THIS
TERMINATION AND RELEASE AGREEMENT (this “
Agreement ”) is made and entered into this
October 24, 2006 , by and among FPL GROUP,
INC. , a Florida corporation (“ FPL Group
”), CONSTELLATION ENERGY GROUP, INC. , a
Maryland corporation (“ Constellation ”), and
CF MERGER CORPORATION , a Florida corporation and
a wholly owned subsidiary of Constellation (“ Merger
Sub ” and together with FPL Group and Constellation, the
“ Parties ” and each a “ Party
”).
W I T N E S S E T H:
WHEREAS, FPL Group, Constellation and Merger Sub
entered into that certain Agreement and Plan of Merger, dated as of
December 18, 2005 (the “ Merger Agreement ”,
terms not otherwise defined herein shall have the respective
meanings ascribed to them in the Merger Agreement to the extent
defined therein);
WHEREAS, in connection with the negotiations
surrounding the Merger Agreement, FPL Group and Constellation
entered into a Confidentiality Agreement, dated as of September 6,
2005 (the “ Confidentiality Agreement ”);
WHEREAS, Constellation requested that FPL Group
agree to terminate the Merger Agreement pursuant to Section 7.01(a)
of the Merger Agreement, which provides that the Merger Agreement
may be terminated at any time prior to the Effective Time by mutual
written consent of FPL Group, Constellation and Merger Sub;
WHEREAS, FPL Group, on and subject to the terms
and conditions of this Agreement, has agreed to such request by
Constellation; and
WHEREAS, the boards of directors of each of FPL
Group, Constellation and Merger Sub have determined to terminate
the Merger Agreement and release each other from all duties,
rights, claims, obligations and liabilities arising from, in
connection with, or relating to, the Merger Agreement, in each case
on the terms and subject to the conditions set forth herein.
NOW,
THEREFORE, in consideration of the covenants and
agreements herein set forth and for other good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, the Parties agree as follows:
1.
Termination of Merger Agreement . Effective immediately, FPL
Group, Constellation and Merger Sub hereby abandon the Merger and
all other transactions contemplated by the Merger Agreement and
mutually terminate the Merger Agreement pursuant to Section 7.01(a)
thereof, including, notwithstanding the provisions of Section 7.02
thereof, Section 5.10 and Article VIII of the Merger Agreement,
none of which provisions shall survive termination of the Merger
Agreement hereunder. Notwithstanding anything to the contrary
contained in the Merger Agreement, no Released Person (as defined
herein) shall have any liability or obligation under the Merger
Agreement, including without limitation, as a result of any action
or failure to act in connection with the Merger Agreement.
2.
Publicity; Confidentiality Agreement . (a) FPL Group and
Constellation shall issue a joint press release in the form, and
containing the contents, of Exhibit A to this Agreement
announcing the transactions contemplated by this Agreement at 8:00
a.m. (New York time) on the first Business Day immediately
following the execution and delivery hereof.
(b) The
Confidentiality Agreement shall remain in full force and effect in
accordance with its terms, except for Section 3 thereof, which
shall be deemed terminated as of the date hereof, and except as
expressly amended by the third sentence of this Section 2(b). In
addition, all information exchanged pursuant to Section 5.04(a) of
the Merger Agreement shall continue to be subject to the
Confidentiality Agreement. Section 8 of the Confidentiality
Agreement is hereby amended so that (i) the period of two years
referenced in the third sentence of such Section 8 shall be the
period of two years from the date of this Agreement and (ii) the
term “Key Employee” shall mean any employee whose total
annual compensation is in excess of $200,000.
3. Fees and
Expenses . (a) No Party shall pay a termination fee to the
other Party under the Merger Agreement. Each Party shall bear its
own costs and expenses heretofore or hereafter incurred by each
Party in connection with or relating to this Agreement and the
Merger Agreement and the transactions contemplated hereby and
thereby; provided , however , that each of FPL Group
and Constellation shall bear and pay one-half of the costs and
expenses incurred in connection with (y) the financial printer and
SEC filing fees in connection with the Form S-4 and the Joint Proxy
Statement (it being understood that if thereafter a Party is able
to and does apply any such shared SEC filing fees to the fees
payable in connection with a subsequent SEC filing, that Party will
promptly upon the application of such fees to the subsequent filing
reimburse the other Party for the amount of the SEC filing fees in
connection with the Form S-4 and the Joint Proxy Statement borne by
such other Party pursuant to this Section 3(a)(y)) and (z) the
filing fees and economic consultant fees in connection with the
premerger notification and report forms under the HSR Act and
economic consultant fees in connection with the FERC
application.
(b) In the
event that, on or prior to September 30, 2007, Constellation (i)
consummates a Constellation Transaction (as defined below) or (ii)
publicly announces its entry into a letter of intent, agreement in
principle, acquisition agreement, joint venture agreement,
partnership agreement or other agreement (other than a
confidentiality or standstill agreement) with respect to a
Constellation Transaction, then, upon the first of such events to
occur, Constellation shall immediately pay FPL Group the
Constellation Fee (as defined below), which shall be payable by
wire transfer of immediately available funds to an account
specified in writing by FPL Group for such payment. For purposes of
this Agreement, “Constellation Fee” means four hundred
twenty-five million dollars ($425,000,000) if the event giving rise
to Constellation’s obligation to make the payment to FPL
Group occurs on or before June 30, 2007, and two hundred ten
million dollars ($210,000,000) if such event occurs on or after
July 1, 2007 but no later than September 30, 2007. For purposes of
this Agreement, “Constellation Transaction” means (i)
any merger (including any triangular merger), consolidation, share
exchange, recapitalization, liquidation, dissolution, business
combination or similar transaction involving Constellation or any
subsidiary of Constellation owning, operating or controlling a
Constellation Material Business (as defined below) which, at
consummation, results in any third party owning 35% or more of the
voting securities of Constellation (or, if Constellation shall not
survive as the ultimate parent company, then of the ultimate parent
company resulting from such transaction) or any third party owning,
directly or indirectly, 35% or more of any class of voting
securities of any such subsidiary, (ii) any direct or indirect
acquisition or purchase by a third party of a business or
businesses (a “Constellation Material Business”) that
constitutes 35% or more of the net revenues, net income or the
assets (including equity securities) of
