taken together as a whole, fully complied or will fully comply in all material respects with the applicable provisions of the Exchange Act and the applicable rules and regulations of the Commission thereunder; and as of its date, and on the date of its filing, and at the Closing Date, the Final Prospectus fully complied and will fully comply in all material respects to the requirements of the Securities Act, the Trust Indenture Act and, in each case, the applicable rules and regulations of the Commission thereunder, and does not and will not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, that the foregoing representations and warranties in this paragraph (c) shall not apply to any Underwriter Information or to any statements in or omissions from any Statement of Eligibility on Form T-1, or amendments thereto, of the Indenture Trustee under the Indenture filed as exhibits to the Registration Statement or Incorporated Documents or to any statements or omissions made in the Registration Statement or Final Prospectus relating to the DTC Book-Entry-Only System that are based solely on information contained in published reports of DTC.

(d) As of its date, at the Applicable Time, on the date of its filing, if applicable, and on the Closing Date, the Pricing Prospectus and each Issuer Free Writing Prospectus (other than the Pricing Term Sheet), considered together, did not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading (except that (i) the principal amount of the Bonds, the tranches, the initial principal balances, the scheduled final payment dates, the final maturity dates, the expected average lives and the Expected Amortization Schedule described in the Pricing Prospectus supersede any previously issued descriptions of such information and (ii) the interest rate, price to the public and underwriting discounts and commissions for each tranche was not included in the Pricing Prospectus). The Pricing Term Sheet, as of its issue date and at all subsequent times through the completion of the public offer and sale of the Bonds, considered together with the Pricing Prospectus and each other Issuer Free Writing Prospectus, did not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The two preceding sentences do not apply to any Underwriter Information. BGE represents, warrants and agrees that it has treated and agrees that it will treat each of the free writing prospectuses listed on Schedule III hereto as an Issuer Free Writing Prospectus, and that each such Issuer Free Writing Prospectus has fully complied and will fully comply with the applicable requirements of Rules 164 and 433 under the Securities Act, including timely filing with the Commission where required, legending and record keeping.

(e) Each Issuer Free Writing Prospectus, as of its issue date and at all subsequent times through the completion of the public offer and sale of the Bonds or until

any earlier date that the Issuer or BGE notified or notifies the Representatives as described in the next sentence, did not, does not and will not include any information that conflicted, conflicts or will conflict with the information then contained in the Registration Statement. If at any time following issuance of an Issuer Free Writing Prospectus there occurred or occurs an event or development as a result of which such Issuer Free Writing Prospectus conflicted or would conflict with the information then contained in the Registration Statement or included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances prevailing at that subsequent time, not misleading, (i) BGE or the Issuer has promptly notified or will promptly notify the Representatives and (ii) BGE or the Issuer has promptly amended or will promptly amend or supplement such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission. The foregoing two sentences do not apply to any Underwriter Information.

(f) BGE has been duly formed and is validly existing as a corporation in good standing under the laws of the jurisdiction of its formation, has the corporate power and authority to own, lease and operate its properties and to conduct its business as presently conducted and as set forth in or contemplated by the Pricing Prospectus or the Final Prospectus, and is qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify or be in good standing would not have a material adverse effect on the business, property or financial condition of BGE and its subsidiaries considered as a whole. BGE is the beneficial owner of all of the limited liability company interests of the Issuer.

(g) BGE has no significant subsidiaries within the meaning of Rule 1-02(w) of Regulation S-X.

(h) The transfer by BGE of all of its rights and interests under the Qualified Rate Order relating to the Bonds to the Issuer and the consummation of the transactions herein contemplated by BGE, and the fulfillment of the terms hereof on the part of BGE to be fulfilled, will not (i) result in a breach of any of the terms or provisions of, or constitute a default under, BGE’s articles of incorporation or bylaws (collectively, the “BGE Charter Documents”) or in a material breach of any of the terms of, or constitute a material default under, any indenture, mortgage, deed of trust or other agreement or instrument to which BGE is a party or (ii) violate any applicable law or any judgment, order or decree of any governmental body, agency or court to which BGE or its property may be subject.

(i) This Underwriting Agreement has been duly authorized, executed and delivered by BGE, which has the necessary corporate power and authority to execute, deliver and perform its obligations under this Underwriting Agreement, and constitutes a valid and binding obligation of BGE, enforceable against BGE in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium or other similar laws relating to or affecting

creditors’ or secured parties’ rights generally and by general principles of equity (including concepts of materiality, reasonableness, good faith and fair dealing), regardless of whether considered in a proceeding in equity or at law, and limitations on enforceability of rights to indemnification or contribution by federal or state securities laws or regulations or by public policy.

(j) BGE (i) is not in violation of the BGE Charter Documents, (ii) is not in default and no event has occurred which, with notice or lapse of time or both, would constitute such a default, in the due performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust or other agreement or instrument to which it is a party or by which it is bound or to which any of its properties is subject, except for any such defaults that would not, individually or in the aggregate, have a material adverse effect on the business, property or financial condition of BGE and its subsidiaries considered as a whole, or (iii) is not in violation of any applicable law or any judgment, order or decree of any governmental body, agency or court to which it or its property may be subject, except for any such violations that would not, individually or in the aggregate, have a material adverse effect on the business, property or financial condition of BGE and its subsidiaries considered as a whole.

(k) Other than as set forth or contemplated in the Pricing Prospectus and the Final Prospectus, there is no litigation or governmental proceeding to which BGE or any of its subsidiaries is a party or to which any property of BGE or any of its subsidiaries is subject or which is pending or, to the knowledge of BGE, threatened against BGE or any of its subsidiaries that would reasonably be expected to, individually or in the aggregate, result in a material adverse effect on the Issuer’s business, property, or financial condition or on BGE’s ability to perform its obligations under the Sale Agreement and the Servicing Agreement.

(l) Other than any necessary action of the PSC, any filings required under the Rate Stabilization Act (as such term is defined in the Pricing Prospectus) or the Initial Qualified Rate Order or as otherwise set forth or contemplated in the Pricing Prospectus, no approval, authorization, consent or order of any public board or body (except such as have been already obtained and other than in connection or in compliance with the provisions of applicable blue-sky laws or securities laws of any state, as to which BGE makes no representations or warranties) is legally required for the issuance and sale by the Issuer of the Bonds.

(m) Neither BGE nor the Issuer is, and, after giving effect to the sale and issuance of the Bonds, neither BGE nor the Issuer will be, an “investment company” within the meaning of the 1940 Act.

(n) Each of the Sale Agreement, the Servicing Agreement and the Administration Agreement has been duly authorized by BGE, and when executed and delivered by BGE and the other parties thereto will constitute a valid and legally binding agreement of BGE, enforceable against BGE in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium or other similar laws relating to or affecting creditors’ or

secured parties’ rights generally and by general principles of equity (including concepts of materiality, reasonableness, good faith and fair dealing), regardless of whether considered in a proceeding in equity or at law, and subject to limitations on enforceability of rights to indemnification by federal or state securities laws or regulations or by public policy.

(o) There are no Maryland transfer taxes related to the transfer of the Rate Stabilization Property or the issuance and sale of the Bonds to the Underwriters pursuant to this Underwriting Agreement required to be paid at or prior to the Closing Date by BGE or the Issuer.

5. Investor Communications.

(a) The Issuer and BGE represent and agree that, unless they obtain the prior consent of the Representatives, and each Underwriter represents and agrees that, unless it obtains the prior consent of the Issuer and BGE and the Representatives, it has not made and will not make any offer relating to the Bonds that would constitute an Issuer Free Writing Prospectus, or that would otherwise constitute a “free writing prospectus,” required to be filed by the Issuer or BGE, as applicable, with the Commission or retained by the Issuer or BGE, as applicable, under Rule 433 under the Securities Act; provided that the prior written consent of the parties hereto shall be deemed to have been given in respect of the Pricing Term Sheet and each other Free Writing Prospectus identified in Schedule III hereto.

(b) BGE and the Issuer (or the Representatives at the direction of the Issuer) will prepare a final pricing term sheet relating to the Bonds (the “Pricing Term Sheet”), containing only information that describes the final pricing terms of the Bonds and otherwise in a form consented to by the Representatives, and will file the Pricing Term Sheet within the period required by Rule 433(d)(5)(ii) under the Securities Act following the date such final pricing terms have been established for all classes of the offering of the Bonds. The Pricing Term Sheet is an Issuer Free Writing Prospectus for purposes of this Underwriting Agreement.

(c) Each Underwriter may provide to investors one or more of the Free Writing Prospectuses, including the Pricing Term Sheet, subject to the following conditions:

(i) Unless preceded or accompanied by a prospectus satisfying the requirements of Section 10(a) of the Securities Act, an Underwriter shall not convey or deliver any Written Communication (as defined in Rule 405 under the Securities Act) to any person in connection with the initial offering of the Bonds, unless such Written Communication (A) is made in reliance on Rule 134 under the Securities Act, (B) constitutes a prospectus satisfying the requirements of Rule 430B, (C) is an Issuer Free Writing Prospectus listed on Schedule III hereto or (D) is an Underwriter Free Writing Prospectus (as defined below).

An “Underwriter Free Writing Prospectus” means any free writing prospectus that contains only preliminary or final terms of the Rate Stabilization Bonds and is not required to be filed by BGE or the Issuer pursuant to Rule 433 under the Securities Act and that contains information substantially the same as the information contained in the Pricing Prospectus or the Pricing Term Sheet (including, without limitation, (1) the class or tranche, size, rating, price, CUSIPs, coupon, yield, spread, benchmark, status and/or legal maturity date of the Bonds, the weighted average life, expected first and final payment dates, trade date, settlement date, expected amortization, transaction parties, credit enhancement, roadshow details, ERISA eligibility, legal investment status, payment window of one or more classes or tranches of Bonds and (2) a column or other entry showing the syndicate structure or the status of the subscriptions for the Bonds, both for the Bonds as a whole and for each Underwriter’s retention and/or expected pricing parameters of the Bonds).

(ii) Each Underwriter shall comply with all applicable laws and regulations in connection with the use of any Free Writing Prospectus and the Pricing Term Sheet, including but not limited to Rules 164 and 433 under the Securities Act.

(iii) All Free Writing Prospectuses provided to investors, whether or not filed with the Commission, shall bear a legend that includes substantially the following statement:

THE ISSUER AND BGE HAVE FILED A REGISTRATION STATEMENT (INCLUDING A PROSPECTUS AND PROSPECTUS SUPPLEMENT) WITH THE SEC FOR THE OFFERING TO WHICH THIS COMMUNICATION RELATES. BEFORE YOU INVEST, YOU SHOULD READ THE PROSPECTUS AND PROSPECTUS SUPPLEMENT IN THAT REGISTRATION STATEMENT AND OTHER DOCUMENTS THE ISSUER AND BGE HAVE FILED WITH THE SEC FOR MORE COMPLETE INFORMATION ABOUT THE ISSUER AND THE OFFERING. YOU MAY GET THESE DOCUMENTS FOR FREE BY VISITING EDGAR ON THE SEC WEB SITE AT WWW.SEC.GOV. YOU CAN ALSO OBTAIN COPIES OF THE REGISTRATION STATEMENT FROM THE SEC UPON PAYMENT OF PRESCRIBED CHARGES, OR YOU CAN EXAMINE THE REGISTRATION STATEMENT FREE OF CHARGE AT THE SEC’S OFFICES AT 100 F STREET, N.E., WASHINGTON, D.C. 20549. ALTERNATIVELY, YOU MAY REQUEST THE PROSPECTUS AND PROSPECTUS SUPPLEMENT BY CALLING BARCLAYS CAPITAL INC. TOLL FREE AT 1-888-227-2275, CITIGROUP GLOBAL MARKETS INC. TOLL FREE AT 1-800-831-9146, GREENWICH CAPITAL MARKETS, INC. TOLL FREE AT 1-866-884-2071 OR

MORGAN STANLEY & CO. INCORPORATED TOLL FREE AT 1-866-718-1649.

The Issuer and the Representatives shall have the right to require additional specific legends or notations to appear on any Free Writing Prospectus, the right to require changes regarding the use of terminology and the right to determine the types of information appearing therein with the approval of, in the case of the Issuer, the Representatives and, in the case of the Representatives, the Issuer (which in either case shall not be unreasonably withheld or delayed).

(iv) Each Underwriter covenants with the Issuer and BGE that after the Final Prospectus is available such Underwriter shall not distribute any written information concerning the Bonds to an investor unless such information is preceded or accompanied by the Final Prospectus or by notice to the investor that the Final Prospectus is available for free by visiting EDGAR on the Commission’s website at www.sec.gov.

(v) Each Underwriter agrees and covenants that (A) no information that is conveyed to investors has been or will be inconsistent with the information contained in the Registration Statement, the Pricing Prospectus and each Issuer Free Writing Prospectus and (B) if an Underwriter shall use an Underwriter Free Writing Prospectus, the liability arising from its use, if any, shall be the sole responsibility of such Underwriter using such Underwriter Free Writing Prospectus unless such Underwriter Free Writing Prospectus was consented to in advance by BGE; provided, however, that, for the avoidance of doubt, (1) this clause (v) shall not constitute an obligation of such Underwriter to indemnify the Issuer or BGE, including under or in a manner similar the obligations contained in Section 11(b) hereof and (2) no Underwriter shall be responsible for any “issuer information” (as defined in Rule 433(h)(2) under the Securities Act) giving rise to such liability that was provided by the Issuer or BGE for inclusion in the Registration Statement, the Pricing Prospectus or any Issuer Free Writing Prospectus or was otherwise previously provided by the Issuer or BGE to such Underwriter for use in such Underwriter Free Writing Prospectus.

6. Purchase and Sale. On the basis of the representations and warranties herein contained, and subject to the terms and conditions herein set forth, the Issuer shall sell to each of the Underwriters, and each Underwriter shall purchase from the Issuer, at the time and place herein specified, severally and not jointly, at the purchase price set forth in Schedule I hereto, the principal amount of the Bonds set forth opposite such Underwriter’s name in Schedule II hereto. The Underwriters agree to make a public offering of the Bonds. The Issuer shall pay (in the form of a discount to the principal amount of the offered Bonds) to the Underwriters a commission equal to $2,492,800.

7. Time and Place of Closing. Delivery of the Bonds against payment of the aggregate purchase price therefor by wire transfer in federal funds shall be made at the place, on the date and at the time specified in Schedule I hereto, or at such other place, time and date as shall be agreed upon in writing by the Issuer and the Representatives. The hour and date of such delivery and payment are herein called the “Closing Date.” The Bonds shall be delivered to

DTC or to the Indenture Trustee, as custodian for DTC, in fully registered global form registered in the name of Cede & Co., for the respective accounts specified by the Representatives not later than the close of business on the business day preceding the Closing Date or such other time as may be agreed upon by the Representatives. The Issuer agrees to make the Bonds available to the Representatives for checking purposes not later than 1:00 P.M. New York Time on the last business day preceding the Closing Date at the place specified for delivery of the Bonds in Schedule I hereto, or at such other place as the Issuer may specify.

If any Underwriter shall fail or refuse to purchase and pay for the aggregate principal amount of Bonds that such Underwriter has agreed to purchase and pay for hereunder, the Issuer shall immediately give notice to the other Underwriters of the default of such Underwriter, and the other Underwriters shall have the right within 24 hours after the receipt of such notice to determine to purchase, or to procure one or more others, who are members of the National Association of Securities Dealers, Inc. (“NASD”) (or, if not members of the NASD, who are not eligible for membership in the NASD and who agree (i) to make no sales within the United States, its territories or its possessions or to persons who are citizens thereof or residents therein and (ii) in making sales to comply with the NASD’s Conduct Rules) and satisfactory to the Issuer, to purchase, upon the terms herein set forth, the aggregate principal amount of Bonds that such defaulting Underwriter had agreed to purchase. If any non-defaulting Underwriter or Underwriters shall determine to exercise such right, such Underwriter or Underwriters shall give written notice to the Issuer of the determination in that regard within 24 hours after receipt of notice of any such default, and thereupon the Closing Date shall be postponed for such period, not exceeding three business days, as the Issuer shall determine and subsequently provide notice to the Underwriters immediately thereafter. If in the event of such a default no non-defaulting Underwriter shall give such notice, then this Underwriting Agreement may be terminated by the Issuer, upon like notice given to the non-defaulting Underwriters, within a further period of 24 hours. If in such case the Issuer shall not elect to terminate this Underwriting Agreement it shall have the right, irrespective of such default:

(a) to require each non-defaulting Underwriter to purchase and pay for the respective aggregate principal amount of Bonds that it had agreed to purchase hereunder as hereinabove provided and, in addition, the aggregate principal amount of Bonds that such defaulting Underwriter shall have so failed to purchase up to an aggregate principal amount of Bonds equal to one-tenth (1/10) of the aggregate principal amount of Bonds that such non-defaulting Underwriter has otherwise agreed to purchase hereunder, and/or

(b) to procure one or more persons, reasonably acceptable to the Representatives, who are members of the NASD (or, if not members of the NASD, who are not eligible for membership in the NASD and who agree (i) to make no sales within the United States, its territories or its possessions or to persons who are citizens thereof or residents therein and (ii) in making sales to comply with the NASD’s Conduct Rules), to purchase, upon the terms herein set forth, either all or a part of the aggregate principal amount of Bonds that such defaulting Underwriter had agreed to purchase or that portion thereof that the remaining Underwriters shall not be obligated to purchase pursuant to the foregoing clause (a).

In the event the Issuer shall exercise its rights under clause (a) and/or (b) above, the Issuer shall give written notice thereof to the non-defaulting Underwriters within such further period of 24 hours, and thereupon the Closing Date shall be postponed for such period, not exceeding three business days, as the Issuer shall determine and subsequently provide notice to the Underwriters immediately thereafter.

In the computation of any period of 24 hours referred to in this Section 7, there shall be excluded a period of 24 hours in respect of each Saturday, Sunday or legal holiday that would otherwise be included in such period of time.

Any action taken by the Issuer or BGE under this Section 7 shall not relieve any defaulting Underwriter from liability in respect of any default of such Underwriter under this Underwriting Agreement. Termination by the Issuer under this Section 7 shall be without any liability on the part of the Issuer, BGE or any non-defaulting Underwriter, except as otherwise provided in Sections 8(a)(ii) and 11 hereof.

8. Covenants.

(a) Covenants of the Issuer. The Issuer covenants and agrees with the several Underwriters that:

(i) If, during such period of time (not exceeding nine months) after the Final Prospectus has been filed with the Commission pursuant to Rule 424(b) as in the opinion of Counsel for the Underwriters (as defined in Section 8(a)(vi) hereof) a prospectus covering the Bonds is required by law to be delivered in connection with sales by an Underwriter or dealer (including in circumstances where such requirement may be satisfied pursuant to Rule 172 under the Securities Act), any event relating to or affecting the Issuer, the Bonds or the Rate Stabilization Property or of which the Issuer shall be advised in writing by the Representatives shall occur that in the Issuer’s reasonable judgment after consultation with Counsel for the Underwriters should be set forth in a supplement to, or an amendment of, the Final Prospectus in order to make the Final Prospectus not misleading in the light of the circumstances when it is delivered to a purchaser (including in circumstances where such requirement may be satisfied pursuant to Rule 172 under the Securities Act), the Issuer will, at its expense, amend or supplement the Final Prospectus by either (A) preparing and furnishing to the Underwriters at the Issuer’s expense a reasonable number of copies of a supplement or supplements or an amendment or amendments to the Final Prospectus or (B) making an appropriate filing pursuant to Section 13 or Section 15 of the Exchange Act, which will supplement or amend the Final Prospectus so that, as supplemented or amended, it will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances when the Final Prospectus is delivered to a purchaser (including in circumstances where such requirement may be satisfied pursuant to Rule 172 under the Securities Act), not misleading; provided that should such event relate solely to the activities of any of the Underwriters, then such Underwriters shall assume the expense of preparing and furnishing any such amendment or supplement.

(ii) The Issuer or BGE will, except as herein provided, pay or cause to be paid all expenses and taxes (except transfer taxes payable in connection with the transfer and delivery of the Bonds from the Underwriters to the Bond purchasers) in connection with (A) the preparation and filing of the Registration Statement, the Pricing Prospectus and the Final Prospectus, (B) the issuance and delivery of the Bonds as provided in Section 7 hereof (including, without limitation, (1) reasonable fees and disbursements of Pillsbury Winthrop Shaw Pittman LLP, who are acting as counsel for the Underwriters (“Counsel for the Underwriters”), (2) the transfer and other taxes payable on the transfer and delivery of the Bonds to the Underwriters and (3) all trustee, rating agency, accounting and PSC financial advisor fees and expenses), (C) the qualification of the Bonds under blue-sky laws (including counsel fees not to exceed $6,000), (D) the printing and delivery to the Underwriters of reasonable quantities of the Registration Statement, the Pricing Prospectus and the Final Prospectus, (E) any amendment or supplement to the Registration Statement, Pricing Prospectus, or any Issuer Free Writing Prospectus (except the cost of amending or supplementing the Prospectus after nine months following the Closing Date, which shall be at the expense of the Underwriters requesting same) and (F) all other costs and expenses of third parties (other than the Underwriters) incident to the issuance and delivery of the Bonds to the Underwriters. Notwithstanding the foregoing, the Issuer shall not, however, be required to pay any amount for any expenses of the Underwriters other than as set forth in clause (B) above or for any fees and expenses of counsel for the PSC’s financial advisor, except that, if the sale of the Bonds provided for herein is not consummated because any condition set forth in Section 9 hereof is not satisfied, because this Underwriting Agreement shall be terminated in accordance with the provisions of Section 10 or 12 hereof, or because of any failure or refusal on the part of the Issuer or BGE to comply with the terms or fulfill any of the conditions of this Underwriting Agreement, other than by reason of a default by any of the Underwriters, the Issuer or BGE will reimburse the Underwriters for the reasonable fees and disbursements of Counsel for the Underwriters, and will reimburse the Underwriters for their reasonable out-of-pocket expenses, in an aggregate amount not exceeding $200,000, incurred in contemplation of the performance of this Underwriting Agreement. The Issuer shall not in any event be liable to any of the several Underwriters for damages on account of loss of anticipated profits.

(iii) During the period from the date of this Underwriting Agreement to the date that is five days after the Closing Date, the Issuer will not, without the prior written consent of the Representatives, offer, sell or contract to sell, or otherwise dispose of, directly or indirectly, or announce the offering of, any asset-backed securities (other than the Bonds).

(iv) To the extent, if any, that any rating necessary to satisfy the condition set forth in Section 9(z) hereof is conditioned upon the furnishing of documents or the taking of other actions by the Issuer on or after the Closing Date, the Issuer shall furnish such documents and take such other actions.

(v) For a period from the date of this Underwriting Agreement until the retirement of the Bonds or until such time as the Underwriters shall cease to maintain a secondary market in the Bonds, whichever occurs first, the Issuer shall file

with the Commission, and to the extent permitted by and consistent with the Issuer’s obligations under applicable law, make available on the website associated with the Issuer’s parent, such periodic reports, if any, as are required (without regard to the number of holders of Bonds to the extent permitted by and consistent with the Issuer’s obligations under applicable law) from time to time under Section 13 or 15(d) of the Exchange Act, and the Issuer shall not voluntarily suspend or terminate its filing obligations with the Commission. The Issuer shall also, to the extent permitted by and consistent with the Issuer’s obligations under applicable law, include in the periodic and other reports to be filed with the Commission as provided above, such information as required by Section 3.07(g) of the Indenture with respect to the Bonds. To the extent that the Issuer’s obligations are terminated or limited by an amendment to Section 3.07(g) of the Indenture, or otherwise, such obligations shall be correspondingly terminated or limited hereunder.

(vi) The Issuer will not file any amendment to the Registration Statement or amendment or supplement to the Final Prospectus during the period when a prospectus relating to the Bonds is required to be delivered under the Securities Act without prior notice to the Underwriters or to which Counsel for the Underwriters shall reasonably object by written notice to BGE and the Issuer.

(b) Covenants of BGE. BGE covenants and agrees with the several Underwriters that, to the extent that the Issuer has not already performed such act pursuant to Section 8(a) hereof:

(vii) BGE, in its capacity as sponsor with respect to the Bonds, will upon request promptly deliver to the Representatives and Counsel to the Underwriters a signed copy of the Registration Statement as originally filed or, to the extent a signed copy is not available, a conformed copy, certified by an officer of BGE to be in the form as originally filed, including all Incorporated Documents and exhibits and all amendments thereto.

(viii) BGE, in its capacity as sponsor with respect to the Bonds, will deliver to the Underwriters, as soon as practicable after the date hereof, as many copies of the Pricing Prospectus and the Final Prospectus as they may reasonably request.

(ix) BGE, in its capacity as sponsor with respect to the Bonds, will cause the Pricing Prospectus and the Final Prospectus to be filed with the Commission pursuant to Rule 424(b) as soon as practicable and advise the Underwriters of any stop order suspending the effectiveness of the Registration Statement or the institution of any proceeding therefor of which Issuer shall have received notice. The Issuer will use its reasonable best efforts to prevent the issuance of any such stop order and, if issued, to obtain as soon as possible the withdrawal thereof. The Issuer has complied and will comply with Rule 433 under the Securities Act in connection with the offering of the Bonds.

(x) As soon as practicable, but not later than 14 months after the date hereof, BGE, in its capacity as sponsor with respect to the Bonds, will make generally

available to its security holders, an earnings statement (which need not be audited) that will satisfy the provisions of Section 11(a) of the Securities Act with respect to the Bonds.

(xi) BGE, in its capacity as sponsor with respect to the Bonds, will furnish such proper information as may be lawfully required and otherwise cooperate in qualifying the Bonds for offer and sale under the blue-sky laws of such jurisdictions as the Representatives may designate; provided that neither the Issuer nor BGE shall be required to qualify as a foreign limited liability company or dealer in securities, to file any consents to service of process under the laws of any jurisdiction, or meet any other requirements deemed by the Issuer or BGE, as applicable, to be unduly burdensome.

(xii) BGE will not file any amendment to the Registration Statement or amendment or supplement to the Final Prospectus during the period when a prospectus relating to the Bonds is required to be delivered under the Securities Act without prior notice to the Underwriters or to which Counsel for the Underwriters shall reasonably object by written notice to BGE and the Issuer.

(xiii) To the extent permitted by applicable law and the agreements and instruments that bind BGE, BGE will use its reasonable best efforts to cause the Issuer to comply with the covenants set forth in Section 8(a) hereof.

(xiv) BGE will use its reasonable best efforts to prevent the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement and, if issued, to obtain as soon as possible the withdrawal thereof.

(xv) If, during such period of time (not exceeding nine months) after the Final Prospectus has been filed with the Commission pursuant to Rule 424(b) as in the opinion of Counsel for the Underwriters a prospectus covering the Bonds is required by law to be delivered in connection with sales by an Underwriter or dealer (including in circumstances where such requirement may be satisfied pursuant to Rule 172 under the Securities Act), any event relating to or affecting BGE, the Bonds or the Rate Stabilization Property or of which BGE shall be advised in writing by the Representatives shall occur that in BGE’s reasonable judgment after consultation with Counsel for the Underwriters should be set forth in a supplement to, or an amendment of, the Final Prospectus in order to make the Final Prospectus not misleading in the light of the circumstances when it is delivered to a purchaser (including in circumstances where such requirement may be satisfied pursuant to Rule 172 under the Securities Act), BGE will cause the Issuer, at BGE’s or the Issuer’s expense, to amend or supplement the Final Prospectus by either (A) preparing and furnishing to the Underwriters at BGE’s or the Issuer’s expense a reasonable number of copies of a supplement or supplements or an amendment or amendments to the Final Prospectus or (B) causing the Issuer to make an appropriate filing pursuant to Section 13 or 15(d) of the Exchange Act, which will supplement or amend the Final Prospectus so that, as supplemented or amended, it will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances when the Final Prospectus is delivered to a purchaser

(including in circumstances where such requirement may be satisfied pursuant to Rule 172 under the Securities Act), not misleading; provided that should such event relate solely to the activities of any of the Underwriters, then such Underwriters shall assume the expense of preparing and furnishing any such amendment or supplement.

(xvi) During the period from the date of this Underwriting Agreement to the date that is five days after the Closing Date, BGE will not, without the prior written consent of the Representatives, offer, sell or contract to sell, or otherwise dispose of, directly or indirectly, or announce the offering of, any asset-backed securities (other than the Bonds).

(xvii) BGE will cause the proceeds for the issuance and sale of the Bonds to be applied for the purposes described in the Pricing Prospectus and the Final Prospectus.

(xviii) To the extent, if any, that any rating necessary to satisfy the condition set forth in Section 9(z) of this Underwriting Agreement is conditioned upon the furnishing of documents or the taking of other actions by BGE on or after the Closing Date, BGE shall furnish such documents and take such other actions.

9. Conditions to the Obligations of the Underwriters. The obligations of the Underwriters to purchase the Bonds shall be subject to the accuracy of the representations and warranties on the part of the Issuer and BGE contained in this Underwriting Agreement, on the part of BGE contained in Article III of the Sale Agreement, and on the part of BGE contained in Section 6.01 of the Servicing Agreement, in each case as of the Closing Date, to the accuracy of the statements of the Issuer and BGE made in any certificates pursuant to the provisions hereof, to the performance by the Issuer and BGE of their obligations hereunder, and to the following additional conditions:

(a) The Final Prospectus shall have been filed with the Commission pursuant to Rule 424(b) prior to 5:30 P.M., New York time, on the second business day after the date of this Underwriting Agreement. In addition, all material required to be filed by the Issuer or BGE pursuant to Rule 433(d) under the Securities Act that was prepared by either of them or that was prepared by any Underwriter and timely provided to the Issuer or BGE shall have been filed with the Commission within the applicable time period prescribed for such filing by such Rule 433(d) under the Securities Act.

(b) No stop order suspending the effectiveness of the Registration Statement shall be in effect, and no proceedings for that purpose shall be pending before, or threatened by, the Commission on the Closing Date; and the Underwriters shall have received one or more certificates, dated the Closing Date and signed by an officer of BGE and the Issuer, as appropriate, to the effect that no such stop order is in effect and that no proceedings for such purpose are pending before, or to the knowledge of BGE or the Issuer, as the case may be, threatened by, the Commission.

(c) Pillsbury Winthrop Shaw Pittman LLP, Counsel for the Underwriters, shall have furnished to the Representatives their written opinion (substantially in the form

attached as Exhibit A hereto), dated the Closing Date, with respect to the issuance and sale of the Bonds, the Indenture, the other Issuer Documents, the Registration Statement and other related matters; and such counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters.

(d) Richards, Layton & Finger, P.A., special Delaware counsel for the Issuer, shall have furnished to the Representatives their written opinion (substantially in the form attached as Exhibit B hereto), dated the Closing Date, regarding the filing of a voluntary bankruptcy petition.

(e) Richards, Layton & Finger, P.A., special Delaware counsel for BGE and the Issuer, shall have furnished to the Representatives their written opinion (substantially in the form attached as Exhibit C hereto), dated the Closing Date, regarding certain Delaware Uniform Commercial Code matters.

(f) Thelen Reid Brown Raysman & Steiner LLP, counsel for the Issuer and BGE, shall have furnished to the Representatives their written opinion (substantially in the form attached as Exhibit D hereto), dated the Closing Date, regarding certain matters with respect to the Issuer and BGE.

(g) Miles & Stockbridge LLP, special Maryland counsel for the Issuer and BGE, shall have furnished to the Representatives their written opinion (substantially in the form attached as Exhibit E hereto), dated the Closing Date, regarding certain Maryland corporate matters.

(h) Thelen Reid Brown Raysman & Steiner LLP, counsel for the Issuer and BGE, shall have furnished to the Representatives their written opinion (substantially in the form attached as Exhibit F hereto), dated the Closing Date, to the effect that a court sitting in bankruptcy would not order the substantive consolidation of the assets and liabilities of the Issuer with those of BGE in connection with a bankruptcy, reorganization or other insolvency proceeding involving BGE.

(i) Miles & Stockbridge LLP, special Maryland counsel for the Issuer and BGE, shall have furnished to the Representatives their written opinion (substantially in the form attached as Exhibit G hereto), dated the Closing Date, regarding certain Maryland constitutional matters relating to the Rate Stabilization Property.

(j) Thelen Reid Brown Raysman & Steiner LLP, counsel for the Issuer and BGE, shall have furnished to the Representatives their written opinion (substantially in the form attached as Exhibit H hereto), dated the Closing Date, regarding certain federal tax matters.

(k) Miles & Stockbridge LLP, special Maryland counsel for BGE, shall have furnished to the Representatives their written opinion (substantially in the form attached as Exhibit I hereto), dated the Closing Date, to the effect that the Rate Stabilization Property is not subject to the lien of BGE’s Mortgage and Deed of Trust, dated as of February 1, 1919, as subsequently supplemented, amended and restated as of June 20, 1995 and as further supplemented.

(l) Miles & Stockbridge LLP, special Maryland counsel for the Issuer and BGE, shall have furnished to the Representatives their written opinion (substantially in the form attached as Exhibit J hereto), dated the Closing Date, with respect to the characterization of the transfer of the Rate Stabilization Property by BGE to the Issuer as a “true sale” for Maryland law purposes.

(m) Thelen Reid Brown Raysman & Steiner LLP, counsel for the Issuer and BGE, shall have furnished to the Representatives its written respective opinions (substantially in the form attached as Exhibit K hereto), dated the Closing Date, regarding certain federal constitutional matters relating to the Rate Stabilization Property.

(n) Seward & Kissel LLP, counsel for the Indenture Trustee, shall have furnished to the Representatives their written opinions (each substantially in the form attached as Exhibit L hereto), dated the Closing Date, regarding certain matters relating to the Indenture Trustee.

(o) Miles & Stockbridge LLP, special Maryland counsel for BGE and the Issuer, shall have furnished to the representatives their opinion (substantially in the form attached as Exhibit M hereto), dated the Closing Date, regarding certain Maryland regulatory issues.

(p) Miles & Stockbridge LLP, special Maryland counsel for the Issuer and BGE, shall have furnished to the Representatives their written opinion (substantially in the form attached as Exhibit N hereto), dated the Closing Date, regarding enforceability and certain Maryland perfection and priority issues.

(q) Thelen Reid Brown Raysman & Steiner LLP, counsel for the Issuer and BGE, shall have furnished to the Representatives their written opinion (substantially in the form attached as Exhibit O hereto), dated the Closing Date, regarding certain bankruptcy matters relating to the Issuer.

(r) Richards, Layton & Finger, P.A., counsel for the Issuer and BGE, shall have furnished to the Representatives their written opinion (substantially in the form attached as Exhibit P hereto), dated the Closing Date, regarding certain matters of Delaware law.

(s) Miles & Stockbridge LLP, special Maryland counsel for the Issuer and BGE, shall have furnished to the Representatives their written opinion (substantially in the form attached as Exhibit Q hereto), dated the Closing Date, regarding certain Maryland tax matters.

(t) Thelen Reid Brown Raysman & Steiner LLP, counsel for the Issuer and BGE, shall have furnished to the Representatives their written opinion (substantially in the form attached as Exhibit R hereto), dated the Closing Date, regarding negative assurances and other matters.

(u) Thelen Reid Brown Raysman & Steiner LLP, counsel for the Issuer and BGE, shall have furnished to the Representatives their written opinion (substantially in

the form attached as Exhibit S hereto), dated the Closing Date, with respect to the characterization of the transfer of the Rate Stabilization Property by BGE to the Issuer as a “true sale” under federal bankruptcy law.

(v) Thelen Reid Brown Raysman & Steiner LLP, counsel for the Issuer and BGE, shall have furnished to the Representatives their written opinion (substantially in the form attached as Exhibit T hereto), dated the Closing Date, regarding the constitutionality of the Rate Stabilization Act under the United States constitution.

(w) On or before the Closing Date, PwC shall have furnished to the Representatives one or more agreed upon procedure reports regarding certain calculations and computations relating to the Bonds, in form or substance reasonably satisfactory to the Representatives, in each case in respect of which the Representatives shall have made specific requests therefor and shall have provided acknowledgment or similar letters to PwC reasonably necessary in order for PwC to issue such reports.

(x) Subsequent to the respective dates as of which information is given in each of the Registration Statement, the Pricing Prospectus and the Final Prospectus, there shall not have been any change specified in the reports required by Section 9(v) hereof which is, in the judgment of the Representatives, so material and adverse as to make it impracticable or inadvisable to proceed with the offering or the delivery of the Bonds as contemplated by the Registration Statement and the Final Prospectus.

(y) The LLC Agreement, the Administrative Agreement, the Sale Agreement, the Servicing Agreement and the Indenture and any amendment or supplement to any of the foregoing shall have been executed and delivered.

(z) Since the respective dates as of which information is given in each of the Registration Statement, the Pricing Prospectus and the Final Prospectus and as of the Closing Date there shall have been no (i) material adverse change in the business, property or financial condition of BGE and its subsidiaries, taken as a whole, or the Issuer or (ii) adverse development concerning the business or assets of BGE and its subsidiaries, taken as a whole, or the Issuer which would be reasonably likely to result in a material adverse change in the prospective business, property or financial condition of BGE and its subsidiaries, taken as a whole, whether or not in the ordinary course of business, or the Issuer or (iii) development which would be reasonably likely to result in a material adverse change in the Rate Stabilization Property, the Bonds or the Qualified Rate Order.

(aa) At the Closing Date, (i) the Bonds shall be rated at least “Aaa”, “AAA”, and “AAA” by Moody’s Investors Service, Inc. (“Moody’s”), Standard & Poor’s, a division of the McGraw-Hill Companies, Inc. (“S&P”), and Fitch, Inc. (“Fitch”), respectively, and the Issuer shall have delivered to the Underwriters a letter from each such rating agency, or other evidence satisfactory to the Underwriters, confirming that the Bonds have such ratings, and (ii) none of Moody’s, S&P and Fitch shall have, since the date of this Underwriting Agreement, downgraded or publicly announced that it has

under surveillance or review, with possible negative implications, its ratings of the Bonds.

(bb) The Issuer and BGE shall have furnished or caused to be furnished to the Representatives at the Closing Date certificates of officers of BGE and the Issuer, reasonably satisfactory to the Representatives, as to the accuracy of the representations and warranties of the Issuer and BGE herein, in the Sale Agreement, the Servicing Agreement and the Indenture at and as of the Closing Date, as to the performance by the Issuer and BGE of all of their obligations hereunder to be performed at or prior to such Closing Date and as to such other matters as the Representatives may reasonably request, including as to the matters set forth in Section 9(y) and 9(cc) hereof.

(cc) An issuance advice letter, in a form consistent with the provisions of the Qualified Rate Order, shall have been filed with the PSC and shall have become effective.

(dd) On or prior to the Closing Date, the Issuer shall have delivered to the Representatives evidence, in form and substance reasonably satisfactory to the Representatives, that appropriate filings have been or are being made in accordance with the Rate Stabilization Law, the Qualified Rate Order and other applicable law reflecting the grant of a security interest by the Issuer in the collateral relating to the Bonds to the Indenture Trustee, including the filing of the requisite notices in the office of the Maryland State Department of Assessments and Taxation.

(ee) On or prior to the Closing Date, BGE shall have funded the capital subaccount of the Issuer with cash in an amount equal to $3,116,000.

(ff) The Issuer and BGE shall have furnished or caused to be furnished to the Rating Agencies at the Closing Date such opinions and certificates as the Rating Agencies shall have reasonably requested prior to such Closing Date.

10. Conditions of Issuer’s Obligations. The obligation of the Issuer to deliver the Bonds shall be subject to the conditions that no stop order suspending the effectiveness of the Registration Statement shall be in effect at the Closing Date and no proceeding for that purpose shall be pending before, or threatened by, the Commission at the Closing Date and the issuance advice letter described in Section 9(bb) shall have become effective. In case these conditions shall not have been fulfilled, this Underwriting Agreement may be terminated by the Issuer upon notice thereof to the Underwriters. Any such termination shall be without liability of any party to any other party except as otherwise provided in Sections 8(a)(ii) and 11 hereof.

11. Indemnification and Contribution.

(a) BGE and the Issuer, jointly and severally, shall indemnify, defend and hold harmless each Underwriter, each Underwriter’s officers and directors, each person who controls any Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act from and against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Securities Act or any other statute or common law and shall reimburse each such

Underwriter, officer and director and controlling person for any reasonable legal or other expenses (including, to the extent hereinafter provided, reasonable counsel fees) as and when incurred by them in connection with investigating any such losses, claims, damages or liabilities or in connection with defending any actions, insofar as such losses, claims, damages, liabilities, expenses or actions arise out of or are based upon (i) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) any untrue statement or alleged untrue statement of a material fact contained in the Pricing Prospectus, the Final Prospectus, and, together with the Pricing Prospectus, the Issuer Free Writing Prospectuses, or any omission or alleged omission to state therein a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading or (iii) any information prepared by or on behalf of BGE or the Issuer and provided to the Underwriters; provided, however, that the indemnity agreement contained in this Section 11 shall not apply to any such losses, claims, damages, liabilities, expenses or actions arising out of, or based upon, any such untrue statement or alleged untrue statement, or any such omission or alleged omission, in each case if such statement or omission was made in reliance upon and in conformity with any Underwriter Information; and provided further, that the indemnity agreement contained in this Section 11 shall not inure to the benefit of any Underwriter (or of any officer or director of such Underwriter or of any person controlling such Underwriter within the meaning of Section 15 of the Securities Act) on account of any such losses, claims, damages, liabilities, expenses or actions, joint or several, arising from the sale of the Bonds to any person if a copy of a supplement or amendment to such Pricing Prospectus, Final Prospectus or Issuer Free Writing Prospectuses (excluding in all cases, however, any document then incorporated by reference therein) (i) is furnished on a timely basis by the Issuer or BGE to the Underwriters, (ii) is required by law or regulation to have been conveyed to such person by or on behalf of such Underwriters, at or prior to the entry into the contract of sale of the Bonds with such person, but was not so conveyed (which conveyance may be oral or written) by or on behalf of such Underwriters and (iii) would have cured the defect giving rise to such loss, claim, damage or liability. The indemnity agreement of BGE and Issuer contained in this Section 11 and the representations and warranties of the Issuer and BGE contained in Sections 3 and 4 hereof shall remain operative and in full force and effect regardless of any termination of this Underwriting Agreement or of any investigation made by or on behalf of any Underwriter, its officers or its directors or any such controlling person and shall survive the delivery of the Bonds.

(b) Each Underwriter shall severally indemnify, defend and hold harmless BGE and the Issuer, each of BGE’s and Issuer’s officers, directors, and managers, and each person who controls the Issuer or BGE within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Securities Act or any other statute or common law and shall reimburse each of them for any reasonable legal or other expenses (including, to the extent hereinafter provided, reasonable counsel fees) as and when incurred by them in connection with investigating any such losses, claims, damages or liabilities or in

connection with defending any actions, insofar as such losses, claims, damages, liabilities, expenses or actions arise out of or are based upon (i) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any 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 (ii) any untrue statement or alleged untrue statement of a material fact contained in the Pricing Prospectus, the Final Prospectus and, together with the Pricing Prospectus, the Issuer Free Writing Prospectuses, or any omission or alleged omission to state therein a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; if such statement or omission was made in reliance upon and in conformity with the Underwriter Information with respect to such Underwriter. The indemnity agreement of the respective Underwriters contained in this Section 11 and the representations and warranties of the Underwriters contained in Section 5 hereof shall remain operative and in full force and effect regardless of any termination of this Underwriting Agreement or of any investigation made by or on behalf of BGE or the Issuer, their directors, managers or officers, any such Underwriter or any such controlling person, and shall survive the delivery of the Bonds.

(c) BGE and the several Underwriters each shall, upon the receipt of notice of the commencement of any action against it or any person controlling it as aforesaid, in respect of which indemnity may be sought on account of any indemnity agreement contained herein, promptly give written notice of the commencement thereof to the party or parties against whom indemnity shall be sought under subparagraph (a) or (b) above, but the failure to notify such indemnifying party or parties of any such action shall not relieve such indemnifying party or parties from any liability hereunder to the extent such indemnifying party or parties is or are not materially prejudiced as a result of such failure to notify and in any event shall not relieve such indemnifying party or parties from any liability which it or they may have to the indemnified party otherwise than on account of such indemnity agreement. In case such notice of any such action shall be so given, such indemnifying party shall be entitled to participate at its own expense in the defense, or, if it so elects, to assume (in conjunction with any other indemnifying parties) the defense of such action, in which event such defense shall be conducted by counsel chosen by such indemnifying party or parties and reasonably satisfactory to the indemnified party or parties who shall be defendant or defendants in such action, and such defendant or defendants shall bear the fees and expenses of any additional counsel retained by them; but if the indemnifying party shall elect not to assume the defense of such action, such indemnifying party will reimburse such indemnified party or parties for the reasonable fees and expenses of any counsel retained by them; provided, however, if the defendants in any such action (including impleaded parties) include both the indemnified party and the indemnifying party and counsel for the indemnifying party shall have reasonably concluded that there may be a conflict of interest involved in the representation by a single counsel of both the indemnifying party and the indemnified party, the indemnified party or parties shall have the right to select separate counsel, satisfactory to the indemnifying party, whose reasonable fees and expenses shall be paid by such indemnifying party, to participate in the defense of such action on behalf of such indemnified party or parties (it being understood, however, that the indemnifying party shall not be liable for the fees and expenses of more than one separate counsel (in

addition to local counsel) representing the indemnified parties who are parties to such action). Each of BGE, the Issuer and the several Underwriters agrees that without the other party’s prior written consent, which consent shall not be unreasonably withheld or delayed, it will not settle, compromise or consent to the entry of any judgment in any claim in respect of which indemnification may be sought under the indemnification provisions of this Underwriting Agreement, unless such settlement, compromise or consent (i) includes an unconditional release of such other party from all liability arising out of such claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of such other party.

(d) If the indemnification provided for in subparagraph (a) or (b) above shall be unenforceable under applicable law by an indemnified party, each indemnifying party agrees to contribute to such indemnified party with respect to any and all losses, claims, damages, liabilities and expenses for which each such indemnification provided for in subparagraph (a) or (b) above shall be unenforceable, in such proportion as shall be appropriate to reflect (i) the relative benefits received by BGE and the Issuer on the one hand and the Underwriters on the other hand from the offering of the Bonds pursuant to this Underwriting Agreement (taking into account the portion of the proceeds of the offering realized by each), (ii) if an allocation solely on the basis provided by clause (i) is not permitted by applicable law or is inequitable or against public policy, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of each indemnifying party on the one hand and the indemnified party on the other in connection with the statements or omissions which have resulted in such losses, claims, damages, liabilities and expenses or (iii) any other relevant equitable considerations; provided, however, that no indemnified party guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any indemnifying party not guilty of such fraudulent misrepresentation. Relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by such indemnifying party or the indemnified party and each such party’s relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. BGE, the Issuer and each of the Underwriters agree that it would not be just and equitable if contribution pursuant to this subparagraph (d) were to be determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to above. Notwithstanding the provisions of this Section 11, no Underwriter shall be required to contribute in excess of the amount equal to the excess of (i) the total underwriting fees, discounts and commissions received by it, over (ii) the amount of any damages which such Underwriter has otherwise been required to pay by reason of any such untrue or alleged untrue statement or omission or alleged omission. The obligations of each Underwriter to contribute pursuant to this Section 11 are several and not joint and shall be in the same proportion as such Underwriter’s obligation to underwrite Bonds is to the total number of Bonds set forth in Schedule II hereto.

12. Termination. This Underwriting Agreement may be terminated at any time prior to the Closing Date with respect to the Bonds by the Representatives by written notice

to the Issuer if after the date hereof and at or prior to the Closing Date (a) there shall have occurred any general suspension of trading in securities on the New York Stock Exchange (“NYSE”) or there shall have been established by the NYSE, or the over-the-counter market, or by the Commission any general limitation on prices for such trading or any general restrictions on the distribution of securities, or a general banking moratorium declared by New York or federal authorities or (b) there shall have occurred any (i) material outbreak of hostilities (including, without limitation, an act of terrorism) or (ii) declaration by the United States of war or national or international calamity or crisis, including, but not limited to, a material escalation of hostilities that existed prior to the date of this Underwriting Agreement or (iii) material adverse change in the financial markets in the United States, and the effect of any such event specified in clause (a) or (b) above on the financial markets of the United States shall be such as to materially and adversely affect, in the reasonable judgment of the Representatives, their ability to proceed with the public offering or the delivery of the Bonds on the terms and in the manner contemplated by the Final Prospectus. Any termination hereof pursuant to this Section 12 shall be without liability of any party to any other party except as otherwise provided in Sections 8(a)(ii) and 11 hereof.

13. Absence of Fiduciary Relationship. Each of the Issuer and BGE acknowledges and agrees that the Underwriters are acting solely in the capacity of an arm’s length contractual counterparty to the Issuer and BGE with respect to the offering of the Bonds contemplated hereby (including in connection with determining the terms of the offering) and not as a financial advisor or a fiduciary to, or an agent of, the Issuer or BGE. Additionally, none of the Underwriters is advising the Issuer or BGE as to any legal, tax, investment, accounting or regulatory matters in any jurisdiction. The Issuer and BGE shall consult with their own advisors concerning such matters and shall be responsible for making their own independent investigation and appraisal of the transactions contemplated hereby, and the Underwriters shall have no responsibility or liability to the Issuer or BGE with respect thereto. Any review by the Underwriters of the Issuer or BGE, the transactions contemplated hereby or other matters relating to such transactions will be performed solely for the benefit of the Underwriters and shall not be on behalf of the Issuer or BGE.

14. Notices. All communications hereunder will be in writing and may be given by United States mail, courier service, telecopy, telefax or facsimile (confirmed by telephone or in writing in the case of notice by telecopy, telefax or facsimile) or any other customary means of communication, and any such communication shall be effective when delivered, or if mailed, three days after deposit in the United States mail with proper postage for ordinary mail prepaid, and if sent to the Representatives, to it at the address specified in Schedule I hereto; and if sent to BGE, to it at c/o Constellation Energy Group, Inc., 750 East Pratt Street, 16^th Floor, Baltimore, MD 21202, Attention: Treasurer; and if sent to the Issuer, to it at Suite 202, 103 Foulk Road, Wilmington, DE 19803. The parties hereto, by notice to the others, may designate additional or different addresses for subsequent communications.

15. Successors. This Underwriting Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the officers and directors, controlling persons and affiliates referred to in Section 11 hereof, and no other person will have any right or obligation hereunder.

16. Applicable Law. This Underwriting Agreement will be governed by and construed in accordance with the laws of the State of New York.

17. Counterparts. This Underwriting Agreement may be signed in any number of counterparts, each of which shall be deemed an original, which taken together shall constitute one and the same instrument.

18. Integration. This Underwriting Agreement supersedes all prior agreements and understandings (whether written or oral) among the Issuer, BGE and the Underwriters, or any of them, with respect to the subject matter hereof.

If the foregoing is in accordance with your understanding of our agreement, please sign and return to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall represent a binding agreement among BGE, the Issuer and the several Underwriters.

	Very truly yours,
	RSB BONDCO LLC
	By:	/s/ Charles A. Berardesco
		Name: Charles A. Berardesco Title: Secretary

	BALTIMORE GAS AND ELECTRIC COMPANY
	By:	/s/ Charles A. Berardesco
		Name: Charles A. Berardesco Title: Corporate Secretary

	The foregoing Underwriting Agreement is hereby confirmed and accepted as of the date specified in Schedule I hereto.

Issuer and BGE Signature Page to Underwriting Agreement

	BARCLAYS CAPITAL INC.
	By:	/s/ Joseph Lau
		Name: Joseph Lau Title: Director

	CITIGROUP GLOBAL MARKETS INC.
	By:	/s/ Mariana Donskaya
		Name: Mariana Donskaya Title: Vice President

	GREENWICH CAPITAL MARKETS, INC.
	By:	/s/ Albert K. Yoshimura
		Name: Albert K. Yoshimura Title: Managing Director

	MORGAN STANLEY & CO. INCORPORATED
	By:	/s/ Sanjeev Khanna
		Name: Sanjeev Khanna Title: Managing Director

SCHEDULE I

Underwriting Agreement dated June 22, 2007

Registration Statement Nos. 333-141366 and 333-141366-01

Representatives:

Barclays Capital Inc.

200 Park Avenue, 5^th Floor

New York, NY 10166

Citigroup Global Markets Inc.

388/390 Greenwich Street

New York, NY 10013

Greenwich Capital Markets, Inc.

600 Steamboat Road

Greenwich, CT 06830

Morgan Stanley & Co. Incorporated

1585 Broadway

New York, NY 10036

Title, Purchase Price and Description of Bonds:

Title:

Series A Rate Stabilization Bonds

	Total Principal Amount of Tranche	Bond Rate	Price to Public	Underwriting Discounts and Commissions	Proceeds to Issuer
Per Tranche A-1 Bond	$284,000,000	5.47%	99.97507%	0.400%	$282,793,199
Per Tranche A-2 Bond	$220,000,000	5.72%	99.95281%	0.400%	$219,016,182
Per Tranche A-3 Bond	$119,200,000	5.82%	99.93340%	0.400%	$118,643,813


Total	$623,200,000				$620,453,194

Original Issue Discount (if any):	$254,006
Other provisions:	None.
Closing Date, Time and Location:	June 29, 2007, 9:00 A.M.; office of Thelen Reid Brown Raysman and Steiner, 875 Third Avenue, New York, NY 10022

I-1

SCHEDULE II

Principal Amount of Bonds to be Purchased

Underwriter	Tranche A-1	Tranche A-2	Tranche A-3	Total
Barclays Capital Inc.	$71,000,000	$55,000,000	$29,800,000	$155,800,000
Citigroup Global Markets Inc.	$71,000,000	$55,000,000	$29,800,000	$155,800,000
Greenwich Capital Markets, Inc.	$71,000,000	$55,000,000	$29,800,000	$155,800,000
Morgan Stanley & Co. Incorporated	$71,000,000	$55,000,000	$29,800,000	$155,800,000


Total	$284,000,000	$220,000,000	$119,200,000	$623,200,000

II-1

SCHEDULE III

Schedule of Issuer Free Writing Prospectuses

A. Free Writing Prospectuses not required to be filed

Electronic Road Show

B. Free Writing Prospectuses Required to be filed pursuant to Rule 433

Preliminary Term Sheet

Pricing Term Sheet

III-1

SCHEDULE IV

DESCRIPTIVE LIST OF UNDERWRITER PROVIDED INFORMATION

A: Pricing Prospectus

(a) under the heading “UNDERWRITING THE BONDS” in the Preliminary Prospectus Supplement: (i) the third sentence under the caption “No Assurance as to Resale Price or Resale Liquidity for the Bonds”; (ii) the first full paragraph under the caption “Various Types of Underwriter Transactions Which May Affect the Price of the Bonds” (except the last sentence thereof); and (iii) the last sentence of the second full paragraph and the last sentence of the fifth full paragraph under the caption “Various Types of Underwriter Transactions Which May Affect the Price of the Bonds”; and (b) under the heading “OTHER RISKS ASSOCIATED WITH AN INVESTMENT IN THE RATE STABILIZATION BONDS” in the Preliminary Prospectus, the first sentence under the caption “The Absence of a Secondary Market for a Series of Rate Stabilization Bonds Might Limit Your Ability to Resell Your Rate Stabilization Bonds of Such Series.”

B. Final Prospectus

(a) the first sentence of the last paragraph on the cover page of the Prospectus Supplement; (b) under the heading “UNDERWRITING THE BONDS” in the Prospectus Supplement: (i) the entire two paragraphs under the caption “The Underwriters’ Sales Price for the Bonds”; (ii) the third sentence under the caption “No Assurance as to Resale Price or Resale Liquidity for the Bonds” (including the table); (iii) the first full paragraph under the caption “Various Types of Underwriter Transactions Which May Affect the Price of the Bonds” (except the last sentence thereof); and (iv) the last sentence of the second full paragraph and the last sentence of the fifth full paragraph under the caption “Various Types of Underwriter Transactions Which May Affect the Price of the Bonds”; and (c) under the heading “OTHER RISKS ASSOCIATED WITH AN INVESTMENT IN THE RATE STABILIZATION BONDS” in the Prospectus, the first sentence under the caption “The Absence of a Secondary Market for a Series of Rate Stabilization Bonds Might Limit Your Ability to Resell Your Rate Stabilization Bonds of Such Series.”

IV-1

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

RECITALS

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

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

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

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

ARTICLE I

DEFINITIONS

SECTION 1.01. Definitions.

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

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

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

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

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

ARTICLE II

APPOINTMENT AND AUTHORIZATION

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

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

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

ARTICLE III

ROLE OF SERVICER

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

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

(b) Reporting Functions.

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

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

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

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

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

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

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

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

SECTION 3.02. Servicing and Maintenance Standards.

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

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

SECTION 3.03. Annual Reports on Compliance with Regulation AB.

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

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

SECTION 3.04. Annual Report by Independent Registered Public Accountants.

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

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

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

SECTION 3.05. Monitoring of Third-Party Collectors.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

ARTICLE IV

SERVICES RELATED TO TRUE-UP ADJUSTMENTS

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

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

(b) True-Up Adjustments.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(iii) Reports to Customers.

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

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

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

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

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

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

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

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

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

ARTICLE V

THE RATE STABILIZATION PROPERTY

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

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

SECTION 5.02. Duties of Servicer as Custodian.

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

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

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

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

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

ARTICLE VI

THE SERVICER

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

SECTION 6.05. Servicing Compensation.

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

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

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

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

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

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

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

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

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

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

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

SECTION 6.10. Remittances.

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

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

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

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

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

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

ARTICLE VII

DEFAULT

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

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

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

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

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

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

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

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

SECTION 7.02. Appointment of Successor.

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

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

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

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

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

ARTICLE VIII

INDEMNIFICATION

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

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

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

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

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

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

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

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

ARTICLE IX

MISCELLANEOUS PROVISIONS

SECTION 9.01. Amendment.

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

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

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

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

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

SECTION 9.02. Maintenance of Accounts and Records.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[SIGNATURE PAGE FOLLOWS]

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

	RSB BONDCO LLC, as Issuer


	By:	/s/ Charles A. Berardesco
		Name: Charles A. Berardesco Title: Secretary


	BALTIMORE GAS AND ELECTRIC COMPANY, as Servicer


	By:	/s/ Charles A. Berardesco
		Name: Charles A. Berardesco Title: Corporate Secretary

Issuer and BGE Signature Page to Servicing Agreement



ACKNOWLEDGED AND ACCEPTED:
DEUTSCHE BANK TRUST COMPANY AMERICAS, not in its individual capacity, but solely in its capacity as Indenture Trustee
By:	/s/ Eileen Hughes
	Name: Eileen Hughes Title: Vice President


By:	/s/ William Schwerdtman
	Name: William Schwerdtman Title: Associate

Trustee Signature Page to Servicing Agreement

EXHIBIT A

MONTHLY SERVICER’S CERTIFICATE

See Attached.

EXHIBIT A

EXHIBIT A

TO RATE STABILIZATION PROPERTY

SERVICING AGREEMENT

FORM OF MONTHLY SERVICER’S CERTIFICATE

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

OF THE SERIES A RATE STABILIZATION PROPERTY SERVICING AGREEMENT)

RSB BONDCO LLC,

Series A Rate Stabilization Bonds

Baltimore Gas and Electric Company, as Servicer

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


SERIES A COLLECTION PERIOD: ________
Customer Class	a. Series A Qualified Rate Stabilization Charge in Effect	b. Series A Billed QRSCs	c. Series A Estimated QRSC Collections	d. Series A QRSC Collections Remitted to Trustee

Residential Service	__ cents/kWh

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

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

	BALTIMORE GAS AND ELECTRIC COMPANY,
	as Servicer


	By
	Title:

EXHIBIT B

CERTIFICATE OF COMPLIANCE

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

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

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

Executed as of this ______________ day of _________________, ____.

	[NAME OF SERVICER]


	By
		Name:
		Title:

EXHIBIT B

ANNEX A

TO CERTIFICATE OF COMPLIANCE

LIST OF SERVICER DEFAULTS

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

Nature of Default	Status

EXHIBIT B

EXHIBIT C

SERVICER’S CERTIFICATE

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

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

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

	Servicing Criteria	Applicable Servicing Criteria
Reference	Criteria
	General Servicing Considerations
1122(d)(1)(i)	Policies and procedures are instituted to monitor any performance or other triggers and events of default in accordance with the transaction agreements.	Applicable; assessment below.
1122(d)(1)(ii)	If any material servicing activities are outsourced to third parties, policies and procedures are instituted to monitor the third party’s performance and compliance with such servicing activities.	Not applicable; no servicing activities were outsourced.
1122(d)(1)(iii)	Any requirements in the transaction agreements to maintain a back-up servicer for pool assets are maintained.	Not applicable; documents do not provide for a back-up servicer.
1122(d)(1)(iv)	A fidelity bond and errors and omissions policy is in effect on the party participating in the servicing function throughout the reporting period in the amount of coverage required by and otherwise in accordance with the terms of the transaction agreements.	Not applicable; Qualified Rate Order imposes credit standards on Third-Party Collectors who handle customer collections and govern performance requirements of utilities.

EXHIBIT C

	Servicing Criteria	Applicable Servicing Criteria
Reference	Criteria
	Cash Collection and Administration
1122(d)(2)(i)	Payments on pool assets are deposited into the appropriate custodial bank accounts and related bank clearing accounts no more than two business days following receipt, or such other number of days specified in the transaction agreements.	Applicable; assessment below.
1122(d)(2)(ii)	Disbursements made via wire transfer on behalf of an obligor or to an investor are made only by authorized personnel.	Applicable; assessment below.
1122(d)(2)(iii)	Advances of funds or guarantees regarding collections, cash flows or distributions, and any interest or other fees charged for such advances, are made, reviewed and approved as specified in the transaction agreements.	Applicable, but no current assessment required; no advances by the Servicer are permitted under the transaction agreements.
1122(d)(2)(iv)	The related accounts for the transaction, such as cash reserve accounts or accounts established as a form of overcollateralization, are separately maintained (e.g., with respect to commingling of cash) as set forth in the transaction agreements.	Applicable, but no current assessment is required since transaction accounts are maintained by and in the name of the Indenture Trustee.
1122(d)(2)(v)	Each custodial account is maintained at a federally insured depository institution as set forth in the transaction agreements. For purposes of this criterion, “federally insured depository institution” with respect to a foreign financial institution means a foreign financial institution that meets the requirements of Rule 13k-1(b)(1) of the Securities Exchange Act.	Applicable, but no current assessment required; all “custodial accounts” are maintained by the Indenture Trustee.
1122(d)(2)(vi)	Unissued checks are safeguarded so as to prevent unauthorized access.	Not applicable; all transfers made by wire transfer.
1122(d)(2)(vii)	Reconciliations are prepared on a monthly basis for all asset-backed securities related bank accounts, including custodial accounts and related bank clearing accounts. These reconciliations are (A) mathematically accurate; (B) prepared within 30 calendar days after the bank statement cutoff date, or such other number of days specified in the transaction agreements; (C) reviewed and approved by someone other than the person who prepared the reconciliation; and (D) contain	Applicable; assessment below.

EXHIBIT C

	Servicing Criteria	Applicable Servicing Criteria
Reference	Criteria
	explanations for reconciling items. These reconciling items are resolved within 90 calendar days of their original identification, or such other number of days specified in the transaction agreements.
	Investor Remittances and Reporting
1122(d)(3)(i)	Reports to investors, including those to be filed with the Commission, are maintained in accordance with the transaction agreements and applicable Commission requirements. Specifically, such reports (A) are prepared in accordance with timeframes and other terms set forth in the transaction agreements; (B) provide information calculated in accordance with the terms specified in the transaction agreements; (C) are filed with the Commission as required by its rules and regulations; and (D) agree with investors’ or the trustee’s records as to the total unpaid principal balance and number of pool assets serviced by the Servicer.	Applicable; assessment below.
1122(d)(3)(ii)	Amounts due to investors are allocated and remitted in accordance with timeframes, distribution priority and other terms set forth in the transaction agreements.	Applicable; assessment below.
1122(d)(3)(iii)	Disbursements made to an investor are posted within two business days to the Servicer’s investor records, or such other number of days specified in the transaction agreements.	Applicable
1122(d)(3)(iv)	Amounts remitted to investors per the investor reports agree with cancelled checks, or other form of payment, or custodial bank statements.	Applicable; assessment below.
	Pool Asset Administration
1122(d)(4)(i)	Collateral or security on pool assets is maintained as required by the transaction agreements or related documents.	Applicable; assessment below.
1122(d)(4)(ii)	Pool assets and related documents are safeguarded as required by the transaction agreements.	Applicable; assessment below.
1122(d)(4)(iii)	Any additions, removals or substitutions to the asset pool are made, reviewed and approved in accordance with any conditions or requirements in the transaction agreements.	Not applicable; no removals or substitutions of Rate Stabilization Property are contemplated or allowed under the transaction documents.

EXHIBIT C

	Servicing Criteria	Applicable Servicing Criteria
Reference	Criteria
1122(d)(4)(iv)	Payments on pool assets, including any payoffs, made in accordance with the related pool asset documents are posted to the Servicer’s obligor records maintained no more than two business days after receipt, or such other number of days specified in the transaction agreements, and allocated to principal, interest or other items (e.g., escrow) in accordance with the related transaction agreements.	Applicable; assessment below.
1122(d)(4)(v)	The Servicer’s records regarding the pool assets agree with the Servicer’s records with respect to an obligor’s unpaid principal balance.	Not applicable; because underlying obligation (Qualified Rate Stabilization Charge) is not an interest bearing instrument
1122(d)(4)(vi)	Changes with respect to the terms or status of an obligor’s pool assets (e.g., loan modifications or re-agings) are made, reviewed and approved by authorized personnel in accordance with the transaction agreements and related pool asset documents.	Applicable; assessment below
1122(d)(4)(vii)	Loss mitigation or recovery actions (e.g., forbearance plans, modifications and deeds in lieu of foreclosure, foreclosures and repossessions, as applicable) are initiated, conducted and concluded in accordance with the timeframes or other requirements established by the transaction agreements.	Applicable; assessment below.
1122(d)(4)(viii)	Records documenting collection efforts are maintained during the period any pool asset is delinquent in accordance with the transaction agreements. Such records are maintained on at least a monthly basis, or such other period specified in the transaction agreements, and describe the entity’s activities in monitoring delinquent pool assets including, for example, phone calls, letters and payment rescheduling plans in cases where delinquency is deemed temporary (e.g., illness or unemployment).	Applicable, but does not require assessment since no explicit documentation requirement with respect to delinquent accounts are imposed under the transactional documents due to availability of “true-up” mechanism.
1122(d)(4)(ix)	Adjustments to interest rates or rates of return for pool assets with variable rates are computed based on the related pool asset documents.	Not applicable; Qualified Rate Stabilization Charges are not interest bearing instruments.

EXHIBIT C

	Servicing Criteria	Applicable Servicing Criteria
Reference	Criteria
1122(d)(4)(iv)	Payments on pool assets, including any payoffs, made in accordance with the related pool asset documents are posted to the Servicer’s obligor records maintained no more than two business days after receipt, or such other number of days specified in the transaction agreements, and allocated to principal, interest or other items (e.g., escrow) in accordance with the related transaction agreements.	Applicable; assessment below.
1122(d)(4)(v)	The Servicer’s records regarding the pool assets agree with the Servicer’s records with respect to an obligor’s unpaid principal balance.	Not applicable; because underlying obligation (Qualified Rate Stabilization Charge) is not an interest bearing instrument
1122(d)(4)(vi)	Changes with respect to the terms or status of an obligor’s pool assets (e.g., loan modifications or re-agings) are made, reviewed and approved by authorized personnel in accordance with the transaction agreements and related pool asset documents.	Applicable; assessment below
1122(d)(4)(vii)	Loss mitigation or recovery actions (e.g., forbearance plans, modifications and deeds in lieu of foreclosure, foreclosures and repossessions, as applicable) are initiated, conducted and concluded in accordance with the timeframes or other requirements established by the transaction agreements.	Applicable; assessment below.
1122(d)(4)(viii)	Records documenting collection efforts are maintained during the period any pool asset is delinquent in accordance with the transaction agreements. Such records are maintained on at least a monthly basis, or such other period specified in the transaction agreements, and describe the entity’s activities in monitoring delinquent pool assets including, for example, phone calls, letters and payment rescheduling plans in cases where delinquency is deemed temporary (e.g., illness or unemployment).	Applicable, but does not require assessment since no explicit documentation requirement with respect to delinquent accounts are imposed under the transactional documents due to availability of “true-up” mechanism.
1122(d)(4)(ix)	Adjustments to interest rates or rates of return for pool assets with variable rates are computed based on the related pool asset documents.	Not applicable; Qualified Rate Stabilization Charges are not interest bearing instruments.

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

EXHIBIT C

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

Executed as of this ______________ day of _________________, ____.

	BALTIMORE GAS AND ELECTRIC COMPANY


	By
		Name:
		Title:

EXHIBIT C

SCHEDULE 4.01(a)

EXPECTED AMORTIZATION SCHEDULE

OUTSTANDING PRINCIPAL BALANCE PER TRANCHE

Payment Date	Tranche A-1	Tranche A-2	Tranche A-3
Settlement Date	$284,000,000	$220,000,000	$119,200,000
4/1/2008	$250,741,286	$220,000,000	$119,200,000
10/1/2008	$225,198,598	$220,000,000	$119,200,000
4/1/2009	$198,590,708	$220,000,000	$119,200,000
10/1/2009	$171,674,318	$220,000,000	$119,200,000
4/1/2010	$143,549,922	$220,000,000	$119,200,000
10/1/2010	$115,131,815	$220,000,000	$119,200,000
4/1/2011	$85,457,334	$220,000,000	$119,200,000
10/1/2011	$55,423,848	$220,000,000	$119,200,000
4/1/2012	$24,142,900	$220,000,000	$119,200,000
10/1/2012	$0	$212,419,156	$119,200,000
4/1/2013	$0	$179,418,862	$119,200,000
10/1/2013	$0	$145,855,662	$119,200,000
4/1/2014	$0	$110,970,180	$119,200,000
10/1/2014	$0	$75,433,398	$119,200,000
4/1/2015	$0	$38,549,788	$119,200,000
10/1/2015	$0	$925,060	$119,200,000
4/1/2016	$0	$0	$81,127,235
10/1/2016	$0	$0	$41,269,298
4/1/2017	$0	$0	$0

SCHEDULE 4.01(A)

ANNEX I

The Servicer agrees to comply with the following servicing procedures:

SECTION 1. DEFINITIONS.

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

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

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

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

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

SECTION 2. DATA ACQUISITION.

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

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

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

ANNEX I

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

SECTION 3. USAGE AND BILL CALCULATION.

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

SECTION 4. BILLING.

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

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

(b) Format.

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

ANNEX I

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

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

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

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

SECTION 5. CUSTOMER SERVICE FUNCTIONS.

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

SECTION 6. COLLECTIONS; PAYMENT PROCESSING; REMITTANCE.

(a) Collection Efforts, Policies, Procedures.

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

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

ANNEX I

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

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

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

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

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

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

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

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

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

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

ANNEX I

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

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

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

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

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

(d) Investment of QRSC Payments Received.

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

(e) Calculation Updates.

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

ANNEX I

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

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

(f) Remittances.

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

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

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

ANNEX I

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, each of the Depositor and the Issuing Entity has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Date: July 5, 2007		BALTIMORE GAS AND ELECTRIC COMPANY —————————————————— (Co-Registrant and Depositor) /s/ Charles A. Berardesco
		—————————————————— Charles A. Berardesco Corporate Secretary
		RSB BONDCO LLC —————————————————— (Co-Registrant and Issuing Entity) /s/ Charles A. Berardesco
		—————————————————— Charles A. Berardesco Secretary

Exhibit No.	Description
1.1	Underwriting Agreement dated June 22, 2007, by and among the Issuing Entity, BGE and Barclays Capital Inc., Citigroup Global Markets Inc., Greenwich Capital Markets, Inc. and Morgan Stanley & Co. Incorporated as underwriters.
4.1	Indenture dated as of June 29, 2007, by and between the Issuing Entity and Deutsche Bank Trust Company Americas, as indenture trustee and securities intermediary.
4.2	Series Supplement dated as of June 29, 2007, by and between the Issuing Entity and the Indenture Trustee.
5.1	Opinion of Thelen Reid Brown Raysman & Steiner LLP with respect to legality of the Rate Stabilization Bonds.
5.2	Opinion of Richards, Layton & Finger, P.A. with respect to due authorization of the Rate Stabilization Bonds by the Issuing Entity.
8.1	Opinion of Thelen Reid Brown Raysman & Steiner LLP with respect to federal tax matters (included in Exhibit 5.1).
8.2	Opinion of Miles and Stockbridge PC with respect to state tax matters.
10.1	Rate Stabilization Property Purchase and Sale Agreement dated as of June 29, 2007, by and between the Issuing Entity and BGE, as seller.
10.2	Rate Stabilization Property Servicing Agreement dated as of June 29, 2007, by and between the Issuing Entity and BGE, as servicer.
10.3	Administration Agreement dated as of June 29, 2007, by and between the Issuing Entity and BGE, as administrator.
10.4	Amended and Restated Limited Liability Company Agreement of RSB BondCo LLC dated as of June 29, 2007.
23.1	Consent of Thelen Reid Brown Raysman & Steiner LLP (contained in its opinion filed as Exhibit 5.1).
23.2	Consent of Thelen Reid Brown Raysman & Steiner LLP (contained in its opinion filed as Exhibit 8.1).
24.1	Consent of Richards, Layton & Finger, P.A. (contained in its opinion filed as Exhibit 5.2).
24.2	Consent of Miles and Stockbridge PC (contained in its opinion filed as Exhibit 8.2).

ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.01. Definitions.	2
SECTION 1.02. Incorporation by Reference of Trust Indenture Act.	2
SECTION 1.03. Rules of Construction.	2

ARTICLE II
THE RATE STABILIZATION BONDS

SECTION 2.01. Form.	3
SECTION 2.02. Denominations; Rate Stabilization Bonds Issuable in Series.	3
SECTION 2.03. Execution, Authentication and Delivery.	5
SECTION 2.04. Temporary Rate Stabilization Bonds.	5
SECTION 2.05. Registration; Registration of Transfer and Exchange of Rate Stabilization Bonds.	5
SECTION 2.06. Mutilated, Destroyed, Lost or Stolen Rate Stabilization Bonds.	7
SECTION 2.07. Persons Deemed Owner.	8
SECTION 2.08. Payment of Principal, Premium, if any, and Interest; Interest on Overdue Principal; Principal, Premium, if any, and Interest Rights Preserved.	8
SECTION 2.09. Cancellation.	9
SECTION 2.10. Outstanding Amount; Authentication and Delivery of Rate Stabilization Bonds.	10
SECTION 2.11. Book-Entry Rate Stabilization Bonds.	19
SECTION 2.12. Notices to Clearing Agency.	20
SECTION 2.13. Definitive Rate Stabilization Bonds.	20
SECTION 2.14. CUSIP Number.	21
SECTION 2.15. Letter of Representations.	21
SECTION 2.16. Special Terms Applicable to Subsequent Transfers of Certain Rate Stabilization Bonds.	21
SECTION 2.17. Tax Treatment.	22
SECTION 2.18. State Pledge.	22
SECTION 2.19. Security Interests.	23

ARTICLE III
COVENANTS

SECTION 3.01. Payment of Principal, Premium, if any, and Interest.	24
SECTION 3.02. Maintenance of Office or Agency.	24
SECTION 3.03. Money for Payments To Be Held in Trust.	25
SECTION 3.04. Existence.	26

SECTION 5.13. Undertaking for Costs.	50
SECTION 5.14. Waiver of Stay or Extension Laws.	51
SECTION 5.15. Action on Rate Stabilization Bonds.	51

ARTICLE VI
THE INDENTURE TRUSTEE

SECTION 6.01. Duties of Indenture Trustee.	51
SECTION 6.02. Rights of Indenture Trustee.	53
SECTION 6.03. Individual Rights of Indenture Trustee.	54
SECTION 6.04. Indenture Trustee’s Disclaimer.	54
SECTION 6.05. Notice of Defaults.	54
SECTION 6.06. Reports by Indenture Trustee to Holders.	55
SECTION 6.07. Compensation and Indemnity.	56
SECTION 6.08. Replacement of Indenture Trustee and Securities Intermediary.	56
SECTION 6.09. Successor Indenture Trustee by Merger.	58
SECTION 6.10. Appointment of Co-Trustee or Separate Trustee.	58
SECTION 6.11. Eligibility; Disqualification.	59
SECTION 6.12. Preferential Collection of Claims Against Issuer.	59
SECTION 6.13. Representations and Warranties of Indenture Trustee.	59
SECTION 6.14. Annual Report by Independent Registered Public Accountants.	60
SECTION 6.15. Custody of Rate Stabilization Bond Collateral.	60

ARTICLE VII
HOLDERS’ LISTS AND REPORTS

SECTION 7.01. Issuer To Furnish Indenture Trustee Names and Addresses of Holders.	61
SECTION 7.02. Preservation of Information; Communications to Holders.	61
SECTION 7.03. Reports by Issuer.	61
SECTION 7.04. Reports by Indenture Trustee.	62

ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES

SECTION 8.01. Collection of Money.	62
SECTION 8.02. Collection Accounts and TPC Deposit Accounts.	62
SECTION 8.03. General Provisions Regarding the Collection Accounts.	67
SECTION 8.04. Release of Rate Stabilization Bond Collateral.	68
SECTION 8.05. Opinion of Counsel.	68
SECTION 8.06. Reports by Independent Registered Public Accountants.	69


ARTICLE IX
SUPPLEMENTAL INDENTURES

SECTION 9.01. Supplemental Indentures Without Consent of Holders.	69
SECTION 9.02. Supplemental Indentures with Consent of Holders.	71
SECTION 9.03. Execution of Supplemental Indentures.	72
SECTION 9.04. Effect of Supplemental Indenture.	72
SECTION 9.05. Conformity with Trust Indenture Act.	73
SECTION 9.06. Reference in Rate Stabilization Bonds to Supplemental Indentures.	73

ARTICLE X
MISCELLANEOUS

SECTION 10.01. Compliance Certificates and Opinions, etc.	73
SECTION 10.02. Form of Documents Delivered to Indenture Trustee.	75
SECTION 10.03. Acts of Holders.	75
SECTION 10.04. Notices, etc., to Indenture Trustee, Issuer and Rating Agencies.	76
SECTION 10.05. Notices to Holders; Waiver.	77
SECTION 10.06. Conflict with Trust Indenture Act.	77
SECTION 10.07. Effect of Headings and Table of Contents.	78
SECTION 10.08. Successors and Assigns.	78
SECTION 10.09. Severability.	78
SECTION 10.10. Benefits of Indenture.	78
SECTION 10.11. Legal Holidays.	78
SECTION 10.12. GOVERNING LAW.	78
SECTION 10.13. Counterparts.	78
SECTION 10.14. Recording of Indenture.	79
SECTION 10.15. Issuer Obligation.	79
SECTION 10.16. No Recourse to Issuer.	79
SECTION 10.17. Basic Documents.	79
SECTION 10.18. No Petition.	79

SECTION 3.05. Protection of Rate Stabilization Bond Collateral.	26
SECTION 3.06. Opinions as to Rate Stabilization Bond Collateral.	27
SECTION 3.07. Performance of Obligations; Servicing; SEC Filings.	28
SECTION 3.08. Certain Negative Covenants.	29
SECTION 3.09. Annual Statement as to Compliance.	30
SECTION 3.10. Issuer May Consolidate, etc., Only on Certain Terms.	31
SECTION 3.11. Successor or Transferee.	33
SECTION 3.12. No Other Business.	33
SECTION 3.13. No Borrowing.	33
SECTION 3.14. Servicer’s Obligations.	33
SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities.	33
SECTION 3.16. Capital Expenditures.	33
SECTION 3.17. Restricted Payments.	33
SECTION 3.18. Notice of Events of Default.	34
SECTION 3.19. Further Instruments and Acts.	34
SECTION 3.20. Purchase of Subsequent Rate Stabilization Property.	34
SECTION 3.21. Inspection.	35
SECTION 3.22. Sale Agreement, Servicing Agreement and Administration Agreement Covenants.	36
SECTION 3.23. Taxes.	38

ARTICLE IV
SATISFACTION AND DISCHARGE; DEFEASANCE

SECTION 4.01. Satisfaction and Discharge of Indenture; Defeasance.	38
SECTION 4.02. Conditions to Defeasance.	40
SECTION 4.03. Application of Trust Money.	41
SECTION 4.04. Repayment of Moneys Held by Paying Agent.	42

ARTICLE V
REMEDIES

SECTION 5.01. Events of Default.	42
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment.	43
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by Indenture Trustee.	44
SECTION 5.04. Remedies; Priorities.	46
SECTION 5.05. Optional Preservation of the Rate Stabilization Bond Collateral.	47
SECTION 5.06. Limitation of Suits.	48
SECTION 5.07. Unconditional Rights of Holders To Receive Principal, Premium, if any, and Interest.	49
SECTION 5.08. Restoration of Rights and Remedies.	49
SECTION 5.09. Rights and Remedies Cumulative.	49
SECTION 5.10. Delay or Omission Not a Waiver.	49
SECTION 5.11. Control by Holders.	49
SECTION 5.12. Waiver of Past Defaults.	50

TIA Section		Indenture Section
310	(a)(1)	6.11
	(a)(2)	6.11
	(a)(3)	6.10(b)(i)
	(a)(4)	N.A.
	(a)(5)	6.11
	(b)	6.12
	(c)	N.A.
311	(a)	6.13
	(b)	6.13
	(c)	N.A.
312	(a)	7.01 and 7.02
	(b)	7.02
	(c)	7.02
313	(a)	7.04
	(b)(1)	7.04
	(b)(2)	7.04
	(c)	7.04
	(d)	7.04
314	(a)	3.09, 4.01, and 7.03(a)
	(b)	3.06 and 4.01
	(c)(1)	2.10, 4.01 and 11.01(a)
	(c)(2)	2.10, 4.01 and 11.01(a)
	(c)(3)	2.10 4.01 and 11.01(a)
	(d)	2.10, 8.04(b) and 10.01(b)
	(e)	10.01(a)
	(f)	10.01(a)

315	(a)	6.01(b)(i)(ii)
	(b)	6.05
	(c)	6.01 (a)
	(d)	6.01(c)(i)-(iii)
	(e)	5.13
316	(a) (last sentence)	Appendix A – definition of “Outstanding”
	(a)(1)(A)	5.11
	(a)(1)(B)	5.12
	(a)(2)	Omitted
	(b)	5.07
	(c)	Appendix A – definition of “Record Date”
317	(a)(1)	5.03(a)
	(a)(2)	5.03(c)(iv)
	(b)	3.03
318	(a)	10.07

	DEUTSCHE BANK TRUST COMPANY AMERICAS, not in its individual capacity but solely as Indenture Trustee and as Securities Intermediary
	By:	/s/ Eileen Hughes
		Name: Eileen Hughes Title: Vice President
	By:	/s/ Louis Bodi
		Name: Louis Bodi Title: Vice President

	/s/ Holly Anne Hertsgaard
	Notary Public
	My commission expires: 2/1/08

	/s/ Winsome Ferguson
	Notary Public
	My commission expires: March 3, 2011

INTEREST RATE	ORIGINAL PRINCIPAL AMOUNT	FINAL MATURITY DATE

	DEUTSCHE BANK TRUST COMPANY AMERICAS, not in its individual capacity but solely as Indenture Trustee and as Securities Intermediary
	By:
		Name: Title:
	By:
		Name: Title:

TEN COM	as tenants in common
TEN ENT	as tenants by the entireties
JT TEN	as joint tenants with right of survivorship and not as tenants in common
UNIF GIFT MIN ACT	___________________ Custodian ______________________ (Custodian) (minor)
	Under Uniform Gifts to Minor Act (____________________) (State)

Tranche	Initial Principal Amount	Rate Stabilization Bond Interest Rate	Scheduled Final Payment Date	Final Maturity Date
Tranche A-1	$284,000,000	5.47%	10/1/2012	10/1/2014
Tranche A-2	$220,000,000	5.72%	4/1/2016	4/1/2018
Tranche A-3	$119,200,000	5.82%	4/1/2017	6/28/2019

	RSB BONDCO LLC, as Issuer
	By:
		Name: Title:

	DEUTSCHE BANK TRUST COMPANY AMERICAS, not in its individual capacity but solely in its capacity as Indenture Trustee
	By:
		Name: Title:
	By:
		Name: Title:

ARTICLE I
DEFINITIONS

SECTION 1.01.	Definitions	1
SECTION 1.02.	Other Definitional Provisions.	1

ARTICLE II
CONVEYANCE OF RATE STABILIZATION PROPERTY

SECTION 2.01.	Conveyance of Initial Rate Stabilization Property	2
SECTION 2.02.	Conveyance of Subsequent Rate Stabilization Property	2
SECTION 2.03.	Conditions to Conveyance of Rate Stabilization Property	3

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER

SECTION 3.01.	Organization and Good Standing	4
SECTION 3.02.	Due Qualification	5
SECTION 3.03.	Power and Authority	5
SECTION 3.04.	Binding Obligation	5
SECTION 3.05.	No Violation	5
SECTION 3.06.	No Proceedings	5
SECTION 3.07.	Approvals	6
SECTION 3.08.	The Rate Stabilization Property.	6
SECTION 3.09.	Limitations on Representations and Warranties	10

ARTICLE IV
COVENANTS OF THE SELLER

SECTION 4.01.	Existence	10
SECTION 4.02.	No Liens	10
SECTION 4.03.	Delivery of Collections	10
SECTION 4.04.	Notice of Liens	11
SECTION 4.05.	Compliance with Law	11
SECTION 4.06.	Covenants Related to Rate Stabilization Bonds and Rate Stabilization Property.	11
SECTION 4.07.	Protection of Title	12
SECTION 4.08.	Nonpetition Covenants	13
SECTION 4.09.	Taxes	13
SECTION 4.10.	Issuance Advice Letter	13
SECTION 4.11.	Tariff	13

SECTION 4.12.	Notice of Breach to Rating Agencies, Etc	14
SECTION 4.13.	Use of Proceeds	14
SECTION 4.14.	Further Assurances	14

ARTICLE V
THE SELLER

SECTION 5.01.	Liability of Seller; Indemnities.	14
SECTION 5.02.	Merger, Conversion or Consolidation of, or Assumption of the Obligations of, Seller	16
SECTION 5.03.	Limitation on Liability of Seller and Others	17

ARTICLE VI
MISCELLANEOUS PROVISIONS

SECTION 6.01.	Amendment	17
SECTION 6.02.	Reserved	17
SECTION 6.03.	Notices	17
SECTION 6.04.	Assignment	18
SECTION 6.05.	Limitations on Rights of Third Parties	18
SECTION 6.06.	Severability	18
SECTION 6.07.	Separate Counterparts	19
SECTION 6.08.	Headings	19
SECTION 6.09.	Governing Law	19
SECTION 6.10.	Assignment to Indenture Trustee	19
SECTION 6.11.	Limitation of Liability	19
SECTION 6.12.	Waivers	19

	RSB BONDCO LLC
	By:
		Name: Title:

	BALTIMORE GAS AND ELECTRIC COMPANY
	By:
		Name: Title:

	ARTICLE I DEFINITIONS

SECTION 1.01.	Definitions.	1

	ARTICLE II APPOINTMENT AND AUTHORIZATION

SECTION 2.01.	Appointment of Servicer; Acceptance of Appointment.	2
SECTION 2.02.	Authorization.	2
SECTION 2.03.	Dominion and Control Over the Rate Stabilization Property.	2

	ARTICLE III ROLE OF SERVICER

SECTION 3.01.	Duties of Servicer.	3
SECTION 3.02.	Servicing and Maintenance Standards.	5
SECTION 3.03.	Annual Reports on Compliance with Regulation AB.	6
SECTION 3.04.	Annual Report by Independent Registered Public Accountants.	6
SECTION 3.05.	Monitoring of Third-Party Collectors.	7

	ARTICLE IV SERVICES RELATED TO TRUE-UP ADJUSTMENTS

SECTION 4.01.	True-Up Adjustments.	9
SECTION 4.02.	Limitation of Liability.	14

	ARTICLE V THE RATE STABILIZATION PROPERTY

SECTION 5.01.	Custody of Rate Stabilization Property Records.	14
SECTION 5.02.	Duties of Servicer as Custodian.	15
SECTION 5.03.	Effective Period and Termination.	16

	ARTICLE VI THE SERVICER

SECTION 6.01.	Representations and Warranties of Servicer.	16
SECTION 6.02.	Binding Effect of Servicing Obligations.	18
SECTION 6.03.	Limitation on Liability of Servicer and Others.	19
SECTION 6.04.	BGE Not to Resign as Servicer.	20
SECTION 6.05.	Servicing Compensation.	20
SECTION 6.06.	Compliance with Applicable Requirements of Law.	21

SECTION 6.07.	Access to Certain Records and Information Regarding Rate Stabilization Property.	21
SECTION 6.08.	Appointments.	22
SECTION 6.09.	No Servicer Advances.	22
SECTION 6.10.	Remittances.	22
SECTION 6.11.	Maintenance of Operations.	23

	ARTICLE VII DEFAULT

SECTION 7.01.	Servicer Default.	23
SECTION 7.02.	Appointment of Successor.	25
SECTION 7.03.	Waiver of Past Defaults.	26
SECTION 7.04.	Notice of Servicer Default.	26
SECTION 7.05.	Cooperation with Successor.	26

	ARTICLE VIII INDEMNIFICATION

SECTION 8.01.	Servicer’s Indemnification; Release of Claims.	26

	ARTICLE IX MISCELLANEOUS PROVISIONS

SECTION 9.01.	Amendment.	28
SECTION 9.02.	Maintenance of Accounts and Records.	29
SECTION 9.03.	Notices.	29
SECTION 9.04.	Assignment.	30
SECTION 9.05.	Limitations on Rights of Others.	30
SECTION 9.06.	Severability.	30
SECTION 9.07.	Separate Counterparts.	30
SECTION 9.08.	Headings.	30
SECTION 9.09.	GOVERNING LAW.	31
SECTION 9.10.	Assignment to Indenture Trustee.	31
SECTION 9.11.	Nonpetition Covenants.	31
SECTION 9.12.	Limitation of Liability.	31

	EXHIBITS AND SCHEDULES

Exhibit A	Form of Monthly Servicer’s Certificate
Exhibit B	Form of Certificate of Compliance
Exhibit C	Form of Servicer Certificate
Schedule 4.01(a)	Expected Amortization Schedule

	ANNEXES

Annex I	Servicing Procedures

ARTICLE I GENERAL PROVISIONS

SECTION 1.01 Definitions	1
SECTION 1.02 Sole Member; Registered Office and Agent	2
SECTION 1.03 Other Offices	3
SECTION 1.04 Name	3
SECTION 1.05 Purpose; Nature of Business Permitted; Powers	3
SECTION 1.06 Limited Liability Company Agreement; Certificate of Formation	5
SECTION 1.07 Separate Existence	5
SECTION 1.08 Limitation on Certain Activities	9
SECTION 1.09 No State Law Partnership	10

ARTICLE II CAPITAL

SECTION 2.01 Initial Capital	10
SECTION 2.02 Additional Capital Contributions	10
SECTION 2.03 Capital Account	11
SECTION 2.04 Interest	11

ARTICLE III ALLOCATIONS; BOOKS

SECTION 3.01 Allocations of Income and Loss.	11
SECTION 3.02 Company to be Disregarded for Tax Purposes	12
SECTION 3.03 Books of Account	12
SECTION 3.04 Access to Accounting Records	12
SECTION 3.05 Annual Tax Information	12
SECTION 3.06 Internal Revenue Service Communications	12

ARTICLE IV MEMBER

SECTION 4.01 Powers	13
SECTION 4.02 Reimbursement of Member Expenses	14
SECTION 4.03 Other Ventures	14
SECTION 4.04 Actions by the Member	14

ARTICLE V OFFICERS

SECTION 5.01 Designation; Term; Qualifications	14
SECTION 5.02 Removal and Resignation	16
SECTION 5.03 Vacancies	16
SECTION 5.04 Compensation	16

ARTICLE VI MEMBERSHIP INTEREST

SECTION 6.01 General	16
SECTION 6.02 Distributions	16
SECTION 6.03 Rights on Liquidation, Dissolution or Winding Up	16
SECTION 6.04 Redemption	16
SECTION 6.05 Voting Rights	17
SECTION 6.06 Transfer of Membership Interests	17
SECTION 6.07 Admission of Transferee as Member	17

ARTICLE VII MANAGERS

SECTION 7.01 Managers	18
SECTION 7.02 Powers of the Managers	19
SECTION 7.03 Reimbursement of Expenses	19
SECTION 7.04 Removal of Managers	19
SECTION 7.05 Resignation of Manager	19
SECTION 7.06 Vacancies	20
SECTION 7.07 Meetings of the Managers	20
SECTION 7.08 Electronic Communications	20
SECTION 7.09 Committees of Managers.	20
SECTION 7.10 Limitations on Independent Managers	21

ARTICLE VIII EXPENSES

SECTION 8.01 Expenses	21

ARTICLE IX PERPETUAL EXISTENCE; DISSOLUTION, LIQUIDATION AND WINDING-UP

SECTION 9.01 Existence	22
SECTION 9.02 Dissolution	22
SECTION 9.03 Accounting	22
SECTION 9.04 Certificate of Cancellation	23
SECTION 9.05 Winding Up	23
SECTION 9.06 Order of Payment of Liabilities Upon Dissolution	23
SECTION 9.07 Limitations on Payments Made in Dissolution	23
SECTION 9.08 Limitation on Liability	23

ARTICLE X INDEMNIFICATION

SECTION 10.01 Indemnity	23
SECTION 10.02 Indemnity for Actions By or In the Right of the Company	24
SECTION 10.03 Indemnity If Successful	24
SECTION 10.04 Expenses	24
SECTION 10.05 Advance Payment of Expenses	25
SECTION 10.06 Other Arrangements Not Excluded	25

ARTICLE XI MISCELLANEOUS PROVISIONS

SECTION 11.01 No Bankruptcy Petition; Dissolution	26
SECTION 11.02 Amendments	26
SECTION 11.04 Governing Law	27
SECTION 11.05 Headings	27
SECTION 11.06 Severability	27
SECTION 11.07 Assigns	27
SECTION 11.08 Enforcement by Independent Managers	27
SECTION 11.09 Waiver of Partition; Nature of Interest	27

Schedule A	Schedule of Capital Contribution of Member
Schedule B	Managers
Schedule C	Officers
Exhibit A	Management Agreement

ACKNOWLEDGED AND AGREED:

Michelle A. Dreyer, as Independent Manager
/s/ Michelle A. Dreyer

Suzanne M. Hay, as Independent Manager
/s/ Suzanne M. Hay

MEMBER’S NAME	INITIAL CAPITAL CONTRIBUTION		MEMBERSHIP INTEREST PERCENTAGE
Baltimore Gas and Electric Company	Expenses Paid by Member on behalf of the Company as of June 22, 2007	$2,143,109.18	100%
	Cash Contribution by Member to Capital Account	$1,770,100.00
	Total Initial Capital Contribution by Member	$3,913,209.18

Name	Office
Kenneth W. Defontes, Jr.	President
John R. Collins	Vice President and Chief Financial Officer
Charles A. Berardesco	Secretary
Jeanne M. Blondia	Treasurer


	Kenneth W. DeFontes, Jr.

	Jeanne M. Blondia

	Mark D. Case

	Michelle A. Dreyer

	Suzanne M. Hay