EXHIBIT 10.2
CL&P FUNDING LLC,
as Note Issuer
and
THE CONNECTICUT LIGHT AND POWER COMPANY, as Servicer
TRANSITION PROPERTY SERVICING AGREEMENT
Dated as of March 30, 2001
ARTICLE 1 DEFINITIONS
Section 1.01. Definitions
Section 1.02. Other Definitional Provisions
ARTICLE 2 APPOINTMENT AND AUTHORIZATION
Section 2.01. Appointment of Servicer; Acceptance of Appointment
Section 2.02. Authorization
Section 2.03. Dominion and Control Over the Transition Property
ARTICLE 3 BILLING SERVICES
Section 3.01. Duties of Servicer
Section 3.02. Servicing and Maintenance Standards
Section 3.03. Certificate of Compliance
Section 3.04. Annual Report by Independent Public Accountants
ARTICLE 4 SERVICES RELATED TO PERIODIC ADJUSTMENTS; REMITTANCES
Section 4.01. Periodic Adjustments
Section 4.02. Limitation of Liability
Section 4.03. Remittances
ARTICLE 5 THE TRANSITION PROPERTY
Section 5.01. Custody of Transition Property Records
Section 5.02. Duties of Servicer as Custodian
Section 5.03. Instructions; Authority to Act
Section 5.04. Effective Period and Termination
Section 5.05. Monitoring of Third-Party Suppliers
Section 5.06. Monitoring and Collecting Exit Charges
ARTICLE 6 THE SERVICER
Section 6.01. Representations and Warranties of Servicer
Section 6.02. Indemnities of Servicer
Section 6.03. Limitation on Liability of Servicer and Others
Section 6.04. Merger or Consolidation of, or Assumption of the Obligations
of, Servicer
Section 6.05. The Connecticut Light and Power Company Not to Resign
as Servicer
Section 6.06. Servicing Compensation
Section 6.07. Compliance with Applicable Law
Section 6.08. Access to Certain Records and Information Regarding
Transition Property
Section 6.09. Appointments
Section 6.10. No Servicer Advances
Section 6.11. Maintenance of Operations
ARTICLE 7 DEFAULT
Section 7.01. Servicer Default
Section 7.02. Appointment of Successor
Section 7.03. Waiver of Past Defaults
Section 7.04. Notice of Servicer Default
Section 7.05. Inter-Creditor Agreement
ARTICLE 8 MISCELLANEOUS PROVISIONS
Section 8.01. Amewndment
Section 8.02. Maintenance of Accounts and Records
Section 8.03. Notices
Section 8.04. Assignment
Section 8.05. Limitations on Rights of Third Parties
Section 8.06. Severability
Section 8.07. Separate Counterparts
Section 8.08. Headings
Section 8.09. Governing Law
Section 8.10. Assignment to Note Trustee
Section 8.11. Nonpetition Covenants
This TRANSITION PROPERTY SERVICING AGREEMENT, dated as of March 30,
2001, is between CL&P Funding LLC, a Delaware limited liability company
(together with any successor thereto permitted under the Note Indenture, as
hereinafter defined, the "Note Issuer"), and The Connecticut Light and Power
Company, a Connecticut corporation.
RECITALS
WHEREAS, pursuant to the Statute and the Financing Order, the Seller and
the Note Issuer are concurrently entering into the Sale Agreement pursuant to
which the Seller is selling to the Note Issuer the Transition Property
created pursuant to the Statute and the Financing Order.
WHEREAS, in connection with its ownership of the Transition Property and
in order to collect the RRB Charge, the Note Issuer desires to engage the
Servicer to carry out the functions described herein. The Servicer currently
performs similar functions for itself with respect to its own charges to its
customers and for others. In addition, the Note Issuer desires to engage the
Servicer to act on its behalf in obtaining Periodic Adjustments from the
DPUC. The Servicer desires to perform all of these activities on behalf of
the Note Issuer.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.01. Definitions. Whenever used in this Agreement, the
following words and phrases shall have the following meanings:
"Advice Letter" means any filing made with the DPUC by the Servicer on
behalf of the Note Issuer to set or adjust the RRB Charge, including the
Issuance Advice Letter, a Routine Annual True-Up Letter, a Routine True-Up
Letter or a Non-Routine True-Up Letter.
"Agreement" means this Transition Property Servicing Agreement, together
with all Exhibits, Schedules and Annexes hereto, as the same may be amended
and supplemented from time to time.
"Annual Accountant's Report" has the meaning set forth in Section 3.04.
"Applicable TPS" means, with respect to each customer, the TPS, if any,
billing the RRB Charge to that customer.
"Bills" means each of the regular monthly bills, summary bills and other
bills issued to customers or TPSs by The Connecticut Light and Power Company
on its own behalf and in its capacity as Servicer.
"Certificate of Compliance" has the meaning set forth in Section 3.03.
"Closing Date" means March 30, 2001.
"CTA" means the "competitive transition assessment" as defined in the
Statute.
"Declaration of Trust" means the Declaration of Trust dated as of March
23, 2001 by First Union Trust Company, National Association, a national
banking association, as Delaware Trustee, and the Finance Authority, as the
same may be amended and supplemented from time to time.
"DPUC" means the Connecticut Department of Public Utility Control and
any successor thereto.
"DPUC Regulations" means all regulations, rules, tariffs and laws
applicable to public utilities or TPSs, as the case may be, and promulgated
by, enforced by or otherwise within the jurisdiction of the DPUC.
"Expected Amortization Schedule" means Schedule 4.01(a) hereto.
"Finance Authority" means the State of Connecticut, acting through the
office of the State Treasurer.
"Financing Order" means the order of the DPUC, issued on November 8,
2000 and supplemented on December 12, 2000 and March 12, 2001 in DPUC-00-05-
01.
"Indemnified Person" has the meaning assigned to such term in Section
6.02.
"Insolvency Event" means, with respect to a specified Person, (a) the
filing of a decree or order for relief by a court having jurisdiction in the
premises in respect of such Person or any substantial part of its property in
an involuntary case under any applicable Federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official for such Person or for any substantial part of its property, or
ordering the winding-up or liquidation of such Person's affairs, and such
decree or order shall remain unstayed and in effect for a period of 60
consecutive days; or (b) the commencement by such Person of a voluntary case
under any applicable Federal or state bankruptcy, insolvency or other similar
law now or hereafter in effect, or the consent by such Person to the entry of
an order for relief in an involuntary case under any such law, or the consent
by such Person to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official
for such Person or for any substantial part of its property, or the making by
such Person of any general assignment for the benefit of creditors, or the
failure by such Person generally to pay its debts as such debts become due.
"Inter-Creditor Agreement" means the Inter-Creditor Agreement dated as
of March 30, 2001 among Citicorp North America, Inc., Citibank, N.A., the
Servicer, the Note Trustee, the Note Issuer and CL&P Receivables Corporation,
as amended, supplemented or modified from time to time.
"Issuance Advice Letter" means the initial Issuance Advice Letter, dated
March 28, 2001, filed with the DPUC pursuant to the Financing Order.
"Lien" means a security interest, lien, charge, pledge or encumbrance of
any kind.
"Losses" has the meaning assigned to that term in Section 6.02(b).
"Monthly Servicer Certificate" has the meaning assigned to that term in
Section 4.01(d)(2).
"Non-Routine Periodic Adjustment" has the meaning set forth in Section
4.01(c)(1).
"Non-Routine True-Up Letter" means a letter filed with the DPUC in
accordance with the Financing Order with respect to any Non-Routine Periodic
Adjustment, pursuant to which the related Non-Routine Periodic Adjustment
will become effective within 60 days after filing of the Non-Routine True-Up
Letter, subject to the review and approval of the DPUC.
"Note Indenture" means the Note Indenture dated as of March 30, 2001,
between the Note Issuer and the Note Trustee, as the same may be amended and
supplemented from time to time.
"Note Issuer" has the meaning set forth in the preamble to this
Agreement.
"Officer's Certificate" means a certificate of the Servicer signed by a
Responsible Officer.
"Opinion of Counsel" means one or more written opinions of counsel who
may be an employee of or counsel to the party providing such opinion(s) of
counsel, which counsel shall be reasonably acceptable to the party receiving
such opinion(s) of counsel.
"Periodic Adjustment" means each adjustment to the RRB Charge made
pursuant to the terms of the Financing Order and in accordance with Section
4.01 hereof.
"Principal Balance" means, as of any Payment Date, the sum of the
outstanding principal amount of the Notes.
"Projected Principal Balance" means, as of any Payment Date, the sum of
the projected outstanding principal amount of the Notes for such Payment Date
set forth in the Expected Amortization Schedule.
"Quarterly Servicer Certificate" has the meaning assigned to that term
in Section 4.01(d)(3).
"Remittance" means each remittance pursuant to Section 4.03 of RRB
Charge Payments by the Servicer to the Note Trustee.
"Remittance Date" means each Servicer Business Day on which a Remittance
is to be made by the Servicer pursuant to Section 4.03.
"Remittance Period" means the twelve-month period commencing on January
1 of each year and ending on the last day of December of each year; provided,
however, that the initial Remittance Period shall commence on the Closing
Date and end on December 31, 2001.
"Required Debt Service" means, for any Remittance Period, the total
dollar amount calculated by the Servicer in accordance with Section
4.01(b)(1) as necessary to be remitted to the Collection Account during such
Remittance Period (after giving effect to (a) the allocation and distribution
of amounts on deposit in the Reserve Subaccount at the time of calculation
and which are available for payments on the Notes, (b) any shortfalls in
Required Debt Service for any prior Remittance Period and (c) any Remittances
based upon the RRB Charge in effect in the prior Remittance Period that are
expected to be realized in such Remittance Period) in order to ensure that,
as of the Payment Date immediately following the end of such period, (i) all
accrued and unpaid interest on the Notes then due shall have been paid in
full, (ii) the Principal Balance of the Notes is equal to the Projected
Principal Balance of the Notes for that Payment Date, (iii) the balance on
deposit in the Capital Subaccount equals the aggregate Required Capital
Level, (iv) the balance on deposit in the Overcollateralization Subaccount
equals the aggregate Required Overcollateralization Level and (v) all other
fees, expenses and indemnities due and owing and required or allowed to be
paid under Section 8.02 of the Note Indenture as of such date shall have been
paid in full; provided, however, that, with respect to any Periodic
Adjustment occurring after the last Scheduled Maturity Date for any Notes,
the Required Debt Service shall be calculated to ensure that sufficient
amounts will be collected to retire such Notes in full as of the earlier of
(x) the next Payment Date and (y) the Final Maturity Date for such Notes.
"Responsible Officer" means the chief executive officer, the president,
the chairman or vice chairman of the board, any vice president, the
treasurer, any assistant treasurer, the secretary, any assistant secretary,
the controller or the finance manager of the Servicer.
"Retirement of the Notes" means the day on which the final payment is
made to the Note Trustee in respect of the last outstanding Note.
"Routine Annual True-Up Letter" means a letter filed with the DPUC,
substantially in the form of Exhibit B hereto, at least 15 days prior to
January 1 each year in respect of an annual Periodic Adjustment. The Routine
Annual True-Up Letter will become effective on January 1 each year, or such
other date as may be specified in such Routine Annual True-Up Letter, so long
as such effective date is at least 15 days after the filing of such Routine
Annual True-Up Letter.
"Routine True-Up Letter" means a letter filed with the DPUC,
substantially in the form of Exhibit B hereto, in respect of a Periodic
Adjustment. The Routine True-Up Letter will become effective 15 days after
the filing thereof.
"RRB Charge" means the portion (which may become all) of the Seller's
CTA designated pursuant to the Financing Order as the RRB Charge (including,
without limitation, the RRB Charge included in special contract customer
rates), as the same may be adjusted from time to time as provided in the
Financing Order, and may in the future include a pro rata component of any
exit fee collected pursuant to Section 16-245w of the Connecticut General
Statutes.
"RRB Charge Collections" means the RRB Charge Payments remitted to the
Collection Account.
"RRB Charge Payments" means the actual payments received by the
Servicer, directly or indirectly (including through a TPS), from or on behalf
of customers (including, without limitation, the RRB Charge included in
special contract customer rates), multiplied by the percentage of such
collections which is calculated in accordance with Annex II hereto to have
been received in respect of the RRB Charge.
"Sale Agreement" means the Transition Property Purchase and Sale
Agreement dated as of March 30, 2001, between The Connecticut Light and Power
Company, as Seller, and the Note Issuer, as the same may be amended and
supplemented from time to time.
"Seller" means The Connecticut Light and Power Company, a Connecticut
corporation, and its permitted successors and assigns under the Sale
Agreement.
"Seller's Receivables Purchase and Sale Agreement" means the Receivables
Purchase and Sale Agreement dated as of September 30, 1997, as amended and
restated as of March 30, 2001, among CL&P Receivables Corporation, the
Servicer, Corporate Asset Funding Company, Inc., and Citibank, N.A. and
Citicorp North America, Inc, as the same may be amended, supplemented,
restated and renewed from time to time.
"Servicer" means The Connecticut Light and Power Company, as the
servicer of the Transition Property, or each successor (in the same capacity)
pursuant to Sections 6.04 or 7.02.
"Servicer Business Day" means any Business Day on which the Servicer's
offices in the State of Connecticut are open for business.
"Servicer Default" means an event specified in Section 7.01.
"Servicing Fee" has the meaning set forth in Section 6.06(a).
"Statute" means Sections 16-245e through and including 16-245k of the
Connecticut General Statutes.
"Termination Notice" has the meaning assigned to that term in Section
7.01(e).
"TPS" means a third party supplier of energy who has entered into a TPS
Service Agreement with the Servicer.
"TPS Service Agreement" means an agreement between a third party
supplier of energy and the Servicer pursuant to which such third party
supplier of energy bills and collects the RRB Charge to and from customers in
accordance with DPUC Regulations, the Financing Order and the guidelines
described in Schedule A to Annex I.
"Transition Property" means the transition property that exists under
Order 6 of the Financing Order (including, without limitation, the RRB Charge
included in special contract customer rates) and is sold by the Seller to the
Note Issuer under the Sale Agreement.
"Transition Property Records" has the meaning assigned to that term in
Section 5.01.
Section 1.02. Other Definitional Provisions.
(a) Capitalized terms used herein and not otherwise defined herein
have the meanings assigned to them in the Note Indenture.
(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 and Annex references contained in this Agreement are references to
Sections, Schedules, Exhibits and Annexes 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 and to the masculine
as well as to the feminine and neuter forms of such terms.
ARTICLE 2
APPOINTMENT AND AUTHORIZATION
Section 2.01. Appointment of Servicer; Acceptance of Appointment.
Subject to Section 6.05 and Article 7, the Note 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 Note Issuer or any assignee thereof in accordance with the
terms of this Agreement and applicable 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
Transition Property, the Servicer shall be, and hereby is, authorized and
empowered by the Note Issuer to (a) execute and deliver, on behalf of itself
and/or the Note Issuer, as the case may be, any and all instruments,
documents or notices, and (b) on behalf of itself and/or the Note Issuer, as
the case may be, make any filing and participate in proceedings of any kind
with any governmental authorities, including with the DPUC. The Note Issuer
shall execute and/or furnish the Servicer with such documents as have been
prepared by the Servicer for execution by the Note Issuer, and with such
other documents as may be in the Note Issuer's possession, 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 Note 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 Transition Property.
Notwithstanding any other provision herein, the Note Issuer shall have
dominion and control over the Transition Property, and the Servicer, in
accordance with the terms hereof, is acting solely as the servicing agent and
custodian for the Note Issuer with respect to the Transition Property and the
Transition Property Records. The Servicer shall not take any action that is
not authorized by this Agreement or that shall impair the rights of the Note
Issuer in the Transition Property, in each case unless such action is
required by applicable law.
ARTICLE 3
BILLING SERVICES
Section 3.01. Duties of Servicer. The Servicer, as agent for the Note
Issuer, shall have the following duties:
(a) Duties of Servicer Generally.
(1) General Duties. The Servicer's duties in general shall
include management, servicing and administration of the Transition Property;
obtaining meter reads, calculating electricity usage (including usage by
customers of any TPS), billing, collection and posting of all payments in
respect of the Transition Property; responding to inquiries by customers, the
DPUC, or any federal, local or other state governmental authorities with
respect to the Transition Property; delivering Bills to customers and TPSs,
investigating and handling delinquencies, processing and depositing
collections and making periodic remittances; furnishing periodic reports to
the Note Issuer, the Note Trustee, the Certificate Trustee and the Rating
Agencies; and taking all necessary action in connection with Periodic
Adjustments as set forth herein. Certain of the duties set forth above may
be performed by TPSs pursuant to TPS Service Agreements. Without limiting
the generality of this Section 3.01(a)(1), 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 xxxx
calculation, billing, customer service functions, collection, payment
processing and remittance set forth in Annex I hereto.
(2) DPUC Regulations Control. Notwithstanding anything to
the contrary in this Agreement, the duties of the Servicer set forth in this
Agreement shall be qualified in their entirety by any DPUC Regulations as in
effect at the time such duties are to be performed.
(3) Allocation of Special Contracts. The Servicer shall
allocate revenues from special contract customers who are receiving services
under special contracts which were in effect on July 1, 1998, until such
contracts expire, on the same cents/kWh basis as the rest of the rate class
in which the special contract customer resides. The Servicer shall calculate
and include an unbundled breakdown at the bottom of each such special
contract customer's xxxx. The Servicer shall allocate the total revenues
from each such special contract customer to each of the unbundled rate
components (including the unbundled CTA component and its RRB Charge
subcomponent) on an equivalent cents/kWh basis times the actual kilowatt-
hours. After the first six unbundled rate components (including the unbundled
CTA component and its RRB Charge subcomponent) are fully satisfied with the
proper revenue allocation, the Servicer shall allocate any remaining revenue
to the unbundled distribution rate component. If more dollars are allocated
to the first six rate components than were billed, the Servicer shall
allocate a negative revenue amount to the unbundled distribution component.
(b) Reporting Functions.
(1) Notification of Laws and Regulations. The Servicer shall
promptly notify the Note Issuer, the Note Trustee, the Certificate Trustee
and the Rating Agencies in writing of any laws or DPUC Regulations hereafter
promulgated that have a material adverse effect on the Servicer's ability to
perform its duties under this Agreement.
(2) Other Information. Upon the reasonable request of the
Note Issuer, the Note Trustee, the Certificate Trustee, or any Rating Agency,
the Servicer shall provide to such Note Issuer, Note Trustee, Certificate
Trustee, or the Rating Agencies, as the case may be, any public financial
information in respect of the Servicer, or any material information regarding
the Transition Property to the extent it is reasonably available to the
Servicer, as may be reasonably necessary and permitted by law for the Note
Issuer, the Note Trustee, the Certificate Trustee, or the Rating Agencies to
monitor the Servicer's performance hereunder.
(3) Preparation of Reports to be Filed with the SEC. The
Servicer shall prepare or cause to be prepared any reports required to be
filed by the Note Issuer or the Certificate Issuer under the securities laws,
including a copy of each Quarterly Servicer Certificate described in Section
4.01(d)(3), the annual Certificate of Compliance described in Section 3.03
and the Annual Accountant's Report described in Section 3.04.
Section 3.02. Servicing and Maintenance Standards. On behalf of the
Note Issuer, the Servicer shall (a) manage, service, administer and make
collections in respect of the Transition Property with reasonable care and in
accordance with applicable law, including all applicable DPUC Regulations and
guidelines, 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 performing its duties as Servicer; (c) use all
reasonable efforts, consistent with its customary servicing procedures, to
xxxx and collect the RRB Charge; (d) file all filings under the applicable
Uniform Commercial Code or the Statute necessary or desirable to maintain the
perfected ownership or security interest of the Note Issuer and the Note
Trustee in the Transition Property; and (e) comply in all material respects
with all laws and regulations applicable to and binding on it relating to the
Transition Property. 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 Transition Property, which, in the
Servicer's judgment, may include the taking of legal action, at the Note
Issuer's expense.
Section 3.03. Certificate of Compliance. The Servicer shall deliver to
the Note Issuer, the Note Trustee, the Certificate Trustee and the Rating
Agencies on or before March 31 of each year, commencing March 31, 2002 to and
including the March 31 succeeding the Retirement of the Notes, an Officer's
Certificate substantially in the form of Exhibit A hereto (a "Certificate of
Compliance"), stating that: (i) a review of the activities of the Servicer
during the twelve months ended the preceding December 31 (or, in the case of
the first Certificate of Compliance to be delivered on or before March 31,
2002, the period of time from the date of this Agreement until December 31,
2001) and of its performance under this Agreement has been made under such
Responsible Officer's supervision, and (ii) to such Responsible Officer's
knowledge, based on such review, the Servicer has fulfilled all of its
obligations in all material respects under this Agreement throughout such
twelve months (or, in the case of the Certificate of Compliance to be
delivered on or before March 31, 2002, the period of time from the date of
this Agreement until December 31, 2001), or, if there has been a default in
the fulfillment of any such material obligation, specifying each such
material default known to such Responsible Officer and the nature and status
thereof.
Section 3.04. Annual Report by Independent Public Accountants.
(a) The Servicer, at the Note Issuer's expense, shall cause a firm
of independent certified public accountants (which may provide other services
to the Servicer) to prepare, and the Servicer shall deliver to the Note
Issuer, the Note Trustee, the Certificate Trustee and the Rating Agencies, a
report addressed to the Servicer (the "Annual Accountant's Report"), which
may be included as part of the Servicer's customary auditing activities, for
the information and use of the Note Issuer, the Note Trustee, the Certificate
Trustee and the Rating Agencies, on or before March 31 each year, beginning
March 31, 2002 to and including the March 31 succeeding the Retirement of the
Notes, 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 months ended December 31 (or, in the case of the first Annual
Accountant's Report to be delivered on or before March 31, 2002, the period
of time from the date of this Agreement until December 31, 2001), identifying
the results of such procedures and including any exceptions noted.
(b) The Annual Accountant's Report shall also indicate that the
accounting firm providing such report is independent of the Servicer within
the meaning of the Code of Professional Ethics of the American Institute of
Certified Public Accountants.
ARTICLE 4
SERVICES RELATED TO PERIODIC ADJUSTMENTS; REMITTANCES
Section 4.01. Periodic Adjustments. From time to time, until the
Retirement of the Notes, the Servicer shall identify the need for Periodic
Adjustments and shall take all reasonable action to obtain and implement such
Periodic Adjustments, all in accordance with the following:
(a) Expected Amortization Schedule. The Expected Amortization
Schedule is attached hereto as Schedule 4.01(a).
(b) Routine Periodic Adjustments and Yearly Filings.
(1) Routine Annual Periodic Adjustments and Filings. For the
purpose of preparing a Routine Annual True-Up Letter, the Servicer shall:
(A) update the assumptions underlying the calculation of the RRB Charge,
including energy usage volume, the rate of charge-offs and estimated expenses
and fees of the Note Issuer and the Certificate Issuer to the extent not
fixed, in each case for the Remittance Period beginning on January 1 of each
year; (B) determine the Required Debt Service for such Remittance Period
based upon such updated assumptions; and (C) determine the RRB Charge to be
charged during such Remittance Period based upon such Required Debt Service.
The Servicer shall file a Routine Annual True-Up Letter with the DPUC no
later than fifteen days prior to January 1 of each year.
(2) Routine Periodic Adjustments. Beginning in the last year
the Notes are scheduled to be outstanding, the Servicer shall file a Routine
True-Up Letter at least 15 days before the end of each calendar quarter. In
addition, the Servicer shall file a Routine True-Up Letter at least 15 days
before the end of any calendar quarter or, beginning in the last year the
Notes are scheduled to be outstanding, at least 15 days before the end of any
calendar month, at each such time as the Servicer may reasonably determine is
necessary to meet the Required Debt Service for the then current Remittance
Period.
(3) The Servicer shall take all reasonable actions and make
all reasonable efforts to secure any Periodic Adjustments.
(c) Non-Routine Periodic Adjustments.
(1) Whenever the Servicer determines that the existing model
for calculating the RRB Charge should be amended or revised, subject to the
consent of the Note Issuer under the conditions set forth in Section 3.18 of
the Note Indenture, the Servicer shall file a Non-Routine True-Up Letter with
the DPUC designating the adjustments to such model and any corresponding
adjustments to the RRB Charge (collectively, a "Non-Routine Periodic
Adjustment"), subject to the review and approval of the DPUC pursuant to the
Financing Order.
(2) The Servicer shall take all reasonable actions and make
all reasonable efforts to secure any Non-Routine Periodic Adjustments.
(3) The Servicer shall implement any resulting adjustments to
the model and any resulting revised RRB Charge as of the effective date of
the Non-Routine True-Up Letter.
(d) Reports.
(1) Notification of Advice Letter Filings and Periodic
Adjustments. Whenever the Servicer files an Advice Letter with the DPUC, the
Servicer shall send a copy of such filing to the Note Issuer, the Note
Trustee, the Certificate Trustee and the Rating Agencies concurrently
therewith. If any Periodic Adjustment requested in any such Advice Letter
filing does not become effective on the applicable date as provided by the
Financing Order, the Servicer shall notify the Note Issuer, the Note Trustee,
the Certificate Trustee and the Rating Agencies by the end of the second
Servicer Business Day after such applicable date.
(2) Monthly Servicer Certificate. So long as any Notes are
outstanding, not later than fifteen (15) days after the end of each month
after the Certificates are issued (excluding March, 2001), or if such day is
not a Servicer Business Day, the next succeeding Servicer Business Day, the
Servicer shall deliver a written report substantially in the form of Exhibit
C hereto (the "Monthly Servicer Certificate") to the Note Issuer, the Note
Trustee, the Certificate Trustee and the Rating Agencies.
(3) Quarterly Servicer Certificate. So long as any Notes are
outstanding, not later than 11:00 a.m. (New York City time) on the Servicer
Business Day immediately preceding each Payment Date, the Servicer shall
deliver a written report substantially in the form of Exhibit D hereto (the
"Quarterly Servicer Certificate") to the Note Issuer, the Note Trustee, the
Certificate Trustee and the Rating Agencies.
(4) TPS Reports. The Servicer shall provide to the Rating
Agencies, upon request, any publicly available reports filed by the Servicer
with the DPUC (or otherwise made publicly available by the Servicer) relating
to TPSs and any other non-confidential and non-proprietary information
relating to TPSs reasonably requested by the Rating Agencies.
Section 4.02. Limitation of Liability.
(a) The Note Issuer and the Servicer expressly agree and
acknowledge that:
(1) In connection with any Periodic Adjustment, the Servicer
is acting solely in its capacity as the servicing agent hereunder.
(2) Neither the Servicer nor the Note Issuer shall be
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 file for Periodic Adjustments or Non-Routine Periodic Adjustments
required by Section 4.01 in a timely and correct manner or other material
breach by the Servicer of its duties under this Agreement that materially and
adversely affects any Periodic Adjustments or Non-Routine Periodic
Adjustments), by the DPUC (or, in connection with any Non-Routine Periodic
Adjustment, by the Rating Agencies) in any way related to the Transition
Property or in connection with any Periodic Adjustment or Non-Routine
Periodic Adjustment, the subject of any filings under Section 4.01, any
proposed Periodic Adjustment or Non-Routine Periodic Adjustment, or the
approval of the RRB Charge and the adjustments thereto.
(3) The Servicer shall have no liability whatsoever relating
to the calculation of the RRB Charge and the adjustments thereto (including
any Non-Routine Periodic Adjustment), including as a result of any inaccuracy
of any of the assumptions made in such calculation regarding expected energy
usage volume, the rate of charge-offs, estimated expenses and fees of the
Note Issuer and the Certificate Issuer, so long as the Servicer has not acted
in a negligent manner in connection therewith, nor shall the Servicer have
any liability whatsoever as a result of any Person, including the Noteholders
or the Certificateholders, not receiving any payment, amount or return
anticipated or expected in respect of any Note or Certificate generally,
except only to the extent that the Servicer is liable under Section 6.02 of
this Agreement.
(b) Notwithstanding the foregoing, this Section 4.02 shall not
relieve the Servicer of any liability under Section 6.02 for any
misrepresentation by the Servicer under Section 6.01 or for any breach by the
Servicer of its obligations under this Agreement.
Section 4.03. Remittances.
(a) Pursuant to the remittance methodology more fully described in Annex
II hereto, starting with collections that are received on the first
Servicer Business Day that is at least 45 days after the first day on which
The Connecticut Light & Power Company imposes the RRB Charge, the Servicer
will remit to the Note Trustee, within two Servicer Business Days after
receipt, by wire transfer of immediately available funds to the General
Subaccount of the Collection Account, an amount equal to the RRB Charge
Payments (as calculated in accordance with Annex II hereto) received on such
day and on any prior day that was not a Servicer Business Day for which a
Remittance has not previously been made. Prior to or simultaneous with each
Remittance to the General Subaccount of the Collection Account pursuant to
this Section, the Servicer shall provide written notice to the Note Trustee
of each such Remittance (including the exact dollar amount to be remitted).
In accordance with to Section 16-245g(e) of the Statute, amounts collected
from customers shall be allocated on a pro rata basis among (i) the RRB
Charge, (ii) any remaining portion of the CTA not the subject of the
Financing Order, and (iii) the Servicer's other charges.
(b) The Servicer may elect to make Remittances less frequently
than on a daily basis, and shall be permitted to do so, but in any event
shall make Remittances within one calendar month of collection thereof,
provided that the Servicer shall send written notice of such election to the
Note Issuer, the Note Trustee and the Certificate Trustee, together with (i)
an Officer's Certificate stating that no Servicer Default has occurred and is
continuing under this Servicing Agreement, (ii) evidence that the Rating
Agency Condition has been satisfied, (iii) evidence of the delivery by the
Servicer to the Note Issuer or the Note Trustee, as applicable, of any credit
enhancement which may be required by the Rating Agencies in connection
therewith in form and substance satisfactory to the Note Issuer and the Note
Trustee, as applicable, the cost of which credit enhancement shall be borne
solely by the Servicer, and (iv) an executed copy of any appropriate
amendment hereto or to the Note Indenture or any other Basic Agreement as
reasonably requested by the Servicer, the Note Issuer or the Note Trustee in
connection therewith.
(c) The Servicer agrees and acknowledges that it will remit RRB
Charge Payments in accordance with this Section 4.03 without any surcharge,
fee, offset, charge or other deduction except for late fees permitted by
Section 6.06.
ARTICLE 5
THE TRANSITION PROPERTY
Section 5.01. Custody of Transition Property Records. To assure
uniform quality in servicing the Transition Property and to reduce
administrative costs, the Note Issuer hereby revocably appoints the Servicer,
and the Servicer hereby accepts such appointment, to act as the agent of the
Note Issuer and the Note Trustee as custodian of any and all documents and
records that the Servicer shall keep on file, in accordance with its
customary procedures, relating to the Transition Property, including copies
of the Financing Order and Advice Letters relating thereto and all documents
filed with the DPUC in connection with any Periodic Adjustment or Non-Routine
Periodic Adjustment and computational records relating thereto (collectively,
the "Transition Property Records"), which are hereby constructively delivered
to the Note Trustee, as pledgee of the Note Issuer with respect to all
Transition Property.
Section 5.02. Duties of Servicer as Custodian.
(a) Safekeeping. The Servicer shall hold the Transition Property
Records on behalf of the Note Issuer and maintain such accurate and complete
accounts, records and computer systems pertaining to the Transition Property
Records on behalf of the Note Issuer and the Note Trustee as shall enable the
Note Issuer to comply with this Agreement and the Note 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 Note
Issuer and the Note Trustee any failure on its part to hold the Transition
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 Note Issuer or the Note Trustee of the Transition
Property Records. The Servicer's duties to hold the Transition Property
Records on behalf of the Note Issuer set forth in this Section 5.02, to the
extent such Transition Property Records have not been previously transferred
to a successor Servicer pursuant to Article 7, 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 7 and (ii) no Notes are
outstanding.
(b) Maintenance of and Access to Records. The Servicer shall
maintain at all times records and accounts that permit the Servicer to
identify RRB Charges billed. The Servicer shall maintain the Transition
Property Records in Berlin, Connecticut or at such other office in the United
States as shall be specified to the Note Issuer and the Note Trustee by
written notice at least 30 days prior to any change in location. The
Servicer shall make available for inspection to the Note Issuer and the Note
Trustee or their respective duly authorized representatives, attorneys or
auditors the Transition Property Records at such times during normal business
hours as the Note Issuer or the Note 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 law (including any DPUC Regulations) 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 Note Trustee
in accordance with the Note Indenture, the Servicer shall release any
Transition Property Records to the Note Trustee, the Note Trustee's agent or
the Note Trustee's designee, as the case may be, at such place or places as
the Note Trustee may designate, as soon as practicable.
(d) Defending Transition Property Against Claims. The Servicer,
on behalf of the Noteholders and the Certificateholders, shall institute any
action or proceeding necessary to compel performance by the DPUC or the State
of Connecticut of any of their obligations or duties under the Statute, the
Financing Order or any Advice Letter, and the Servicer agrees to take such
legal or administrative actions, including defending against or instituting
and pursuing legal actions and appearing or testifying at hearings or similar
proceedings, as may be reasonably necessary to block or overturn any attempts
to cause a repeal of, modification of or supplement to the Statute or the
Financing Order or the rights of holders of Transition Property by executive
action, legislative enactment or constitutional amendment or (if such means
become available in the future) referendum or initiative petition that would
be adverse to Certificateholders. The costs of any such action shall be
payable from RRB Charge Collections as an Operating Expense in accordance
with the priorities set forth in Section 8.02(d) of the Note Indenture. The
Servicer's obligations pursuant to this Section 5.02 shall survive and
continue notwithstanding the fact that the payment of Operating Expenses
pursuant to Section 8.02(d) of the Note Indenture may be delayed (it being
understood that the Servicer may be required to advance its own funds to
satisfy its obligations hereunder).
Section 5.03. Instructions; Authority to Act. For so long as any Notes
remain outstanding, the Servicer shall be deemed to have received proper
instructions with respect to the Transition Property Records upon its receipt
of written instructions signed by a Responsible Officer (as defined in the
Note Indenture) of the Note Trustee.
Section 5.04. 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 5.04. If any Servicer shall resign as Servicer in accordance with
the provisions of this Agreement or if all of the rights and obligations of
any Servicer shall have been terminated under Section 7.01, the appointment
of such Servicer as custodian shall terminate upon appointment of a successor
Servicer, subject to the approval of the DPUC, and acceptance by such
successor Servicer of such appointment.
Section 5.05. Monitoring of Third-Party Suppliers. From time to time,
until the Retirement of the Notes, the Servicer shall, using the same degree
of care and diligence that it exercises with respect to payments owed to it
for its own account, implement such procedures and policies as are necessary
to properly enforce the obligations of each TPS to remit RRB Charges, in
accordance with the terms and provisions of the Financing Order, the TPS
Service Agreement and Schedule A to Annex I hereto.
Section 5.06. Monitoring and Collecting Exit Charges. The Servicer
shall, using the same degree of care and diligence that it exercises with
respect to payments owed to it for its own account, xxxx and collect any exit
charges to which it may be entitled pursuant to Section 16-245w of the
Connecticut General Statutes, and shall remit that portion of the exit
charges representing (or allocable to) the RRB Charge together with the RRB
Charge Payments for a particular billing date.
ARTICLE 6
THE SERVICER
Section 6.01. Representations and Warranties of Servicer. The Servicer
makes the following representations and warranties, as of the Closing Date,
on which the Note Issuer is deemed to have relied in entering into this
Agreement relating to the servicing of the Transition Property.
(a) Organization and Good Standing. The Servicer is duly
organized and validly existing as a corporation in good standing under the
laws of the State of Connecticut, with the requisite corporate power and
authority to own its properties as such properties are currently owned and to
conduct its business as such business is now conducted by it, and has the
requisite corporate power and authority to service the Transition Property
and to hold the Transition Property Records as custodian.
(b) Due Qualification. The Servicer is duly qualified to do
business as a foreign corporation 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 Transition Property as required by this Agreement) shall require such
qualifications, licenses or approvals (except where the failure to so qualify
or obtain such licenses and approvals would not be reasonably likely to have
a material adverse effect on the Servicer's business, operations, assets,
revenues or properties or adversely affect the servicing of the Transition
Property).
(c) Power and Authority. The Servicer has the requisite corporate
power and authority to execute and deliver this Agreement and to carry out
its terms; and the execution, delivery and performance of this Agreement have
been duly authorized by all necessary corporate action on the part of the
Servicer.
(d) Binding Obligation. This Agreement constitutes a legal, valid
and binding obligation of the Servicer enforceable against it 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: (i) conflict with or result in any breach of any of the terms and
provisions of, nor constitute (with or without notice or lapse of time) a
default under, the articles of organization or by-laws of the Servicer, or
any material indenture, agreement or other instrument to which the Servicer
is a party or by which it is bound; (ii) result in the creation or imposition
of any Lien upon any of the Servicer's properties pursuant to the terms of
any such indenture, agreement or other instrument; nor violate any existing
law or any existing order, rule or regulation applicable to the Servicer of
any court or of any federal or state regulatory body, administrative agency
or other governmental instrumentality having jurisdiction over the Servicer
or its properties, so as to adversely affect the Servicer, the Noteholders or
the Certificateholders.
(f) No Proceedings. There are no proceedings pending and, to the
Servicer's knowledge, there are no proceedings threatened and, to the
Servicer's knowledge, there are no investigations pending or threatened,
before any court, federal or state regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over the Servicer or
its properties involving or relating to the Servicer or the Note Issuer or,
to the Servicer's knowledge, any other Person: (i) asserting the invalidity
of this Agreement; (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement; or (iii) seeking any
determination or ruling that might materially and adversely affect the
performance by the Servicer of its obligations under, or the validity or
enforceability of, this Agreement.
(g) Approvals. No approval, authorization, consent, order or
other action of, or filing with, any court, federal or state regulatory body,
administrative agency or other governmental instrumentality 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 and those that the Servicer is required to make in the
future pursuant to Article 3 or 4 and post-closing filings in connection
therewith.
Section 6.02. Indemnities of Servicer.
(a) The Servicer shall be liable in accordance herewith only to
the extent of the obligations specifically undertaken by the Servicer and as
expressly provided under this Section 6.02.
(b) The Servicer shall indemnify the Note Issuer, the Noteholders,
and the Certificateholders and any Swap Counterparty(each an "Indemnified
Person" for purposes of Section 6.02 (b) and (d)) for, and defend and hold
harmless each such Person from and against, any and all liabilities,
obligations, losses, damages, payments, claims, costs or expenses of any kind
whatsoever (collectively, "Losses") that may be imposed on, incurred by or
asserted against any such Person as a result of (i) the Servicer's willful
misconduct or negligence in the performance of its duties or observance of
its covenants under this Agreement (including the Servicer's willful
misconduct or negligence relating to the maintenance and custody by the
Servicer, as custodian, of the Transition Property Records) or (ii) the
Servicer's breach in any material respect of any of its representations or
warranties in this Agreement; provided, however, that the Servicer shall not
be liable for any Losses resulting from the willful misconduct or gross
negligence of any such Indemnified Person; and, provided, further, that the
Noteholders, and the Certificateholders and any Swap Counterparty shall be
entitled to enforce their rights and remedies against the Servicer under this
Section 6.02(b) solely through a cause of action brought for their benefit by
the Note Trustee or the Certificate Trustee, as the case may be; and,
provided, further, that the Servicer shall not be liable for any Losses,
regardless of when incurred, after the Notes and the Certificates have been
paid in full and any Losses are fully paid to any Swap Counterparty, except
as provided in Section 6.02(c).
(c) The Servicer shall indemnify and hold harmless the Note
Trustee, the Delaware Trustee, any Swap Counterparty, the Certificate
Trustee, the Certificate Issuer, the State of Connecticut, the Finance
Authority, the State Treasurer, agencies of the State of Connecticut and any
of their respective affiliates, officials, officers, directors, employees,
consultants, counsel and agents (each an "Indemnified Person" for purposes of
Section 6.02(c) and (d)) for, and defend and hold harmless each such Person
from and against, any and all Losses imposed on, incurred by or asserted
against any of such Indemnified Persons as a result of: (i) the Servicer's
willful misconduct or negligence in the performance of its duties or
observance of its covenants under this Agreement (including the Servicer's
willful misconduct or negligence relating to the maintenance and custody by
the Servicer, as custodian, of the Transition Property Records) or (ii) the
Servicer's breach in any material respect of any of its representations or
warranties in this Agreement; provided, however, that the Servicer shall not
be liable for any Losses resulting from the willful misconduct or gross
negligence of such Indemnified Person or resulting from a breach of a
representation or warranty made by such Indemnified Person in any of the
Basic Documents that gives rise to the Servicer's breach.
(d) The Servicer shall not be required to indemnify an Indemnified
Person for any amount paid or payable by such Indemnified Person pursuant to
Section 6.02(b) or (c) in the settlement of any action, proceeding or
investigation without the written consent of the Servicer, which consent
shall not be unreasonably withheld. Promptly after receipt by an Indemnified
Person of notice of its involvement in any action, proceeding or
investigation, such Indemnified Person shall, if a claim for indemnification
in respect thereof is to be made against the Servicer under Section 6.02 (b)
or (c), notify the Servicer in writing of such involvement. 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
Section 6.02(b) or (c), as applicable, 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 Section 6.02(b) or (c), the Servicer
shall be entitled to assume the defense of any such action, proceeding or
investigation. Upon assumption by the Servicer of the defense of any such
action, proceeding or investigation, the Indemnified Person shall have the
right to participate in such action or proceeding and to retain its own
counsel. The Servicer shall be entitled to appoint counsel of the Servicer's
choice at the Servicer's expense to represent the Indemnified Person in any
action, proceeding or investigation for which a claim of indemnification is
made against the Servicer under Section 6.02(b) or (c) (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, however, that such counsel shall be reasonably satisfactory
to the Indemnified Person. Notwithstanding the Servicer's election to
appoint counsel to represent the Indemnified Person in an 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 use
of counsel chosen by the Servicer to represent the Indemnified Person would
present such counsel with a conflict of interest, (ii) the actual or
potential defendants in, or targets of, 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, (iii)
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 or (iv) the Servicer
shall authorize the Indemnified Person to employ separate counsel at the
expense of the Servicer. 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 (in addition to local counsel).
The Servicer will not, without the prior written consent of the Indemnified
Person, settle or compromise or consent to the entry of any judgment with
respect to any pending or threatened claim, action, suit or proceeding in
respect of which indemnification may be sought under Section 6.02(b) or (c),
as applicable (whether or not the Indemnified Person is an actual or
potential party to such claim or action) unless such settlement, compromise
or consent includes an unconditional release of the Indemnified Person from
all liability arising out of such claim, action, suit or proceeding.
(e) Indemnification under Section 6.02(b) and 6.02(c) shall
include reasonable fees and out-of-pocket expenses of investigation and
litigation (including reasonable attorneys' fees and expenses), except as
otherwise provided in this Agreement.
(f) For purposes of Section 6.02(b) and 6.02(c), in the event of
the termination of the rights and obligations of The Connecticut Light and
Power Company (or any successor thereto pursuant to Section 6.04) 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.
(g) The indemnities contained in this Section 6.02 survive the
resignation or termination of the Note Trustee, the Certificate Trustee or
the Delaware Trustee or the termination of this Agreement or any Swap
Agreement.
Section 6.03. Limitation on Liability of Servicer and Others. Except
as otherwise provided under this Agreement, neither the Servicer nor any of
the directors, officers, employees or agents of the Servicer shall be liable
to the Note Issuer or any other Person for any action taken or for refraining
from the taking of any action pursuant to this Agreement or for errors in
judgment; provided, however, that this provision shall not protect the
Servicer or any director, officer, employee or agent of the Servicer against
any liability that would otherwise be imposed by reason of willful misconduct
or negligence in the performance of 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 Note
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, the Servicer shall not be under
any obligation to appear in, prosecute or defend any legal action relating to
the Transition Property.
Section 6.04. Merger or Consolidation of, or Assumption of the
Obligations of, Servicer. Any Person (a) into which the Servicer may be
merged or consolidated, (b) which may result from any merger or consolidation
to which the Servicer shall be a party or (c) which may succeed to the
properties and assets of the Servicer substantially as a whole, which Person
in any of the foregoing cases executes an agreement of assumption to perform
every obligation 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 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 Note Issuer and the Note Trustee an Officers' Certificate stating that
such consolidation, merger or succession and such agreement of assumption
comply with this Section and that all conditions precedent provided for in
this Agreement relating to such transaction have been complied with, (iii)
the Servicer shall have delivered to the Note Issuer and the Note Trustee an
Opinion of Counsel either (A) stating that, in the opinion of such counsel,
all statutory filings to be made by the Servicer, including filings with the
DPUC pursuant to the Statute, have been executed and filed that are necessary
to preserve and protect fully the interests of the Note Issuer in the
Transition Property and reciting the details of such filings or (B) stating
that, in the opinion of such counsel, no such action shall be necessary to
preserve and protect such interests and (iv) the Rating Agencies shall have
received prior written notice of such transaction. When any Person acquires
the properties and assets of the Servicer substantially as a whole and
becomes the successor to the Servicer in accordance with the terms of this
Section 6.04, then upon satisfaction of all of the other conditions of this
Section 6.04, the Servicer shall automatically and without further notice be
released from all its obligations hereunder.
Section 6.05. The Connecticut Light and Power Company Not to Resign as
Servicer. Subject to the provisions of Section 6.04, The Connecticut Light
and Power Company shall not resign from the obligations and duties hereby
imposed on it as Servicer under this Agreement except upon either (a) a
determination that the performance of its duties under this Agreement shall
no longer be permissible under applicable law or (b) satisfaction of the
following: (i) the Rating Agency Condition shall have been satisfied (except
that with respect to Moody's it shall be sufficient to provide ten days prior
notice) and (ii) the DPUC shall have approved such resignation. Notice of
any such determination permitting the resignation of The Connecticut Light
and Power Company shall be communicated to the Note Issuer, the Note Trustee,
the Certificate Trustee and the Rating Agencies at the earliest practicable
time (and, if such communication is not in writing, shall be confirmed in
writing at the earliest practicable time) and any such determination that the
performance of The Connecticut Light and Power Company's duties under this
Agreement shall no longer be permissible under applicable law shall be
evidenced by an Opinion of Counsel to such effect delivered by The
Connecticut Light and Power Company to the Note Issuer, the Note Trustee and
the Certificate Trustee concurrently with or promptly after such notice. No
such resignation shall become effective until a successor Servicer shall have
assumed the responsibilities and obligations of The Connecticut Light and
Power Company in accordance with Section 7.02.
Section 6.06. Servicing Compensation.
(a) In consideration for its services hereunder, until the
Retirement of the Notes, the Servicer shall receive an annual fee (the
"Servicing Fee") in an amount equal to (i) five one-hundredth of one percent
(0.05%) of the initial principal balance of the Notes for so long as the
Servicer is The Connecticut Light and Power Company or any successor Servicer
that bills the RRB Charge concurrently with other charges for services or
(ii) up to one and one-quarter percent (1.25%) of the initial principal
balance of the Notes for so long as the Servicer is a successor Servicer that
bills the RRB Charge separately to customers (which amount shall be
determined by a separate agreement between the Note Issuer and the Servicer).
The Servicing Fee shall be payable in quarterly installments on each Payment
Date. The Servicer also shall be entitled to retain as additional
compensation (i) any interest earnings on RRB Charge Payments received by the
Servicer and invested by the Servicer pursuant to Section 6(c) of Annex I
hereto prior to remittance to the Collection Account and (ii) all late
payment charges, if any, collected from customers or TPSs.
(b) The Servicing Fee set forth in Section 6.06(a) and expenses
provided for in Section 6.06(c) shall be paid to the Servicer by the Note
Trustee, on each Payment Date in accordance with the priorities set forth in
Section 8.02(d) of the Note Indenture, by wire transfer of immediately
available funds from the Collection Account to an account designated by the
Servicer. Any portion of the Servicing Fee not paid on such date shall be
added to the Servicing Fee payable on the subsequent Payment Date.
(c) The Note Issuer shall pay all expenses incurred by the
Servicer in connection with its activities hereunder (including any
reasonable fees to and disbursements by accountants, counsel, or any other
Person, any taxes imposed on the Servicer (other than taxes based on the
Servicer's net income) and any expenses incurred in connection with reports
to Noteholders and Certificateholders, subject to the priorities set forth in
Section 8.02(d) of the Note Indenture).
Section 6.07. Compliance with Applicable Law. The Servicer covenants
and agrees, in servicing the Transition Property, to comply in all material
respects with all laws applicable to, and binding upon, the Servicer and
relating to such Transition Property the noncompliance with which would have
a material adverse effect on the value of the Transition Property; provided,
however, that the foregoing is not intended to, and shall not, impose any
liability on the Servicer for noncompliance with any law that the Servicer is
contesting in good faith in accordance with its customary standards and
procedures.
Section 6.08. Access to Certain Records and Information Regarding
Transition Property. The Servicer shall provide to the Noteholders, the Note
Trustee and the Certificate Trustee access to the Transition Property Records
in such cases where the Noteholders, the Note Trustee and the Certificate
Trustee shall be required by applicable law to be provided access to such
records. 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 shall affect the obligation of the
Servicer to observe any applicable law (including any DPUC Regulation)
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.
Section 6.09. Appointments.
(a) The Servicer may at any time appoint any Person to perform all
or any portion of its obligations as Servicer hereunder; provided, however,
that the Rating Agency Condition shall have been satisfied in connection
therewith (except that with respect to Moody's it shall be sufficient to
provide ten days prior notice); and, provided, further, that the Servicer
shall remain obligated and be liable under this Agreement for the servicing
and administering of the Transition 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 Transition Property; and, provided, further, however, that
nothing herein (including the Rating Agency Condition) shall preclude the
execution by the Servicer of a TPS Service Agreement with any TPS pursuant to
applicable DPUC Regulations. 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 Note Issuer, the Note Trustee, the Noteholders 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 6.05.
(b) The Servicer has no employees. Therefore, in carrying out the
foregoing duties or any of its other obligations under this Agreement, the
Servicer may enter into transactions with or otherwise deal with any of its
Affiliates to obtain the services of employees of such Affiliates as is its
current practice; provided, however, that the terms of any such transactions
or dealings shall be no less favorable to the Note Issuer than would be
available from unaffiliated parties or that would be available if the
Servicer were to hire its own employees to perform such services.
Section 6.10. No Servicer Advances. The Servicer shall not make any
advances of interest on or principal of the Notes or the Certificates.
Section 6.11. Maintenance of Operations. The Servicer agrees to
continue to operate its distribution system to provide service to its
customers so long as it is acting as the Servicer under this Agreement.
ARTICLE 7
DEFAULT
Section 7.01. Servicer Default. If any one of the following events
(each a "Servicer Default") shall occur and be continuing:
(a) any failure by the Servicer to remit to the Collection Account
on behalf of the Note 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 Note Issuer or the Note
Trustee; or
(b) any failure on the part of the Servicer duly to observe or to
perform in any material respect any other covenants or agreements of the
Servicer set forth in this Agreement, which failure shall (a) materially and
adversely affect the rights of the Noteholders or Certificateholders and (ii)
continue unremedied for a period of 60 days after the date on which written
notice of such failure, requiring the same to be remedied, shall have been
given (A) to the Servicer by the Note Issuer or (B) to the Servicer by the
Note Trustee or by the Holders of Notes evidencing not less than 25 percent
of the Outstanding Amount of the Notes; or
(c) any representation or warranty made by the Servicer in this
Agreement shall prove to have been incorrect in any material respect when
made, which has a material adverse effect on the Noteholders or
Certificateholders and which material adverse effect continues unremedied for
a period of 60 days after written notice of such failure is received by the
Servicer from the Note Issuer or the Note Trustee;
(d) an Insolvency Event occurs with respect to the Servicer; or
(e) an "Event of Termination" under the Seller's Receivables
Purchase and Sale Agreement occurs and has not been remedied or waived;
then, and in each and every case, so long as the Servicer Default shall not
have been remedied, either the Note Trustee, or the Holders of Notes
evidencing not less than 25 percent of the Outstanding Amount of the Notes,
by notice then given in writing to the Servicer (and to the Note Trustee if
given by the Noteholders) (a "Termination Notice") may terminate all the
rights and obligations (other than the obligations set forth in Section 6.02)
of the Servicer under this Agreement. In addition, upon a Servicer Default
described in Section 7.01(a), each of the following shall be entitled to
apply to the DPUC for sequestration and payment of revenues arising with
respect to the Transition Property in accordance with Sections 16-245k(e) and
Section 16-245k(g) of the Statute: (1) the Note Trustee or the Noteholders;
(2) the Certificate Trustee or the Certificateholders; (3) the Delaware
Trustee; (4) the Note Issuer or its assignees; or (5) pledgees or transferees
of the Transition Property. On or after the receipt by the Servicer of a
Termination Notice, and subject to the approval of the DPUC, all authority
and power of the Servicer under this Agreement, whether with respect to the
Notes, the Transition Property, the RRB Charge 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 Note 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 Transition Property Records and
related documents, or otherwise. The predecessor Servicer shall cooperate
with the successor Servicer, the Note Issuer and the Note 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 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 Transition Property or the
RRB Charge. In case a successor Servicer is appointed as a result of a
Servicer Default, all reasonable costs and expenses (including reasonable
attorneys' fees and expenses) incurred in connection with transferring the
Transition Property Records to the successor Servicer and amending this
Agreement to reflect such succession as Servicer pursuant to this Section
shall be paid by the predecessor Servicer upon presentation of reasonable
documentation of such costs and expenses. All other reasonable costs and
expenses incurred in transferring servicing responsibilities to a successor
servicer shall constitute Operating Expenses of the Note Issuer.
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 and reimbursement of
expenses as provided herein, 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 termination hereunder, the Note Issuer shall appoint,
subject to the approval of the DPUC, a successor Servicer with the Note
Trustee'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 Note
Issuer and the Note Trustee. If within 30 days after the delivery of the
Termination Notice, the Note Issuer shall not have obtained such a new
Servicer, the Note Trustee may appoint (subject to the approval of the DPUC)
or petition the DPUC or 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 DPUC
Regulations to perform the duties of the Servicer, (ii) the Rating Agency
Condition shall have been satisfied and (iii) such Person assumes in writing
the obligations of the Servicer hereunder or enters into a servicing
agreement with the Note Issuer having substantially the same provisions as
this Agreement.
(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 of Notes evidencing
not less than a majority of the Outstanding Amount of the Notes may, on
behalf of all Noteholders, 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 Remittances to the Collection Account 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 Note Issuer, the Note Trustee, the Certificate Trustee, the
Certificate Issuer, the Finance Authority and the Rating Agencies, promptly
after any of its Responsible Officers having obtained actual knowledge
thereof, but in no event later than five Business Days thereafter, written
notice in an Officers' Certificate of any event which with the giving of
notice or lapse of time, or both, would become a Servicer Default under
Section 7.01(a) or (b).
Section 7.05. Inter-Creditor Agreement. So long as the Inter-Creditor
Agreement remains in effect, the rights and remedies set forth in this
Article 7 shall be subject to the provisions of the Inter-Creditor Agreement.
ARTICLE 8
MISCELLANEOUS PROVISIONS
Section 8.01. Amendment.
(a) This Agreement may be amended in writing by the Servicer and
the Note Issuer with ten Business Days' prior written notice given to the
Rating Agencies and the prior written consent of the Note Trustee (which
consent shall not be unreasonably withheld), but without the consent of any
of the Noteholders or any of the Certificateholders (notwithstanding any
provision of any other document that would otherwise require such consent as
a precondition of Note Trustee consent), to cure any ambiguity, to correct or
supplement any provisions in this Agreement or for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions
in this Agreement or of modifying in any manner the rights of the
Noteholders; provided, however, that such action shall not, as evidenced by
an Officer's Certificate delivered to the Note Issuer, the Note Trustee and
any Swap Counterparty, adversely affect in any material respect the interests
of any Noteholder, or any Certificateholder or adversely affect the interests
of any Swap Counterparty. No amendment may be made to this Agreement that
would adversely affect any Swap Counterparty without its prior written
consent.
(b) This Agreement may also be amended in writing from time to
time by the Servicer and the Note Issuer with ten Business Days' prior
written notice given to the Rating Agencies and the prior written consent of
the Note Trustee (which consent shall not be unreasonably withheld) and the
prior written consent of the Holders of Notes evidencing not less than a
majority of the Outstanding Amount of the Notes, for the purpose of adding
any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of the
Noteholders; provided, however, that any amendment of the provisions of
Sections 4.01 or 4.03 shall satisfy the Rating Agency Condition.
(c) If the written consent of Noteholders is required in
connection with an amendment hereof, approval by Noteholders of the substance
of any proposed amendment or consent shall constitute sufficient consent of
the Noteholders pursuant to this Section, and it shall not be necessary that
Noteholders approve of the particular form of any amendment or consent.
(d) Promptly after the execution thereof, the Note Issuer shall
provide each of the Rating Agencies with a copy of any amendment to this
Agreement.
(e) Prior to its consent to any amendment to this Agreement, the
Note Trustee shall be entitled to receive and conclusively rely upon an
Opinion of Counsel stating that such amendment is authorized or permitted by
this Agreement. The Note Trustee may, but shall not be obligated to, enter
into any such amendment which affects the Note Trustee's own rights, duties
or immunities under this Agreement or otherwise.
Section 8.02. Maintenance of Accounts and Records.
(a) The Servicer shall maintain accounts and records as to the
Transition Property accurately and in accordance with its standard accounting
procedures.
(b) The Servicer shall permit the Note 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 Transition Property and the RRB Charge.
Nothing in this Section 8.02(b) shall affect the obligation of the Servicer
to observe any applicable law (including any DPUC Regulation) 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 8.02(b).
Section 8.03. Notices. Unless otherwise specifically provided herein,
all notices, directions, consents and waivers required under the terms and
provisions of this Agreement shall be in English and in writing, and any such
notice, direction, consent or waiver may be given by United States mail,
courier service, facsimile transmission or electronic mail (confirmed by
telephone, United States mail or courier service in the case of notice by
facsimile transmission or electronic mail) or any other customary means of
communication, and any such notice, direction, consent or waiver shall be
effective when delivered, or if mailed, three days after deposit in the
United States mail with proper postage for ordinary mail prepaid:
(a) if to the Servicer, to
The Connecticut Light and Power Company
c/o Northeast Utilities Service Company
if by U.S. Mail:
X.X. Xxx 000
Xxxxxxxx, XX 00000-0000
if by courier:
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Treasurer
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Email: xxxxxxx@xx.xxx
(b) if to the Note Issuer, to
CL&P Funding LLC
c/o The Connecticut Light and Power Company
if by U.S. Mail:
X.X. Xxx 000
Xxxxxxxx, XX 00000-0000
if by courier:
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: President
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Email: xxxxxxx@xx.xxx
with a copy to:
The Connecticut Light and Power Company
if by U.S. Mail:
X.X. Xxx 000
Xxxxxxxx, XX 00000-0000
if by courier:
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Treasurer
Facsimile: 000-000-0000
Telephone: 000-000-0000
Email: xxxxxxx@xx.xxx
(c) if to the Note Trustee, to
First Union Trust Company, National Association
One Xxxxxx Square
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: Corporate Trust Administration
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
(d) if to Moody's, to
Xxxxx'x Investors Service, Inc.
00 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: ABS Monitoring Department
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
(e) if to S&P, to
Standard & Poor's
00 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Asset Backed Surveillance Department
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
(f) if to Fitch, to
Fitch, Inc.
Xxx Xxxxx Xxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: ABS Surveillance
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Email: xxxx@xxxxxxxxxxxx.xxx
(g) if to the Finance Authority, to
Office of the State Treasurer
00 Xxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Assistant Treasurer - Debt Management
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
(h) if to the Certificate Issuer, to:
Connecticut RRB Special Purpose Trust CL&P-1
First Union Trust Company, National Association
One Xxxxxx Square
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: Corporate Trust Administration
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
(with copies to the Finance Authority at the addresses listed
herein)
(i) if to any Swap Counterparty, to the address and in the manner
set forth in any Swap Agreement (a copy of which will be provided by the
Certificate Trustee, upon request); and
(j) as to each of the foregoing, at such other address as shall be
designated by written notice to the other parties.
Section 8.04. Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Section 6.04 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 8.05. Limitations on Rights of Third Parties. The provisions
of this Agreement are solely for the benefit of the Servicer, the Note
Issuer, the Noteholders, the Certificateholders, any Swap Counterparty, the
Note Trustee, the Certificate Trustee, the Delaware Trustee, the Finance
Authority, the Certificate Issuer and the other Persons expressly referred to
herein and such Persons shall have the right to enforce the relevant
provisions of this Agreement, except that the Noteholders, and the
Certificateholders and any Swap Counterparty shall be entitled to enforce
their rights against the Servicer under this Agreement solely through a cause
of action brought for their benefit by the Note Trustee or the Certificate
Trustee, as the case may be. 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 Transition Property or under or in
respect of this Agreement or any covenants, conditions or provisions
contained herein.
Section 8.06. 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 remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
Section 8.07. 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 8.08. 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 8.09. Governing Law. This Agreement shall be construed in
accordance with the substantive laws of the State of Connecticut, without
giving effect to its conflict of law or other principles that would cause the
application of the laws of another jurisdiction, and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws.
Section 8.10. Assignment to Note Trustee. The Servicer hereby
acknowledges and consents to the collateral assignment of any or all of the
Note Issuer's rights and obligations hereunder to the Note Trustee for the
benefit of the holders of the Notes and to the further assignment of the Note
Trustee's rights and obligations under the Note Indenture to the Certificate
Trustee for the benefit of the holders of the Certificates.
Section 8.11. Nonpetition Covenants. Notwithstanding any prior
termination of this Agreement or the Note Indenture, but subject to the
DPUC's right to order the sequestration and payment of revenues arising with
respect to the Transition Property notwithstanding any bankruptcy,
reorganization or other insolvency proceedings with respect to the debtor,
pledgor or transferor of the Transition Property pursuant to Sections 16-
245k(e) and 16-245k(g) of the Statute, the Servicer shall not, prior to the
date which is one year and one day after the termination of the Note
Indenture with respect to the Note Issuer, petition or otherwise invoke or
cause the Note Issuer or the Trust to invoke the process of any court or
governmental authority for the purpose of commencing or sustaining a case
against the Note Issuer or the Trust 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 Note Issuer
or the Trust or any substantial part of the property of the Note Issuer or
the Trust, or ordering the winding up or liquidation of the affairs of the
Note Issuer or the Trust.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this Transition
Property Servicing Agreement to be duly executed by their respective officers
as of the day and year first above written.
CL&P FUNDING LLC,
Note Issuer
By: /S/XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
Title: President
THE CONNECTICUT LIGHT AND POWER COMPANY,
Servicer
By /S/XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
Title: Treasurer
EXHIBIT A
CERTIFICATE OF COMPLIANCE
The undersigned hereby certifies that he/she is the duly elected and
acting [________] of The Connecticut Light and Power Company, as servicer
(the "Servicer") under the Transition Property Servicing Agreement, dated as
of March __, 2001 (the "Servicing Agreement"), between the Servicer and CL&P
Funding LLC (the "Note Issuer"), and further certifies on behalf of the
Servicer that:
1. A review of the activities of the Servicer and of its performance
under the Servicing Agreement during the __________ months ended December 31,
20[_] has been made under the supervision of the undersigned pursuant to
Section 3.03 of the Servicing Agreement; and
2. To the undersigned's knowledge, based on such review, the Servicer
has fulfilled all of its material obligations in all material respects under
the Servicing Agreement throughout the __________ months ended December 31,
20[_], except as listed on Annex A hereto.
Executed as of this _______ day of ___________, 20__ .
THE CONNECTICUT LIGHT AND POWER COMPANY,
Servicer
By: /S/ XXXXX X. XXXXX
Name: XXXXX X. XXXXX
Title: Treasurer
ANNEX A TO EXHIBIT A
LIST OF SERVICER DEFAULTS
Nature of Default Status
EXHIBIT B
FORM OF ROUTINE TRUE-UP LETTER
[date]
ADVICE
THE STATE OF CONNECTICUT DEPARTMENT OF PUBLIC UTILITY CONTROL (THE
"DEPARTMENT")
SUBJECT: Periodic RRB Charge True-Up Mechanism Advice Filing
Pursuant to DPUC Docket No. 00-05-01 (the "Financing Order"), The Connecticut
Light and Power Company ("CL&P"), as servicer of the RRBs or any successor
Servicer and on behalf of the RRB Trustee as assignee of the special purpose
entity (the "SPE"), shall apply for adjustment to the RRB Charge fifteen days
prior to January first of each year and at such additional intervals as may
be provided for in the Financing Order. Any capitalized terms not defined
herein shall have the meanings ascribed thereto in the Financing Order.
PURPOSE
This filing establishes the revised RRB Charge to be assessed and collected
from CL&P's customers, whether or not CL&P's distribution system is being
operated by CL&P or a successor distribution company. The RRB Charge is a
usage-based component of the competitive transition assessment on each
customer's monthly xxxx and may include any back-up, maintenance, emergency
or other delivery or energy service fee collected until the Total RRB Payment
Requirements are discharged in full. The RRB Charge is applied equally to
all customers of the same class in accordance with the method of allocation
in effect on July 1, 1998. In the Financing Order, the Department authorized
CL&P to file Routine True-Up Letters fifteen days prior to the first day of
January of each year and at such additional intervals, if necessary, as
provided for in the Financing Order. CL&P, or a successor Servicer, is
authorized to file periodic RRB Charge adjustments to the extent necessary to
ensure the timely recovery of revenues sufficient to provide for the payment
of an amount equal to the sum of the Periodic RRB Payment Requirement for the
upcoming year, which may include indemnity obligations of the SPE in the RRB
transaction documents for SPE officers and directors, trustee fees,
liabilities of the special purpose trust and liabilities to the underwriters
related to the underwriting of the RRBs. Routine True-Up Letter filings are
those where CL&P uses the methodology approved by the Department in the
Financing Order to adjust upward or downward the existing RRB Charge.
Using the methodology approved by the Department in the Financing Order, this
filing modifies the variables used in the RRB Charge calculation and provides
the resulting modified RRB Charge. Table I shows the revised assumptions for
each of the variables used in calculating the RRB Charge for customers. The
assumptions underlying the current RRB Charges were filed in an Issuance
Advice Letter, dated March 30, 2001.
Table I below shows the current assumptions for each of the variables used in
the RRB Charge calculation.
TABLE I
INPUT VALUES FOR RRB CHARGE
Forecasted retail kWh sales for the period:_____
Forecasted percent of customers' billed amounts charged-off:_____
Percent of customers' billed amounts charged-off:_____
Weighted average days sales outstanding:_____
(calculated as follows)
Percent of billed amounts collected in current month:_____
Percent of billed amounts collected in second month after billing:_____
Percent of billed amounts collected in third month after billing:_____
Percent of billed amounts collected in fourth month after billing:_____
Percent of billed amounts collected in fifth month after billing:_____
Forecasted ongoing interest and transaction expenses (including any already
accrued but unpaid for the period):_____
Current Overcollateralization Subaccount balance:______
Scheduled Overcollateralization Subaccount balance at the end of the
period:______
Current Capital Subaccount balance:______
Initial Capital Subaccount balance:______
Current RRB outstanding balance:_____
Scheduled RRB outstanding balance at the end of the period:______
Current Reserve Subaccount balance:______
The adjusted RRB Charge calculated for customers is as follows: _____
EFFECTIVE DATE
In accordance with the Financing Order, Routine True-Up Letters for annual
RRB Charge adjustments shall be filed fifteen days prior to January 1 each
year or more frequently, if necessary, with the resulting changes to be
effective 15 days after the filing, notwithstanding the fact that adjustments
to other components of the CTA will occur simultaneously and may not become
effective immediately. No approval by the Department is required. Therefore,
these RRB Charges shall be effective as of ___________.
NOTICE
Copies of this filing are being furnished to the parties on the attached
service list. Notice to the public is hereby given by filing and keeping
this filing open for public inspection at CL&P's corporate headquarters.
Enclosures
EXHIBIT C
FORM OF MONTHLY SERVICER CERTIFICATE
Pursuant to Section 4.01(d)(2) of the Transition Property Servicing
Agreement, dated as of March 30, 2001 (the "Agreement"), between The
Connecticut Light and Power Company, as servicer (the "Servicer") and CL&P
Funding LLC, the Servicer does hereby certify as follows:
Capitalized terms used herein have their respective meanings as set
forth in the Agreement.
For the Monthly Period:_____________
1. Xxxxxxxx:
a) Monthly kWh Consumption:
b) Applicable RRB Charge:
c) Total RRB Charge Amount Billed this Month:
d) Cumulative RRB Charge Amount Billed this Remittance Period:
2. Remittances:
a) Total Amount Remitted this Month:
b) Cumulative Amount Remitted this Remittance Period:
c) "RRB%" (calculated in accordance with Annex II to the Agreement)for
this Remittance Period:
3. Draws on Subaccounts:
a) Reserve Subaccount Draw Amount this Month:
b) Cumulative Reserve Subaccount Draw Amount this Remittance Period
(net of funding):
c) Overcollateralization Subaccount Draw Amount this Month:
d) Cumulative Overcollateralization Subaccount Draw Amount this
Remittance Period (net of funding):
e) Capital Subaccount Draw Amount this Month:
f) Cumulative Capital Subaccount Draw Amount this Remittance Period
(net of funding):
Executed as of this day of .
THE CONNECTICUT LIGHT AND POWER COMPANY,
Servicer
By: /s/ XXXXX X. XXXXX
Name: XXXXX X. XXXXX
Title: TREASURER
EXHIBIT D
FORM OF QUARTERLY SERVICER CERTIFICATE
Pursuant to Section 4.01(d)(3) of the Transition Property Servicing
Agreement, dated as of March 30, 2001 (the "Agreement"), between The
Connecticut Light and Power Company, as servicer (the "Servicer"), and CL&P
Funding LLC, the Servicer does hereby certify, for the current Payment Date
(__________ __, 20[ ]) (the "Current Payment Date"), as follows:
Capitalized terms used herein have their respective meanings as set
forth in the Agreement. References herein to certain sections and
subsections are references to the respective sections of the Agreement.
1. RRB Charge Collections and Aggregate Amounts Available for the Current
Payment Date:
i. Amount Remitted [Month] [Year]
ii. Amount Remitted [Month] [Year]
iii. Amount Remitted [Month] [Year]
iv. Amount Remitted [Month] [Year]
v. Amount Remitted [Month] [Year]
vi. Amount Remitted [Month] [Year]
vii. Amount Remitted [Month] [Year]
viii. Amount Remitted [Month] [Year]
ix. Total Amount Remitted for this Period (sum of i. through viii.
above):
x. Net Earnings on Collection Account:
xi. Expenses Paid to Date:
xii. General Subaccount Balance (sum of ix. and x.above minus xi.):
xiii. Reserve Subaccount Balance
xiv. Overcollateralization Subaccount Balance
xv. Capital Subaccount Balance
xvi. Collection Account Balance (sum of xii.through xv. above):
2. Outstanding Principal Balance as of Prior Payment Date by Tranche:
i. Class A-1 Principal Balance Outstanding Note/Certificate:
ii. Class A-2 Principal Balance Outstanding Note/Certificate:
iii. Class A-3 Principal Balance Outstanding Note/Certificate:
iv. Class A-4 Principal Balance Outstanding Note/Certificate:
v Class A-5 Principal Balance Outstanding Note/Certificate:
vi. Total Note/Certificate Principal Balance:
3. Required Funding/Payments as of Current Payment Date
a) Projected Principal Balances and Payments
Projected Quarterly
Principal Principal Due
i. Class A-1 Note/Certificate
ii. Class A-2 Note/Certificate
iii. Class A-3 Note/Certificate
iv. Class A-4 Note/Certificate
v. Class A-5 Note/Certificate
vi. Total Projected Principal Amount:
b) Required Interest Payments
Note/Cert Days in Interest
Interest Rate Applicable Due
i. Class A-1 Note/Certificate
ii. Class A-2 Note/Certificate
iii. Class A-3 Note/Certificate
iv. Class A-4 Note/Certificate
v. Class A-5 Note/Certificate
vi. Total Required Interest
Amount:
c) Projected Subaccount Payments and Levels
Subaccount Projected Level
Level Required
i. Capital Subaccount:
ii. Overcollateralization Subaccount:
iii. Total Subaccount
Payments and Levels:
4. Allocation of Remittances as of Current Payment Date Pursuant to Section
8.02(d) of Note Indenture:
a) Quarterly Expenses
Net Expense Amount (Payable on Current Payment Date)
i. Note, Delaware and Certificate Trustee Fees and Expenses:
ii. Quarterly Servicing Fee:
iii. Quarterly Administration Fee:
iv. Operating Expenses (subject to $100,000 cap):
v. Total Expenses:
b) Quarterly Interest
Per $1000 of Aggregate
Original Principal Amount
i. Class A-1 Note/Certificate
ii. Class A-2 Note/Certificate
iii. Class A-3 Note/Certificate
iv. Class A-4 Note/Certificate
v. Class A-5 Note/Certificate
vi. Total Quarterly Interest:
c) Quarterly Principal
Per $1000 of Aggregate
Original Principal Amount
i. Class A-1 Note/Certificate
ii. Class A-2 Note/Certificate
iii. Class A-3 Note/Certificate
iv. Class A-4 Note/Certificate
v. Class A-5 Note/Certificate
vi. Total Quarterly Principal:
d) Other Payments
i. Operating Expenses (in excess of
$100,000):
ii. Funding of CapitalSubaccount
(to required amount):
iii. Funding of Overcollateralization
Subaccount (to required level):
iv. Deposits to Reserve Subaccount:
v. Interest earnings on Capital Account
Released to Note Issuer:
e) Aggregate Payments Pursuant to Section 8.02(d)(i) of Note Indenture
i. To Note Trustee, Certificate Trustee and
Delaware Trustee:
ii. To Finance Authority and Certificate Issuer:
5. Outstanding Principal Balance and Collection Account Balance as of Current
Payment Date (after giving effect to payments to be made on such
distribution date):
a) Principal Balance Outstanding:
i. Class A-1 Principal Balance Outstanding Note/Certificate:
ii. Class A-2 Principal Balance Outstanding Note/Certificate:
iii. Class A-3 Principal Balance Outstanding Note/Certificate:
iv. Class A-4 Principal Balance Outstanding Note/Certificate:
v. Class A-5 Principal Balance Outstanding Note/Certificate:
vi. Total Note/Certificate Principal Balance:
b) Collection Account Balances Outstanding:
i. Capital Subaccount:
ii. Overcollateralization Subaccount:
iii. Reserve Subaccount:
iv. Total Subaccount Amount:
6. Subaccount Draws as of Current Payment Date (if applicable,
pursuant to Section 8.02(e) of Note Indenture):
i. Capital Subaccount:
ii. Overcollateralization Subaccount:
iii. Reserve Subaccount:
iv. Total Subaccount Draws:
7. Shortfalls in Interest and Principal Payments as of Current
Payment Date (if applicable):
a) Quarterly Interest Shortfall
i. Class A-1 Note/Certificate
ii. Class A-2 Note/Certificate
iii. Class A-3 Note/Certificate
iv. Class A-4 Note/Certificate
v. Class A-5 Note/Certificate
vi. Total Quarterly Interest Shortfall:
b) Quarterly Principal Shortfall
i. Class A-1 Note/Certificate
ii. Class A-2 Note/Certificate
iii. Class A-3 Note/Certificate
iv. Class A-4 Note/Certificate
v. Class A-5 Note/Certificate
vi. Total Quarterly Principal Shortfall:
8. Shortfalls in Required Subaccount Levels as of Current
Distribution Date:
i. Capital Subaccount
ii. Overcollateralization Subaccount:
iii. Total Subaccount Shortfalls:
IN WITNESS WHEREOF, the undersigned has duly executed and delivered this
Quarterly Servicer Certificate this ___ day of ____, ____.
THE CONNECTICUT LIGHT AND POWER COMPANY,
Servicer
By:_/s/XXXXX X. XXXXX
Name: XXXXX X. XXXXX
Title: TREASURER
SCHEDULE 4.01(a)
Expected Amortization Schedule
Outstanding Principal Balance
Payment Class Class Class Class Class
Date X-0 X-0 X-0 X-0 X-0
Closing 224,858,822 255,056,333 292,381,624 287,907,878 378,195,343
9/30/01 181,027,904 255,056,333 292,381,624 287,907,878 378,195,343
12/30/01 145,111,154 255,056,333 292,381,624 287,907,878 378,195,343
3/30/02 112,308,456 255,056,333 292,381,624 287,907,878 378,195,343
6/30/02 87,709,027 255,056,333 292,381,624 287,907,878 378,195,343
9/30/02 58,292,404 255,056,333 292,381,624 287,907,878 378,195,343
12/30/02 32,187,247 255,056,333 292,381,624 287,907,878 378,195,343
3/30/03 0 255,056,333 292,381,624 287,907,878 378,195,343
6/30/03 0 227,732,868 292,381,624 287,907,878 378,195,343
9/30/03 0 195,337,425 292,381,624 287,907,878 378,195,343
12/30/03 0 166,293,780 292,381,624 287,907,878 378,195,343
3/30/04 0 131,792,472 292,381,624 287,907,878 378,195,343
6/30/04 0 102,416,672 292,381,624 287,907,878 378,195,343
9/30/04 0 67,903,967 292,381,624 287,907,878 378,195,343
12/30/04 0 36,747,662 292,381,624 287,907,878 378,195,343
3/30/05 0 0 292,381,624 287,907,878 378,195,343
6/30/05 0 0 260,766,487 287,907,878 378,195,343
9/30/05 0 0 223,906,099 287,907,878 378,195,343
12/30/05 0 0 190,375,878 287,907,878 378,195,343
3/30/06 0 0 151,200,741 287,907,878 378,195,343
6/30/06 0 0 117,159,077 287,907,878 378,195,343
9/30/06 0 0 77,796,006 287,907,878 378,195,343
12/30/06 0 0 41,760,787 287,907,878 378,195,343
3/30/07 0 0 0 287,907,878 378,195,343
6/30/07 0 0 0 251,293,044 378,195,343
9/30/07 0 0 0 209,247,737 378,195,343
12/30/07 0 0 0 170,490,986 378,195,343
3/30/08 0 0 0 125,955,154 378,195,343
6/30/08 0 0 0 86,550,513 378,195,343
9/30/08 0 0 0 41,638,744 378,195,343
12/30/08 0 0 0 0 378,195,343
3/30/09 0 0 0 0 330,702,282
6/30/09 0 0 0 0 288,320,065
9/30/09 0 0 0 0 240,335,496
12/30/09 0 0 0 0 195,586,975
3/30/10 0 0 0 0 144,900,682
6/30/10 0 0 0 0 99,319,619
9/30/10 0 0 0 0 48,054,208
12/30/10 0 0 0 0 0
ANNEX I
SERVICING PROCEDURES
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 set forth in the Agreement.
(b) Whenever used in this Annex I, the following words and phrases
shall have the following meanings:
"Billed RRB Charges" means the dollar amounts billed to customers or the
Applicable TPS or allocated from special contract customers in accordance
with Section 3.01(a)(3) of the Agreement, in each case in respect of the RRB
Charge, whether billed to customers or the Applicable TPS by the Servicer or
to customers by a TPS pursuant to a TPS Service Agreement.
"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 or others, as in effect from
time to time and in accordance with DPUC Regulations. The Servicer shall
provide ten days' prior written notice to the Rating Agencies of any
amendment to the Servicer Policies and Practices that would adversely affect
in any material respect the Noteholders or Certificateholders.
SECTION 2. DATA ACQUISITION
(a) Installation and Maintenance of Meters. Except to the extent that
a TPS is responsible for such services pursuant to a TPS Service Agreement,
the Servicer shall cause to be installed, replaced and maintained meters in
accordance with the Servicer Policies and Practices.
(b) Meter Reading. In accordance with the Servicer Policies and
Practices, the Servicer shall obtain usage measurements for each customer;
provided, however, that the Servicer may determine any customer's usage on
the basis of estimates in accordance with applicable DPUC Regulations; and,
provided, further, that the Servicer may obtain usage measurements from the
Applicable TPS for customers receiving meter reading services from such TPS
if the applicable TPS Service Agreement so provides.
(c) Cost of Metering. The Note Issuer shall not be obligated to pay
any costs associated with the metering duties set forth in this Section 2,
including the costs of installing, replacing and maintaining meters, nor
shall the Note Issuer be entitled to any credit against the Servicing Fee for
any cost savings realized by the Servicer or any TPS as a result of new
metering and/or billing technologies.
SECTION 3. USAGE AND XXXX CALCULATION
The Servicer 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 DPUC Regulations) in
accordance with the Servicer Policies and Practices and shall determine
therefrom Billed RRB Charges; provided, however, that in the case of
customers served by a TPS pursuant to a TPS Service Agreement, the Servicer
may obtain usage measurements from the Applicable TPS for customers receiving
meter reading services from such TPS if the applicable TPS Service Agreement
so provides and shall determine therefrom Billed RRB Charges.
SECTION 4. BILLING
(a) The Servicer shall implement the RRB Charge as of the Closing Date
and shall thereafter xxxx each customer or the Applicable TPS, or allocate
from special contract customers in accordance with Section 3.01(a)(3) of the
Agreement, in each case for each customer's Billed RRB Charges in accordance
with the provisions of this Section 4.
(b) Frequency of Bills; Billing Practices. In accordance with the
Servicer Policies and Practices, the Servicer shall generate and issue a Xxxx
to each customer, or, in the case of a customer who is being billed by a TPS,
to the Applicable TPS, or allocate from special contract customers in
accordance with Section 3.01(a)(3) of the Agreement, in each case with
respect to such customer's Billed RRB Charges. In the event that the
Servicer makes any material modification to the Servicer Policies and
Practices, it shall notify the Note Issuer, the Note Trustee, the Certificate
Trustee and the Rating Agencies as soon as practicable, and in no event later
than 60 Servicer Business Days after such modification goes into effect;
provided, however, that the Servicer may not make any modification that will
materially adversely affect the Certificateholders.
(c) Format.
(i) Each Xxxx to a customer shall contain or be deemed to contain
a CTA that shall include the RRB Charge owed by such customer for the
applicable billing period, subject, in the case of special contract
customers, to Section 3.01(a)(3) of the Agreement.
(ii) Each Xxxx in which the CTA is listed as a line item shall
contain a statement (as a footnote) to the effect that all or a portion of
the CTA is owned by the Note Issuer and not the Seller.
(iii) The Servicer shall conform to such requirements in
respect of the format, structure and text of Bills delivered to customers and
TPSs as applicable DPUC Regulations shall from time to time prescribe. To
the extent that Xxxx format, structure and text are not prescribed by
applicable law or by applicable DPUC Regulations, the Servicer shall, subject
to clauses (i) and (ii) of this subsection (c), determine the format,
structure and text of all Bills in accordance with its reasonable business
judgment, the Servicer Policies and Practices and historical practice.
(d) Delivery. Except as provided in the next sentence, the Servicer
shall deliver all Bills to customers (i) by United States mail in such class
or classes as are consistent with the Servicer Policies and Practices or (ii)
by any other means, whether electronic or otherwise, that the Servicer may
from time to time use in accordance with the Servicer Policies and Practices.
In the case of customers that have elected to be billed by a TPS, the
Servicer shall deliver all Bills to the Applicable TPSs by such means as are
mutually agreed upon by the Servicer and the Applicable TPS in the TPS
Service Agreement and which are consistent with DPUC Regulations. The
Servicer or a TPS, as applicable, shall pay from its own funds all costs of
issuance and delivery of all Bills that it renders, including printing and
postage costs as the same may increase or decrease from time to time.
SECTION 5. CUSTOMER SERVICE FUNCTIONS
The Servicer or a TPS to the extent provided in the applicable TPS
Service Agreement shall handle all customer inquiries and other customer
service matters according to the Servicer Policies and Practices.
SECTION 6. COLLECTIONS; PAYMENT PROCESSING; REMITTANCE
(a) Collection Efforts, Policies, Procedures.
(i) The Servicer shall collect Billed RRB Charges from customers
and TPSs as and when the same become due in accordance with such collection
procedures as it follows with respect to comparable assets that it services
for itself or others, including the following:
(A) The Servicer shall prepare and deliver overdue notices to
customers and TPSs in accordance with applicable DPUC Regulations and the
Servicer Policies and Practices.
(B) The Servicer shall deliver past-due and shut-off notices in
accordance with applicable DPUC Regulations and the Servicer Policies and
Practices.
(C) The Servicer shall adhere to and carry out disconnection
policies and termination of billing by a TPS pursuant to a TPS Service
Agreement in accordance with Sections 16-262c, 16-262d and 16-262e of the
Connecticut General Statutes or successor provisions, applicable DPUC
Regulations and the Servicer Policies and Practices.
(D) The Servicer may employ the assistance of collection agents in
accordance with applicable DPUC Regulations and the Servicer Policies and
Practices.
(E) The Servicer shall apply customer and TPS deposits to the
payment of delinquent accounts in accordance with applicable DPUC Regulations
and the Servicer Polices and Practices.
(F) The Servicer shall comply with the provisions of Section
3.01(a)(3) of the Agreement relating to special contract customers.
(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 Policies and Practices, (B) would not materially adversely affect
the Certificateholders and (B) would comply in all material respects with
applicable law.
(iii) The Servicer shall accept payment from customers in
respect of Billed RRB Charges in such forms and methods and at such times and
places in accordance with the Servicer Policies and Practices. The Servicer
shall accept payment from TPSs in respect of Billed RRB Charges in such forms
and methods and at such times and places as the Servicer and each TPS shall
mutually agree in accordance with the applicable TPS Service Agreement and
applicable DPUC Regulations.
(b) Payment Processing, Allocation, Priority of Payments. The Servicer
shall post all payments received to customer or TPS accounts as promptly as
practicable, and, in any event, substantially all payments shall be posted no
later than one Servicer Business Day after receipt.
(c) Investment of RRB Charge Payments Received. Prior to remittance on
the applicable Remittance Date, the Servicer may invest RRB Charge Payments
at its own risk and for its own benefit, and such investments and funds shall
not be required to be segregated from the other investments and funds of the
Servicer. The Servicer shall be entitled to retain as additional
compensation any interest earnings on RRB Charge Payments invested by it.
(d) Calculation of RRB Charge Payments; Remittances. In accordance
with Section 4.03(a) of the Agreement, the Servicer shall remit to the Note
Trustee for deposit in the Collection Account an amount equal to the RRB
Charge Payments calculated in accordance with the methodology described in
Annex II attached to the Agreement.
(e) Remittances.
(i) The Note Issuer shall cause to be established the Collection
Account in the name of the Note Trustee in accordance with Section 8.02 of
the Note Indenture.
(ii) The Servicer shall make or cause to be made Remittances to the
Collection Account in accordance with Section 4.03 of the Agreement.
(iii) Any change of account or change of institution affecting
the Collection Account shall not take effect until the Note Issuer has
provided at least fifteen (15) Servicer Business Days written notice thereof
to the Servicer.
SECTION 7. TPSs
In the event a TPS performs services pursuant to a TPS Service
Agreement, the Servicer shall comply with the procedures set forth in
Schedule A to this Annex I.
SCHEDULE A
TO ANNEX I
Additional Servicing Procedures Applicable to TPSs
1. Establishing TPS Relationship
In addition to any actions required by the DPUC or by applicable law,
for each TPS that is responsible for collecting Billed RRB Charges, the
Servicer shall take the following steps:
(a) Maintain adequate records of the payment arrangement applicable to
such TPS;
(b) Maintain copies of all customer requests to convert to billing by a
TPS;
(c) Verify with the DPUC that each TPS is licensed to supply
electricity in Connecticut;
(d) Obtain information from the TPS including, but not limited to:
name, contact, address, telephone facsimile transmission number and
internet address;
(e) Maintain and update records of customers to permit prompt reversion
to dual-billing;
(f) Maintain estimates of one month's maximum RRB Charge Payments for
each TPS required to post a bond, letter of credit or cash deposit
pursuant to the applicable TPS Service Agreement; and
(g) Comply with credit conditions set out in the Financing Order and
applicable TPS Service Agreement.
2. Monitoring TPS Obligations
(a) The Servicer shall require each TPS to pay all undisputed and all
disputed Billed RRB Charges or make a financial arrangement for such
payment according to the applicable TPS Service Agreement; and
(b) For all TPSs subject to any remittance option where such TPS is
liable for all amounts billed in respect of customers served thereby
regardless of the amounts received therefrom, the Servicer shall monitor
payment compliance and take all actions permitted by the DPUC and the
Financing Order in the event of a default in payment.
3. Enforcing TPS Obligations
The Servicer shall promptly take all actions specified by the Financing
Order with respect to amounts not remitted to the Servicer in accordance with
the payment terms specified by the Financing Order, in addition to any other
remedies available at law.
ANNEX II
REMITTANCE METHODOLOGY
